Economic Models, Estimation and Risk Programming: Essays in Honor of Gerhard Tintner

473 Pages·1969·7.6 MB·English

by  Karl A. Fox (auth.), Karl A. Fox, G. V. L. Narasimham (eds.)

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GERHARD TINTNER
Lectu re Notes in
Operations Research and
Mathematical Economics
Edited by M. Beckmann, Providence and H. P. Kunzi, Zurich
15
Economic Models, Estimation
and Risk Programming:
Essays in Honor of Gerhard Tintner
Edited by
K. A. Fox, J. K. Sengupta, Iowa State University, Ames
and G. V. L. Narasimham, New York University, New York City
Springer-Verlag
Berlin · Heidelberg · New York 1969
Contribution by K. A. Fox"T he Invisible Revolution:
Emergence of a Mathematical Science"
© 1962 by The University of Chicago. All rights reserved.
Published 1962. First Phoenix Edition 1964.
Third Impression 1965
ISBN-13: 978-3-540-04638-7 e-ISBN-13: 978-3-642-46198-9
DOl: 10.1007/978-3-642-46198-9
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the amount of the fee to be determined by agreement with the publisher.
© by Springer-Verlag BerlilJ . Heidelberg 1969. Library of Congress Catalog Card Number 72-98260.
Title No. 3764.
PREFACE
These essays in honor of Professor Gerhard Tintner are substantive
contributions to three areas of econometrics, (1) economic models and
applications,. (2) estimation, and (3) stochastic programming, in each of
which he has labored with outstanding success. His own work has extended
into multivariate analysis, the pure theory of decision-making under un-
certainty, and other fields which are not touched upon here for reasons of
space and focus. Thus, this collection is appropriate to his interests but
covers much less than their full range.
Professor Tintner's contributions to econometrics through teaching,
writing, editing, lecturing and consulting have been varied and inter-
national. We have tried to highlight them in "The Econometric Work of
Gerhard Tintner" and to place them in historical perspective in "The
Invisible Revolution in Economics: Emergence of a Mathematical Science."
Professor Tintner's career to date has spanned the organizational life of the
Econometric Society and his contributions have been nearly coextensive with
its scope. His principal books and articles up to 1968 are listed in
the "Selected Bibliography."
Professor Tintner's current research involves the intricate problems
of specification and application of stochastic processes to economic systems,
particularly to growth, diffusion of technology, and optimal control. As
always, he is moving with the econometric frontier and a portion of the
frontier is moving with him.
IV
Two of the editors wrote dissertations under Professor Tintner's super-
vision; the third knew him as a colleague and friend. While the editors took
the initiative in organizing the volume, the responses of the other
contributors were warm, generous, and prompt; many of them had known
Professor Tintner longer, and in some respects better, than had the editors
themselves. It would be inappropriate for the editors to thank the other
contributors; let us simply say that Professor Tintner is fortunate in his
friends.
The editors wish to tnank Dr. Bikas C. Sanyal, who coordinated the
notation and other technical features of the manuscript, and Helen M. Brown
and Juanita Adams, who typed it in final form.
On behalf of all the authors, we offer this collection of essays to
Professor Tintner in honor of his pioneering contributions to econometrics
and as a token of our friendship and high respect.
Karl A. Fox
G.V.L. Narasimham
Jati K. Sengupta
Ames and New York
June 17, 1969
v
CONTRIBUTORS
S. N. AFRIAT, Professor of Economics, University of North Carolina,
Chapel Hill.
R. L. ANDERSON, Professor of Statistics, University of Kentucky, Lexington.
ABRAHAM CHARNES, University System Professor and Jesse H. Jones Professor
of Management Science and Biomathematics, The University
of Texas.
WILLIAM W. COOPER, Professor of Public Policy and Dean of the School of
Urban and Public Affairs, Carnegie-Mellon University.
KARL A. FOX, Distinguished Professor of Economics, Iowa State University,
Ames.
TRYGVE HAAVELMO, Professor of Economics, University of Oslo, Institute
of Economics, Oslo, Norway.
HARRY H. HALL, Assistant Professor of Agricultural Economics and Statistics,
University of Kentucky, Lexington.
EARL O. HEADY, Charles F. Curtiss Distinguished Professor and Executive
Director, Center for Agricultural and Economic Development,
Iowa State University, Ames.
DALE W. JORGENSON, Professor of Economics, Harvard University.
DONALD W. KATZNER, Assistant Professor of Economics, University of
Pennsylvania.
LAWRENCE R. KLEIN, Benjamin Franklin Professor of Economics,
University of Pennsylvania
TJALLING C. KOOPMANS, Director, Cowles Foundation for Research in Economics,
Yale University.
PAUL V. MOESEKE, Professor Ordinarius of Mathematical Economics, University
of Louvain and Professor of Economics, Iowa State Uni-
versity, Ames.
G.V.L. NARASIMHAM, Associate Professor of Economics, Graduate School of
Business Administration, New York University, New York City.
JAMES P. QUIRK, Professor of Economics, University of Kansas, Lawrence.
JATI K. SENGUPTA, Professor of Economics and Statistics, Iowa State Uni-
versity, Ames.
C. J. STEILBERG, The Netherlands Railway, Utrecht, The Netherlands.
VI
HENRI THEIL, University Professor and Director, Center for Mathematical
Studies in Business and Economics, University of Chicago.
JAN·TINBERGEN, Professor of Development Programming, Netherlands Economic
Institute, Rotterdam.
TONG-ENG WANG, Assistant Professor of Business Administration, Marshall
University, Huntington, West Virginia.
HERMAN WOLD, Professor of Statistics, University of Uppsala.
ARNOLD ZELLNER, H.G.B. Alexander Professor of Economics and Statistics,
Graduate School of Business, University of Chicago.
VII
TABLE OF CONTENTS
PREFACE
CONTRIBUTORS
I. INTRODUCTORY ESSAYS 1
1. The Invisible Revolution in Economics: Emergence of a
Mathematical Science
by Karl A. Fox 2
2. The Econometric Work of Gerhard Tintner
by Jati K. Sengupta 20
II. ECONOMIC MODELS AND APPLICATIONS 34
3. The Demand for Capital Services
by Dale W. Jorgenson 35
4. The Competitive Equilibrium: A Qualitative Analysis
by James P. Quirk 58
5. Stability of Absolute Prices in a Wa1rasian System
by Trygve Haave1mo 86
6. Revealed Preference: Equivalence Theorem and Induced
Pre order
by Paul Van Moeseke 92
7. Objectives, Constraints and Outcomes in Optimal Growth
Models
by Tja11ing C. Koopmans 110
8. The Theory of the Optimum Regime
by Jan Tinbergen 133
9. Application of Linear and Nonlinear Programming Models
in Specifying Land Use, Spatial Equilibrium and Prices
for Agriculture
by Earl O. Heady and Harry Hall 190
10. Estimating the Effects of Institutional and Technological
Changes upon Agricultural Development: A Comparison of
Multiple Regression and Programming Approaches
by Karl A. Fox and Tong-eng Wang 223
11. Thirty-three Supply Curves of Three-Month Loans
by Henri Theil and C. J. Stei1berg 261
VIII
III. ESTIMATION OF ECONOMETRIC MODELS 276
12. Regression and Projection
by S. N. Afriat 277
13. The Use of Prior Information in Regression Analysis
by R. L. Anderson 302
14. E. P. Mackeprang's Question Concerning the Choice of
Regression--A Key Problem in the Evolution of Econometrics
by Herman O. Wold 325
15. On the Possibility of the General Linear Economic Model
by Donald W. Katzner and Lawrence R. Klein 342
16. On the Aggregation Problem: A New Approach to a
Troublesome Problem
by Arnold Zellner 365
17. Some Properties of Estimators Occurring in the Theory of
Linear Stochastic Processes
by G. V. L. Narasimham 375
IV. STOCHASTIC PROGRAMMING METHODS IN ECONOMIC MODELS 390
18. Distribution Problems in Stochastic and Chance-
Constrained Programming
by Jati K. Sengupta 391
19. Deterministic Equivalents for Optimizing and Satisficing
under Chance-Constrained Programming
by Abraham Charnes and William W. Cooper 425
SELECTED BIBLIOGRAPHY OF GERHARD TINTNER 456