Econometric Methods in Short-term Planning: the Norwegian Lesson

Ragnar Frisch, the spiritual father of the generation of Norwegian economists to which I belong, had a favourite idea which he returned to often in the early post-war years. As he saw it, scientifically based economic planning in Norway — and Frisch was very much for scientific planning — would have to develop as the result of joint efforts by three centres: university economists would provide the theoretical tools, economists at the Central Bureau of Statistics would organise data to fit the theory and turn the theoretical tools into workable models, and finally, the group of economists within the Ministry of Finance responsible for planning would put the models to practical use. As we shall see, this vision by Frisch proved to be a fairly accurate anticipation of what was later actually to happen. Even today, macroeconomic planning in Norway is organised pretty much according to the pattern he foresaw.