ABSTRACT
Fifty years have passed since Keynes was asked to review a book prepared by Tinbergen for the League of Nations. Keynes saw “a mass of unintelligible figurings” in the econometric study without “the slightest explanation or justification of the underlying logic” (Letter to Kahn of August 23, 1938). The book was found “grievously disappointing.” Keynes’ published review of “Professor Tin-bergen’s Method” (1939) reflects his severe disappointment and it expresses serious doubts concerning the application of multiple correlation techniques to complex economic problems. Tinbergen (1940a, b) responded with a clarification of his approach and illustrated the further use of econometrics in business-cycle research. But he left many of Keynes’ objections unanswered. Letters from the two principals and from Harrod (clarifying Keynes’ position) have been reprinted in Moggridge (1973). Now some ambiguities and poorly-expressed portions of Keynes’ review can be put aside and the principal criticisms of econometrics can be reassessed from a more modern perspective that recognizes some of the subsequent changes in methodology.
