The book contains a collection of articles reprinted from the Special Issues of the Indian Journal of Applied Economics published in the reverential memory of Jan Tinbergen in three parts. This work will be of immense value to professors, researchers and students of Economics who are interested in Tinbergen's writings and the areas in which he was interested.

There are 20 articles in this book authored by leading Economists in the world including Paul A. Samuelson, Franco Modigliani, L.R. Klein, the Nobel Laureates in Economics and many distinguished Economists from all parts of the world. 

As years roll by, the contributions of certain economists looming larger and larger, the appreciation for them becomes more and more universal. People then start paying more and more attention to the researches and contributions of and about their personal lives and ideals. The honour they had received recede into the background and the world goes on seeking more and more guidance for their theoretical and practical ideals from the writings of such eminent economists. All economists in the world agree, that JAN TINBERGEN would be the current coin even for the distant future.

This eminent economist, Tinbergen, was attracted by economics who was otherwise a physicist with a view to work towards the betterment and well-being of mankind. His vision was long and engulfed both the rich and poor countries. Scholars from different realms, the affluent and underdeveloped were treated equally by him. Throughout his life, he never felt he was above others. He always stretched his warm and welcoming hand to struggling scholars all over the world.

Tinbergen who is considered as the Father of Econometrics shared the first NOBEL PRIZE in ECONOMICS in 1969 along with Ragner Frisch. These economists who were instrumental for starting the International Econometric Association have contributed along with many other economists, who are now Nobel Laureates, to the development of economics and econometrics and made it a perfect science but for which the Royal Swedish Academy would not have recognised 'ECONOMICS' as a science, deserving the Nobel Prize. In this context, the contributions of Paul A. Samuelson to economics is outstanding. He has done his mighty efforts in revolutionising the theories in economics, and has played a pivotal role in upholding and establishing the Keynesian theories. He has been called the "AMERICAN KEYNES." After the revolutionary book: 'Value and Capital' by J.R. Hicks (Translated by me into a leading Indian language. Kannada, and released by J.R. Hicks himself in 1980), the Keynesianism was further researched and upheld by Paul A. Samuelson which got strengthened by the contributions of Franco Modigliani and others. Many researchers in the United States, followers of Samuelson like Robert M. Solow have also contributed largely in this line. These efforts by American eminent economists led by Paul A. Samuelson added stimulus to the Keynesian concepts, so much so that the "General Tfteory of Employment, Interest and Money" of Keynes born in England was almost transferred to the United States for further contributions on that classic work and the contribution of the British on Keynes has almost been relegated to the background. I have tried to narrate this just to impress upon the fact that the Applied Economics for which Econometrics is the basis was first flagged off by Jan Tinbergen and it was Samuelson who later had really done greater work in this area of economics. Keynesian theories of unemployment, interest and money, though had its beginning in the United Kingdom, the real aftermath development of it was made in the United States, thanks to the leadership of Samuelson and his followers. The researches are still a continuing process which is going Jan Tinbergen was fond of me, thanks to a small monograph which I wrote in 1977 on the contributions of Nobel Laureates in Economics. He sent his appreciation through his letter dated 13th July 1977 in which he had said, referring to my that humble work: "/ think you give an encyclopaedic survey of the work by these economists and appear to have studied an enormous volume of literature. Your descriptions of the works ofKuznets and Myrdal will be very useful to many economists and also laymen. It is of course less simple to inform a general audience about men like Koopmans or Frisch, since their work is mathematically oriented and not easy to make accessible to the general reader. I want also to thank you for the kind words you write about me." It is this first letter which established love and affection between Tinbergen and myself. Later on, a number of my works which he saw were primarily the result of his inspiration, follow up and guidance. In the same letter, he had informed me that: ".I took advantage of what you write about your work and your own State. I hope you will be able to contribute by the project valuation and economic development of your country which is so important. Since you are energetic and have been successful in your studies you may make a considerable contribution."

What my guide and philosopher, Jan Tinbergen, had professed in his letter almost came true as years rolled on. Some works (atleast important ones) are highlighted by Tinbergen in his Foreword to my work: "Nobel Economists—Lives and Contributions' in three volumes (1995). It is great of this immortal person, who gave real shape to this work of mine published in a set of three volumes and it looks as if it was his departing blessing as it were which cannot be forgotten in my present life, nay, future lives too. In his Foreword, he has described that work "as a landmark in the history of economic thought," He has also described me as "One of the brilliant economists of the day." I do not know whether a humble man like me could accept these high appreciations but will certainly remain with gratitude for this recognition all through my life. It also shows how Tinbergen's milk of kindness, profound affection and love towards me grew by leaps and bounds for over three decades. In an another work of mine, 'Econometric Models: Techniques and Applications', Tinbergen in his Foreword has said that: "this good book does not need any explicit recommendation ... The book reflects the high status of India in the world being the developing country in the non-Communist world; in the way the USA is by far the largest developed nation among the developed and China in the (Ex) Communist group of countries. This book consists of an impressive set of economic thinking in applied versions."

On my monograph on 'Nobel Economists' (1977), while Kenneth J. Arrow had said: "a very useful service", Milton Friedman had said: "I appreciate the book 'NobelEconomists'. The article there on me is certainly accurate and fair." It is these and many appreciations and support that led me on to the task of rewriting about the lives and contributions of all the Nobel Economists under the kind guidance of Jan Tinbergen. Further, Tinbergen who had agreed to be a Member of Indian Journal of Applied Economics replied my letter little late. Therefore, being a person of utmost courtesy and humane in nature, he wrote to me thus: "Excuse me for this late answer. I had very many letters to answer. But, of course, I stick to my promise and shall be glad to be a Member of the Editorial Advisory Board of Indian Journal of Applied Economics" (January 3, 1992). He went on following up my works and used to write to me quite often and was very prompt in his replies. It is very painful to read his letter of June 7, 1994, a letter written two days earlier to his passing away. In that letter he promised me that he would soon send an article on 'World Government' which I did on. not receive. I quote from the letter: "You will soon receive copies of my article on ' World Government '.Am I still endebted on other issues ? Please let me know.'' This last letter among the innumerable ones I have received pains me because he could not complete his article on 'World Government' and has asked me whether he had not kept up all his promises. Where do we get such an eminent person with that humane and humble character? Soon after I came to know about his passing away, I decided to bring out a 'Special Issue' of Indian Journal of Applied Economics in his reverential memory and wrote to many professors in various universities in the Netherlands and to all eminent economists in the world who were close with Tinbergen or familiar with his work or in the areas in which he was interested. The response to my request was spontaneous and articles are still coming which have to be used in later issues of the Journal. The life and contributions of Jan Tinbergen are covered in greater detail in Chapter II of Volume I of my book 'Nobel Economists—Lives and Contributions'. Therefore, I have not elaborated these aspects here.

There are in all 20 papers in this book. Of these 20 papers, 9 papers have focussed on Tinbergen's life and contributions. The other papers are research papers on Tinbergen's work or relate to the areas in which he was interested.

The first paper by Paul A. Samuelson is a tribute to Jan Tinbergen in which he calls him as "One Exact Match for Economics and Physics." Franco Modigliani's paper is based on Tinbergen Lecture at Frankfurt. There are four papers reproduced with permission of the authors and the original publishers. Since the papers speak for themselves, I need not elaborate on these papers. I wish to express my gratitude to all the contributors. Paul A. Samuelson, the Institute Professor Emeritus, MIT, Cambridge and the first American Nobel Laureate has helped me a lot by sending his paper so willingly and in such a short time. This shows his regard to Prof. Jan Tinbergen. I am extremely grateful to him for this paper. Similarly, Franco Modigliani, the Nobel Laureate, spontaneously agreed for publishing his revised version of the Frankfurt paper. I wish to express my gratitude to Modigliani for his continued support.

A number of economists from the Netherlands, United States and Australia in particular have taken keen interest. I wish to record my appreciation and thanks to all contributors and professors. Papers from P. de Wolff and T.J.M. van der Linden of the University of Amsterdam, Peter Terhal, Centre for Development Planning, Erasmus University, and L.R. Klein, University of Pennsylvania, the Nobel Laureate, have been included. These papers which have been published earlier in the Journal: 'Review of Social Economy' have been reprinted with permission. I am grateful to John B. Davis, Marquette University and Editor, 'Review of Social Economy' for his kind and spontaneous permission to reprint these papers from his Journal (December 1988). I also wish to thank Prof. Jacques J. Polak, Prof. Per Jacobson Foundation, International Monetary Fund Washington and Jacob J. Krabbe, Professor, Department of Economics, Wageuingen Agricultural University, The Netherlands for their contributions. My sincere thanks are to J. Kol, Erasmus University. I will be failing in my duty if I do not record my appreciation to the unstinted support given by Anthonie Knoester and Arnout H.E.M. Wellink. Anthonie Knoester, Erasmus University, also President of the Royal Netherlands Economic Association suggested that his paper published in 'Tinbergen Lectures on Economics Policy' may be reproduced which shows how much Tinbergen was attached to the Association. This article explains the role Tinbergen had played for developing that Association. I am thankful to the co-author Arnout H.E.M. Wellink for his willingness to republish this article. On my request Anthonie Knoester hastened to gel the permission from Joop Dirkmatt, Elseviere/North Holland for republication of the article 'Tinbergen and the Royal Netherlands Economic Association'. I am thankful to Joop Dirkmatt for his cooperation and speedy action. I wish to record my appreciation and gratitude to John B. Davis, Marquette University and Editor, 'Review of Social Economy' for his permission to reproduce the articles by L.R. Klein, Peter Terhal, P. de Wolff, T.J.M. van der Linden which came as a suggestion and spontaneous permission to reprint in this book.

I take this opportunity to specially express my gratitude to Samuelson, Modigliani and L.R. Klen, the Nobel Laureates who have contributed their papers. I will be failing in my duty if I do not record the moral support of P.R. Brahmananda, former Professor of Economics, University of Bombay, India A number of Nobel Laureates and eminent economists have expressed their inability to contribute either on the ground of their health difficulties or pre-occupation. However, they have conveyed their regards to Jan Tinbergen. These Laureates who have conveyed their best wishes are Milton Friedman, Robert M. Solow, Kenneth J. Arrow, Gerard Debreu, Harry M. Markowitz, Douglass C. North, Herbert A. Simon, William F. Sharpe, Gary S.Becker, and Trygve Haavelmo. The other economists to be mentioned for their support and timely suggestions are Patricia Mackins, Teun Kloek, Gunnar Bramness, M.M.G. Fase, Svend Hylleberg, Prof. Dr. J.S. Cramer, Mary S. Morgan, Prof. Dr. Herman K. van Dijk, and John Lodewijks. Many editors of international Economic Journals have helped me to complete this work. They are John D. Hey, 'The Economic Journal', David Hendry, 'Oxford Bulletin of Economics and Statistics', Wojuech W. Charemza, 'Economics of Planning', John B. Davis, Marquette University and Editor, 'Review of Social Economy' and Anthonie Knoester, President of the Royal Netherlands Economic Association for all their cooperation and support. I also wish to record my grateful thanks to S.K. Kuipers, Editor, ‘De Economist' for his interest and support.

Tinbergen was a natural worldcitizen. He showed how mutual economic coperation would benefit each of the countries as well as all of them. He extended this vision to the whole world. If a World Government comes to existence in course of time and all human beings become equal citizens in that arrangement, Tinbergen's dream would have been fulfilled. That so many contributors from so many countries have partaken in this humble commemorative enterprise is an augury for the possibilities for which Tinbergen lived. The papers contained in this book are reprinted from the three issues of Volume 5 of the Indian Journal of Applied Economics which are Special Issues in reverential memory of Jan Tinbergen.

                                                                                       K.Puttaswamaiah 

Preface v
List of Contributors xiii
1. Tribute to Jan Tinbergen: One Exact Match for Economics                   1
and Physics
—Paul A. Samuelson
2. The European Unemployment Crisis: A Monetarist Keynesian            17
Approach and Its Implications
—Franco Modigliani
3. Tinbergen's Economic Writings: Main Characteristics                          41
—J. Kol
4. Early Testing of Macroeconomic Theories before Tinbergen                55
—Robert W. Dimand
5. Carrying Forward the Tinbergen Initiative in Macroeconometrics        69
—L.R. Klein
6. Tinbergen in World Peace: A Comparative Historical Perspective        91
—P. Terhal
7. Jan Tinbergen: A Quantitative Economist                                          107     
—P. de Wolff and J. T.J.M. van der Linden
8. Tinbergen and the Royal Netherlands Economic Association             121
—Anthonie Knoester and Arnout H.E.M. Wellink
9. Financial Intermediation and Economic Development                        143
—Nicholas A. Lash and Bala Batavia
10. Development Cooperation in the Twenty-first Century:                  161
Suggestions for a New Framework
—Keith Griffin and Terry McKinley
11. A Reinterpretation of 'External Economies' in the Context              183
of Economic Development
—Ismail Shariff
12. A Semi-Input-Output Analysis of Australian Comparative
Advantage                                                                                            193
—Neil Dias Karunaratne
13. Economic Thought in the Netherlands: The Contribution of Prof.    211
Jan Tinbergen
—J.TJ.M. van der Linden
14. Spatio-Temporal Variations in Employment Growth Rates of          225
Dutch Firms
—Cess Goner, Peter Nijkamp and Michiel De Bruijn
15. A Composite Target Function for Predictions in Econometric          253
Models
—AnilK. Srivastava andShalabh
16. Memories of Jan Tinbergen: The Geneva Years
----Jacques. J. Polak                                                                             259
17. Jan Tinbergen,In Memoriam
----Jacob J. Krabbe                                                                               263
18. Why is Poverty Rate Higher in Rural India?
----B.N. Ghosh                                                                                      267
19. Remembering Tinbergen as a Noble Economist
----P.R.Brahmananda                                                                           279
20. The Concept of Development:Its Dialects and Dynamics
----P.Jegadish Gandhi                                                                          283

THE HINDU

TUESDAY, JUNE 17, 1997

HUMANIST SAINT
TINBERGEN AND MODERN ECONOMICS — The Nobel Economist Saint: Edited by K. Puttasw-maiah; Indus Publishing Company; FS-5, Tagore Garden, New Delhi-110027.

Jan Tinbergen (1903-94) shared the first Nobel Prize for Economics in 1969 with Ragnar Frisch. an award that was conferred on them largely in recognition of their contributions to the emerging science of econometrics. It was also a recognition by the Royal Swedish Academy that economics had come of age, and was the only, social science that merited status on a par with the physical sciences. Though Tinbergen made seminal contributions to econometrics, his interests were wide-ranging, and the problems of the developing countries were close to his heart. He looked forward to the time when the yawning gulf between the developing and the developed world would disappear, and all peoples of the world would live in peace under a democratic world government. Since he was not only a great economist but also a fine human being, he was greatly admired and loved. Hence the sub-title. In 1969, at the time of his Stockholm triumph, Samuelson hailed him as a "humanist saint".

There are in all 20 papers in the book, nine of which focus on Tinbergen's life and contributions. The other papers either relate to his work or to areas of his interest. Several leading economists in the world including Paul A. Samuelson, Franco Modi-gliani and L. R. Klein, Nobel Laureates in Economics, and many distinguished economists from different parts of the world have contributed to this volume. Actually these articles originally appeared in special issues of the Indian Journal of Applied Economics, and have been thoughtfully assembled together in this volume.

Tinbergen gravitated into economics from physics, unable to resist the analytical and humanitarian temptations of economics. In a brilliant homage to him, Samuelson has provided an immigration model in economics that matches closely a thermodynamics model which equalises subsystems' temperatures and pressures. Tinbergen would have greatly enjoyed "this repast cooked up in his honour".

Franco Modigliani's paper deals with the European unemployment crisis, where since 1982 unemployment has been uniformly above nine per cent on the average. The problem has become serious and complex, he notes, due to the existence of "real" in contrast to Keynes "nominal wage rigidity", and in part due to the new top priority assigned to price stability. He suggests that the appropriate policy response should be not to leave wage contracts entirely in private hands, but to ensure that these are subject to negotiations involving labour, employers, government and the unemployed.

L. R. Klein's paper contains some interesting ideas on carrying forward the Tinbergen initiative in mac-roeconometrics. J. Kol's paper analytically examines the main characteristics of Tinbergen's writings, which encompass six broad areas — economic dynamics and business cycles; economic policy, theory and models; international economics and economic integration; economic development; income distribution and the economic order. Kol's paper concentrates on the four main characteristics of Tinbergen's work — policy relevance, measurement, balance and learning from experience. Measurement, according to Tinbergen was central to the vocation of science, the retreat of subjectivism and the simultaneous advance of objectivity. He defined measurement as representation by numbers, cardinal or ordinal. His doctoral dissertation in 1929, "Minimum Problems in Physics and Economics", already expressed his conviction that quantitative methods could be fruitfully applied to the solution of economic problems. He sadly noted in 1973 that "for some queer and deplorable reason most human beings are more impressed by words than by figures, to the great disadvantage of mankind."

There are a number of other substantive articles in the book, among which the following may be mentioned. An article by Keith Griffin and Terry McKin-ley contains suggestions for a new international framework for development cooperation. Ismail Sha-riff provides a re-interpretation of external economics in the context of economic development. In a paper on rural poverty, B. N. Ghose argues that rural poverty has been aggravated by the transfer of rural resources through the mechanisms of unfavourable terms of trade, transfer of rural savings, agricultural taxation and rural skill drain. A paper by Jagdish Gandhi subjects the concept of development to a searching re-examination. Altogether this is gn enduring tribute to an outstanding economist and great human being. The volume could have been enriched by a bibliography of Tinbergen's writings and a subject index.

ASIAN ECONOMIC REVIEW

December, 1996
Vol.XXXVIII No. 3

TINBERGEN AND MODERN ECONOMICS: THE NOBLE ECONOMIST SAINT, By K Puttaswamaiah, Indus Publishing Company, New Delhi, 1996, pp. xxi+311

This is the 36th publication of the noted Professor Puttaswamaiah, Previously of the University of Mysore and presently the Editor-in-Chief, Indian Journal of Applied Economics, noted for excellent Articles. Professor Puttaswamaiah appears saintly himself like his idol the Late most distinguished Professor Jan Tinbergen, the first recipient of the NoblePrize for Economics in 1969, whose humanism and economics are legendary across the globe. It is noble economists like Tinbergen who humanise the 'dismal science of economics' and bring it close the lives of the commonalty and share their joys and sprrows.

Professor Puttaswamaiah had warm relationship with the saintly Tinbergen and this book is his great homage to the revered memory of reverend memory of the memorable Tinbergen. Professor Puttaswamaiah earns the gratidue of any number of economists and others all over through this marvellous collection of Essays by the living greatest of economics in honour and memory of Tinbergen, his economics and his ever lasting contribution to the great science of economics. The Editor's exertions are writ large on the pages of the volume from the first to the last. The gurushisya, master-pupil, like relationship of Tinbergen and Puttaswamaiah is examplary. May this inter-continental relationship set a new trend in the economists' relationship, universally. Tinbergen appears not only a model economist but also a model humanist of the highest mould. His was a most brilliant and benign figure and intellect. He was an intensely family and personal personality.

To take up the task on hand, "There are in all 20 papers in this book. Of these 20 papers, 9 papers have focussed on Tinbergen's life and contributions. The other papers are research papers on Tinbergen's work or relate to the areas in which he was interested" (p.viii).

This collection on our times 'Adam Smith should adorn each and every private and public collection of economics books. One hopes one of these Puttaswamaiah would bring a companion volume to the volume-a Guide to Tinbergen or a Reader on Tinbergen for the benefit of the ignoramuses or economic illiterates like the present reviewer, and Puttaswamaiah, as a noted Tinbergen scholar worldover, is best suited to undertake the assignment.

The homagers team is headed by the inimitable Professor PaulA Samuelson, the greatest living economist. lie calls Tinbergen a "humanist saint". Samuelson thinks that Tibergen's was an enlightening mind which could disentangle hard theorems like the factor price equalization. Professor Samuelson illustrates the example of Tinbergen as an example of the match between Economics and Physics, to which discipline Professor Tinbergen originally belonged. Samuelson sets the right tone to the volume. Franco Modigliani writes on "The European Unemployment Crisis: A Monetarist-Keynesian Approach and Its Implication", which explains the grim unemployment situation calls for a Keynesian solution to it with the freeze of nominal wages for a time, which however is difficult to get accepted on the familiar Keynesian grounds. The third Note is "Tinbergen's Economic Writings Main Characteristics" by J Kol. Tinbeegen's Notes number 1100 and span Six broad areas: Business Cycles, Economic Policy, International Economics, Economic Development, Income Distribution and the Economic Order. If anything, he was not dogmatic and for final solutions believing in sythesis. "In answering criticism on the convergence theory Tinbergen (1972-2) makes it very clear that the search for a sythesis is something very different from seeking a compromise. Compromise is horse-trading or even jobbery" (p.47) Robert W Diamand in "Early Testing of Macroeconomic Theories Before Tinbergen" and Tinbergen's contribution-in the field is said to be, from the previous correlation analyses and testing, the use of Keynes criticised 'ordinary least squares to estimate a simultaneous equation model' (p.63). In "Carrying Forward the Tinbergen Initiative Macroeconometrics" L.R. Klein observes, "Large systems of up to 1000 equations or even more are now in existence around the world..... They were spawned by Professor Tinbergen's work for the Dutch economy, the USA and the UK" (p.76). It is a different thing whether Tinbergen who lived through this phase himself had done any large modelling himself. There is today world modelling, all pioneered on the initial macroecnometric modelling of Tinbergen. They are minute, accurate and forecasting and policy serving, both formulation and correction, models today. Tinbergen's concerns were wide and varied, including World Peace, on which the Tinbergen-Fischer Model is dealt by P. Terhal. The model calls for a reorientation of current thinking from the narrow national confines to the global level. Thus, Tibergen was a citizen of the world. The next two Essays carry Tinbergen's Quantitative economics and his long association with the Netherlands Economic Association, and the next Note is "Financial Intermediation and Economic Development" N. A. Lash and Bala Batavia reviewing the debate between the financial liberalization and repression schools, from the choice of the hot word of'repression' the swing of the Note towards the liberalization school could be well anticipated. Keith Griffin - Terry Mckinley's futuristic "development Cooperation in the Twenty First Century: Suggestions for a New Framework", finding the current international economic order quite iniquitous, suggest a new or 21st century framework based on the fading foreign aid, thus making their futuristic framework a limping one even before the commencement of the new century. Ismail SharifFs " A Reinterpretation of 'External Economies' in the Context of Economic Development' is a good survey of the changing meaning and interpretation of 'EEs' from Marshall to Allyn Young to Rosenstein-Rodan and others to support his case for public investment in education, health, irrigation, transport, etc. In "A Semi-Input-Output Analysis of Australian Comparative Advantage" Neil Dias Karunaratne proves Australia's protectionist policies adversely affecting its trade prospects. Then, where is the much talked about the western concern for free or fair trade? It is well brought home that "Keynesian" rather than "Schumpeterian" entrepreneur dominate the Australian scene (p. 194). Tinbergen dominated the Dutch economic thought on economic policy for nearly six decades, all of which is well brought out J.T.J.M. vander Lindan. In "Spatio- Temporal Variations in Employment Growth Rates of Dutch Firms" Cees Gorter, Peter Nijkamp and Michiel De Bruijn bring out the fact of the suburban and innovative firms giving more employment than their urban and non-innovative couter-parts. In the Award won " Composite Target Function for Prediction in Econometric Models" Anil K Srivastava and Shalabh bring out" that the least squares procedure yield most efficient prediction for the average value of study variables outside the sample"(p.257).

The Essays by Jacque J Polak and Jacob J Krabbe are on Tinbergen's Geneva Netherland careers and contributions respectively, and Professor B.N. Gosh in his seminal Essay "Why is Poverty Rate Higher in Rural India?" notes the higher rate and dimensions of rural poverty (RP) in the country due to irrational allocation of resources without reference to their efficiency and productivity and the neglect of agriculture and other rural sector's. Dr Gosh's is a refreshingly a fresh approach He further finds both skill and capital drain from the countryside to towns, adding to the rural-urban income gap. The renowned Indian economist in his small but poignant Essay "Remembering Tinbergen as a Noble Economist" particularly notes his tilt towards LDCs and his pleading of their case for aid from the developed countries. Last but not the least is" The Concept of Development: Its Dialects and Dynamics by P. Jagadish Gandhi which traces the contents of development theory from the 9th century to the present and pleads for people's oriented development at the threshold of the 21st century.

Thus, by going through this excellent edited work of Dr Puttaswamaiah one goes through the seminal contribution of Tinbergen and the whole course of economics in the 20th century, which makes the publication a must for the multitude of economics' population.

Osmania University
Hyderabad                                                                              - J.S. Narayan Rao