Full text: Study week on the econometric approach to development planning

fessor WoLD agrees with me on this, We really have three types of 
models: the explanatory models, the forecasting models and the de- 
cision models. My primary concern is with decision models. 
I have a brief comment on Prof. STONE’s paper at the point 
where he mentioned the role of estimation, If I understood him 
right he suggested that estimation of certain parameters in a model 
might be made, so to speak, in advance, by the scientists, but the 
question is whether this can be done in a way that is independent of 
the use of the model. I think the answer is NO because the method 
of estimation will depend essentially on what kind of statements you 
want to make. Ordinarily you will not have point estimates, you 
will have confidence intervals, and depending on the « gambling 
attitude » of the policy makers, the kind of confidence intervals 
which you will want for your estimates will depend on the purpose 
of the model. As an illustration, consider two Ministers of Finance, 
one being afraid of losing his job if there is unemployment, the other 
being afraid of losing it because of inflation: the estimates, in the 
way of confidence intervals for the multiplier, which you would give 
to these two gentlemen, could be quite different. 
I have two different comments, one to Prof. STONE’s paper. 
think the model on which he and his associates are working is 
highly interesting because of its scope and the detail of disaggrega- 
tion and because it gives an opportunity to test the return on disag 
gregation; one can experiment with the model, re-introduce aggre- 
gation and in that way determine how much of the information that 
is obtained by the extreme disaggregation is lost owing to going over 
to higher degrees of aggregation; I would like to ask whether Mr. 
STONE has made plans to exploit this possibility and urge him to do 
‘11 Stone - pag. 99

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