Obituary: Jan Tinbergen
Thursday 16 June 1994
JAN TINBERGEN and Ragnar Frisch were the first recipients of the Nobel Prize for Economics in 1969. Four years later Tinbergen's younger brother, Nikolaas, shared the Nobel Prize in Biology for his work on animal behaviour. His youngest brother, Luuk, was a Professor of Zoology. These facts begin to suggest the gifted academic family into which Jan Tinbergen was born in 1903.
After attending secondary school in The Hague, Tinbergen studied physics at the University of Leiden from 1922 to 1926, receiving his doctorate in 1929 with a thesis on the mathematics of minima and maxima as applied to physics and economics. He then joined a new unit for business-
cycle research in the Dutch Central Bureau of Statistics, where he remained until 1945, apart from a two-year interlude in which he worked for the League of Nations in Geneva. He also became a part-time lecturer in statistics at the University of Amsterdam in 1931, and a part-time professor at the Netherlands School of Economics (now Erasmus University) in Rotterdam in 1933.
Tinbergen threw himself into econometric research, attempting to test economic theories which were mathematically formulated, and soon found himself building econometric models of the entire economy. His first attempt to build such a model, containing 24 equations to describe the Dutch economy, was not published until 1936, 10 years after it was first conceived. It foreshadowed elements of Keynes's General Theory (1936), the post-war notion of the Phillips curve (a trade-off between inflation and unemployment) and even the idea of rational expectations associated with macroeconomic theories today.
The pioneering significance of this Dutch publication attracted no attention outside or even inside the Netherlands. Nevertheless, it led to Tinbergen being asked to test the various business-cycle theories which Gottfried Haberler had reviewed in his epoch-making book for the League of Nations, Prosperity and Depression (1937). The result was a two-volume work, Statistical Testing of Business Cycle Theories, the first volume of which focused entirely on investment activity and the second on the macroeconomic modelling of business cycles in the United States. Keynes wrote a scathing review of the first volume in the Economic Journal, which drew a polite reply from Tinbergen complaining that Keynes had totally misunderstood his econometric methods. Even the more down-to-earth second volume was greeted with general scepticism. The fact is that model-building of this type had to wait until the 1950s before it was to become truly respectable. Tinbergen, however, was not discouraged from his aims and went on to duplicate his earlier American model for the British economy in Business Cycles in the United Kingdom, 1870-1914 (1951).
During the German occupation of the Netherlands (1940-45), Tinbergen continued his research at the Central Bureau of Statistics. When the war ended in 1945, he was appointed Director of the newly established Netherlands Central Planning Bureau and turned his attention to the problem of policy making. On the Theory of Economic Policy (1952) and Centralisation and Decentralisation in Economic Policy (1954) were capped by Economic Policy: principles and design (1956), in which Tinbergen advanced the thesis that a government cannot achieve a set of quantitative targets (such as full employment, a stable price level, and balance of payments equilibrium) unless it employs an equal number of quantitative instruments (such as the level of government expenditure, the level of taxes, and the rate of growth of the money supply). The use of this framework was illustrated by examples of actual problems facing the Dutch economy, which served to drive home its practical import.
Economic Policy soon became one of Tinbergen's most widely read books and its message is now common parlance among policy- makers everywhere. It formed the basis for a number of Tinbergen's famous papers, proclaiming the imminent convergence of the economic systems of communist and Western countries. This looked like wishful thinking in the 1950s, then like inspired guesswork in the 1960s and in the fullness of time like another great economic prediction gone wrong.
In 1955 Tinbergen left the Central Planning Bureau to become a full-time Professor of Development Planning at the Netherlands School of Economics, after which he concentrated his activities on the problems of the Third World. He became an adviser to many developing countries, a consultant to various UN agencies, a chairman of the UN Committee for Development Planning from 1966 to 1975, and travelled and lectured to persuade others of the need for an ambitious international development policy designed to close the gap between poor and rich nations. These activities are only imperfectly reflected in a series of books, such as The Design of Development (1958), Mathematical Models of Economic Growth (1962), co-authored with Henk Bos, Econometric Models of Education (1965), again co-authored with Bos, Development Planning (1967), and Reshaping the International Order (1976).
In 1973 he became Professor of International Co-operation at the University of Leiden, retiring in 1975 with the publication of Income Distribution: analysis and policy (1975), an ambitious work which attempted to provide in one framework both a positive explanation of the personal distribution of income and a normative statement of an equitable income distribution. On balance, this work was not well received and yet it marks an amazing achievement to round off an amazing career.
Even this was not an end to the career. Further books on international peace and understanding appeared as late as 1987, Warfare and Welfare (with D. Fischer), and 1990, World Security and Equity.
There are Tinbergen Institutes in both Amsterdam and Rotterdam, postgraduate research centres at which Dutch students and visiting scholars engage in economic study and research. Their foundation is just one of the ways in which Dutch economists have paid tribute to Tinbergen's international reputation. He was the greatest economist that the Netherlands has ever produced. He was also, by the way, the nicest great economist that I have ever met.
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