Study week on the econometric approach to development planning

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Monograph

Identifikator:: 1824422792

URN:: urn:nbn:de:zbw-retromon-217476

Document type:: Monograph

Title:: Study week on the econometric approach to development planning

Place of publication:: Amsterdam [u.a.]

Publisher:: North-Holland Publ. Co. [u.a.]

Year of publication:: 1965

Scope:: XLVII, 1259 S.; graph. Darst.

Digitisation:: 2022

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Decision rules and simulation techniques in development programming / Henri Theil, Nederlandsche Economische Hoogeschool - Econometrisch Institut Rotterdam - Nederland

Collection:: Economics Books

SEMAINE D'ÉTUDE SUR LE ROLE DE L ANALYSE ECONOMETRIQUE ETC. 46 cedure is not only that it is more systematic but also (and particularly) that, in general, taking account of the possibility that future information may be reacted to contributes to better results from the standpoint of the goal pursued (}). The primary objective of this paper is to illustrate the method of linear decision rules in the context of development programming. The paper has no pretensions with respect to the development of model building in this field. Models describ- ing the constraints under which the economy operates are undoubtedly important and in fact indispensable for the deri- vation of decision rules; but it is felt that the introduction of innovations in that area would shift the attention away from the primary objective and, therefore, a very simple capital-income ratio model is introduced in Section 2. In Section 3 a quadratic social preference function is formulated, after which the theory of linear decision rules follows in Sections 4 and 5. Section 6 deals with the second objective of this paper: the use of simulation techniques in development programming. Since many of the structural relations and also the long-term development of many crucial outside forces are subject to a considerable degree of uncertainty, particularly in the field of growth and development, it seems plausible that simulation techniques can be valuable to indicate the range of variability of the outcomes which result from different policy procedures. In order to concentrate on the main idea, the application is confined to the same simple case as that of the earlier sections. 2. THE MODEL Let K, be the stock of capital goods at the end of year ¢ and Y, national income of that vear, both in real terms. One (') An additional advantage is that the strategy approach enables the decision maker to formulate predictions (no perfect predictions!) of his own future actions and of their consequences. But this aspect will not be pursued here (7] Theil - pag. 3

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