The Klein–Goldberger model was an early macroeconometric model for the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...

developed by Lawrence Klein and

Arthur Goldberger Arthur Stanley Goldberger (November 20, 1930 – December 11, 2009) was an econometrician and an economist. He worked with Nobel Prize winner Lawrence Klein on the development of the Klein–Goldberger macroeconomic model at the University of ...

, Klein's doctoral student at the

University of Michigan , mottoeng = "Arts, Knowledge, Truth" , former_names = Catholepistemiad, or University of Michigania (1817–1821) , budget = $10.3 billion (2021) , endowment = $17 billion (2021)As o ...

, in 1955. Grounded in Keynesian macroeconomic theory, it describes the workings of the United States economy in terms of 20 simultaneous equations, using

time series In mathematics, a time series is a series of data points indexed (or listed or graphed) in time order. Most commonly, a time series is a sequence taken at successive equally spaced points in time. Thus it is a sequence of discrete-time data. Exa ...

data from 1929 to 1952. The Klein–Goldberger model extended the pioneering work of Jan Tinbergen in the 1940s, and paved the way for even larger models such as the Wharton models of the 1960s, or the Brookings model, with almost 400 equations. The model was estimated with the

limited information maximum likelihood Simultaneous equations models are a type of statistical model in which the dependent variables are functions of other dependent variables, rather than just independent variables. This means some of the explanatory variables are jointly determined ...

method only, but alternative

ordinary least squares In statistics, ordinary least squares (OLS) is a type of linear least squares method for choosing the unknown parameters in a linear regression model (with fixed level-one effects of a linear function of a set of explanatory variables) by the prin ...

estimations were provided by

Karl A. Fox Karl August Fox (July 14, 1917 – April 20, 2008) was an American economist. He was a professor of economics at Iowa State University from 1955 to 1987. During 1954–55, he was senior staff economist with the President’s Council of Economic A ...

(1956). In one of the earliest computational simulations of an econometric model, Irma and Frank Adelman (1959) tested the Klein–Goldberger model on an

IBM 650 The IBM 650 Magnetic Drum Data-Processing Machine is an early digital computer produced by IBM in the mid-1950s. It was the first mass produced computer in the world. Almost 2,000 systems were produced, the last in 1962, and it was the first ...

at the

Berkeley Radiation Laboratory Lawrence Berkeley National Laboratory (LBNL), commonly referred to as the Berkeley Lab, is a United States national laboratory that is owned by, and conducts scientific research on behalf of, the United States Department of Energy. Located in ...

, and found that when shocked by disturbances, it generates fluctuations with the same characteristics as the business cycles observed in United States economic data.

References

Further reading