ABSTRACT OF PAPER
Title: Conferences of Vatican II (7-13 October 1963): controversies around the role of econometrics for planning economics and developing fairer societies
Author: Dupont-Kieffer Ariane
The conference organized by the Pontifical Academy of Sciences in 1963 on "the role of econometrics in formulating development plans" (proceedings published in 1965) is a key step not only in the work of Frisch but also for the history of econometrics, challenging the more or less normative status of econometric models. This conference or more precisely this one-week studies ("semaine d’études") is interesting in two respects : on the one hand, this conference is driven by the acknowledgment that "the free game of individual choices does not ensure, as we believed in the past, favorable outcomes for all concerned" (Conférence, 1965, page 1) and the Vatican invited the community of econometricians to revisit the role and contribution of economics to social justice and welfare issues; on the other hand, the conference stated that econometrics is "a significant progress for mathematical systems to study phenomena related to economic activities" (ibid.). Therefore, econometrics is anchored in an ambivalent position, being both defined as a positive tool of knowledge and as a mean of changing society and creating a better world. These contributions and the related debates are still not well-known and should be better enhanced and disseminated as they have represented at that time an methodological break for econometrics and a theoretical turning point for welfare economics, as it can be noticed from the two introductory chapters by Richard Stone and Ragnar Frisch. By revisiting the contributions, it appears that 3 types of solutions to dampen economic fluctuations and underemployment are defined by econometricians. First of all, some econometricians, like Herman Wold with his simultaneous equations or Franklin Fisher and his estimation of dynamic systems, turned to methodological innovations for economic modeling in a quest to better understand the causes and nature of crisis and fluctuations. Secondly, others, as Edmond Malinvaud and his optimal path of economic growth or Maurice Allais’s contribution on the role of capital goods in the economic development, favored theoretical innovations. Thirdly, others accepted and promoted the possibility of planning and focused on institutional solutions to ease and make efficient policies and planning. Henri Theil proposed to redefine the decision rules for any planning procedure. Frisch is going one step further by designing a complete and precise procedure for the definition and the implementation of direct planning. In addition of being at the core of understanding and forecasting activities, the Frischian econometric model also becomes a key element of the political agenda. My paper aims to understand first how the contribution of Frisch to the Vatican helps to understand his definition of econometrics in relation with direct planning combined with a competitive framework. Then I investigate in what extent the lively and intense discussions raised by Frisch’s proposal, has driven the econometricians community to adopt a position on 3 points: nature and definition of econometrics, the role of econometrician as regards to planning activities and the ultimate goal of planning and the desirable society. Bibliographical references Frisch, Ragnar Anton Kittil. 1965. Selection and Implementation — the Econometrics of the Future, in Semaine d’Etude sur le Rôle de l’analyse économétrique dans la formulation de plans de développement, Pontificiae Academiae Scientarvm Scripta varia- 28, Rome, 1197-1204. Louça, Francisco. 1999. The Economic Challenge to Keynes: Arguments and Contradictions in the Early Debates about a Late Issue. European Journal of the History of Economics, 6(3), 404-38.
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