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

great generality is usually sought and frequently achieved. In 
practice it is often necessary to adopt a formulation at the 
same time less general than theorists would like within the 
range of phenomena they consider, and less restricted in its 
range. For example, the consumption functions we are using 
cannot handle complementary or inferior groups of commodities 
but they can handle systematic changes in preferences and also 
adaptive behaviour. 
Fifth, is assembling observations on which to base our 
projections, we can achieve a great deal by the careful proces- 
sing of existing data, but however thoroughly we do this our 
knowledge remains incomplete. We must therefore try to gain 
the cooperation of outside experts in practical walks of life, 
who may be less well placed than we are to attempt a synoptic 
view of the whole economic system, but whose specific know- 
ledge is always greater than ours. The realism of our projections 
can only increase as we succeed in getting more reliable in- 
formation into the model. 
Sixth, to be a useful tool for policy-making a model must 
enable us to make not just one but many alternative projections 
based on different assumptions. When it has reached this stage 
the model becomes in its turn a source of information in the 
light of which a policy can be drawn up. If this policy is 
carried out, the model can then be used to make predictions. 
Seventh, no policy can be carried out without a control 
system which keeps the plan in touch with events. This con- 
trol system consists of a mixture of centralised and decentralised 
administrative machinery, including all private arrangements 
for the management of businesses, cooperatives, labour unions 
and so on. The model can be used to review the control system 
and show how administrative methods might be modified so as 
to improve the economy’s inherent tendency to stability. I have 
not tried to formulate this range of problems because as yet we 
have done very little work on them. 
Eighth, it is impossible to plan unless one knows what one 
‘11 Stone - pag. 81

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