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Trygve Haavelmo

Trygve Haavelmo at Cowles Commission, University of Chicago in March 1947.

Trygve Magnus Haavelmo was born in Skedsmo near Oslo in 1911. In 1930 he entered the University of Oslo and obtained a degree in economics in 1933. He had studied under Ragnar Frisch and began upon graduation as one of many assistants at Frisch’s newly founded Institute of Economics. In 1935 he was appointed head of computations (chief computor) at the Institute. In the autumn term 1936 Haavelmo studied at the Department of Statistics, London University College with Jerzy Neyman and Egon Pearson. In the spring of 1938 he made a study tour to Berlin, Geneva (Jan Tinbergen) and Oxford (Jakob Marschak). In the academic year 1938-1939 Haavelmo was a lecturer in statistics at the University of Aarhus. In June 1939 Haavelmo left for the U.S. on a study trip meant to last 1 to 1 1/2 years. In 1940-41 Haavelmo had a Rockefeller Fellowship in New York and spent at Harvard University and travelling around. In 1942-1944 Haavelmo worked as a statistician at Nortraship’s office in New York, and in 1944-46 as Commercial Secretary at the Norwegian Embassy in Washington, D.C. In 1943-44 Haavelmo also completed and got published the work that gave a new foundation for econometrics and for which he 45 years later would be awarded the Nobel Prize in Economic Sciences.

In the dissertation, "The Probabililty Approach in Econometrics", Haavelmo introduced a probabilistic foundation for analysis of economic relations. Haavelmo is particularly known for his work with identification problems and analysis of simultaneous economic equations. His ideas provided an important input for the research activity at the Cowles Commission in Chicago where modern econometric methods were developed. Haavelmo worked at the Cowles Commission from 1946 until he returned to Norway in March 1947.

In Norway Haavelmo worked as head of a division under the Ministry of Finance, an important position and strenuous in coordinating and implementing the post-war planning regime. He was appointed professor of economics and statistics in March 1948 and remained so until retirement in 1979. The Nobel Prize came as a surprise ten years later, and was the first Nobel Prize awarded for econometric work.

Haavelmo had profound theoretical interests, especially in applied macroeconomics. He was drawn upon as an expert both officially as a member of expert panels and informally. In 1960 he published the book "A Study in the Theory of Investment", a subject that had preoccupied him since he studied Wicksell and Keynes in the 1930s, and which he found unsatisfactory treated in the Keynesian literature with regard to the supply side of the capital goods market. Some years earlier in 1954 he had published the book "A Study in the Theory of Economic Evolution," which was innovative in terms of methodological approach to economic development issues. Both of these monographs comprised innovative ideas that others brought forward and to some extent got credited for.

Haavelmo's lectures in economic theory for over 30 years put a strong mark on the Norwegian economic-theoretical thinking. He often based the lectures on a critical assessment of prevailing perceptions. The lectures covered a wide field of topics including the equilibrium theory, employment theory, inflation and growth. Towards the end of his career he took up the environmental consequences of economic development, and the need for mechanisms that can limit emissions.

More on Haavelmo can be found in the links below.


Sources

Moene, Karl Ove and Asbjørn Rødseth (1991). Nobel Laureate Trygve Haavelmo, Journal of Economic Perspectives. 5(3), 175-192.

The Nobel Memorial Prize in Economics 1989, Scandinavian Journal of Economics. 92(1) (1990), 25-30.

Bjerkholt, Olav (2006). Trygve Haavelmo - Economics, 1989, in Norwegian Nobel Prize Laureates - From Bjørnson to Kydland, Universitetsforlaget.

Bjerkholt, Olav (2005). Frisch's econometric laboratory and the rise of Trygve Haavelmo's Probability Approach, Econometric Theory. 21(3), 491-533.

Bjerkholt, Olav (2007). Writing "the probability approach" with nowhere to go: Haavelmo in the United States, 1939-1944, Econometric Theory. 23(5), 775-837.  

Bjerkholt, Olav (2008). Trygve Haavelmo's visit in Aarhus 1938-39, Nationaløkonomisk tidsskrift. 146(1), 66-88.

Bjerkholt, Olav (2010). The “Meteorological” and the “Engineering” Type of Econometric Inference: a 1943 Exchange between Trygve Haavelmo and Jakob Marschak, Memorandum 07/2010.

Bjerkholt, Olav (2011). Trygve Haavelmos økonometriske rundreise 1933-47.
En Nobelpris blir til
, Foredrag i Statsøkonomisk Forening, 19. september 2011.

Anundsen, André K., Tord S. H. Krogh, Ragnar Nymoen and Jon Vislie (2011).
Overdeterminacy and Endogenous Cycles: Trygve Haavelmo's Business Cycle Model and Its Implications for Monetary Policy, Memorandum 03/2011.

Anderson, Theodore W. (1991). Trygve Haavelmo and Simultaneous Equation Models, Scandinavian Journal of Statistics. 18(1), 1-19.

Christiansen, Vidar and Asbjørn Rødseth (2000), In Memoriam: Trygve Haavelmo, 1911-1999, Scandinavian Journal of Economics. 102(2), 181-191.

The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1989.

Recent writings on Haavelmo

Anundsen, André K., Tord S. H. Krogh, Ragnar Nymoen, Jon Vislie (2011): Overdeterminacy and endogenous cycles: Trygve Haavelmo’s business cycle model and its implications for monetary policy, Memorandum 03/2011.