Cooperation between politicians and econometricians and the search for optimal economic policy

The problem of formalizing the cooperation between politicians and econometricians as an iterative-or trial and error-process, such that the weights in a preference function can be obtained in a finite number of steps, is considered. The approach is based on the pioneering suggestions made by Tinbergen and Frisch within the framework of a formal theory of economic policy. Using the implicit information given by a possible and implementable dialogue between a policy maker and a model builder it is shown that it is possible to take into account explicitly the interdependence between targets, instruments, and weights.