Frisch, Ragnar 1895-1973
The Norwegian economist Ragnar Frisch was a dominant force in the development of economics during the inter-war period of the 1920s and 1930s. He pioneered the use of quantitative methods encompassing three fields of analysis: economic theory, mathematics, and statistics. Economists drew on these three areas to develop the specialized field of econometrics. Frisch continued to build this field of study after World War II (1939–1945) until his death in 1973. He was honored in 1969 with the Nobel Prize in Economics, which he received jointly with Jan Tinbergen (1903–1994) of the Netherlands, who was also a European pioneer in the field of econometrics.
Frisch’s main contributions were in developing statistical and mathematical analysis of several branches of economics. He estimated production and demand relationships, theoretical mathematical models of economic cycles, and systems of international trade. Together with Joseph Schumpeter (1883–1950) of Harvard, Irving Fisher (1867–1947) of Yale, and many other leading scholars from Europe and the United States, Frisch influenced Alfred Cowles (1891–1984) to help finance the launching in 1930 of the Econometric Society and in 1933 of its journal, Econometrica, which was to become a leading scholarly publication. The Econometric Society remains a strong international force in many branches of economics.
Tinbergen’s statistical models of the dynamic fluctuations of national or world economies constitute one path of econometric research that flourishes today, and Frisch’s theoretical economic models, statistical archives, and estimation methods form a different path for understanding the working of economic systems. Frisch’s model was, at an early stage, called an ecocirc system. It expanded a line of thinking that grew out of his celebrated article “Propagation Problems and Impulse Problems in Dynamic Economics” (1933), which shows how continuing external random shocks to an economy can propagate regular, maintained cycles that could otherwise fade away.
Students of Frisch became important in Norwegian and international organizations and institutions. Trygve Haavelmo (1911–1999), a favored student of Frisch, became a Nobel laureate in 1989. During the Great Depression, Frisch delivered radio addresses and published articles on economic policies to improve the Norwegian economy. His recommendations anticipated some of the proposals made by John Maynard Keynes (1883–1946) for the United Kingdom, the United States, and other European economies.
During World War II, Frisch was imprisoned in a German-controlled camp, Grini, where many intellectuals and senior Norwegian officials were held. Soon after his release, he visited the Cowles Commission at the University of Chicago, where Haavelmo and others were actively engaged in econometric analysis using many of Frisch’s ideas. Frisch turned his attention in the postwar years not only to Norwegian and international economic systems, but also to economic development problems of comparatively poor countries. During this time he visited India, where he interacted with Indian economists and political leaders. Frisch continued to work on his ecocirc system, training Norwegian students and colleagues to deal with expanded subsystems for an enlarged master plan, but he did not complete his overall project—to build a complete economic accounting and planning system. In a larger framework, after World War II, he was inspired by the input-output analysis of Wassily Leontief (1906–1999), the social accounting systems of Richard Stone (1913–1991), and international trade matrices developed at the United Nations, where he consulted on applied economic analysis. Frisch also maintained a deep interest in bee populations and felt that the development of bees and their products was helpful in understanding the economic development of human populations. He was proud of their fine honey output as well.
Arrow, Kenneth J. 1960. The Work of Ragnar Frisch, Econometrician. Econometrica 28: 175–192.
Frisch, Ragnar. 1933. Propagation Problems and Impulse Problems in Dynamic Economics. In Economic Essays in Honor of Gustav Cassel, 171–205. London: Allen and Unwin.
Frisch, Ragnar. 1947. On the Need for Forecasting a Multilateral Balance of Payments. American Economic Review 37 (September): 535–551.
Frisch, Ragnar, and Harald Holme. 1935. The Characteristic Solutions of a Mixed Difference and Differential Equation Occurring in Economic Dynamics. Econometrica 3 (2): 225–239.
Strom, Steinar, ed. 1998. Econometrics and Economic Theory in the 20th Century. For the 100th anniversary of the birth of Ragnar Frisch. Cambridge: Cambridge University Press.
Lawrence R. Klein