A. Tinbergen (1936). An economic policy for 1936
1. What is the problem/question that Tinbergen is investigating in this paper?
Tinbergen wants to analyse the reaction of the economy to different policies and
how to get out of the (at that time) current recession, where he focused on
unemployment.
See footnote on first page; Is a recovery in the domestic economic situation of
this country possible, with or without action on the part of the Government even
without an improvement in our export position? What can be learned about this
problem from the experience of other countries?
2. What does Tinbergen mean by “We have to steer clear of these rocks” on page
41 of his paper?
He means that economists should closely pay attention to how they generalize a
situation, how to simplify this, in order to keep it realistic and useful.
The question when studying the economy is what factors are important at what
factors are less relevant and can be left out. However, the economy is a complex
subject/manner, therefore you cannot simplify too much as then you can’t make
a proper analysis anymore.
-> Why is generalization indispensable?
-> What is meant by stylizing?
-> Why do we need to steer clear of the rocks? Are these rocks some sort of ‘dirt’
in an otherwise ‘clean picture’?
-> Is cleaning ‘dirt’ a purely pragmatic and beneficial practice in social science?
-> Can a ‘rough figure’ in production remain a ‘rough figure’ in use?
3. What does he do in section 3 of the paper (page 42-44)? What is his aim?
Tinbergen identifies 3 sorts of economic variables; Physical Quantities, Prices
(Index Numbers) and Value Figures (in Guilder). He tries to identify as much and
as clearly as possible all the variables that affect the economy and how they
interact.
This is the attempt of Tinbergen to stylize (generalize) and identifies the
quantitative measurements.
4. Define “economic influences” and “non-economic influences”.
Non-economic influences are from outside the model and are not intertwined with
each other, whereas economic influences can be determined by both non-
economic influences and other economic influences, they are constantly
changing and interdependent.
5. How does Tinbergen evaluate alternative economic policies?
He puts in different values/changes inputs for some variables/equations and then
analyses how the model changes; he emphasizes the balance of payments
(indicator for the international position) and the unemployment level.
1. What is the problem/question that Tinbergen is investigating in this paper?
Tinbergen wants to analyse the reaction of the economy to different policies and
how to get out of the (at that time) current recession, where he focused on
unemployment.
See footnote on first page; Is a recovery in the domestic economic situation of
this country possible, with or without action on the part of the Government even
without an improvement in our export position? What can be learned about this
problem from the experience of other countries?
2. What does Tinbergen mean by “We have to steer clear of these rocks” on page
41 of his paper?
He means that economists should closely pay attention to how they generalize a
situation, how to simplify this, in order to keep it realistic and useful.
The question when studying the economy is what factors are important at what
factors are less relevant and can be left out. However, the economy is a complex
subject/manner, therefore you cannot simplify too much as then you can’t make
a proper analysis anymore.
-> Why is generalization indispensable?
-> What is meant by stylizing?
-> Why do we need to steer clear of the rocks? Are these rocks some sort of ‘dirt’
in an otherwise ‘clean picture’?
-> Is cleaning ‘dirt’ a purely pragmatic and beneficial practice in social science?
-> Can a ‘rough figure’ in production remain a ‘rough figure’ in use?
3. What does he do in section 3 of the paper (page 42-44)? What is his aim?
Tinbergen identifies 3 sorts of economic variables; Physical Quantities, Prices
(Index Numbers) and Value Figures (in Guilder). He tries to identify as much and
as clearly as possible all the variables that affect the economy and how they
interact.
This is the attempt of Tinbergen to stylize (generalize) and identifies the
quantitative measurements.
4. Define “economic influences” and “non-economic influences”.
Non-economic influences are from outside the model and are not intertwined with
each other, whereas economic influences can be determined by both non-
economic influences and other economic influences, they are constantly
changing and interdependent.
5. How does Tinbergen evaluate alternative economic policies?
He puts in different values/changes inputs for some variables/equations and then
analyses how the model changes; he emphasizes the balance of payments
(indicator for the international position) and the unemployment level.
