Gerhard Tintner and Oswaldo Dávila · 1965
Tintner and Dávila’s research article presents a highly aggregated Keynesian model for long-term economic forecasting in Ecuador. It proceeds from a defense of econometric planning to model specification, estimation using 1950–1961 data, projections for 1964–1968, and calculations of policy-sensitive elasticities. Its central claim is that coherent development policy requires explicit models connecting economic theory with observed national conditions.
En otras palabras, la planificación requiere el uso de modelos econométricos.
English translation: In other words, planning requires the use of econometric models.
This assertion follows a contrast between the irregular, crisis-prone development of industrialized countries and the possibility of more deliberate growth in poorer economies. Planning promises to reduce the waste associated with historical trial and error. Mathematics, statistics, and economic theory together make assumptions explicit and permit forecasts of alternative policies and unforeseen changes. The authors nevertheless make statistical limitations central to their choice of method:
La elaboración de modelos desagregados, dada la mala calidad y escasez de información disponible, introduce con frecuencia errores de magnitud, con la consecuencia de que no se logra una descripción adecuada de la realidad del país cuya estructura se trata de reproducir con el modelo.
English translation: The elaboration of disaggregated models, given the poor quality and scarcity of the information available, frequently introduces errors of magnitude, with the consequence that no adequate description is obtained of the reality of the country whose structure one is attempting to reproduce with the model.
Aggregation is therefore a practical response to unreliable evidence, not simply a preference for formal simplicity. The article’s ambition rests on matching analytical complexity to the available data.
Es un modelo muy modesto. Consta solamente de 5 ecuaciones, de las cuales 3 son básicamente definiciones y solamente 2 tratan de reproducir el comportamiento de la economía ecuatoriana, considerando el sistema económico en el nivel más agregado posible.
English translation: It is a very modest model. It consists of only 5 equations, of which 3 are basically definitions and only 2 attempt to reproduce the behaviour of the Ecuadorian economy, considering the economic system at the most aggregated level possible.
The system combines a consumption function, a national-income identity, an employment relation derived from marginal productivity theory, a Cobb–Douglas production function, and capital accumulation with depreciation. Output, private consumption, wages, employment share, and capital are endogenous; gross investment and the aggregate of government consumption plus exports minus imports are exogenous. This distinction turns a description of economic interdependence into an instrument for examining changes in expenditure and investment.
Using national accounts and planning-agency population estimates, the authors estimate consumption through reduced-form equations fitted by least squares. They report a marginal propensity to consume of 0.57. Production estimation follows a method attributed to Klein and incorporates an exponential time trend:
El coeficiente de regresión de $t$ (0.00739) corresponde como logaritmo al número 1.017 y representa un aumento medio de la tendencia exponencial de la producción de aproximadamente 1.7 %, lo que puede explicarse por el progreso técnico.
English translation: The regression coefficient of $t$ (0.00739) corresponds as a logarithm to the number 1.017 and represents an average increase in the exponential trend of production of approximately 1.7 %, which may be explained by technical progress.
Technical progress thus enters as a possible interpretation of the trend rather than as an independently measured mechanism. The ensuing projections, expressed per inhabitant at 1960 prices, report average growth rates of 2.8 percent for output, 1.5 percent for consumption, and 8.1 percent for investment.
The concluding elasticity calculations provide the article’s most direct planning application. As reported, a one-percent increase in investment raises output by approximately 0.33 percent and consumption by slightly more than a quarter percent, while reducing the employment share and increasing wages. An equivalent increase in government consumption plus net exports produces similar output and consumption responses but raises employment and lowers wages. The conceptual payoff is that expenditure changes with comparable aggregate effects can imply sharply different labor-market outcomes.
The authors finally separate government consumption, exports, and imports to estimate their individual output effects. Some displayed equations and numerical interpretations are inconsistent, particularly the import elasticity, so the reported magnitudes warrant caution. The article’s enduring relevance lies in its compact demonstration of how a data-constrained planning model can connect national accounting, behavioral estimation, forecasts, and comparative policy effects without claiming a detailed representation of the economy.
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