His main focus is in quantitative economics. He is a strong proponent of Econometrics, in fact, at the 1954 David Novick Symposium, he proclaimed that "nonmathematical contributions to economics are fat, sloppy, and vague." In regard to econometrics he believes "that economic life is enormously complicated and that the successful model will try to build in as much of the complicated interrelationships as possible. That is why I want to work with large econometric models and a great deal of computer power. Instead of the rule of parsimony, I prefer the following rule: the largest possible system that can be managed and that can explain the main economic magnitudes as well as the parsimonious system is the better system to develop and use."

The following is Klein's opinions on economic policy:

"Whether a professional economist should get involved in policy is a matter of taste and personality. There is much to be said for remaining detached, independent, and purely scholarly or academic. Also, there are degrees of involvement in policy making for an economist; some may be directly and formally involved by virtue of official appointments in both the public and private sectors. Others may be only informally involved through giving advice, if requested, and writing on policy issues. Some have to be actual policy makers; I prefer to have a sense of detachment and serve only informally as a policy person when requested. As far as public policy is concerned, I believe that we have duties and responsibilities to act in pro bono publico servicing of the economy. There is obvious self-satisfaction in seeing one's own efforts being put to use. That, in itself, should be a motivating factor in bringing economists into the policy arena. In addition, some economists want to be involved in a public policy process because they support the general notion of activist, interventionist decision making in order to guide the economy on a good path, i.e., a path of stable equilibrium growth along which economic improvement takes place. Others may want to be involved in order to block activist policy, but that is definitely not to my tastes. I do encounter such activity frequently.

Philosophically, I do not believe that the market system, in even its purest form, provides adequate self-regulatory responses. The economy definitely needs guidence-even leadership-and it is up to professional economists to provide public policy makers with the right information to deliver such leadership. As for the methods of doing this, I see no alternative to the quantitative approach to econometrics, but I do realize that all policy issues are not quantitative and measurable. At times, subjective decisions must also be made....Econometric information, to be useful in policy formation, must be detailed. In many instances partial analysis of specific industries, markets, or decision processes will fit the policy need, but in general we need to move in the direction of preparation of large-scale complex systems in order to help policy makers. In this respect, significant advances in computer technology and the provision of detailed information through associated telecommunications processes are making it ever more possible to push econometrics in the direction of serving policy makers."

Works by Lawrence R. Klein :

• My Professional Life Philosophy, Eminent Economists: Their Life Philosophies, by Michael Szenberg
  

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