Trygve Haavelmo Biography

Trygve Magnus Haavelmo was born on 13 December 1911 in Skedsmo, a municipal town located in Akershus County, Norway. His father, Halvor Halvorsen Haavelmoen, came from a farming background, but gave that up to pursue a career in teaching. His mother’s name was Jenny Eugenie Haavelmoen nee Gundersen.

Elder of his parents’ two children, he had a younger brother called Sverre, born in 1913. Little is known about their childhood except that they grew up in Strømmen, a municipal town located around twenty kilometer east of Oslo. He must have had his early education there.

Trygve had his secondary education at the prestigious Oslo Katedralskole. He received his examen atrium (school leaving certificate) from there in 1930.  Thereafter, he entered the University of Oslo (Then Royal Frederick University).

Initially he wanted to study either philology or some form of engineering. But at that time Norway was going through the Great Depression and he needed to finish his education as quickly as possible Therefore he chose economics, which could be completed within three years.

His curriculum required him to undertake some kind of research at the statistics seminars. His talent in field was noticed by one of his professors, Norwegian economist Ragnar Frisch, who had recently returned from the USA with the intention of setting up Institute of Economics at the University of Oslo.

In 1933, he earned his Candidatus oeconomices, a degree roughly equivalent to Master of Economics, from the University of Oslo. Immediately, he was offered the job of a research assistant at Frisch’s Institute of Economics.

In 1933, Trygve Haavelmo began his career as a research assistant at the Institute of Economics, remaining with the organization till 1938.  Because it was a private institute, funded by the Rockefeller Foundation and housed in the University premises, the job did not offer much in way of career prospects or security. 

Despite all the shortcomings, he quickly became an invaluable assistant to Frisch, helping him in his pioneering work with macroeconomic equations for cyclical fluctuations, spending the summer of 1934 proof-reading Frisch’s book, Confluence Analysis. Many of the calculations in that book had also been carried out by Haavelmo.

In 1934, he collaborated with Frisch on a commission from the Norwegian Brewers’ Association. Working together for eighteen months, they coined a new term, ølførhet to reflect a likely minimum beer drinking age and established that ”the demand elasticity for beer, given for the Norwegian market as a whole, lies around 1.65.”

In 1935, he was appointed head of Computation Department at the Institute of Economics.  in the same year, he first met Tjalling Koopmans, who spent the autumn at the institute.  Later Koopmans would become a source of inspiration to Haavelmo. 

All through, Trygve Haavelmo continued to assist Frisch, making large scale calculations, spending lot of time and energy on them. Concurrently, he also started transcribing many of Frisch’s important lectures on macroeconomic theory.

In September 1936, he attended, together with Frisch, the sixth European meeting of the Econometric Society, held in Oxford. Thereafter, he moved to London, meeting many important economists there, returning home sometime in December 1936.

While in London he was invited by Friedrich Hayek to participate in his seminars at the London School of Economics. It is also believed that he studied briefly at the Department of Statistics, London University College, where he met Jerzy Neyman.

1937, the institute took up a large-scale, government-supported project to investigate into the country’s economic opportunities, requiring Haavelmo to undergo an intensely busy period. In the same year, he published his first paper, Confluent Relations as a Means of Connecting a Macrodynamic Subsystem with the Total System, Abstract, Econometrica.

In December 1937, he traveled to Berlin, spending a month and half at the Institut für Konjunkturforschung in Berlin. Thereafter, he moved to Geneva where he had an opportunity to work alongside Jan Tinbergen at the League of Nations.

In April 1938, Haavelmo was in Paris, at the Department of Statistics of the Institut Henri Poincare. He spent the final three weeks of his European journey in Oxford with the brilliantly talented Jacob Marschak. He came back to Oslo in June 1938.

In the academic year of 1938 –1939, Trygve Haavelmo served as a lecturer in statistics at the University of Aarhus, Finland. In the spring of 1938, he also made a study tour to Berlin, Geneva and Oxford, meeting many important academics.  

In 1939, Trygve Haavelmo sailed for the USA on an academic scholarship, intending to return home within a year. But the occupation of Norway by the Nazi forces in April 1940 made it imperative that he remained in the USA, spending his initial years attending seminars and giving lecture.

His first stop in the USA was at Colorado Springs, where the Cowles Commission for Research in Economics was holding their 5th research conference from July 3 to July 28, 1939. Thereafter, he traveled west, studying with Jerzy Neyman at the University of California at Berkeley until November 1939.

In the spring of 1940, he traveled to New York to study Statistical theory at Columbia University; concurrently visiting the New School for Social Research in Greenwich Village. Also in 1940, he became a Rockefeller Scholar and started writing his most important work, The Probability Approach in Econometrics.

From July 1 to July 26, 1940, he attended another conference arranged by Cowles Commission for Research in Economics. Later, he wrote a report on it, entitled The Problem of Testing Economic Theories by Means of Passive Observations.

In 1941, he delivered the first version of The Probability Approach in Econometrics at the Harvard University. It was published three years later in an American periodical, Econometrica, and earn him his PhD from University of Oslo in 1946.

When his scholarship ended in 1942, he joined the Norwegian Shipping and Trade Mission as a statistician, remaining there till 1944.

In 1945, he served as the Commercial Attache, at the Norwegian Embassy in Washington, DC. All the while, he continued to publish multiple papers, including Multiple (Multiplier)2 Effects on Balanced Budget.  

In 1946, he was appointed a Researcher by Cowles Commission, which has by then moved to the University of Chicago. He worked with them till he returned to Norway in 1947. During his stay there, he published additional papers on the Multiplier Effects on Balanced Budged.

Returning home to Oslo in 1947, Trygve Haavelmo joined Ministry of Commerce and Industry and Ministry of Finance, as Chief of Section. He remained with them for around a year and publishing twelve articles on various topics in 1947–1948. They include Trends in modern American economics and What can we do to protect ourselves from a recession etc.

In 1948, he left his job to become Professor of Economics at the University of Oslo, remaining with the institution till his retirement in 1979. During this period, he often visited USA on the invitation of the University of Chicago and published many important papers, including A Study in the Theory of Investment (1960).

After his retirement from the University of Oslo, he became a professor emeritus at the same institute. All the while, he continued to publish numerous papers. Among them, Strategies in Combating poverty in underdeveloped countries, published in 1992 is probably his last original work.

The last book published in his lifetime was a collection of his works from 1944 till 1988. Entitled Økonomi, individ og samfunn (Economics, individual and society). It discusses the foundational problems in the social sciences as well as relevant challenges for economics.

Trygve Haavelmo is best remembered for his 1944 work, The Probability Approach in Econometrics. First conceived in 1940, the work is based upon modern theory of probability and statistical inference, and represents an attempt to provide a theoretical basis for the analysis of interrelation between economic variables.

In 1989, Trygve Haavelmo received the Nobel Prize in Economics "for his clarification of the probability theory foundations of econometrics and his analyses of simultaneous economic structures."

In 1940, Trygve Haavelmo met his lifelong partner, US-born Beulah Midgett. Although they never married, she followed him back to Norway, where they continued to live together.

Trygve Haavelmo died on 26 July 1999, in Oslo, Norway, at the age of 87.