An excerpt from the Nobel Laureate’s memoir, Home in the World, at Scroll.in:
By June 1956, at the end of my first year as a research student, I had a set of chapters that looked as if they could form a dissertation. A substantial number of economists at various universities were work ing then on different ways of choosing between techniques of production. Some were particularly focused on maximising the total value of the output produced, whereas others wanted to maximise the surplus that was generated, and there were also some profit maximisers.
Analysing these – and other – approaches, and taking note of the fact that a higher surplus, when reinvested, could lead to a higher rate of growth and through that to a higher output in the future, the different criteria could be compared through assessing alternative time series of outputs and consumption.
I was sure that the unruly literature on all this could be sorted out and nicely disciplined through comparative evaluation of alternative time series, which turned out to be fun to do. I called it the “time series approach”. I was glad to be able to outline an easily discussable general methodology for the various alternative proposals that were being offered.