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And yet it rocks! Fluctuations and growth in Ragnar Frisch's rocking horse model

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  • Vincent Carret

    (TRIANGLE - Triangle : action, discours, pensée politique et économique - ENS de Lyon - École normale supérieure de Lyon - UL2 - Université Lumière - Lyon 2 - IEP Lyon - Sciences Po Lyon - Institut d'études politiques de Lyon - Université de Lyon - UJM - Université Jean Monnet - Saint-Étienne - CNRS - Centre National de la Recherche Scientifique)

Abstract

Ragnar Frisch's famous "rocking horse" model has been the object of much praise and even controversy since its publication in 1933. In this paper, we propose a new simulation of the trajectories of the model to clarify those controversies and show that there exists cyclical solutions for a large set of parameters. By building an analytical solution that takes the same form as Frisch's original solution, we are also able to provide new insights into the ideas that he encapsulated in his model. In particular, we show that the author tried to construct a model that would combine both cycles and growth. Finally, the exploration of Frisch's formal construction of the model leads us to link his statistical work on the decomposition of time series with the construction of the 1933 model.

Suggested Citation

  • Vincent Carret, 2020. "And yet it rocks! Fluctuations and growth in Ragnar Frisch's rocking horse model," Working Papers halshs-02969773, HAL.
    • Handle: RePEc:hal:wpaper:halshs-02969773
    Note: View the original document on HAL open archive server: https://hal.science/halshs-02969773v3
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    References listed on IDEAS

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    1. Michaël Assous & Vincent Carret, 2020. "(In)stability at the Cowles Commission (1939–1948)," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 27(4), pages 582-605, July.
    2. Michaël Assous & Vincent Carret, 2020. "(In)stability at the Cowles Commission (1939-1948)," Post-Print halshs-02934177, HAL.
    3. Louca, Francisco, 2001. "Intriguing Pendula: Founding Metaphors in the Analysis of Economic Fluctuations," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 25(1), pages 25-55, January.
    4. Samuelson, P. A., 1974. "Remembrances of Frisch," European Economic Review, Elsevier, vol. 5(1), pages 7-23, June.
    5. Dupont-Kieffer, Ariane, 2012. "The Accelerator Principle At The Core Of Frisch’S 1933 Rocking Horse Model," Journal of the History of Economic Thought, Cambridge University Press, vol. 34(4), pages 447-473, December.
    6. Olav Bjerkholt & Ariane Dupont, 2010. "Ragnar Frisch's Conception of Econometrics," History of Political Economy, Duke University Press, vol. 42(1), pages 21-73, Spring.
    7. Henry Ludwell Moore, 1921. "Generating Cycles of Products and Prices," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 35(2), pages 215-239.
    8. Boumans, Marcel, 1995. "Frisch on testing of business cycle theories," Journal of Econometrics, Elsevier, vol. 67(1), pages 129-147, May.
    9. Stefano Zambelli, 2007. "A Rocking Horse That Never Rocked: Frisch's “Propagation Problems and Impulse Problems”," History of Political Economy, Duke University Press, vol. 39(1), pages 145-166, Spring.
    10. Mauro Boianovsky & Hans-Michael Trautwein, 2007. "Johan Åkerman vs. Ragnar Frisch on Quantitative Business Cycle Analysis," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 14(3), pages 487-517.
    11. Muriel Dal-Pont Legrand & Harald Hagemann, 2019. "Impulses and Propagation Mechanisms in Equilibrium Business Cycles Theories: From Interwar Debates to DSGE "Consensus"," GREDEG Working Papers 2019-01, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    12. Edward C. Prescott, 2006. "The Transformation of Macroeconomic Policy and Research," The American Economist, Sage Publications, vol. 50(1), pages 3-20, March.
    13. Edward C. Prescott, 2006. "Nobel Lecture: The Transformation of Macroeconomic Policy and Research," Journal of Political Economy, University of Chicago Press, vol. 114(2), pages 203-235, April.
    14. Jens Christopher Andvig, 1981. "Ragnar Frisch and Business Cycle Research During the Interwar Years," History of Political Economy, Duke University Press, vol. 13(4), pages 695-725, Winter.
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    Cited by:

    1. Vincent Carret, 2023. "The Emperor Has No Clothes: A Reply to Ginoux and Jovanovic," Working Papers halshs-03948122, HAL.
    2. Vincent Carret, 2021. "Rupture and continuity in the original divide between micro-dynamics and macro-dynamics," Working Papers halshs-03242180, HAL.
    3. Michaël Assous & Vincent Carret, 2021. "Relaxation oscillations in the early development of econometrics: coming (almost) full circle (1929-1951)," Working Papers halshs-03206795, HAL.
    4. Michaël Assous & Vincent Carret, 2021. "The hidden side of Jan Tinbergen’s approach to economic policy (1934-1944)," Working Papers halshs-03133125, HAL.
    5. Carret, Vincent, 2023. "The Emperor Has No Clothes: A Reply To Ginoux And Jovanovic," SocArXiv xt4qd, Center for Open Science.

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