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

In fact, I agree completely with what Professor FriscH said; but 
my point was different. It was that for the discussion and for the 
analysis of the difficulties we meet we must distinguish between real 
difficulties and artificial difficulties which arise only from the con- 
sideration of discrete series. That is quite different. 
This last group of comments refer to shortcomings of model build- 
ing that arise because the empirical observations for some reason or 
other do not match the theoretical model. 
Professor LEONTIEF very rightly -emphasizes that there must be 
a sound balance between the accuracy of the statistical observations 
and the degree of refinement of the statistical methods applied. A 
caution in the same vein is that the application of refined statistical 
methods should not become an end in itself, and thereby become 
futile. Or « sieving moscitoes, but swallowing camels », as the 
Swedish proverb goes, the moscitoes being sampling errors that are 
reduced by refined techniques but tend to zero anyway in large 
samples, whereas the camels of specification errors are ignored al- 
though they are finite entities that do not tend to zero with increasing 
Professor FRISCH very instructively points out a crucial feature 
in the transition from deterministic to stochastic models, namely 
that when it comes to differentials versus finite differences, it is often 
easier to work with differentials if the approach is deterministic. 
and with differences if it is stochastic 
Wold - pag. 7.

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