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Saturday, May 20, 2017

Tjalling Koopmans: pioneer of optimization models


Photo source: Wikimedia Commons, Eric Koch


Tjalling Koopmans (1910-1985) was an influential economist best known for optimization models and applying linear programming to general equilibrium models. He was also director of the Cowles Commission (1948-1955) and is 1975 co-recipient of the Nobel Prize in Economics. The Concise Encyclopedia of Economics said,


"Koopmans showed the conditions required for economy-wide efficiency in allocating resources. He like Kantorovich, used his activity analysis techniques to derive efficient criteria for allocating between the present and the future."


Economist Thomas Sargent said,


"Koopmans complained that macroeconomic models weren't satisfactory because they didn't handle randomness." (Conversations with Economists by Arjo Klamer)


The rest of this post is some quotes from Koopmans.


Philosophy of economics


"One is led to conclude that economics as a scientific discipline is still somewhat hanging in the air." (Three Essays, 1957)


"We looked upon economic theory as a sequence of conceptual models that seek to express in simplified form different aspects of an always more complicated reality." (Three Essays, 1957)