Obituary: Albert Bergstrom

Albert Bergstrom

Albert Rex Bergstrom, Professor Emeritus at the University of Essex and former Professor of Econometrics at the University of Auckland. Died aged 79.

New Zealand's first econometrician, Rex Bergstrom spent half his professional life in this country before moving permanently to Britain.

From 1950 to 1970, he brought the Department of Economics at the University of Auckland into international prominence through his pioneering research on economic modelling.

Professor Bergstrom trained some of New Zealand's most outstanding economists, business leaders and administrators, including the present Chancellor of the University of Auckland, Hugh Fletcher, and the former acting Vice-Chancellor and Head of the School of Business and Economics, Alastair MacCormick.

Noting that the economy itself goes on without interruption between the various observations that we make of it at discrete (e.g. quarterly) intervals, Professor Bergstrom became convinced that the best way to model modern economies was in continuous time.

Most of his career was devoted to the task of building these models and developing tools for estimating them.

He developed a prototype model for the British economy.

Such economy-wide models have now been constructed for most of the world's leading industrialised countries, including Britain, the United States, Italy, Germany, Sweden and the Netherlands.

Professor Bergstrom's conviction of the importance of this approach has been vindicated in the world of finance, where second-by-second transactions data are now widely available and used to price options, other financial derivatives and to measure market volatility.

Professor Bergstrom was a brilliant and versatile teacher.

During his two decades on the faculty at Auckland, he rose to the rank of Professor of Econometrics and taught money and banking, public finance, and all the economic theory courses, as well as econometrics, a feat that is extraordinary by present-day standards.

In the 1960s, he developed and taught an econometrics sequence at Auckland that was the equal of the best graduate courses offered in North America and Europe.

His students conducted empirical research on various aspects of the New Zealand economy, exploring macroeconomic aggregates such as imports, consumption and the stock of money, and investigating the empirical determinants of variables such as inflation.

He also played a key role in developing econometrics in Britain, starting at the London School of Economics and Political Science as a Reader over 1962-1964.

In 1970, he moved permanently from Auckland to the University of Essex, where, in addition to his academic work, he served as chairman of the Department of Economics (1976-1979), as dean of the School of Social Sciences (1972-1975), and as Pro-Vice Chancellor (1982-1985).

Professor Bergstrom held a deep concern for fundamental issues in economics.

His research was ambitious, often tackling the most difficult problems in the subject at the time, and he was resolute in pursuing his own approach.

In the few weeks before his death, he completed the manuscript of a new book, A Continuous Time Econometric Model of the United Kingdom with Stochastic Trends (co-authored with Ben Nowman, one of his former students from Essex University).

The book develops and estimates the latest version of his econometric model of the British economy.

Professor Bergstrom is survived by his wife, a son and two grandchildren.

He is remembered in his profession by the Bergstrom Prize, which is awarded every three years to an outstanding young New Zealand econometrician.

At the University of Essex, the flag was flown at half-mast on the day of his funeral.

* Peter C. B. Phillips is Sterling Professor of Economics at Yale University, and Distinguished Alumnus Professor of Economics at the University of Auckland.