The Cowles Commission

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The "Cowles Commission for Research in Economics" was founded by the businessman and economist, Alfred Cowles in 1932. The Cowles Commission initially found its home in Colorado Springs, and its first research director, Charles F. Roos, appointed in 1934.  The Austrian emigre economists Gerhard Tintner and Abraham Wald found their way to Colorado Springs as research fellows.

In 1939, the Cowles Commission moved to the University of Chicago under the directorship of Theodore O. Yntema (a student of the recently-deceased Henry Schultz). Jacob Marschak took over as director in 1943 until 1948, when he passed the reins over to Tjalling C. Koopmans.  Rising hostile opposition to the Cowles Commission by the department of economics at Chicago during the 1950s  led Koopmans to convince the Cowles family to move it to Yale University in 1955 (where it was renamed the "Cowles Foundation").

As its motto (Science is Measurement, later adjusted to Theory and Measurement) indicates, the Cowles Commission was dedicated to the pursuit of linking economic theory to mathematics and statistics. Its main contributions to economics lie in its "creation" and consolidation of two important fields -- general equilibrium theory and econometrics - which were vigorously pursued by its two most famous directors: Jacob Marschak (director from 1943 to 1948) and Tjalling C. Koopmans (director from 1948 to 1954).  James Tobin would become director after the 1955 move to Yale.  From 1955 to 1967, the directorship became a veritable musical chair between Tobin and Koopmans.

The Cowles Commission benefited greatly from the great European intellectual migration of the 1930s and 1940s: many economists, statisticians and mathematicians from Central Europe and elsewhere poured into the United States. Many of these, such as those of the Vienna Colloquium were familiar with Walrasian theory and thus the Cowles Commission was an important haven for many of them.

General Equilibrium Theory

The list of economists who passed through Cowles on the way to establishing Walrasian G.E. Theory is rather large. Theodore O. Yntema, Oskar Lange and Jacob Mosak were early Cowles Commission associates that began working immediately on G.E. systems. The 1944 Cowles monographs on Price Flexibility and Employment by Oskar Lange and General Equilibrium Theory in International Trade by Jacob Mosak are classics of G.E. theory.

From its inception, the Cowles Commission had set down links across the Atlantic: early Cowles participants included Ragnar Frisch, Rene Roy and the L.S.E. economists, R.G.D.Allen and Abba Lerner. They were joined in the 1940s by more foreigners interested in G.E., such as Leonid Hurwicz, Jacob Marschak and Tjalling Koopmans. Several young Americans of mathematical persuasion, such as Kenneth Arrow, I.N. Herstein and Herbert Simon, signed up soon after.

From France, Gerard Debreu and Edmond Malinvaud, two students of Maurice Allais, joined quickly after. Lionel McKenzie, Nicholas Georgescu-Roegen and David Gale were also familiar faces at Cowles.

The initial concern was the development of activity analysis and linear programming - initiated by the 1937 von Neumann paper and the works of Abraham Wald, both members of the old Vienna Colloquium -- to describe the production side and later the demand side of the economy. The famous 1951 Cowles conference and monograph, Activity Analysis of Production and Allocation edited by Koopmans provides a historic collection of breakthrough papers on this topic.

The year 1951 also saw another path-breaking contribution appear as a Cowles monograph, namely Social Choice and Individual Values by Kenneth Arrow, which introduced the famous "Arrow (Im)possibility Theorem" and initiated the axiomatic development of Social Choice theory.

The early post-war period attracted numerous young economists: Roy Radner, Martin J. Beckmann, Don Patinkin, Franco Modigliani, Stanley Reiter, Harry Markowitz, Hendrik Houthakker,  Helen Makower which were instrumental to the development of general equilibrium theory and its applications to other fields.

The year 1959 saw the publication of two more historical Cowles monographs: Gerard Debreu's classic Theory of Value: An axiomatic approach and Harry Markowitz's Portfolio Selection.

After the move to Yale in 1955, several more economists and mathematicians became involved in the Cowles project: James Tobin, Herbert Scarf, Martin Shubik, Donald J. Brown, Abraham Robinson, Edmund Phelps, Joseph Stiglitz, Menahem Yaari, Ross M. Starr, William Nordhaus and numerous others.

The issue of choice under uncertainty and information was pursued in the 1967 series of monographs by Donald Hester and James Tobin. In 1972, the famous monograph Economic Theory of Teams of Jacob Marschak and Roy Radner appeared, and, in 1973, the Computation of Economic Equilibria by Herbert Scarf.


The Cowles Commission approach to econometrics is famous for its concentration on the estimation of large, simultaneous equations models - particularly the economy-scale macroeconometric models enabled by the Keynesian Revolution in economics. The "identification problem" was a very early and famous concern of the Cowles Commission as were the methods of estimation and hypothesis testing used today in economics.

The Cowles program on econometrics was pioneered in the 1930s and 1940s by Ragnar Frisch, Gerhard Tintner, Trygve Haavelmo, Lawrence Klein and, for a while, Abraham Wald. Other Cowles figures such as Jacob Marschak, T.C. Koopmans, Leonid Hurwicz, Edmond Malinvaud, Theodore W. Anderson, Carl Christ and Herman Rubin were also instrumental figures.

Among the famous outputs of the Cowles work was the "Klein Model", an essentially multi-sectoral Neo-Keynesian behemoth of an econometric model. After a long pause since 1955, multi-equation econometrics at Cowles picked up again in the 1980s with the work of Ray C. Fair.

There are two Cowles monographs on econometrics which deserve special mention, both of which came out in 1950: the Koopmans-edited Statistical Inference in Dynamic Economic Models, the proceedings of a conference which set up econometrics as we know it, and Lawrence Klein's Economic Fluctuations in the United States, 1921-1941, which introduced the world to the Klein Model.

Cowles Nobels:

Several Cowles associates have won Nobel prizes for research done while at the Cowles Commission. These include Tjalling Koopmans, Kenneth Arrow, Gerard Debreu, James Tobin, Franco Modigliani, Herbert Simon, Lawrence Klein, Trygve Haavelmo and Harry Markowitz.




Resources on the Cowles Commission


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