Published online by Cambridge University Press: 07 October 2026
Chapter 3 explores the history of macroeconometric modeling, which emerged in Norway and the Netherlands in the 1930s and became a crucial tool in business forecasting after World War II. By enabling economists to simulate policy interventions and compare different future scenarios, macroeconometric modeling strengthened both policymakers’ and economists’ agency. While policymakers were entrusted with the responsibility to choose and engineer the “optimal” future, economists played a crucial role in shaping the realm of possible futures and limiting it. This led to a paradoxical situation where the future became both more open and more narrow. The development of macroeconometric modeling reignited hopes in the planning capabilities of individuals, prompting economists to question whether the business cycle was “obsolete” in the 1960s. However, the crises of the 1970s revealed the limitations of previous econometric approaches, leading to experimentation with new methods and a reevaluation of the role of econometric modeling in economic research. Despite this, macroeconometric modeling remained an indispensable tool for economic forecasting and decision-making.
To save this book to your Kindle, first ensure no-reply@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.
Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.
Find out more about the Kindle Personal Document Service.
To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.
To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.