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

certainty it is not even possible to make an observation without 
disturbing the system itself. We should not press the question of 
neutrality in an extreme way, but take a broad view that for certain 
purposes certain models would be more appropriate than others. 
The point stressed by Professor LEONTIEF is extremely important 
the validity and also the precision and the effectiveness of a 
model to serve certain purposes which may be purely explanatory 
or may be decision making or may be forecasting or may be of other 
types. I think this raises questions of substance which we should 
discuss; and we should, among ourselves at least, provisionally agree 
on what kind of words we should use. 
I am not sure whether there is really any disagreement between 
Prof. Arrars and Prof. FriscH, but their debate does confirm Prof. 
MAHALANOBIS” view that it is a good thing to clarify our terminology 
— not necessarily to establish it for the indefinite future, but at least 
for the purpose of our discussion during the Study Week. The 
question has been posed: What is a decision model, and how does 
it differ from a forecasting model? It is my undestanding that 
decision model and policy model are essentially the same notion. If 
so, the question can be answered along the lines of a famous argument 
by the distinguished Swedish economist GUNNAR MyrpAL. Political 
actions, including actions of economic policy, are based on value 
judgements, and it is typical that the judgements are radically 
different for members of different political parties. The analysis of 
economic policy and other decision systems takes the form of a 
policy model, where the value judgements underlying alternative 
political actions are included as specified hypotheses, hypotheses 
which in themselves are politically neutral. In this way the policy 
model becomes, in principle, an instrument for strictly scientific 
analysis of alternative lines of political action. 
‘1] Stone - pag. 108

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