DEFINITION of Jan Tinbergen
Jan Tinbergen is a Dutch economist who won the first Nobel Memorial Prize in Economics in 1969, which he shared with Ragnar Frisch for their work in the development and application of dynamic models for analyzing economic processes. Tinbergen was one of the first economists to apply math to economics and is considered a pioneer in the economics field, as well as in econometrics.
BREAKING DOWN Jan Tinbergen
Born in The Hague in The Netherlands in 1903, Tinbergen attended the University of Leiden and defended his PhD thesis in 1929 on “Minimization problems in Physics and Economics,” a thesis which allowed him to engage a cross-disciplinary approach to his further research in mathematics, physics, economics and politics.
He was then tapped by The Netherlands Central Bureau of Statistics to become the chairman of a new department of business surveys and mathematical statistics, a position in government that he held until 1945. During that period, he also became a professor of mathematics and statistics at the University of Amsterdam and at the Netherland School of Economics. During that time, from 1936-1938, Tinbergen also was a consultant to the League of Nations, filling positions in government and education simultaneously.
In 1945 he became the first director of The Netherlands Bureau for Economic Policy Analysis and left this position in 1955 to focus on education and spent a year at Harvard University. He also served as an economic consultant to a host of developing nations, including United Arab Republic, Turkey, and Venezuela.
Throughout his career, Tinbergen was interested in the issues of income distribution in a culture, and the phrase “Tinbergen Norm,” arose from a theory he pursued that a society that has a larger than 5 to 1 gap between the lowest income and the highest income, insurmountable social issues would occur.
Influence of 'Jan Tinbergen'
Tinbergen helped to develop the field of econometrics and developed multi-equation models of national economies that were a precursor to today's computer-driven economic forecasts. His research focused on macroeconomics, business cycles and economic development. He also developed the idea that governments must use multiple policy instruments if they want to impact multiple policy targets. This is based on the idea that if policy makers have certain targets they wish to reach, they must have an equal number of instruments that they control in order to effectively direct policy towards the targets. This is akin to saying that if you want to shoot five deer (targets) you have to have at least five bullets (instruments.) Understanding these types of models can help policy makers aim for targets that are relational to the instruments they control.
An innovator in macroeconomic modeling, Tinbergen developed the first comprehensive macroeconomic model, first for the Netherlands and then exported to the United Kingdom and the United States. In the course of his career, he authored several important texts for the field of economics, including The Dynamics of Business Cycles: A Study in Economic Fluctuations. Chicago: U of Chicago Press, 1974