The Cowles Commission for Research in Economics is an economic research institute, founded in Colorado Springs by the businessman and economist Alfred Cowles in 1932. In 1939, the Cowles Commission moved to the University of Chicago under the directorship of Theodore O. Yntema. Jacob Marschak 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 in 1955 (where it was renamed the Cowles Foundation). Economics (deriving from the Greek words οίκω [okos], house, and νέμω [nemo], rules hence household management) is the social science that studies the allocation of scarce resources to satisfy unlimited wants. ... A research institute is a establishment endowed for doing research. ... Colorado Springs is a middle-sized city, located just east of the geographic center of the state of Colorado in the United States. ... A businessman (sometimes businesswoman, female; or businessperson, gender neutral) is a generic term for a wide range of people engaged in profit-oriented enterprises, generally the management of a company. ... Alan Greenspan, former chairman, United States Federal Reserve. ... Alfred Cowles (15 September 1891, 28 December 1984) was an American economist, businessman and founder of the Cowles Commission. ... Year 1932 (MCMXXXII) was a leap year starting on Friday (the link will display full 1932 calendar) of the Gregorian calendar. ... Year 1939 (MCMXXXIX) was a common year starting on Sunday (link will display the full calendar) of the Gregorian calendar. ... The University of Chicago is a private university located principally in the Hyde Park neighborhood of Chicago. ... Jacob Marschak (* 23 July 1898 Kiev, Ukraine; † 27 July 1977 Los Angeles, USA) was an American economist of Ukrainian origin. ... Year 1943 (MCMXLIII) was a common year starting on Friday (the link will display full 1943 calendar) of the Gregorian calendar. ... 1948 (MCMXLVIII) was a leap year starting on Thursday (the link is to a full 1948 calendar). ... Tjalling Charles Koopmans (August 28, 1910–February 26, 1985) was the joint winner, with Leonid Kantorovich, of the 1975 Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel. ... The University of Chicago is a private university located principally in the Hyde Park neighborhood of Chicago. ... “Yale” redirects here. ... Year 1955 (MCMLV) was a common year starting on Saturday (link displays the 1955 Gregorian calendar). ...

As its motto (Science is Measurement) indicates, the Cowles Commission was dedicated to the pursuit of linking economic theory to mathematics and statistics. Its main contributions to economics lie in its creation and consolidation of two important fields: general equilibrium theory and econometrics. A motto (from Italian) is a phrase or a short list of words meant formally to describe the general motivation or intention of an entity, social group, or organization. ... Economics is the social science studying production and consumption through measurable variables. ... Euclid, Greek mathematician, 3rd century BC, as imagined by by Raphael in this detail from The School of Athens. ... A graph of a normal bell curve showing statistics used in educational assessment and comparing various grading methods. ... General Equilbrium (linear) supply and demand curves. ... Econometrics literally means economic measurement. It is a combination of mathematical economics and statistics. ...

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.^[1]

Several Cowles associates have won Nobel prizes for research done while at the Cowles Commission. These include Tjalling Koopmans, Kenneth Arrow, Gerard Debreu, James Tobin, Franco Modigliani, Herbert Simon, Lawrence Klein, Trygve Haavelmo and Harry Markowitz. Nobel Prize medal. ... Tjalling Charles Koopmans (s-Graveland, August 28, 1910 – New Haven, February 26, 1985) was the joint winner, with Leonid Kantorovich, of the 1975 Nobel Prize in Economics. ... Kenneth Joseph Arrow (born August 23, 1921) is an American economist, joint winner of the Nobel Prize in Economics with John Hicks in 1972, and the youngest person ever to receive this award, at 51. ... Gerard Debreu was a naturalized US citizen from France Gerard Debreu (July 4, 1921 – December 31, 2004) was a French economist and mathematician (In July 1975, he became a naturalized citizen of the United States). ... For the convicted Republican political operative, see James Tobin (political operative). ... Franco Modigliani (June 18, 1918 – September 25, 2003) was an Italian-American economist at the MIT Sloan School of Management, and winner of the Nobel Memorial Prize in Economics in 1985. ... Herbert Alexander Simon (June 15, 1916 – February 9, 2001) was an American political scientist whose research ranged across the fields of cognitive psychology, computer science, public administration, economics, management, and philosophy of science and a professor, most notably, at Carnegie Mellon University. ... Lawrence Robert Klein (born September 14, 1920) is an American economist. ... Trygve Magnus Haavelmo (13 December 1911 – 26 July 1999), born in Skedsmo, Norway, was an influential economist with main research interests centered on the fields of econometrics and economics theory. ... Harry Max Markowitz (born August 24, 1927) is an influential economist at the Rady School of Management at the University of California, San Diego. ...

Notes

• ^  Christ, Carl F. 1994. “The Cowles Commission Contributions to Econometrics at Chicago: 1939-1955” Journal of Economic Literature. Vol. 32.

External links

• Cowles Foundation at Yale
• Source HET