160 PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 
in the sense that advantage is taken of its properties to secure para- 
meter estimates. In Professor FriscH’s example, the birth rate 
may perfectly well be an instrument in the policy sense and fail 
to be an instrument in the statistical sense in that its movements 
when not influenced by the policy maker may be functions of the 
disturbances and the other endogenous variables of the system, 
Once again, my usage has quite a long tradition in econometrics 
behind it. 
ALLAIS 
This is not at all a criticism of FISHERS paper, but as an econo- 
mist, I must confess that I feel myself in sympathy with some of 
Prof. FriscH’s words. I did not intend to say anything, but in 
the introduction to this Study Week, we read « The econometric 
method represents a big improvement over non-mathematical me- 
thods of studying phenomena connected with economic operations ». 
I think we must be very careful about the impression which can 
be given to outsiders by the methods we use. My feeling is that 
there is a terrible gap between the power of statistical methods and 
the limitations of economic models and the data. The methods we 
have are in advance, and very largely in advance, if we compare 
them to the economic models which we use. We may have wonder- 
ful methods to analyse the models which are built but the value 
of the conclusions will then depend primarily on the value of the 
models. 
Thus the danger is that public opinion or politicians may greatly 
overestimate what we can do. The precision of the methods is one 
thine. Their value is another 
FISHER 
I am in basic agreement with Professor ALLAIS’ remarks. Anyone 
who has ever done a good deal of empirical econometric work knows 
6] Fisher - pag. 76