A History of Macroeconometric Model-Building.

• Author: Garrison, Roger W.

By Ronald G. Bodkin, Lawrence R. Klein and Kanta Marwah. Brookfield, Vermont: Edward Elgar Publishing Co., 1991. Pp. xvii, 573. $97.95.

In today's economics profession, interest in the history of the discipline and interest in macroeconometric model-building rarely occur in combination. This volume, then, which was produced by economists who have built some of those models and made some of that history, is likely to attract attention.

The three author/editors contributed a two-chapter "Introduction" and a three-chapter "Summing Up," as well as a chapter-per-decade treatment of macroeconometric model-building in the United States during the 1950s, 1960s and 1970s plus individual chapters on macroeconometric modelling in Canada and of India. All this material accounts for ten of the seventeen chapters and about half of the book. Model-building in other countries and the macro-modelling of other economies comprise five of the remaining seven chapters, which are contributed by six authors: Anton P. Barten (Netherlands), James Ball and Sean Holly (United Kingdom), Raymond Courbis (France), Kazuo Sato (Japan), and Abel Beltran-del-Rio (Latin America). And finally, Roger Bolton and Bert G. Hickman contributed chapters on regional econometric models and multi-country modelling, respectively. Only two of the chapters (by Barten and Bolton) have previously appeared in print.

The introductory chapter attempts to root the parametric estimation of macroeconomic systems in the general equilibrium theories of Walras and Pareto. But apart from the recognition that "everything depends upon everything else" both in pure theory and in parametric estimation, the actual lineage from nineteenth-century general equilibrium theory to twentieth-century macroeconometric model-building is weak. The historical sketch begins to gain in credibility with the account of the contributions of Ragnar Frisch and Michal Kalecki in the early 1930s. Central to the history, of course, is John Maynard Keynes, who, it can be noted, felt a much stronger kinship to Marshall than to Walras.

Detailed coverage of the model-builders and their models is not easily presented in readable prose. The coverage begins with a history of people and their ideas (Tinbergen in Holland followed by Klein and Goldberger in the United States) but turns quickly into a history of institutions and their computers (Social Science Research Council, Bureau of Economic Analysis, Data Resources, Inc., and...