(Please see the correction appended below)
The Econometric Society was founded in 1932 with the idea of combining economic theory, measurement, and statistical technique to create a powerful new means of analysis. Econometrics has grown to be an important field of study, but it remains a topic within economics instead of one subtending it. Eighty-two years later, does economics need another sub-discipline concerned with data?
It would seem so. The recently-formed Society for Economic Measurement is holding its inaugural meetings at the University of Chicago’s Booth School of Business this week. Marquee speakers include Dale Jorgenson, of Harvard University; Karl Shell, of Cornell University; James Heckman, of the University of Chicago; Francis Diebold, of the University of Pennsylvania; John Hassler, of Stockholm University; and Jacques Mairesse, of Maastricht University – all pioneers in combining theory with measurement. The founding president is William Barnett, of the University of Kansas, editor of the journal Macroeconomic Dynamics.
A recent issue of MD described the agenda: better, more realistic monetary aggregates; scanning data linked to the CPI; new index number techniques to assess technical change; the measurement and reconciliation of individual household wealth, income, savings and labor supply data; the measurement of employment flows (from workers’ perspectives) and of job flows (from employers’ perspective.
William Petty called this “political arithmetick” when he founded the subject in 1661. “Measurement economics” seems a more suitable heading today.The new angle of vision apparently arises mostly from the advent of the computer and the means it offers to collect and analyze “big data.” More on this important topic in September, when Economic Principals has returned from the North Woods.
A correction: Writing too quickly last week about Finding Equilibrium: Arrow, Debreu, McKenzie and the Problem of Scientific Credit, by Till Düppe and E. Roy Weintraub (Princeton University Press, 2014), EP made a serious mistake, combining one misfortune with another and blaming both on Gérard Debreu, the Nobel laureate, who died in 2004.
Robert Anderson, of the University of California at Berkeley, wrote, “I was astonished to read the following statement in the August 11 [EP] article:”
Further details had emerged, including an astonishing fact: the anonymous referee, who bottled UP McKenzie’s submission to Econometrica for a critical time, while Arrow and Debreu tidied up their proof, was none other than Debreu himself; and Debreu hadn’t disclosed his conflict of interest to the editor, Robert Solow. Debreu’s conduct was thus revealed as having been dishonorable.
The chronology of the book makes it clear that it was [Leonid] Hurwicz and [John] Nash who held up the publication by failing to provide timely referee reports. The chronology states that Solow requested a referee report from Debreu on October 5, 1953; that on December 14, Strotz communicated to McKenzie that the reports were favorable and that Debreu submitted his final referee report recommending publication on December 17, 1953. That is fast refereeing by any standard.
Furthermore, it indicates that on May 1, 1953, Solow noted the similarity
between McKenzie’s paper and that of Arrow and Debreu. So Solow was fully aware of the situation when he asked Debreu to referee the paper. Debreu, however, did fail to notify Solow of the overlap between the Arrow-Debreu and McKenzie papers.
I believe a correction is in order.
To buttress his case, Anderson attached excerpts from the chronology compiled by Düppe and Weintraub. Here it is.
March: Submits his paper to Econometrica; Strotz sends it to Nash and Hurwicz to referee.
April 9: Submits to Solow an extension of his existence proof for the summer Econometric Society meeting in Kingston, Rhode Island.
May 1: Solow acknowledges McKenzie’s letter and notes the similarity between his paper and that of Arrow and Debreu
Arrow and Debreu:
June 9: Paper is received by Strotz at Econometrica; Strotz sends it to Georgescu-Roegen, associate editor, to find referees, who forwards it to Baumol and Phipps
June 9: Strotz tells McKenzie he is re-prodding the referees.
June 23: Strotz admits to McKenzie that there were failures in the referee process for his paper
August 6: Strotz tells McKenzie that the referees for his paper have been removed and begins looking for new referees.
August 17: Hurwicz, original referee for the McKenzie paper, delivers his report and Strotz says he already has a second referee in place
October 5: Debreu gets a request from Solow to referee the McKenzie article
December 14: McKenzie learns that the two reports on the paper are in and positive and that the paper will be likely accepted
December 17: Debreu sends his final referee report about McKenzie to Strotz
McKenzie: April: McKenzie’s paper appears in Econometrica
Arrow and Debreu: July: Paper appears in Econometrica
EP erred in asserting that Debreu stalled the acceptance of McKenzie’s paper and regrets an embarrassing error. The argument of the August 11 weekly, however, is not much affected. There are other issues of scientific conduct, chiefly Debreu’s failure to apprise Arrow after he heard McKenzie’s presentation of an existence proof on December 29 1952. There will, of course, be many careful reviews of the book.
So, too, does EP regret having given so little space to Düppe and Weintraub’s arguments about “the problem of scientific credit,” the phrase which anchors their sub-title and supplies the rationale for having turned two journal articles into a general-interest book. That problem has only become more vexatious since the introduction, in 1969, of a Nobel Prize for economic sciences. That is why anyone concerned with the allocation of credit should read Finding Equilibrium.