Oskar Morgenstern is best known for his book, coauthored with physicist John von Neumann, Theory of Games and Economic Behavior. Morgenstern is also known for his skepticism about economic measurement. In a 1950 book, On the Accuracy of Economic Observations, Morgenstern challenged the easy use of data on national income to reach conclusions about the state of the economy and about appropriate policies, citing simon kuznets’s finding that the measurement of national income is subject to a 10 percent margin of error. Morgenstern pointed out that economic policy advisers often proposed policies based on shifts in national income of 1 percent or less. Morgenstern reasoned that one cannot reach any conclusions based on small shifts that are well within the margin of error.
Morgenstern was born in Germany. After earning his doctorate, he became a professor at the University of Vienna in 1935. He was on leave in the United States in 1938 when the Nazis occupied Vienna. Dismissed from the university because he was considered “politically unbearable,” Morgenstern became a professor at Princeton University, where he remained until his retirement in 1970.