DEFINITION of Trygve Haavelmo
Trygve Haavelmo was a Norwegian economist who won the 1989 Nobel Memorial Prize in Economics for his econometric research showing how economic theories can be tested and his analysis on simultaneous structures in economics. Much of his research focused on interdependence problems. Haavelmo also made contributions to predicting investment in a country, and used mathematical statistics to explain how some economic theories are actually misleading.
BREAKING DOWN Trygve Haavelmo
Trygve Haavelmo (1911-1999) studied under fellow Nobel laureate Ragnar Frisch and earned his Ph.D. in economics from the University of Oslo. Dr. Haavelmo was a professor at the University of Oslo from 1948 to 1979, and also worked for the Norwegian government's Maritime Fleet Administration, the Norwegian Embassy in the United States and the Cowles Commission. In addition, Haavelmo served as president of the Econometric Society.
Three of Haavelmo's publications were considered groundbreaking contributions to the field of econometrics. The first, The Probability Approach in Econometrics (1944), was his doctoral thesis that argued that methods used at the time in the discipline led to inaccurate results; instead, he presented a hypothesis that mathematics-based statistical analyses were superior to less rigorous analyses based on economic laws. A Study in the Theory of Economic Evolution (1954) laid a foundation for subsequent research into the possible reasons for economic underdevelopment of a particular country compared to other countries. The third piece of influential work was another book, A Study in the Theory of Investment (1960), which discussed theories on the demand for real capital and slow adjustment process of the capital in impacting economic development.