The chapter starts by discussing how we can determine the long-term qualitative behaviour of the solutions to second-order recurrence equations. In particular, in some cases, it can be seen that the solution is oscillatory. In the context of the multiplier-accelerator model, this corresponds to what are known as business cycles. The chapter concludes with an analysis of a dynamic macroeconomic model that is more realistic than the multiplier-accelerator one.

Chapter 8 analyzes his work for the League of Nations, which resulted in the first macro-econometric model of the US economy. The League’s Economic and Financial Section was a hub of economic expertise in the 1930s. Before Tinbergen arrived, Gottfried Haberler had produced an overview of the business-cycle theories. This chapter argues that the projects of Haberler and Tinbergen are best understood as outcomes of joint work under the supervision of Arthur Loveday and Dennis Robertson, with the help of assistants, coauthors, and expert committees. Although commissioned and published under the names of particular authors and understood as monographs, the studies are attempts to create expert consensus. A detailed study of the Tinbergen report demonstrates at once the various coauthors and internal critics involved and the contested nature of virtually all aspects of the study, as well as the potency of this new teamwork, without which the study would have been impossible. That this report was meant to forge expert consensus means that the critique of John Maynard Keynes of both studies should be understood partly as a challenge to the League of Nations as an institution, and partly to this new type of consensual expert knowledge more broadly.

Chapter 10 argues that the central contribution of Tinbergen is his decision models, which conceive of economic policy as the relation between instruments and goals. The chapter analyzes the way in which the original econometric models of the 1930s were transformed by Tinbergen (and Ragnar Frisch) into models for policymaking, in response to their new state positions. Tinbergen was director at the Central Planning Bureau in the Netherlands, which developed into the premier economic policy institute there. The transformation of econometric models into decision models no longer treated policy as a given, but instead treated behavioral economic relations as given, and the policy variables as decision variables, placing the economic expert inside the model. The chapter explores this fundamental transformation, and how it impacted Tinbergen’s own view of economics. He no longer believed that the primary goal was to describe the economic structure, but rather to design of (optimal) decision models to pursue targets. This was true at the firm and state levels. He sought to redefine crucial concepts such as unemployment and business cycles in policy terms. Finally, he used that transformation to analyze the optimal level of decision-making in the economy, a crucial insight for his later work.

Chapter 6 analyzes the trajectory from his early econometric studies to the macroeconomic model he completed in 1936. During this period, he worked at the Central Bureau of Statistics and the Netherlands Economics Institute, to develop new methods to study business cycles. That research was linked to a network of similar institutes across Europe in London, Vienna, Paris, Berlin, and beyond. The chapter demonstrates how the analysis of the dynamics of particular markets provided inspiration for a study of the dynamics of the overall economy. The goal shared by many theorists of the age was to arrive at a dynamic economic theory, as opposed to the static equilibrium models of classical economics. Tinbergen sought to identify the relevant mechanism that could explain the type of movements typically seen in the overall economy: business cycles of about eight years. But the chapter argues that there was also an iterative dynamic between the political and policy issues of the time and Tinbergen’s work, which was never purely scientific or disconnected from practical concerns. The chapter concludes with a sketch of the main characteristics of his econometric work: the dynamic nature, the combination between theory and empirics, the substantive institutional emphasis, and the way in which Tinbergen believed that quantitative econometric studies could help overcome theoretical and political differences.