Econometric Methodology at the Cowles Commission: Rise and Maturity

Considering the contribution of the Cowles research institute to the development of econometrics, one has little choice in this address and must mainly focus attention on one major achievement, namely, the building of the simultaneous equation methodology. One does not need to demonstrate the indisputable fact that this methodology was conceived and elaborated at the Cowles Commission in the forties. Neither does one need to insist on the long standing significance of this achievement nor on its central place in any education or reflection concerning statistical inference about economic phenomena. More interesting is the question of how research at Cowles during the first 15 years of its existence led to this result and how further econometric research here during the last 30 years relates to the simultaneous equation achievement. Also relevant is the following question: how does the message that was sent out by the Cowles people to the world in 1950 stand today? Should it be replaced by another different one? Or should it simply be somewhat amended and supplemented?To do full justice to the research work and achievements of the many econometricians that were associated with Cowles through the years would require a much longer paper than the present one. But one must at least try also to summarize here those main concerns that stood outside the simultaneous equation methodology.