SEMAINE D'ÉTUDE SUR LE ROLE DE L’ANALYSE ECONOMETRIOUE ETC.
[t is this means about which I am going to speak today.
To size up the nature of the problem, let us review briefly
the directions that have been explored in the search for a better
economic system. Ronghiy speaking they may be classified
into three groups.
The first direction, one characterized by a very mild devia-
tion from the traditional market type of economy, consists of
admitting only monetary and fiscal instruments in the attempt
at steering the economy. The human behaviour patterns at the
various levels of society are such that, in this mildest form of
attempt to steer the economy in a desirable direction, one faces
a fundamental choice between inflation accompanied by fairly
full employment or a reasonably stable price level accompanied
by less than full employment of labour and other resources.
A precise description of the situation would, of course, neces-
sitate specifications of a number of details, but the choice 1
have mentioned indicates the essence of the matter. This
choice is strikingly illustrated in the famous Samuelson-Solow
menu. This menu consists, as you know, of a curve applicable
to the United States’ economy and showing how rapid an in-
crease in the price level we must be willing to accept in order
to reduce the unemployment percentage to a given level. An
even more important fact is that monetary and fiscal instru-
ments alone are not sufficient to assure the fulfillment of the
aighly specialized preferences we may have regarding the re-
sults to be obtained from the community’s economic activity.
The mild form of steering about which I am now speaking
might perhaps be described by saying that it is a timid attempt
to introduce a small amount of enlightenment into that which
[ have called, on several previous occasions, the unenlightened
financialism.
The second direction in the search for an improved eco-
nomic system deviates a little more from the traditional market
conomy. It consists of admitting state intervention of various
sorts, aiming at influencing directly the quantities of goods
“171 Frisch - pag.
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