This autumn it will be exactly fifty years ago that Jan Tinbergen received the unofficial Nobel Prize in Economics Sciences. How relevant is his work at a time when models are increasingly being challenged? In an interview with Erasmus Magazine, Philip Hans Franses, Professor of Econometrics at Erasmus School of Economics, discusses Jan Tinbergen’s legacy and forecasting a crisis. ‘No economist will claim to fully understand the world.’
‘Tinbergen has left the Netherlands with so many things,’ says Franses. ‘He introduced a model that captures reality in all its complexity. It gave economists and policymakers a common language. Suddenly it became possible to make pronouncements about the influence of, for example, inflation, the price level or wages.’
According to Franses, Tinbergen had it easier than today’s economists, because the Dutch economy has become more complex. ‘It is more interwoven with the world economy and everything goes faster. We have had several economic crises in recent decades, but between the Second World War and the first oil crisis of 1973 – the period in which Tinbergen did most of his work – the Netherlands was in a state of great serenity. There were no major financial upsets, life went on without anything eventful happening. You could easily turn the cogs to adjust inflation or unemployment a little. The predictions made by Tinbergen came true very nicely.’