Encyclopedia, Difference between revisions of "Ragnar Frisch" - New World
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| + | '''Ragnar Anton Kittil Frisch''' (March 3, 1895 – January 31, 1973) was a [[Norway|Norwegian]] [[economist]] and pioneer econometrician, famous for the development of large-scale econometric models connected to economic planning and national income accounting. He was a founder of econometrics as an independent discipline. With Jan Tinbergene, he was a joint winner of the 1969 Nobel Prize for Economics. | ||
| + | |||
| + | ==Life== | ||
| + | |||
| + | Ragnar Frisch was born in [[Oslo]], [[Norway]], the son of [[goldsmith|gold-]] and [[silversmith]] Anton Frisch and Ragna Fredrikke Kittilsen. Being expected to continue his family business, Frisch became an [[Apprenticeship|apprentice]] in the David Andersen workshop in Oslo. However, at his mother's advice, while doing his apprenticeship Frisch also started studying at the [[University of Oslo]]. His chosen topic was economics, as it seemed to be "the shortest and easiest study" available at the university. In 1919 Frisch received his degree, and in 1920 he passed his handicraftsman tests and became a partner in his father's workshop. | ||
| + | |||
| + | In 1921 Frisch received a fellowship from the university which enabled him to spend three years studying economics and mathematics in [[France]] and [[England]]. After his return to Norway, in 1923, although the family's business was having difficulties, he continued his scientific activity, feeling that research, not jewelry, is his real calling. He published a few papers in [[probability theory]], beginning teaching at the University of Oslo in 1925 and, in 1926, gaining his Ph.D with a thesis in [[mathematical statistics]]. | ||
| + | |||
| + | Frisch received a fellowship from the [[Rockefeller Foundation]] to visit the [[United States]] in 1927. There, he looked for other economists interested in the new mathematical and statistical approaches to economics, making contacts with [[Irving Fisher]], [[Wesley Clair Mitchell]], [[Allyn Young]] and [[Henry Schultz]]. He wrote a paper analyzing the role of [[investment]] in explaining [[economic fluctuations]]. Wesley Mitchell, who had just written a book on [[business cycle]]s, helped widely popularize Frisch's paper. | ||
| + | |||
| + | Although his fellowship was extended to travel to [[Italy]] and France, the next year Frisch had to return to Norway because of his father's death. He spent one year to modernize and recapitalize the workshop by selling family assets and to find a jeweler to manage the business for him. Then he returned to academic work, in 1928 being appointed Associate Professor in statistics and economics at the Oslo University. He founded the Institute of Economics at the University of Oslo and the first econometric laboratory. He became a full Professor at the Oslo University in 1931. He also founded at the university the Rockefeller-funded Institute of Economics in 1932 and became its Director of Research. | ||
| + | |||
| + | Frisch married Marie Smedal in 1920 and they had a daughter, Ragna. His granddaughter, Nadia Hasnoui (Ragna's child), became a Norwegian TV personality. After his first wife died in 1952, he remarried in 1953 with childhood friend Astrid Johannessen. | ||
| + | |||
| + | Ragnar Frisch received the Antonio Feltrinelli prize from the [[Accademia Nazionale dei Lincei]] in 1961 and the [[Nobel Prize in Economics|Nobel Memorial Prize in Economics]] in 1969 (jointly with [[Jan Tinbergen]]) for "having developed and applied dynamic models for the analysis of economic processes".He also worked as an economic expert in developing countries, including Egypt and India. He retired from teaching in 1965. | ||
| + | |||
| + | Ragnar Frisch died on January 31, 1973, in Oslo, Norway. | ||
| + | |||
| + | ==Work== | ||
| − | + | In 1926, Frisch published an article outlining his view that economics should follow the same path towards theoretical and empirical quantization as other sciences, especially physics. He believed that econometrics would help realize that goal, and that the use of mathematical tools would yield a better understanding of economics. He wrote: | |
| + | :“Intermediate between mathematics, statistics, and economics, we find a new discipline which for lack of a better name, may be called econometrics. Econometrics has as its aim to subject abstract laws of theoretical political economy or “pure “economics to experimental and numerical verification, and thus to turn pure economics, as far as is possible, into a science in the strict sense of the word.” (Frisch, On a Problem in Pure Economics). | ||
| − | ' | + | In 1926, he published his seminal article "Sur un problème d'économie pure" starting the implementation of his own quantization program. The article offered theoretical axiomatizations which lead to a precise specification of both [[ordinal utility|ordinal]] and [[cardinal utility]], followed by an empirical estimation of the cardinal specification. He introduced the measurement of marginal utility. Frisch also started lecturing a course on [[production theory]] introducing a mathematization of the subject. |
| − | + | After the introduction of the new economical science, econometrics, Frisch founded in 1930 the Econometric Society. In the constitution of the society, Frisch put that it had the goal to promote studies which would unify the empirical-quantitative and theoretical-quantitative aspects of economics, making economics resemble natural sciences. | |
| − | |||
| − | In | + | In 1927 and 1928 Frisch published a series of articles on the statistics of time series. In 1929 he published his first important essay on econometric methodology, "Correlation and scatter in statistical variables," followed in the same year by "Statics and dynamics in economic theory," which introduced dynamics in economic analysis. His distinction between the terms “static” and “dynamic” helped formalize the production theory. |
| − | |||
| − | + | Faced by the Great Depression, Frisch started to advocate econometrics as the tool to solve the problems of economy and society in general. He believed that econometricians have the special responsibility to engage in social action, and bring the change. He thus proposed five mental activities that an econometrician must engage into: | |
| + | # The descriptive procedure (engaging in descriptive, historical and experimental work); | ||
| + | # The understanding procedure (engaging in rational part of the investigation); | ||
| + | # The prediction procedure (engaging in predicting the future phenomena); | ||
| + | # The human purpose decision (engaging in moral evaluation of the possible outcomes of our decisions) | ||
| + | # Social engineering (engaging in bringing the change to life). | ||
| − | Frisch | + | From the mid-1930s Frisch wrote extensively on business cycles. He was likely the first person to have made the distinction between the study of individual firms and industries (“microeconomics”), and aggregate economy (“macroeconomics”). His work on impulse-propagation business cycles helped formalize modern New Classical business cycle theory. |
| − | + | In the 1933 paper, Frisch and Frederick Waugh introduced their famous Frisch-Waugh theorem, which states that the determination of the coefficients in a standard regression model via ordinary least squares and a method involving projection matrices are equivalent. | |
| − | Frisch | + | Influenced by the devastation of the World War II, and before that the Great Depression, Frisch developed the view that neither economics nor politics can act alone to solve the world problems. He argued that both have to work together to bring change to society. He developed a set of planning tools and growth models that was successfully used by Norwegian government after the war. |
| − | + | By the end of his life he however changed his opinion, seeing that econometricians have been misinterpreted and misused his ideas. He wrote: | |
| + | :" I have insisted that econometrics must have relevance to concrete realities—otherwise it degenerates into something which is not worthy of the name econometrics, but ought rather to be called playometrics." | ||
| − | + | ==Legacy== | |
| − | + | Frisch was one of the founders of [[economics]] as a modern [[science]]. He made a number of significant advances in the field of economics and coined a number of new words including [[econometrics]] and [[macroeconomics]]. His 1926 paper on consumer theory helped set up [[Neo-Walrasian research]]. He formalized [[production theory]] (1965). In econometrics he worked on time series (1927) and linear regression analysis (1934). With Frederick Waugh, he introduced the celebrated [[Frisch-Waugh theorem]] (''Econometrica'' 1993) (sometimes referred to as the [[Frisch-Waugh-Lovell theorem]]). His 1933 work on impulse-propagation business cycles was one of the principles behind modern [[New Classical economics|New Classical]] [[business cycle]] theory. He also played a role in introducing econometric modeling to government economic planning and accounting. | |
| − | Frisch was one of the founders of economics as a modern science. He made a number of significant advances in the field of economics and coined a number of new words including [[econometrics]] and [[macroeconomics]]. His 1926 paper on consumer theory helped set up [[Neo-Walrasian research]]. He formalized [[production theory]] (1965). In econometrics he worked on time series (1927) and linear regression analysis (1934). With Frederick Waugh, he introduced the celebrated [[Frisch-Waugh theorem]] ('' | ||
| − | + | He was one of the founders of the [[Econometric Society]] and editor of ''Econometrica'' for over twenty years. The [[Frisch Medal]], so named in his honor, is given every two years for the best paper published in the aforementioned ''Econometrica'' in the previous five years. | |
| − | == | + | ==Publications== |
| − | |||
| − | |||
| − | |||
| − | |||
| − | |||
| − | + | * Frisch, Ragnar. 1926. Sur un problème d'économie pure [On a problem in pure economics]. ''Norsk Matematisk Forenings Skrifter, 1''(16), 1-40 | |
| − | + | * Frisch, Ragnar. 1927. Sammenhengen mellem primærinvestering og reinvestering [The relationship between primary investment and reinvestment]. ''Statsøkonomisk Tidsskrift, 41'', 117-152 | |
| + | * Frisch, Ragnar. 1929. Correlation and scatter in statistical variables. ''Nordic Statistical Journal, 1'', 36-102 | ||
| + | * Frisch, Ragnar. 1929. Statikk og dynamikk i den økonomiske teori [Statics and dynamics in economic theory]. ''Nationaløkonomisk Tidsskrift, 67'', 321-379 | ||
| + | * Frisch, Ragnar. 1934. ''Statistical Confluence Analysis by Means of Complete Regression Systems''. Universitetets Okonomiske | ||
| + | * Frisch, Ragnar. 1952. ''The occurrence test''. Institute of Economics, University of Oslo | ||
| + | * Frisch, Ragnar. 1960. ''Planning for India: Selected Explorations in Methodology''. Asia Publishing House. | ||
| + | * Frisch, Ragnar. 1965. ''Theory of Production''. Rand McNally | ||
| + | * Frisch, Ragnar. 1966. ''Maxima and Minima: Theory and Economic Applications''. Springer. ISBN 9027700931 | ||
| + | * Frisch, Ragnar. 1971. ''Cooperation between politicians and econometricians on the formalization of political preferences.'' Sveriges industriforbund | ||
| + | * Frisch, Ragnar. 1971. On a Problem in Pure Economics. In J.S. Chipman, L. Hurwicz, M.K. Richter and H.F. Sonnenschein (eds), ''Preferences, Utility and Demand: A Minnesota Symposium''. Harcourt Brace Jovanovic Inc, 386-423. Translated by J.S. Chipman from Frisch (1926a). | ||
| + | * Frisch, Ragnar. 1975. ''Economic Planning Studies''. Springer. ISBN 9027702454 | ||
| + | * Frisch, Ragnar. 1978 (original published in 1932). ''New Methods of Measuring Marginal Utility''. Porcupine Press. ISBN 0879918632 | ||
| + | * Frisch, Ragnar & Frederick V. Waugh. 1933. Partial Time Regressions as Compared with Individual Trends. ''Econometrica, 1''(4), 387-401. | ||
| + | ==References== | ||
| + | * Andvig, Jens Christopher. 1984. ''Ragnar Frisch and the Great Depression: A study in the interwar history of macroeconomic theory and policy.'' Norsk Utenrikspolitisk Institutt. ISBN 8270020265 | ||
| + | * Bjerkholt, Olav. 2000. A turning point in the development of Norwegian economics – the establishment of the University Institute of Economics in 1932. ''Memorandum No 36'', University of Oslo. | ||
| + | * Bjerkholt, Olav & Dupont, Ariane. 2007. Ragnar Frisch’s conception of econometrics. ''Paper for the Summer Meeting of the Econometric Society'', Duke University, June 21-24, 2007. Retrieved on July 11, 2007, <http://72.14.205.104/search?q=cache:Re78dPNLf6QJ:https://zeus.econ.umd.edu/cgi-bin/conference/download.cgi%3Fdb_name%3DNASM2007%26paper_id%3D601+Ragnar+Frisch&hl=en&ct=clnk&cd=73> | ||
| + | * ''Ragnar A.K. Frisch, 1895-1973.'' On New School <http://cepa.newschool.edu>. Retrieved on July 10, 2007, <http://cepa.newschool.edu/het/profiles/frisch.htm> | ||
| + | * Strøm, Steinar. 1999. ''Econometrics and Economic Theory in the 20th Century: The Ragnar Frisch Centennial Symposium.'' Cambridge University Press. ISBN 0521633656 | ||
==External links== | ==External links== | ||
| − | |||
| − | |||
| − | |||
| + | * [http://nobelprize.org/nobel_prizes/economics/laureates/1969/frisch-autobio.html Ragnar Frisch] - Autobiography at Nobel e-Museum | ||
| + | * [http://www.alfredslinks.com/links/economy/frisch-ragnar.htm Ragnar Frisch] – Biography and the list of Nobel winners in economy | ||
| + | * [http://cepa.newschool.edu/het/profiles/frisch.htm Ragnar Frisch] – Biography at the Department of Economics of the New School for Social Research | ||
| + | * [http://www.nobel-winners.com/Economics/ragnar_frisch.html Ragnar Frisch] – Biography at nobel-winners.com | ||
| + | * [https://ep.eur.nl/bitstream/1765/8085/1/1974EER.pdf Ragnar Frisch’s role in econometrics: A sketch] – Article by Jan Timbergen | ||
{{Credits|Ragnar_Anton_Kittil_Frisch|111688385|}} | {{Credits|Ragnar_Anton_Kittil_Frisch|111688385|}} | ||
Revision as of 01:23, 11 July 2007
Ragnar Anton Kittil Frisch (March 3, 1895 – January 31, 1973) was a Norwegian economist and pioneer econometrician, famous for the development of large-scale econometric models connected to economic planning and national income accounting. He was a founder of econometrics as an independent discipline. With Jan Tinbergene, he was a joint winner of the 1969 Nobel Prize for Economics.
Life
Ragnar Frisch was born in Oslo, Norway, the son of gold- and silversmith Anton Frisch and Ragna Fredrikke Kittilsen. Being expected to continue his family business, Frisch became an apprentice in the David Andersen workshop in Oslo. However, at his mother's advice, while doing his apprenticeship Frisch also started studying at the University of Oslo. His chosen topic was economics, as it seemed to be "the shortest and easiest study" available at the university. In 1919 Frisch received his degree, and in 1920 he passed his handicraftsman tests and became a partner in his father's workshop.
In 1921 Frisch received a fellowship from the university which enabled him to spend three years studying economics and mathematics in France and England. After his return to Norway, in 1923, although the family's business was having difficulties, he continued his scientific activity, feeling that research, not jewelry, is his real calling. He published a few papers in probability theory, beginning teaching at the University of Oslo in 1925 and, in 1926, gaining his Ph.D with a thesis in mathematical statistics.
Frisch received a fellowship from the Rockefeller Foundation to visit the United States in 1927. There, he looked for other economists interested in the new mathematical and statistical approaches to economics, making contacts with Irving Fisher, Wesley Clair Mitchell, Allyn Young and Henry Schultz. He wrote a paper analyzing the role of investment in explaining economic fluctuations. Wesley Mitchell, who had just written a book on business cycles, helped widely popularize Frisch's paper.
Although his fellowship was extended to travel to Italy and France, the next year Frisch had to return to Norway because of his father's death. He spent one year to modernize and recapitalize the workshop by selling family assets and to find a jeweler to manage the business for him. Then he returned to academic work, in 1928 being appointed Associate Professor in statistics and economics at the Oslo University. He founded the Institute of Economics at the University of Oslo and the first econometric laboratory. He became a full Professor at the Oslo University in 1931. He also founded at the university the Rockefeller-funded Institute of Economics in 1932 and became its Director of Research.
Frisch married Marie Smedal in 1920 and they had a daughter, Ragna. His granddaughter, Nadia Hasnoui (Ragna's child), became a Norwegian TV personality. After his first wife died in 1952, he remarried in 1953 with childhood friend Astrid Johannessen.
Ragnar Frisch received the Antonio Feltrinelli prize from the Accademia Nazionale dei Lincei in 1961 and the Nobel Memorial Prize in Economics in 1969 (jointly with Jan Tinbergen) for "having developed and applied dynamic models for the analysis of economic processes".He also worked as an economic expert in developing countries, including Egypt and India. He retired from teaching in 1965.
Ragnar Frisch died on January 31, 1973, in Oslo, Norway.
Work
In 1926, Frisch published an article outlining his view that economics should follow the same path towards theoretical and empirical quantization as other sciences, especially physics. He believed that econometrics would help realize that goal, and that the use of mathematical tools would yield a better understanding of economics. He wrote:
- “Intermediate between mathematics, statistics, and economics, we find a new discipline which for lack of a better name, may be called econometrics. Econometrics has as its aim to subject abstract laws of theoretical political economy or “pure “economics to experimental and numerical verification, and thus to turn pure economics, as far as is possible, into a science in the strict sense of the word.” (Frisch, On a Problem in Pure Economics).
In 1926, he published his seminal article "Sur un problème d'économie pure" starting the implementation of his own quantization program. The article offered theoretical axiomatizations which lead to a precise specification of both ordinal and cardinal utility, followed by an empirical estimation of the cardinal specification. He introduced the measurement of marginal utility. Frisch also started lecturing a course on production theory introducing a mathematization of the subject.
After the introduction of the new economical science, econometrics, Frisch founded in 1930 the Econometric Society. In the constitution of the society, Frisch put that it had the goal to promote studies which would unify the empirical-quantitative and theoretical-quantitative aspects of economics, making economics resemble natural sciences.
In 1927 and 1928 Frisch published a series of articles on the statistics of time series. In 1929 he published his first important essay on econometric methodology, "Correlation and scatter in statistical variables," followed in the same year by "Statics and dynamics in economic theory," which introduced dynamics in economic analysis. His distinction between the terms “static” and “dynamic” helped formalize the production theory.
Faced by the Great Depression, Frisch started to advocate econometrics as the tool to solve the problems of economy and society in general. He believed that econometricians have the special responsibility to engage in social action, and bring the change. He thus proposed five mental activities that an econometrician must engage into:
- The descriptive procedure (engaging in descriptive, historical and experimental work);
- The understanding procedure (engaging in rational part of the investigation);
- The prediction procedure (engaging in predicting the future phenomena);
- The human purpose decision (engaging in moral evaluation of the possible outcomes of our decisions)
- Social engineering (engaging in bringing the change to life).
From the mid-1930s Frisch wrote extensively on business cycles. He was likely the first person to have made the distinction between the study of individual firms and industries (“microeconomics”), and aggregate economy (“macroeconomics”). His work on impulse-propagation business cycles helped formalize modern New Classical business cycle theory.
In the 1933 paper, Frisch and Frederick Waugh introduced their famous Frisch-Waugh theorem, which states that the determination of the coefficients in a standard regression model via ordinary least squares and a method involving projection matrices are equivalent.
Influenced by the devastation of the World War II, and before that the Great Depression, Frisch developed the view that neither economics nor politics can act alone to solve the world problems. He argued that both have to work together to bring change to society. He developed a set of planning tools and growth models that was successfully used by Norwegian government after the war.
By the end of his life he however changed his opinion, seeing that econometricians have been misinterpreted and misused his ideas. He wrote:
- " I have insisted that econometrics must have relevance to concrete realities—otherwise it degenerates into something which is not worthy of the name econometrics, but ought rather to be called playometrics."
Legacy
Frisch was one of the founders of economics as a modern science. He made a number of significant advances in the field of economics and coined a number of new words including econometrics and macroeconomics. His 1926 paper on consumer theory helped set up Neo-Walrasian research. He formalized production theory (1965). In econometrics he worked on time series (1927) and linear regression analysis (1934). With Frederick Waugh, he introduced the celebrated Frisch-Waugh theorem (Econometrica 1993) (sometimes referred to as the Frisch-Waugh-Lovell theorem). His 1933 work on impulse-propagation business cycles was one of the principles behind modern New Classical business cycle theory. He also played a role in introducing econometric modeling to government economic planning and accounting.
He was one of the founders of the Econometric Society and editor of Econometrica for over twenty years. The Frisch Medal, so named in his honor, is given every two years for the best paper published in the aforementioned Econometrica in the previous five years.
Publications
- Frisch, Ragnar. 1926. Sur un problème d'économie pure [On a problem in pure economics]. Norsk Matematisk Forenings Skrifter, 1(16), 1-40
- Frisch, Ragnar. 1927. Sammenhengen mellem primærinvestering og reinvestering [The relationship between primary investment and reinvestment]. Statsøkonomisk Tidsskrift, 41, 117-152
- Frisch, Ragnar. 1929. Correlation and scatter in statistical variables. Nordic Statistical Journal, 1, 36-102
- Frisch, Ragnar. 1929. Statikk og dynamikk i den økonomiske teori [Statics and dynamics in economic theory]. Nationaløkonomisk Tidsskrift, 67, 321-379
- Frisch, Ragnar. 1934. Statistical Confluence Analysis by Means of Complete Regression Systems. Universitetets Okonomiske
- Frisch, Ragnar. 1952. The occurrence test. Institute of Economics, University of Oslo
- Frisch, Ragnar. 1960. Planning for India: Selected Explorations in Methodology. Asia Publishing House.
- Frisch, Ragnar. 1965. Theory of Production. Rand McNally
- Frisch, Ragnar. 1966. Maxima and Minima: Theory and Economic Applications. Springer. ISBN 9027700931
- Frisch, Ragnar. 1971. Cooperation between politicians and econometricians on the formalization of political preferences. Sveriges industriforbund
- Frisch, Ragnar. 1971. On a Problem in Pure Economics. In J.S. Chipman, L. Hurwicz, M.K. Richter and H.F. Sonnenschein (eds), Preferences, Utility and Demand: A Minnesota Symposium. Harcourt Brace Jovanovic Inc, 386-423. Translated by J.S. Chipman from Frisch (1926a).
- Frisch, Ragnar. 1975. Economic Planning Studies. Springer. ISBN 9027702454
- Frisch, Ragnar. 1978 (original published in 1932). New Methods of Measuring Marginal Utility. Porcupine Press. ISBN 0879918632
- Frisch, Ragnar & Frederick V. Waugh. 1933. Partial Time Regressions as Compared with Individual Trends. Econometrica, 1(4), 387-401.
ReferencesISBN links support NWE through referral fees
- Andvig, Jens Christopher. 1984. Ragnar Frisch and the Great Depression: A study in the interwar history of macroeconomic theory and policy. Norsk Utenrikspolitisk Institutt. ISBN 8270020265
- Bjerkholt, Olav. 2000. A turning point in the development of Norwegian economics – the establishment of the University Institute of Economics in 1932. Memorandum No 36, University of Oslo.
- Bjerkholt, Olav & Dupont, Ariane. 2007. Ragnar Frisch’s conception of econometrics. Paper for the Summer Meeting of the Econometric Society, Duke University, June 21-24, 2007. Retrieved on July 11, 2007, <http://72.14.205.104/search?q=cache:Re78dPNLf6QJ:https://zeus.econ.umd.edu/cgi-bin/conference/download.cgi%3Fdb_name%3DNASM2007%26paper_id%3D601+Ragnar+Frisch&hl=en&ct=clnk&cd=73>
- Ragnar A.K. Frisch, 1895-1973. On New School <http://cepa.newschool.edu>. Retrieved on July 10, 2007, <http://cepa.newschool.edu/het/profiles/frisch.htm>
- Strøm, Steinar. 1999. Econometrics and Economic Theory in the 20th Century: The Ragnar Frisch Centennial Symposium. Cambridge University Press. ISBN 0521633656
External links
- Ragnar Frisch - Autobiography at Nobel e-Museum
- Ragnar Frisch – Biography and the list of Nobel winners in economy
- Ragnar Frisch – Biography at the Department of Economics of the New School for Social Research
- Ragnar Frisch – Biography at nobel-winners.com
- Ragnar Frisch’s role in econometrics: A sketch – Article by Jan Timbergen
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