Review

Author(s): Camilo Dagum

Review by: Camilo Dagum
Source: Revue de l'Institut International de Statistique / Review of the International
Statistical Institute, Vol. 39, No. 2 (1971), pp. 244-245
Published by: International Statistical Institute (ISI)
Stable URL: http://www.jstor.org/stable/1402187
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 244

write[r] -= E [Xtr]]
same notation to denote
for the the rising factorial
(more commonly moment,
used) falling whilst
factorial Kendall
moment & Stuart
(the use precisely
latter being denotedthe
by
Johnson & Kotz as p(r) = E [X(r) ]). Again, the distinction drawn between contagious distributions
and compound or generalized distributions seems to me to be at variance with current practice.
In view of the practical relevance of multivariate distributions, it is disturbing that the authors have
only been able to bring together sufficient useful information on them to fill about 40 pages out of a
book of eight times that length; this is a reflection on the current research position and not on the
authors.
The general standard of lay-out and presentation is high and few misprints were detected in the text.
However, a careful examination of over half the journal references listed indicated that about one in
ten of them contained some inaccuracy in date, volume number or paging. Most of these were minor
but one or two were such as to make it extremely difficult to locate the relevant article. (Readers should
be warned that all paging of papers in "Teoriya Veroyatnostei i ee Primeneniya" refers to the original
Russian and not to the much more readily available complete English translation "Theory of prob-
ability and its applications".)
The book summarises a vast amount of information yet remains readable. It is not, of course,
primarily designed as a text book (formal proofs are absent), but it would certainly make excellent
background reading for an advanced course on discrete distributions.
Inevitably one compares this book with that by Patil & Joshi. To a very large extent the books are
complementary, being entirely different in style and purpose. The dictionary part of Patil & Joshi is
set out concisely and systematically, with a separate short section for each of 115 distributions. By
contrast, Johnson & Kotz is a much more continuous text and deals more with classes of distributions.
Its scope is broader, e.g. it covers problems of estimation and approximation for each major distri-
bution and gives some indication of uses. The bibliography in Patil & Joshi is elaborate and extensive,
more than 3000 separate publications being listed. All references are classified and subsequent users
listed. At the end of each chapter of Johnson & Kotz there is a straight listing of relevant references
(varying in number from 20 to 105). The total number of distinct references in the book is less than
600 and there is no overall collation.
Clearly the intentions of the authors of the two books are very different, and each in its way is highly
successful. Both should be in every statistics library and on the bookshelves of individuals whose
interests involve the theory and applications of discrete distributions.
Bradford, England C. D. Kemp

Malinvaud, E. Methodes statistiques de 1'&conometrie; 2ieme 6d. Paris, Dunod, xiv + 782 p. Finance
et iconomie appliquee, 16. 118Fr.
This highly successful and outstanding contribution of Malinvaud to the growing literature on
econometrics now appears revised and enlarged in its second edition.
The author gives a rigorous explanation of the development of statistical methods geared to the
needs of econometrics. Through a discussion of the validity of these methods and an analysis of their
properties, the reader gains a thorough understanding of both the methods and their application as a
tool of econometric research.
The entire book, from Part I through Part V, is a development of the statistical methods and
inferences that constitute the framework of econometric theory and method, e.g., the general theory
of linear estimation, linear models with errors in variables, non-linear models with additive errors,
time series analysis and simultaneous equation models.
The basic notions and statistical methods of econometrics are introduced with well chosen examples
explaining their properties and applications. More specifically, Malinvaud treats the application of
the consumption function, supply and demand in a competitive market, elasticities, seasonal move-
ment, business cycles, and identification and estimation in market models and in income determination
models.
This second edition is revised and substantially enlarged and gives the up-to-date developments of
the subject matter covered in the first edition, published by Dunod in 1964. It has a net increase of
148 pages over the first edition, which are mainly concentrated in Part II (increase from 132 to 190 pp.)
and Part IV (increase from 127 to 186 pp.).
In Part I, an introduction, the author has omitted a section on bunch maps and has added several
sections on Bayesian statistical methods as well as a section on non-parametric models.
In Part II, on the theory of linear estimation, the author offers a more extended discussion of the
subject matter incorporated in the first edition. He adds a section on Bayesian theory and two appen-
dices: one is a short summary of vector and matrix differentiation, trace operation and some of its

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 245

applications, and the other deals with a formal analysis of the Gauss-Markov theorem.
Part III contains two chapters and one appendix. Chapter 9 on non-linear models with additive
random terms is largely revised. Chapter 10, on linear models with errors in variables, stands almost
without modification.
Part IV, on time series, is very much enlarged and up-dated so that it contains a more detailed
analysis. The author introduces the stochastic processes as a general conceptual framework and
analyzes the different components of a time series. It deals also with the methods of spectral analysis,
including modem development of the subject not covered in the first edition. For example, spectral
analysis for non-stationary time series and the bivariate stationary process with its spectral represen-
tation, and the associated concepts of power cross-spectrum, co-spectrum, quadrature spectrum and
coherence-inequality have been added. This part also covers a rigorous econometric analysis of auto-
correlation, autoregressive models and distributed lag models.
Part V, on simultaneous equation models, was enlarged from 113 to 134 pages, including the revision
and extension of the subjects covered in the first edition.
Malinvaud concludes his excellent book with an epilogue that is particularly important in today's
outstanding development and refinement of quantitative methods. This epilogue stands in substantial
agreement with Oskar Morgenstern's "On the Accuracy of Economic Observations" (1950), Princeton
University Press, 2nd edition, 1963. To illustrate Malinvaud's stand, we quote his concluding remarks:
"Finally, we must never forget that our progress in understanding economic laws depends strictly on
the quality and abundance of statistical data. Nothing can take the place of the painstaking work of
observation of the facts. All improvements in methodology would be in vain if they had to be applied
to mediocre data".
Malinvaud's book includes a comprehensive and up-to-date thirteen-page bibliography, as well as
a subject and author index. It has the singular virtue of being of value to both the layman and the
expert. On an introductory level, it does not demand an extensive mathematical and statistical back-
ground. Nonetheless, the book was mainly written for graduate students majoring in quantitative
economics and, since the publication of the first edition, it has become the main source of reference
in that area.
The text is carefully and accurately printed and is relatively free of typographical errors. The fol-
lowing are a few minor errors carried over from the first edition: On page 27 in formula (44), n is
printed instead of m; on page 212, line 3, a symbol M is missing; on page 291, line 5, bp is written
for b,; and on page 586 a minus sign is missing in the left-hand side of the equation that precedes
formula (37).
The second edition as was the first, will become both a major reference and a systematic study of
econometrics.

Iowa City Camilo Dagum

Mincer, J. (Ed.) Economic forecasts and expectations - analysis of forecasting behavior and performance.
New York, Columbia University Press, 1969, xix + 251 p., National Bureau of Economic Research,
Studies in business cycles, 19 $ 10.-

The book includes five papers: 1. The Evaluation of Economic Forecasts, by Jacob Mincer and
Victor Zarnowitz; 2. Data Errors and Forecasting Accuracy, by Rosanne Cole; 3. Models of Adaptive
Forecasting, by Mincer; 4. Expectations in the Term Structure of Interest Rate, by Stanley Diller;
5. Consumer Anticipations and Models of Durable Goods Demand, by F. Thomas Juster.
Forecasting activity is as old as mankind and is essential to people in their private as well as in their
social activities. Forecasting is done for many varied and diverse things ranging from weather to stock
markets. The primary objective of economic forecasting is to reduce excessive variations in economic
activity. Economic forecasting had its start at the end of the past century and became a specialized
activity after World War I. Its development depended on the accumulation of economic statistics and
improvement of modern statistical methods. Our market economy is complex and entities must adjust
themselves quickly to face the frequent changes in business conditions. It is therefore clearly convenient
for them to forecast these changes. Only right forecasts will lead to the right decisions. Due to the
increasing complexity of economic life, forecasting methods are becoming considerably more sophisti-
cated. The development of new forecasting methods demands research.
This book includes several papers that analyze and try to clear up methodological problems related
to forecasting performed with several linear models. The first three chapters are of a theoretical nature
and the last two apply some of the ideas developed in the previous chapters.
The analysis performed on the structure of the interest rate (Chapter 4) and some demand models

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