Paul Samuelson

Paul Samuelson
Samuelson between 1970 and 1975
Born	Paul Anthony Samuelson (1915-05-15)May 15, 1915 Gary, Indiana, U.S.
Died	December 13, 2009(2009-12-13) (aged 94) Belmont, Massachusetts, U.S.
Education	University of Chicago (BA) Harvard University (MA, PhD)
Spouses	Marion Crawford ​ ​ (m. 1938; died 1978)​ [4] Risha Clay ​ (m. 1981)​ [5]
Academic career
Field	Public goods
Awards	John Bates Clark Medal (1947) Nobel Memorial Prize in Economic Sciences (1970) National Medal of Science (1996)
Information at IDEAS / RePEc
Signature

Part of a series on
Macroeconomics
Basic concepts Aggregate demand Aggregate supply Business cycle CAGR Deflation Demand shock Disinflation Effective demand Expectations Adaptive Rational Financial crisis Growth Inflation Demand-pull Cost-push Interest rate Investment Liquidity trap Measures of national income and output GDP GNI NNI Microfoundations Money Endogenous Money creation Demand for money Liquidity preference Money supply National accounts SNA Nominal rigidity Price level Recession Shrinkflation Stagflation Supply shock Saving Unemployment
Policies Fiscal Monetary Commercial Central bank Universal basic income
Models IS–LM AD–AS Keynesian cross Multiplier Accelerator Phillips curve Arrow–Debreu Harrod–Domar Solow–Swan Ramsey–Cass–Koopmans Overlapping generations General equilibrium DSGE Endogenous growth Matching theory Mundell–Fleming Overshooting NAIRU
Related fields Econometrics Economic statistics Monetary economics Development economics Evolutionary economics International economics
Schools Mainstream Keynesian Neo- New Monetarism New classical Real business-cycle theory Stockholm New neoclassical synthesis Saltwater and freshwater Heterodox Austrian Chartalism Modern monetary theory Ecological Post-Keynesian Circuitism Disequilibrium Marxian Market monetarism Supply-side
People François Quesnay Adam Smith Thomas Robert Malthus Karl Marx Léon Walras Knut Wicksell Irving Fisher Wesley Clair Mitchell John Maynard Keynes Alvin Hansen Michał Kalecki Gunnar Myrdal Simon Kuznets Joan Robinson Friedrich Hayek John Hicks Richard Stone Hyman Minsky Milton Friedman Paul Samuelson Lawrence Klein Edmund Phelps Robert Lucas Jr. Edward C. Prescott Peter Diamond William Nordhaus Joseph Stiglitz Thomas J. Sargent Paul Krugman N. Gregory Mankiw
See also Macroeconomic model Publications in macroeconomics Economics Applied Microeconomics Political economy Mathematical economics
Money portal Business portal
v t e

Paul Anthony Samuelson (May 15, 1915 – December 13, 2009) was an American economist who was the first American to win the Nobel Memorial Prize in Economic Sciences. When awarding the prize in 1970, the Swedish Royal Academies stated that he "has done more than any other contemporary economist to raise the level of scientific analysis in economic theory".^[6]

Samuelson was one of the most influential economists of the latter half of the 20th century.

Samuelson was born in

Samuelson attended the University of Chicago as an undergraduate, earning a Bachelor of Arts degree in 1935. He said he was born as an economist at 8:00 am on January 2, 1932, in the University of Chicago classroom.^[7] The lecture mentioned as the cause was on the British economist Thomas Malthus, who most famously studied population growth and its effects.^[13] Samuelson felt there was a dissonance between neoclassical economics and the way the system seemed to behave; he said Henry Simons and Frank Knight were a big influence on him.^[14] He next completed his Master of Arts degree in 1936, and his Doctor of Philosophy in 1941 at Harvard University. He won the David A. Wells prize in 1941 for writing the best doctoral dissertation at Harvard University in economics, for a thesis titled "Foundations of Analytical Economics", which later turned into Foundations of Economic Analysis. As a graduate student at Harvard, Samuelson studied economics under Joseph Schumpeter, Wassily Leontief, Gottfried Haberler, and the "American Keynes" Alvin Hansen.

Samuelson moved to MIT as an assistant professor in 1940 and remained there until his death.^[15] Samuelson's biographer argues that a central reason for Samuelson's move from Harvard to MIT was the anti-Semitism that was famously widespread at Harvard at the time. In a 1989 letter to his friend Henry Rosovsky, Samuelson blamed anti-Semitism in Harvard economics above all on chair Harold Burbank, as well as on Edward Chamberlin, John H. Williams, John D. Black, and Leonard Crum.^[16]

Samuelson's family included many well-known economists, including brother

During his seven decades as an economist, Samuelson's professional positions included:

• Assistant professor of economics at MIT, 1940; associate professor, 1944.
• Member of the Radiation Laboratory 1944–45.
• Professor of international economic relations (part-time) at the Fletcher School of Law and Diplomacy in 1945.
• Guggenheim Fellowship from 1948 to 1949
• Professor of economics at MIT beginning in 1947 and
  Institute Professor
  beginning in 1962.
• Vernon F. Taylor Visiting Distinguished Professor at Trinity University (Texas) in spring 1989.

Samuelson died after a brief illness on December 13, 2009, at the age of 94.^[17] His death was announced by the Massachusetts Institute of Technology.^[13] James M. Poterba, an economics professor at MIT and the president of the National Bureau of Economic Research, commented that Samuelson "leaves an immense legacy, as a researcher and a teacher, as one of the giants on whose shoulders every contemporary economist stands".^[17] Susan Hockfield, the president of MIT, said that Samuelson "transformed everything he touched: the theoretical foundations of his field, the way economics was taught around the world, the ethos and stature of his department, the investment practices of MIT, and the lives of his colleagues and students".^[18] His second wife died in 2019.

As professor of economics at the Massachusetts Institute of Technology, Samuelson worked in many fields, including:^[19]

• utility function or a preference ordering, Samuelson imposed conditions directly on the choices made by individuals – their preferences as revealed by their choices.^[20]
• public goods and private goods.^[21][22]
• Capital theory, where he is known for 1958 consumption loans model and a variety of turnpike theorems and involved in Cambridge capital controversy.^[23][24]
• Finance theory, in which he is known for the random walk hypothesis and efficient-market hypothesis.^[25][26][27]
• International economics, where he influenced the development of two important international trade models: the Balassa–Samuelson effect, and the Heckscher–Ohlin model (with the Stolper–Samuelson theorem).^[28][29]
• Macroeconomics, where he popularized the overlapping generations model as a way to analyze economic agents' behavior across multiple periods of time,^[30] developed multiplier-accelerator model,^[31] analyzed Phillips curve,^[32] and contributed to formation of the neoclassical synthesis.^[33]

Samuelson is considered one of the founders of

He was also essential in creating the neoclassical synthesis, which ostensibly incorporated Keynesian and neoclassical principles and still dominates current mainstream economics. In 2003, Samuelson was one of the ten Nobel Prize–winning economists signing the Economists' statement opposing the Bush tax cuts.^[34]

Samuelson believed

For many years, Samuelson wrote a column for Newsweek. One article included Samuelson's most quoted remark and a favorite economics joke:

To prove that Wall Street is an early omen of movements still to come in GNP, commentators quote economic studies alleging that market downturns predicted four out of the last five recessions. That is an understatement. Wall Street indexes predicted nine out of the last five recessions! And its mistakes were beauties.^[36]

In the early editions of his famous, bestselling economics textbook Paul Samuelson joked that GDP falls when a man "marries his maid".^[37]

Paul Samuelson's book

The book proposes to:

• Examine underlying analogies between central features in theoretical and applied economics and
• Study how
  operationally meaningful
  theorems can be derived with a small number of analogous methods (p. 3),

in order to derive "a general theory of economic theories" (Samuelson, 1983, p. xxvi). The book showed how these goals could be parsimoniously and fruitfully achieved, using the language of the mathematics applied to diverse subfields of economics. The book proposes two general hypotheses as sufficient for its purposes:

• Maximizing behavior of agents (including consumers as to utility and business firms as to profit) and
• Economic systems (including a market and an economy) in stable equilibrium.

The first tenet suggests that all actors, whether firms or consumers, are striving to maximize something. They could be attempting to maximize profits, utility, or wealth, but it did not matter because their efforts to improve their well-being would provide a basic model for all actors in an economic system.[39] His second tenet focuses on providing insight on the workings of equilibrium in an economy. Generally in a market, supply would equal demand. However, he noted that this isn't always the case and that the important thing to look at was a system's natural resting point. Foundations presents the question of how an equilibrium would react when it is moved from its optimal point.^[39] Samuelson was also influential in providing explanations on how the changes in certain factors can affect an economic system. For example, he could explain the economic effect of changes in taxes or new technologies.

In the course of analysis, comparative statics, (the analysis of changes in equilibrium of the system that result from a parameter change of the system) is formalized and clearly stated.

The chapter on welfare economics "attempt(s) to give a brief but fairly complete survey of the whole field of welfare economics" (Samuelson, 1947, p. 252). It also exposits on and develops what became commonly called the Bergson–Samuelson social welfare function. It shows how to represent (in the maximization calculus) all real-valued economic measures of any belief system that is required to rank consistently different feasible social configurations in an ethical sense as "better than", "worse than", or "indifferent to" each other (p. 221).

Economics

Main article:

Economics: An Introductory Analysis

Samuelson is also author (and from 1985 co-author) of an influential principles textbook,

Economics, first published in 1948 (19th ed. as of 2010; multiple reprints). The book sold more than 300,000 copies of each edition from 1961 through 1976 and was translated into forty-one languages. As of 2018, it had sold over four million copies. William Nordhaus joined as co-author on the 12th edition (1985). Sometime before 1988, it had become the best-selling economics textbook of all time.^[40][41]

Samuelson was once quoted as saying, "Let those who will write the nation's laws if I can write its textbooks."

Second World War, it helped to popularize the insights of John Maynard Keynes

. A main focus was how to avoid, or at least mitigate, the recurring slumps in economic activity.

Samuelson wrote: "It is not too much to say that the widespread creation of dictatorships and the resulting World War II stemmed in no small measure from the world's failure to meet this basic economic problem [the Great Depression] adequately."[43] This reflected the concern of Keynes himself with the economic causes of war and the importance of economic policy in promoting peace.^[44][45][46]

Samuelson's book was the second to introduce Keynesian economics to a wide audience, and was by far the most successful. Canadian economist Lorie Tarshis, who had been a student attending Keynes's lectures at Harvard in the 1930s, published in 1947 an introductory textbook that incorporated his lecture notes, titled Elements of Economics.^[47][48][49]

Samuelson's textbook was a watershed in introducing the serious study of business cycles to the economics curriculum. It was particularly timely because it followed the Great Depression. The study of business cycles along with the introduction of the Keynesian approach of aggregate demand set the stage for the macroeconomic revolution in America, which then diffused throughout the world through translations into every major language. Generations of students, who then became teachers, learned their first and most influential lessons from Samuelson's Economics. It attracted many imitators, who became successful in different niches of the college market.

The text was not without criticism. While it praised the "mixed economy" of market and government, some found that too radical and attacked it as socialist. As a precursor to criticisms of Samuelson's Economics textbook,

William F. Buckley, Jr., in his 1951 book, God and Man at Yale, devoted an entire chapter, attacking both Samuelson's and Tarshis' textbooks. For Samuelson's book, Buckley drew from the Educational Examiner and credited it as an "excellent review of Samuelson's text." ("Note to Chapter Two." p. 234)^[51][a] For Tarshis' book, Buckley drew from Merwin K. Hart's organization to wit: "I am also grateful to the National Economic Council for its telling analysis of the Tarshis." ("Note to Chapter Two." p. 234)^[51] Buckley essentially characterized both as – in the words of Paul Davidson – "communist inspired".^[51][49]

Buckley, for the rest of his life, defended the criticisms set forth in his book.

Other publications

There are 388 papers in Samuelson's Collected Scientific Papers. Stanley Fischer (1987, p. 234) writes that taken together they are "unique in their verve, breadth of economic and general knowledge, mastery of setting, and generosity of allusions to predecessors".

Samuelson was co-editor, along with William A. Barnett, of Inside the Economist's Mind: Conversations with Eminent Economists (Blackwell Publishing, 2007), a collection of interviews with notable economists of the 20th century.

Memberships

• Member of the
  National Academy of Sciences,^[54]
• Fellow of the British Academy
• President (1965–68) of the International Economic Association
• Member and past president (1961) of the American Economic Association
• Member of the editorial board and past president (1951) of the Econometric Society
• Fellow, council member and past vice-president of the Royal Economic Society.
• Member of Phi Beta Kappa.

Selected publications

Textbooks and chapters

• Samuelson, Paul A. (1947), Enlarged ed. 1983. Foundations of Economic Analysis, Harvard University Press.
• Samuelson, Paul A. (1948),
  ISBN 978-0-07-126383-2
• Samuelson, Paul A. (1958), Linear Programming and Economic Analysis with
  Robert M. Solow, McGraw–Hill. Chapter-preview links.

Chapters

• Samuelson, Paul A. (1960). "Efficient paths of capital accumulation in terms of the calculus of variations". In
  ISBN 9780804700214. {{cite book}}: ISBN / Date incompatibility (help
  )
• Samuelson, Paul A. (1982). "Quesnay's 'Tableau Economique' as a theorist would formulate it today". In
  ISBN 9780333321997. {{cite book}}: |editor-first1= has generic name (help
  )

Journal articles

• Samuelson, Paul A. (1952). "Economic Theory and Mathematics – An Appraisal" (PDF). American Economic Review. 42 (2): 56–66.
• Samuelson, Paul A (1954). "The Pure Theory of Public Expenditure". Review of Economics and Statistics. 36 (4): 387–89.
  S2CID 153571905
  .

Collected works

• The Collected Scientific Papers of Paul A. Samuelson, MIT Press. Preview links for vol. 1–3 below. Contents links for vol. 4–7.
  OCLC 1079936608 (all editions)
  .
  • Samuelson, Paul A. (1966), Vol. 1 → via Google Books, 1937–mid-1964.
  • ––. (1966), Vol. 2 → via Google Books, 1937–mid-1964.
  • ––. (1972), Vol. 3 → via Google Books, mid-1964–1970.
  • ––.(1977), Vol. 4 → via Internet Archive (registration required), 1971–76.
  • ––. (1986), Vol. 5 → via Google Books, 1977–1985 Description → via
  • ––. (2011), Vol. 6^{[permanent dead link‍]}, 1986–2009. Description → via Wayback Machine
  • ––. (2011), Vol. 7^{[permanent dead link‍]}, 1986–2009.

Essays

• Samuelson, Paul A. (1983). "My Life Philosophy", The American Economist, 27(2), pp. 5–12.
• Samuelson, Paul A. (2007), Inside the Economist's Mind: Conversations with Eminent Economists with
  ISBN 1-4051-5917-0
• Samuelson, Paul A. (2002), Paul Samuelson and the Foundations of Modern Economics, Transaction Publishers,
  ISBN 978-0-76-580114-2

Papers

• Paul A. Samuelson Papers, 1933–2010,
  OCLC 664246147
  .

See also

• Samuelson's inequality
• Samuelson's Iceberg transport cost model
• Keynesian economics
• New Keynesian economics
• Neo-Keynesian economics
• Neoclassical economics
• Paul Samuelson – Wikiquote
• List of Jewish Nobel laureates

Notes

Explanatory annotations

1. Gustavus Demetrious Crain, Jr. (1885–1973), founder of Crain Communications
   .

References

1. ^ Business Cycles and Depressions: An Encyclopedia, p. 361, at Google Books
2. ^ De Vroey, Michel; Malgrange, Pierre (2012). "From The Keynesian Revolution to the Klein–Goldberger model: Klein and the Dynamization of Keynesian Theory". History of Economic Ideas. 20 (2): 113–36.
3. hdl:1721.1/13875
   .
4. ^ "Marion Crawford Samuelson". The New York Times. February 15, 1978. Retrieved October 1, 2023.
5. ^ "Risha Clay Samuelson: Obituary". The Boston Globe. June 4, 2019.
6. ^ ^{a b} Frost, Greg (December 13, 2009). "Nobel-winning economist Paul A. Samuelson dies at age 94". MIT News. "In a career that spanned seven decades, he transformed his field, influenced millions of students and turned MIT into an economics powerhouse"
7. ^ ^{a b c d e} "Paul Samuelson: The last of the great general economists died on December 13th, aged 94", The Economist, December 17, 2009
8. ISSN 1941-1383
   .
9. S2CID 155020549
   .
10. doi:10.1257/jep.11.2.137
    .
11. ISBN 978-0-9742615-3-9
    .
12. Newspapers.com
    .
13. ^
    ISSN 0362-4331
    . Retrieved April 26, 2016.
14. ISBN 978-1-84376-335-2
    .
15. doi:10.1215/00182702-2716118
    .
16. ISBN 9780190664091
    .
17. ^ ^{a b} "Nobel economics laureate Samuelson died at 94". Reuters. December 14, 2006.
18. ^ "Economics revolutionary Paul Samuelson dies aged 94", The Daily Telegraph, December 14, 2009
19. ^ Fischer, Stanley. "Samuelson, Paul Anthony (1915–2009)". The New Palgrave Dictionary of Economics. Third Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2018.
20. JSTOR 2549561
    .
21. ISSN 0030-7653
    .
22. JSTOR 1925895
    .
23. JSTOR 2295954
    .
24. ISSN 0362-546X
    .
25. ^ Samuelson, Paul A. (Spring 1965). "Proof That Properly Anticipated Prices Fluctuate Randomly". Industrial Management Review. 6 (2): 41–49.
26. JSTOR 2296483
    .
27. doi:10.3905/jpm.1974.408496
    .
28. JSTOR 2967638
    .
29. JSTOR 1928178
    .
30. ISSN 0022-3808
    .
31. JSTOR 1927758
    .
32. JSTOR 1815021
    .
33. ^ Tobin, James. "Macroeconomics and fiscal policy". Paul Samuelson and Modern Economic Theory. Eds. E. Cary Brown and Robert M. Solow. McGraw-Hill, 1983.
34. ^ "Economists' statement opposing the Bush tax cuts". April 3, 2003. Retrieved October 31, 2007.
35. ^ Samuelson, Paul (1969). "The Way of an Economist". In Samuelson, P. A. (ed.). International Economic Relations: Proceedings of the Third Congress of the International Economic Association. London: Macmillan. pp. 1–11.
36. ^ Samuelson, Paul (September 19, 1966). "Science and Stocks". Newsweek. p. 92.
37. ^ "The Trouble With GDP". The Economist. April 30, 2016. Retrieved October 22, 2018.
38. ^ Liossatos, Panagis, S. (2004). "Statistical Entropy in General Equilibrium Theory", (p. 3). Department of Economics, Florida International University.
39. ^
    S2CID 206525085
    .
40. ^ Rosalsky, Gregory Ellis (March 14, 2018). "Freeing Econ 101: Beyond the Grasp of the Invisible Hand". Behavorial Scientist (non-profit digital magazine). Broad Street, Lower Manhattan. Retrieved April 23, 2021.
41. OCLC 989032184 (all editions)
    .
42. ^ "Paul Anthony Samuelson: The Concise Encyclopedia of Economics | Library of Economics and Liberty". www.econlib.org. Retrieved April 26, 2016.
43. Mankiw, Gregory (January 10, 2009). "Is government spending too easy an answer?"
    . The New York Times.
44. ISBN 978-0-19-829236-4
    .
45. ISBN 9780070547865
    .
46. ^ "Paul A. Samuelson Biographical".
47. OCLC 989388561. Retrieved April 23, 2021 – via Internet Archive
    .
48. OCLC 222424878, 5550180927, 7323662377
    (article).
49. ^
    OCLC 5550151503, 192224991
    (article).
50. OCLC 8504916331
    (article).
51. ^
    OCLC 189667 (all editions)
    .
52. ^ "Paul Anthony Samuelson". American Academy of Arts & Sciences. Retrieved December 15, 2022.
53. ^ "APS Member History". search.amphilsoc.org. Retrieved December 15, 2022.
54. ^ "Paul A. Samuelson". www.nasonline.org. Retrieved December 15, 2022.

Further reading

• ISBN 978-0-19-066411-4. Description & arrow-scrollable preview
  .
• Fischer, Stanley (1987). Samuelson, Paul Anthony. Vol. 4. London: Macmillan. pp. 234–41.
  ISBN 978-0-935859-10-2. {{cite book}}: |work= ignored (help
  ).
• Silk, Leonard (1976). The Economists. New York: Basic Books.
  ISBN 978-0-465-01810-9
  ..
• ISBN 978-0-02-929780-3
  ..
• Fusfeld, Daniel R. (2002). "The Neoclassical Synthesis". The Age of the Economist (9th ed.). Boston:
  ISBN 978-0-321-08812-3
  ..
• "I inkomstpolitiken tvår vi våra händer".
  ISSN 0533-070X.{{cite news}}: CS1 maint: date and year (link
  )

External links

Wikimedia Commons has media related to Paul Samuelson.

Wikiquote has quotations related to Paul Samuelson.

• Paul Samuelson at the Mathematics Genealogy Project
• Paul A. Samuelson on Nobelprize.org
• Presentation Speech by Professor Assar Lindbeck, Stockholm School of Economics, Award Ceremony, The Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel, 1970
• A History of Economic Thought biography, 2004
• "Paul Anthony Samuelson (1915–2009)".
  Library of Economics and Liberty (2nd ed.). Liberty Fund
  . 2009.
• Paul Samuelson, Yale Honorands biography, May 2005
• "Nobel-winning economist Paul A. Samuelson dies at age 94", MIT News, December 13, 2009
• Works by or about Paul Samuelson at the Internet Archive
• Appearances on C-SPAN
• Paul Samuelson publications indexed by Google Scholar

Awards
Preceded by Ragnar Frisch Jan Tinbergen	Laureate of the Nobel Memorial Prize in Economics 1970	Succeeded by Simon Kuznets