No CrossRef data available.
Article contents
Some Remarks on an Econometric Model of a Provincial Economy*
Published online by Cambridge University Press: 07 November 2014
Extract
It appears to be generally agreed that there ought to be a close integration of economic theory and the building of econometric models, together with the auxiliary activities of data collection and processing. If this is to be so, then every econometric model must be a special purpose model or at best a model designed for a limited range of related uses. A model is, by definition, an image of reality that is simplified according to certain criteria of what is important and what is not. Its construction necessarily reflects the main preoccupations of its builders, the relations and measures they think relevant to the problems they face, and even their particular versions of economic theory. This leaves the door wide open for differences in emphasis, in priorities, and even in fundamental interpretations of economic phenomena. In short, a model appropriate for, say, Quebec, will necessarily differ considerably from models constructed for the federal government or its agencies and from models set up by large corporations for their own use. And it is not just a matter of fitting different parameters into the same logical structure; the logical structures themselves will differ.
Secondly, if true integration of model building with economic theory is to be attained, and if a solid observational basis is to be secured, we must work very close to the micro-economic level. This means that models must be disaggregated, since our most solid theoretical results are in micro-economics.
- Type
- Articles
- Information
- Canadian Journal of Economics and Political Science/Revue canadienne de economiques et science politique , Volume 31 , Issue 4 , November 1965 , pp. 552 - 558
- Copyright
- Copyright © Canadian Political Science Association 1965
Footnotes
*
The original version of this paper was presented at the meeting of the Canadian Political Science Association in Vancouver in June 1965. I was led to propose this topic largely as a result of my experience in working on the Quebec system of economic accounts being constructed by the Bureau de la Statistique du Québec with the co-operation of the Laboratoire d'économetrie de l'Université de Montréal. Mr. Marc Boucher is in charge of this project. Needless to say the opinions expressed here are not necessarily those of the Bureau de la Statistique du Québec.
References
1 Orcutt, Guy H., “Simulation of Economic Systems: Model Description and Solution,” 11 1964, mimeoGoogle Scholar; “GO2–A Microanalytic Model of the Economy for Use in Aggregation Studies,” Jan. 1965, mimeo; Orcutt, G., Greenberger, M., Korbel, J., and Rivlin, A., Microanalysis of Socioeconomic Systems: A Simulation Study (New York, 1961).Google Scholar
2 Theil, H., Linear Aggregation of Economic Relations (Amsterdam, 1955)Google Scholar; Malinvaud, E., “Aggregation Problems in Input-Output Models” in Barna, T., ed., The Structural Interdependence of the Economy (Milano and New York, 1955).Google Scholar
3 Rectangular matrices are mentioned on several occasions in input-output literature: see, for instance, Stone, R., A Programme for Growth, I, A Computable Model of Economic Growth (Cambridge, 07 1962)Google Scholar; K. Levitt, “Inter-Industry Study of the Economy of the Atlantic Provinces, Canadian Political Science Association, Conference on Statistics, Charlottetown, 1964, with discussion by G. Rosenbluth. For a brief non-technical description of the Quebec system, see, du Québec, Bureau de la Statistique, Aide mémoire concernant le système cle comptabilité nationale du Québec, 10 1963, mimeoGoogle Scholar; a more rigorous discussion of some of its properties may be found in a paper, “Un système rectangulaire d'échanges inter-industries à rendements non proportionnels,” presented by the present author at the September 1965 meeting of the Econometric Society in Rome, mimeo.
4 See, for instance, Frisch, Ragnar, “Market Prices vs. Factor Costs and the Constancy of Production Coefficients,” in Pfouts, R. W., ed., Essays in Economics and Econometrics (Chapel Hill, 1963), 191–215 Google Scholar; Klein, L. R., “On the Interpretation of Professor Leontief's System,” Review of Economic Studies, XX (1952–1953), 131–6CrossRefGoogle Scholar; Matuszewski, T. I., Pitts, P. R., et Sawyer, J. A., “L'Ajustement périodique des systèmes de relations inter-industrielles, Canada, 1949–1958,” Econometrica, XXXI, no 1–2 (01–avril 1963), 90–110 CrossRefGoogle Scholar; Tilanus, C. B. and Rey, Guido, “Input-Output Volume and Value Predictions for the Netherlands, 1948–1958,” International Economic Review, V, no 1 (1964), 34–45.CrossRefGoogle Scholar
5 Nataf, A., “Systèmes économiques de production à rendement croissant,” in Publications de l'ISUP, Vol. IX, fase. 2 (Paris, 1960).Google Scholar
6 Cf. Frisch, Ragnar, “The Occurrence Test,” in Fondements et applications de la théorie du risque en économétrie, Colloques internationaux du Centre National de la Recherche Scientifique, XL (Paris, 1953), 215–22.Google Scholar
7 The idea is not new, of course; see, for instance, Johansen, Leil, A Multi-Sectoral Study of Economic Growth (Amsterdam, 1960)Google Scholar, and the various Cambridge models, e.g., Stone, A Programme for Growth.
8 See for instance, Wood, Marshall K., “Parm–An Economic Programming Model,” Management Science, XI, no 7 (05 1965), 619–80.CrossRefGoogle Scholar
9 Cf. Centre de Recherches Mathématiques pour la Planification, Projet de modèle de laboratoire simplifié en vue des études préliminaires du Vème Plan (esquisses centrales et variantes) (Paris, 1962), mimeo.Google Scholar
10 Cf. Massé, P., “The French Plan and the Economic Theory,” Econometrica, XXXIII, no 2 (1965), 265–76CrossRefGoogle Scholar; Nataf, A., “Essais de Formalisation de la Planification,” L'Actualité économique, no 3 et 4 (10 1963-mars 1964), 581–601.Google Scholar