The Origins of Macroeconometric Models

Abstract

Macroeconometric models that developed after the Second World-War had their origins in the macroeconomic theories that attempted to formalize the description of the national economy as a whole at the end of the 19th c. and in the early 20th c. These were firstly the general equilibrium theory developed by L. Walras. It assumed that a national economy can be described using a system of equations explaining the behaviour of economic agents. It became operational after more that 20 years as a special aggregation system was proposed, that led to the construction of empirical computable general equilibrium models. Next, rested on the foundations of business cycle theory laid by R. Frisch and M. Kalecki in the 30s, that encouraged J. Tinbergen to construct the first macroeconomic models firstly for Netherlands and just before the Second World-War for the United States. The most influential were, however, the fundamental writings by J.M. Keynes in the late 30 s. opening the way for macroeconomic theories and policies. They resulted in the construction of the macroeconometric “mainstream” models by L.R. Klein after the second World-War.