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Ragnar Frisch's Axiomatic Approach in Econometrics

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  • Olav Bjerkholt

    (Department of Economics [Oslo] - Faculty of Social Sciences [Oslo] - UiO - University of Oslo)

  • Ariane Dupont

Abstract

Ragnar Frisch's concept of econometrics was broader in scope than the more restricted connotation it has today as a sub-discipline of economics, it may be more properly rendered as a reconstruction of economics along principles inspired and drawn from natural sciences. In this reconstruction an axiomatic approach played a key role. In his 1926 essay, Sur un problème d'économie pure, Frisch set out what may have been the first axiomatic approach towards modelling consumer behaviour. Frisch's axiomatic approach was driven by two ambitions. The general aim was to argue in favour of using axiomatics as a basis for theorizing in economics, not least for the modelling of individual behaviour. A more specific ambition was to provide a basis for a quantitative notion of marginal utility. In 1933 Frisch presented an extended set of axioms for quantifying utility in a lecture series in Paris. The lecture series was supposed to be published, but Frisch failed to submit a final version of the manuscript and the lectures were never published. The set of axioms has been retrieved from Frisch's archival remains and is presented here for the first time. Frisch returned yet another time to the same topic when he attended a research conference at Cowles Commission in 1937. He presented then a more general choice-field theory, the core of which was a system of axioms for individual behaviour, published only as a (long) abstract. After this latter attempt Frisch's interest in explicitly axiomatization seem to have waned, although his promotion of axiomatics in economics is related to other methodological innovations that he promoted, such as the use of structural equations for modelling micro-and macroeconomic systems, and the use of structured interviews as a source of information when passive observations fail to provide a basis for estimating relationships. As a national accounting pioneer Frisch also argued for an axiomatic approach towards national accounting.

Suggested Citation

  • Olav Bjerkholt & Ariane Dupont, 2007. "Ragnar Frisch's Axiomatic Approach in Econometrics," Post-Print hal-01081715, HAL.
    • Handle: RePEc:hal:journl:hal-01081715
    Note: View the original document on HAL open archive server: https://hal.science/hal-01081715
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    References listed on IDEAS

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    1. E. H. Phelps Brown, 1934. "Notes on the Determinateness of the Utility Function: I," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 2(1), pages 66-69.
    2. D. Wade Hands, 2006. "Integrability, Rationalizability, and Path-Dependency in the History of Demand Theory," History of Political Economy, Duke University Press, vol. 38(5), pages 153-185, Supplemen.
    3. Philip Mirowski & D. Wade Hands, 2006. "Introduction to Agreement on Demand: Consumer Theory in the Twentieth Century," History of Political Economy, Duke University Press, vol. 38(5), pages 1-6, Supplemen.
    4. Abram Burk, 1936. "Real Income, Expenditure Proportionality, and Frisch's "New Methods of Measuring Marginal Utility"," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 4(1), pages 33-52.
    5. Frisch, Ragnar, 1992. "Statics and dynamics in economic theory," Structural Change and Economic Dynamics, Elsevier, vol. 3(2), pages 391-401, December.
    6. Harro Bernardelli, 1934. "Notes on the Determinateness of the Utility Function: II," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 2(1), pages 69-75.
    7. Jevons, William Stanley, 1871. "The Theory of Political Economy," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number jevons1871.
    8. Paul A. Samuelson, 1937. "A Note on Measurement of Utility," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 4(2), pages 155-161.
    9. O. Lange, 1934. "The Determinateness of the Utility Function," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 1(3), pages 218-225.
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    Cited by:

    1. Dagsvik, John K, 2017. "Invariance Axioms and Functional Form Restrictions in Structural Models," Memorandum 08/2017, Oslo University, Department of Economics.
    2. Dagsvik, John K., 2018. "Invariance axioms and functional form restrictions in structural models," Mathematical Social Sciences, Elsevier, vol. 91(C), pages 85-95.
    3. André Lapidus, 2019. "David Hume and Rationality in Decision-Making: A Case Study on the Economic Reading of a Philosopher," Post-Print hal-01831901, HAL.

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    More about this item

    Keywords

    axiomatics; Ragnar Frisch; econometrics; marginal utility; demand curves; index numbers; national accounts JSL classification: 2;
    All these keywords.

    JEL classification:

    • B23 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Econometrics; Quantitative and Mathematical Studies
    • B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory

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