This chapter is focused on a line of research which was temporarily considered but soon abandoned. Presenting the reasons behind the abandonment of this approach shows by contrast the ideas which were pursued.

How early contributors accounted for the role of shocks and exogenous influences ? Ludwig Hamburger argued for the use of relaxation oscillations modeled from a particular nonlinear equation developed by the Dutch physicist Balthasar Van der Pol, because he saw in such oscillations a possibility to explain self-sustained but irregular cycles.

Other great economist were interested by this concept. The Norwegian Ragnar Frisch, the french mathematical economist François Divisia, who decided to invite the physicist Philippe Le Corbeiller, involved in the study of self-sustained oscillatory systems, in the first European meeting of the Econometric society. 

One can learn from this episode that in the search for new mathematical tools able to account for economic mechanisms, economics came first, mathematics second. If Hamburger received considerably less attention than Tinbergen, it is most likely because he did not manage to go beyond the analogy stage while the former constantly strove to relate his equations, their parameters and their derivations to significant economic factors.

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[chapter 3 posts]

Coming (almost) full circle: Relaxation oscillations in the early development of econometrics (1929-1951)