Economic Thought In The Netherlands: The Contribution Of Professor Jan Tinbergen∗

Abstract

Considering controversies about Macro-economic theory, and looking at conflicting economic policies put forward to cure our present eco? nomic ills, one cannot avoid feeling that we are suffering from a bad hangover. After we had in 'sixties, we are now afflicted by hangover of shaken confidence. Then, in 'sixties, we were convinced that we had at our disposal many good instruments to control business cycle and to regulate economy. And indeed, while Netherlands were gradually becoming a mixed economy in that period, i.e. were becoming a country with an economic system of regulated capital? ism in which serious economic slumps were no longer expected, fluctua? tions of business cycle remained restricted within reasonable limits. The new situation with which we are confronted since 'seventies casts doubt upon this optimism and makes a critical reassessment imperative. In this vein, for example, Professor Driehuis [1977, p. 39] blames Dutch government's current impotence to solve country's serious economic problems upon inadequacies of Macro-economic theory and practi? cal considerations of economic policy. Similarly, Professor Vermaat deplores lack of a consistent set of related Macro-economic hypotheses and too little attention to structural developments in comparison to attention devoted to cyclical oscillations in economic policies. The absence of a consistent set of related hypotheses comes to light in what is known as the models discussion, i.e. in controversies about explanatory powers and predictive reliability of economists' analytical instruments. This controversy rages on in spite of fact that with passage of time analytical instruments have become increasingly sophisticated and devel? oped from mainly short-term into rather complex vintage and medium-term models. [Vide: VINTAF II; Driehuis and Van der Zwan 1978, p. 268 seq.] Concerning practice, it is said that aims of economic policy have been too global and too ambitious to be realizable simultaneously. To this growing recognition must be added that market mechanism does not