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

500 PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 28 certainly had no precise idea about when he should judge his coef- ficient high or when low. The only thing he knew was that the coefficient was bound to lie between —1 and +1; whether .7 was high or whether .99 was high, that certainly was not a matter that could be decided at that time. In the same way I hope I am able to give an appropriate answer after ten years or so. Regarding expected utility to be replaced by the max-min ap- proach, I have my doubts. I think the max-min approach is always a little difficult by the time your random variables have an infinite range. And also regarding expected utility, this has a rather firm foundation given by von NEUMAN and MORGENSTERN; they showed that under a number of rather innocent assumptions a rational man behaves as if he maximizes expected utility. It is of course quite another affair whether these preferences can be represented in the way I do, but I think that given the large number of difficulties which we are bound to have in formulating a preference function anyhow, this is a matter of relatively minor concern. Finally, regarding Professor FISHER, I must say that no com- putations have been made on the part of the loss function which is due to the instruments and the part which is due to the non- controlled variables. But the basic data are available, so the com- putations can be made. FRISCH Professor THEIL excused himself for the non-realism of the choice of instruments. He excused himself by pointing to the simplicity of the model. I should say that this is an excellent example of how a simple model can reveal very pertinent facts and conclusions. In this particularly simple model, which I complimented Professor THEIL on, I should say that the capital output ratio is a much better example of a real instrument, but THEIL took that simply as a constant that was given. That was mv first remark. ‘71 Theil - pag. 36

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