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Anna Carabelli's avatar

In his 1939 discussion on Tinbergen's method in econometrics, Keynes comes back to his 1921 Treatise on Probability's question. Is statistics or econometrics a mere description of reality or is it a probable inference (prediction) and what are the assumptions implied passing from description to prediction. Keynes's judgement is that Tinbergen's method is fallacious and inappropriate to obtain a reasonable probable inference. Note that for Keynes, a reasonable probable inference does not mean a successful prevision. In a Treatise on Probability, Keynes quotes Herodotus, saying that if one make a decision foolishly and obtain something by mere luck (by mere success), this does not make the decision less foolish.

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