Cowles Foundation

	Email		Print
	Bookmark		Link

Cowles Foundation

The Cowles Commission for Research in Economics is an economic research institute

Research institute

A research institute is an establishment endowed for doing research. Research institutes may specialize in basic research or may be oriented to applied research....
, founded in Colorado Springs in 1932 by Alfred Cowles

Alfred Cowles

Alfred Cowles, 3rd was an American economist, businessman and founder of the Cowles Commission. He was the grandson of Alfred Cowles, Sr.. He graduated from Yale in 1913....
, a businessman and economist. In 1939, the Cowles Commission moved to the University of Chicago

University of Chicago

The University of Chicago is a private university located principally in the Hyde Park, Chicago neighborhood of Chicago. Although an older university by the same name existed prior to its founding, the modern University of Chicago credits its founding to the oil magnate John D....
under the directorship of Theodore O. Yntema

Theodore O. Yntema

Theodore Otte Yntema was an United States economist.Yntema graduated summa cum laude in 1921 from Hope College as valedictorian. He received his master's degree from the University of Illinois in 1922....
. Jacob Marschak

Jacob Marschak

Jacob Marschak was an American economist of Russian Jewish origin....
took over as director in 1943 until 1948, when it was passed over to Tjalling C. Koopmans. Rising hostile opposition to the Cowles Commission by the department of economics at University of Chicago during the 1950s led Koopmans to convince the Cowles family to move it to Yale University

Yale University

Yale University is a private university in New Haven, Connecticut. Founded in 1701 as the Collegiate School, Yale is the Colonial Colleges institution of higher education in the United States and is a member of the Ivy League....
in 1955 (where it was renamed the Cowles Foundation).

As its motto (Science is Measurement) indicates, the Cowles Commission was dedicated to the pursuit of linking economic theory to mathematics and statistics.

Discussion

Ask a question about 'Cowles Foundation'

Start a new discussion about 'Cowles Foundation'

Answer questions from other users

Full Discussion Forum

Encyclopedia

The Cowles Commission for Research in Economics is an economic research institute

Research institute

Alfred Cowles

University of Chicago

Theodore O. Yntema

Jacob Marschak

Yale University

Econometrics

Econometrics is concerned with the tasks of developing and applying quantitative or statistical methods to the study and elucidation of economic principles....
.

The thrust of the Cowles approach was a specific, probabilistic framework in estimating simultaneous equations to model an economy. Its ultimate goal in doing so was to gain policy insight. The Cowles approach structured its models from a priori economic theory. One of its main contributions was in exposing the bias of ordinary least squares regression in identifying coefficient estimates. Consequently Cowles researchers developed new methods such as the indirect least squares, instrumental variable methods, full information maximum likelihood method, and limited information maximum likelihood method. All of these methods used theoretical, a priori restrictions. According to an article by Carl F. Christ the Cowels approach was grounded on the following assumptions: 1, simultaneous economic behavior; 2, linear or logarithmic equations and disturbances; 3, systematic, observable variables without error; 4, discrete variable changes as opposed to continuous; 5, a prior determination of exogeneity and endogeneity; 6, the existence of a reduced form; 7, independence of the explanatory variables; 8, a priori identified structural equations; 9, normally distributed disturbances with zero means, finite and constant covariances, a nonsingular covariance matrix, and serial independence; 10, a dynamically stable system of equations.

Several Cowles associates have won Nobel prize

Nobel Prize

The Nobel Prize , established in the 1895 will of Swedish chemist Alfred Nobel; it was first awarded in Nobel Prize in Physics, Nobel Prize in Chemistry, Nobel Prize in Physiology or Medicine, Nobel Prize in Literature, and Nobel Peace Prize in 1901....
s for research done while at the Cowles Commission. These include Tjalling Koopmans

Tjalling Koopmans

Tjalling Charles Koopmans was the joint winner, with Leonid Kantorovich, of the 1975 Nobel Memorial Prize in Economic Sciences.Koopmans was born in 's-Graveland, Netherlands....
, Kenneth Arrow

Kenneth Arrow

Kenneth Joseph Arrow is an United States economist and joint winner of the Nobel Memorial Prize in Economics with John Hicks in 1972. To date, he is the youngest person to receive this award, at 51....
, Gerard Debreu

Gerard Debreu

G?rard Debreu was a France economist and mathematician. In July 1975, he became a naturalized citizen of the United States. Best known as a professor of economics at the University of California, Berkeley, where he began work in 1962, he won the 1983 Nobel Memorial Prize in Economics....
, James Tobin

James Tobin

James Tobin was an United States economist. Tobin advocated and developed the ideas of Keynesian economics. He believed that governments should intervene in the economy in order to stabilize output and avoid recessions....
, Franco Modigliani

Franco Modigliani

Franco Modigliani was an Italian-American economist at the MIT Sloan School of Management and MIT Department of Economics, and winner of the Nobel Memorial Prize in Economics in 1985....
, Herbert Simon

Herbert Simon

Herbert Alexander Simon was an United States psychologist whose research ranged across the fields of cognitive psychology, computer science, public administration, economics, management, philosophy of science and sociology and was a professor, most notably, at Carnegie Mellon University....
, Lawrence Klein

Lawrence Klein

Lawrence Robert Klein is an American economics. For his work in creating computer models to forecast economic trends in the field of econometrics at the Wharton School of the University of Pennsylvania, he was awarded the Nobel Memorial Prize in Economic Sciences in 1980....
, Trygve Haavelmo

Trygve Haavelmo

Trygve Magnus Haavelmo was an economist with main research interests centered on the fields of econometrics and economics theory. During World War II he worked with Nortraship in the Statistical Department in New York City....
and Harry Markowitz

Harry Markowitz

Harry Max Markowitz is a professor at the Rady School of Management at the University of California, San Diego. He is best known for his pioneering work in Modern Portfolio Theory, studying the effects of asset risk, correlation and Diversification on expected investment portfolio returns....
.

Cowles Foundation

External links