The years of high econometrics: A short history of the generation that reinvented economic

This book is an essay in biography and its subject matter is the collective effort of that brilliant generation of economists who aspired to transform economics into a rigorous science. The powerful econometric movement took shape in the 1930s, the years of high theory – the concept that Shackle used to describe the period of the inception of the Keynesian revolution, a period that cannot be thoroughly understood unless both movements are contrasted. In a sense, both the Keynesian revolution and the econometric revolution shared the same motivation: to extend the empirical capacity of economics, broadening its analytical scope and strengthening its capacity for designing a control policy. As the story unfurls, it becomes obvious that the young econometricians with Keynesian leanings were more radically engaged in such a task than the Cambridge circle itself, and this was the profound reason for a great deal of the harsh criticism and disappointment that they faced. Furthermore, the acceptance of the epistemological primacy of a very peculiar type of simple mathematical formalism contributed to the marginalisation of some of the major theoretical alternatives developed in the first half of the century. Evidence shows that the endorsement of the urgent political agenda for action against unemployment and the dangers of war were instrumental in determining the victory of a specific mathematical drive, and that the econometric programme as it came to be conceived in these incipient years was shaped by this movement. As a consequence of its impact, econometrics became a tool for the reconstruction of neoclassical economics, which sought to be redescribed in the language of mathematical formalism and statistical inference and estimation, and simultaneously responsible for the decay of heterodox alternatives elsewhere. In that sense, modern economics was a tributary of that success.