Editor's Note
Author(s): Ragnar Frisch
Reviewed work(s):
Source: Econometrica, Vol. 1, No. 1 (Jan., 1933), pp. 1-4
Published by: The Econometric Society
Stable URL: http://www.jstor.org/stable/1912224 .
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EDITORIAL
Two YEARS have now elapsed since the foundingof the Econometric
Society. Althoughthe Society has purposelygiven little publicityto
its affairsduringthes;eyears of organization,inquiriesand suggestions
have come frommany quartersmanifestinga readinessfor,and a keen
expectationof,somethingalong the lines now followedby the EconometricSociety. A source of potential energy,much largerthan originally anticipated by the foundersof the Society, seems to exist,only
waitingto be released and directedinto econometricwork.
This is the reason why the Society has decided to establishits own
journal. ECONOMETRICA will be its name. It will appear quarterly;this
is the firstissue.
A word of explanationregardingthe term econometricsmay be in
order. Its definitionis implied in the statementof the scope of the
Society, in Section I of the Constitution,which reads: "The Econometric Society is an internationalsociety for the advancement of
economictheoryin its relationto statisticsand mathematics.The Societyshall operateas a completelydisinterested,
scientificorganization
withoutpolitical,social, financial,or nationalisticbias. Its main object
shall be to promotestudiesthat aim at a unificationof the theoreticalquantitative and the empirical-quantitativeapproach to economic
problemsand that are penetratedby constructiveand rigorousthinking similarto that whichhas come to dominatein the naturalsciences.
Any activitywhichpromisesultimatelyto furthersuch unificationof
theoreticaland factual studiesin economicsshall be withinthe sphere
of interestof the Society."
This emphasison the quantitativeaspect ofeconomicproblemshas a
profoundsignificance.Economic lifeis a complexnetworkof relationships operatingin all directions.Therefore,so long as we confineourselvesto statementsin generaltermsabout one economicfactorhaving
an "effect"on some otherfactor,almost any sort of relationshipmay
be selected,postulated as a law, and "explained" by a plausible argument.
Thus, thereexista real dangerof advancing statementsand conclusions which-although true as tendenciesin a very restrictedsenseare neverthelessthoroughlyinadequate, or even misleadingif offered
as an explanationofthe situation.To use an extremeillustration,they
may be just as deceptiveas to say that whena man triesto row a boat
forward,the boat will be drivenbackward because of the pressureexertedby his feet.The rowboatsituationis not, of course,explainedby
findingout thatthereexistsa pressurein one directionor another,but
2
ECONOMETRICA
only by comparingthe relative magnitudesof a numberof pressures
It is this comparisonof magnitudesthat gives
and counter-pressures.
a real significance
to the analysis. Many, ifnot most,of the situations
we have to face in economicsare of just this sort. The fullusefulness
of a large and importantgroup of oureconomic analyses will come,
therefore,
onlyas we succeed in formulatingthe discussionsin quantitative terms.
But there are several aspects of the quantitative approach to economics,and no single one of these aspects, taken by itself,should be
confoundedwitheconometrics.Thus, econometricsis by no means the
same as economicstatistics.Nor is it identical withwhat we call general economictheory,although a considerableportionof this theory
has a definitelyquantitative character.Nor should econometricsbe
taken as synonomouswiththe application of mathematicsto economics. Experience has shown that each of these three view-points,that
of statistics,economic theory,and mathematics,is a necessary,but
conditionfora real understandingofthe quannot by itselfa sufficient,
titative relationsin moderneconomic life. It is the unificationof all
threethat is powerful.And it is thisunificationthat constituteseconometrics.
This unificationis morenecessarytoday than at any previousstage
in economics.Statistical informationis currentlyaccumulatingat an
however
unprecedentedrate. But no amountofstatisticalinformation,
completeand exact, can by itselfexplain economicphenomena.If we
are not to get lost in the overwhelming,
bewilderingmass of statistical
data that are now becomingavailable, we need the guidance and help
of a powerfultheoreticalframework.Withoutthis no significantinterpretationand coordinationof our observationswill be possible.
The theoreticalstructurethat shall help us out in thissituationmust,
however,be moreprecise,morerealistic,and, in many respects,more
complex, than any heretoforeavailable. Theory, in formulatingits
abstract quantitative notions,must be inspiredto a largerextent by
the technique of observation.And freshstatistical and other factual
studies must be the healthy element of disturbancethat constantly
threatensand disquietsthe theoristand preventshim fromcomingto
rest on some inherited,obsolete set of assumptions.
This mutualpenetrationofquantitativeeconomictheoryand statistical observationis theessenceofeconometrics.And thereinlies theneed
formathematics,both in the formulationof the principlesof economic
theory,and in the technique of handlingthe statistical data. Mathematics is certainlynot a magic procedurewhichin itselfcan solve the
riddles of moderneconomic life, as is believed by some enthusiasts.
But, when combinedwith a thoroughunderstandingof the economic
EDITORIAL
3
significanceof the phenomena,it is an extremelyhelpfultool.Indeed,
this tool is indispensablein a great many cases. Many of the essential
thingsin the new settingof the problemsare so complexthat it is impossible to discuss them safely and consistentlywithout the use of
mathematics.
To stimulateworkin the directionshere indicatedis the purpose of
the Econometric Society and its journal ECONOMETRICA. EcoNoMETRICA willreporton research,teaching,scientific
meetings,and other
activitiesof econometricinterestin the various countries.It will publish originalpapers that are significant,directlyor indirectly,as contributionstowards the developmentof econometrics.The historyof
our subject willalso receiveattention.No effort
willbe made, however,
to preemptall the importanteconometriccontributions
forthe columns
of this journal. On the contrary,ECONOMETRICA will encourage,and
probably fromtime to time reporton, econometricpapers in all the
leading economicjournals of the world. The generalpolicy will be to
make ECONOMETRICA a clearinghouseforeconometricwork.
As time goes on, some formof cooperationmay perhaps develop.
ECONOMETRICA
may,forinstance,be readyto take overforpublication
papers that are so mathematicalas to be unsuitableforpublicationin
certainothereconomicjournals. Indeed, it willbe an editorialprinciple
of ECONOMETRICA
that no paper shall be rejectedsolelyon the ground
ofbeingtoo mathematical.This applies no matterhow highlyinvolved
the mathematicalapparatus may be.
This is not,ofcourse,to say that a paper willbe renderedacceptable
to ECONOMETRICA merelyby its employmentofmathematicalsymbols.
The policy of ECONOMETRICA will be as heartilyto denounce futile
playingwithmathematicalsymbolsin economicsas to encouragetheir
constructiveuse. And a considerableportionofthe materialappearing
in ECONOMETRICA will probablybe entirelynon-mathematical.
In statisticaland othernumericalworkpresentedin ECONOMETRICA
the originalraw data will,as a rule,be published,unless theirvolume
is excessive. This is importantin orderto stimulatecriticism,control,
and furtherstudies. The aim will be to presentthis kind of paper in a
condensedform.Brief,precise descriptionsof (1) the theoreticalsetting,(2) the data, (3) the method,and (4) the results,are the essentials.
At one time we consideredorganizingin ECONOMETRICA an extensive work on abstracts of econometricarticlesand books. However,
it was found that this would to some extent overlap the work done
by othereconomicjournals,and that ECONOMETRICA woulddo a greater
servicein organizingsurveysofthe significant
developmentswithinthe
main fieldsthat are of interestto the econometrician.Each year there
will appear in ECONOMETRICA foursuch surveys,one for each of the
4
ECONOMETRICA
followingfields: (1) general economic theory (includingpure economics), whichwill appear as a regularfeaturein the Januaryissue, (2)
business cycle theory,in the April issue, (3) statistical technique,in
in the Octoberissue.
the Julyissue, (4) statisticalinformation,
All these surveyswill be internationalin scope, but therewill be no
attemptto make them all-inclusive.On the contrary,they will be selective. Their aim will be to presentto the reader an appraisal of the
really significantdevelopmentsin the fieldsin question,thus being a
usefulguideforthosewho are interestedin thesefields,withouthaving,
perhaps, the time to followthe literatureclosely. There will be one
responsibleauthorforeach survey,who will seek, whennecessary,the
cooperationof specialists. The names of the authors of the firstfour
surveyswill be foundin the Section on Announcementsat the end of
this issue.
Complete freedomof thought will rule in the columns of ECONOMETRICA, and candid discussionon the surveysor on other material
appearing in its pages will always be welcome. To judge from the
stimulatingdiscussionsthat have taken place both at the European
and the Americanmeetingsof the Society, there is no danger of inbreedingof thought amongst econometricians.It is true that those
attending the meetingshave shown a veritable enthusiasmfor the
common cause, econometrics.But, togetherwith this communityin
general interest and attitude, there has been manifesta variety of
ideas and a franknessin mutual criticismthat guaranteethe broadness
and freshnessof the futurework. This vigorousspiritwill, no doubt,
be reflectedin the columnsof ECONOMETRICA.
ECONOMETRICA is presented to the public in the hope that it will be
able to do its full share in the constructiveworkmapped out by the
EconometricSociety.
EDITOR