Trygve Haavelmo

Trygve Haavelmo, in full Trygve Magnus Haavelmo was a Norwegian Economist who pioneered an aspect of economics, which is known as economic forecasting. He is one of the eminent figures in the discipline of economics and is reckoned as a genius in the field of econometrics. His main interest lies in econometrics and economic theory. He had received the Nobel Prize in economics for his contribution towards the discipline. [br]

Trygve Haavelmo, in full Trygve Magnus Haavelmo was a Norwegian Economist who pioneered an aspect of economics, which is known as economic forecasting. He is one of the eminent figures in the discipline of economics and is reckoned as a genius in the field of econometrics. His main interest lies in econometrics and economic theory. He had received the Nobel Prize in economics for his contribution towards the discipline. [br]

Life and Career

Haavelmo took birth in Skedsmo in Norway on 13 December 1911. He started off his career as a student at the University of Oslo under the supervision of Ragnar Frisch. Haavelmo was a brilliant student and hence received the scholarship under the Fulbright Program and went to US in the year 1939. He stayed in US till 1947. During his stay in US he spent much of his time at the Cowels Commission. Haavelmo returned to Oslo and landed up a job in the Trade Department and eventually the University of Oslo where he taught till 1979 roped him in.

Contribution to Economics

During his sojourn in USA he wrote his seminal dissertation entitled “The Probability Approach in Econometrics”. In this thesis he elaborated that many of the methods used in economics were misleading. Previously economics did not acknowledge the interaction of multiple economic relations and that economic laws are not rigorous.

In his dissertation Haavelmo introduced a new approach to estimate economic relations employing mathematical statistics. His provided the foundation and opened up new vistas in the arena of estimating complicated economic relations. After this path breaking innovation he turned towards economic theory. At that time he was also involved in teaching the students in the University of Oslo. He wrote a book entitled “A Study in the Theory of Economic Evolution”, which contained a study on the causes of underdeveloped economy of a specific country in comparison to other countries.

Haavelmo also contributed to the Theory of Investment. He wrote another book entitled, “A Study in the Theory of Investment” in which he talked on the demand for real capital, the reluctance in the modification of the real capital. His work has inspired several studies on investment behavior. There are other treatises written by Haavelmo on environmental economics, which have also inspired further research work. Many theories have developed based on his treatise. [br]

Haavelmo contribute to the other areas of economics as well. He introduced a new approach in the Business Cycle Theory. He was also instrumental in creating the “Balanced Budget Multiplier Theorem”.

Haavelmo has not only been a researcher but also an amazing teacher to his students. He has been the role model for all of his students and has been able to motivate them to pursue economics as their field of interest.

Achievements of Haavelmo

Haavelmo received the coveted Nobel Prize in economics in 1989 for clarifying the foundation of the probability theory of econometrics and his analyses of economic structures.

Major Works of Haavelmo
He has written many books. Some of them are:

• A Study in the Theory of Economic Evolution
• A Study in the Theory of Economic Relation
• A Study in the Theory of Investment He died on 26 July 1999 leaving the entire gamut of work to the future economists.

Books by Trygve Haavelmo

• A study in the theory of economic evolution (Contributions to economic analysis)
• A study in the theory of investment (Studies in economics of the Economic Research Center of the University of Chicago)
• The Probability Approach in Econometrics. Supplement to Econometrica, Volume 12, July, 1944

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