Econometric Models and Economic Planning and Policy: Some Trends and Problems

Abstract

If we use the term econometric models in a somewhat broad sense, then I think we can say that such models now play some part in connection with economic planning and policy-making “almost everywhere”. The roles they play, however, are different in different countries. On the one hand we have countries where the use of the models is integrated in the decision-making process itself in the relevant ministries or divisions of government. Sometimes in the past I have got the feeling that Norway has, in this respect, been a singleton, but this is probably not true. France may also be a case in point, and other countries have been developing in the same direction. On the other hand we have countries where the models are used mainly by independent agencies, private or public, but outside the decision-making process concerning national planning and policy. The United States may belong to this class. In such cases the use of econometric models will mainly be in the direction of forecasting, simulations of the historical development in order to find out about the influences of various factors such as elements of economic policy, exogenous influences of various sorts etc., and calculations of alternative conditional forecasts in order to elucidate possibilities in economic policy.