SEMAINE D'ÉTUDE SUR LE ROLE DE L’ANALYSE ECONOMETRIQUE ETC. 177
WoLD
Professors ALLAIS and HAAVELMO comment upon econometric
models from the point of view of epistemology, the genera] theory
of knowledge. The main point I wish to make in my reply is that
this is a highly important aspect of econometric model building.
Several of the much debated issues about econometric models are not
specific to econometrics, they are fundamental issues in the
social sciences by and large; and many of the econometric techniques
are pioneering in the still wide realm of nonexperimental model
building.
As to the first part of Professor ALLAIS’ comment, I would like
to emphasize the sharp distinction between on the one hand the
hypotheses that constitute the theoretical part of a model, on the
other hand the actual facts that the model serves to explain. There
is always a pluralism of models, and there is never perfect agreement
between a model and the facts as actually observed. The choice
between different types of model is to a large extent a matter of
economy of thought, to quote ERNsT MacH. More specifically, it is
often a matter of choosing the model that uses the smallest number
of parameters when representing the facts. I do not think that at
this point there is really any difference between our views. And
similarly with the last part of Professor ALLAIS’ comment. Expe-
rience has shown that it is sometimes (and in economics quite often)
convenient and useful to approach the reality by way of models
where time is a discrete variable, but if it turns out that if discrete
time gives rise to difficulties, then of course we. should respecify
time as a continuous variable.
Professor HAAVELMO’s comments and five question marks have
direct bearing on the epistemological foundations of econometrics:
more specifically a bearing upon econometrics as nonexperimental
model building. This is a most important topic for our round table
discussion, and I welcome his remarks so much the more as they
give me an opportunity to state agreement all through, except
perhaps on one point which I think requires some qualification
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Wold - pag. 63