Robert Solow
Robert Solow | |
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Exogenous growth model | |
Awards | John Bates Clark Medal (1961) Nobel Memorial Prize in Economic Sciences (1987) National Medal of Science (1999) Presidential Medal of Freedom (2014) |
Information at IDEAS / RePEc |
Robert Merton Solow,
Biography
Robert Solow was born in Brooklyn, New York, into a
In 1941, Solow left the university and joined the
Solow returned to Harvard in 1945, and studied under
In 1949, just before going off to Columbia, he was offered and accepted an assistant professorship in the
Solow also held several government positions, including senior economist for the Council of Economic Advisers (1961–62) and member of the President's Commission on Income Maintenance (1968–70). His studies focused mainly in the fields of employment and growth policies, and the theory of capital.
In 1961 he won the American Economic Association's
Solow was the founder of the Cournot Foundation and the Cournot Centre. After the death of his colleague Franco Modigliani, Solow accepted an appointment as new Chairman of the I.S.E.O Institute, an Italian nonprofit cultural association which organizes international conferences and summer schools. He was a founding trustee of the Economists for Peace and Security.[42]
Solow's students include 2010 Nobel Prize winner
Solow was one of the signees of a 2018 amicus curiae brief that expressed support for Harvard University in the
Solow was one of the supporters of Joe Biden's Inflation Reduction Act of 2022.[46]
Solow died at his home in Lexington, Massachusetts, on December 21, 2023, at the age of 99.[47]
Model of economic growth
Solow's model of
Solow also was the first to develop a growth model with different vintages of capital.[48] The idea behind Solow's vintage capital growth model is that new capital is more valuable than old (vintage) capital because new capital is produced through known technology. He first states that capital must be a finite entity because all of the resources on the earth are indeed limited.[39] Within the confines of Solow's model, this known technology is assumed to be constantly improving. Consequently, the products of this technology (the new capital) are expected to be more productive as well as more valuable.[48]
The idea lay dormant for some time perhaps because
To better communicate the meaning behind his work, Solow used a graphical design to illustrate his concepts. On the x-axis he puts capital per worker and for the y-axis he uses output per worker. The reason for graphing capital and output per worker is due to his assumption that the nation is at full employment. The first (top) curve represents the output produced at each given level of capital. The second (middle) curve shows the depreciating nature of capital which remains constantly positive. The third curve (bottom) conveys savings/investment per worker. As the old machinery wears down and breaks, new capital goods must be bought to replace the old. The point where the two lines meet is known as the steady state level, which means that the nation is producing just enough to be able to replace the old capital. Countries that are closer to the steady state level, on the left side, grow more slowly when compared to countries closer to the vertex of the graph. When countries are to the right of the steady state level, they are not growing because all the returns they create needs to go to replacing and repairing their old capital.[49]
Since Solow's initial work in the 1950s, many more sophisticated models of economic growth have been proposed, leading to varying conclusions about the causes of economic growth. For example, rather than assuming, as Solow did, that people save at a given constant rate, subsequent work applied a consumer-optimization framework to derive savings behavior endogenously, allowing saving rates to vary at different points in time, depending on income flows, for example. In the 1980s efforts have focused on the role of technological progress in the economy, leading to the development of endogenous growth theory (or new growth theory). Today, economists use Solow's sources-of-growth accounting to estimate the separate effects on economic growth of technological change, capital, and labor.[48]
In 2022, Solow was still an emeritus
Honors
- Grand-Cross of the Order of Prince Henry, Portugal (September 27, 2006)[51]
- Member, American Academy of Arts and Sciences (1956)[52]
- Member, United States National Academy of Sciences (1972)[53]
- Member, American Philosophical Society (1980)[54]
Publications
Books
- Dorfman, Robert; Samuelson, Paul; Solow, Robert M. (1958). Linear programming and economic analysis. New York: McGraw-Hill.
- Solow, Robert M. (October 15, 1970). Growth Theory: An Exposition (1970, second edition 2006). Oxford University Press. ISBN 978-0195012958.
- Solow, Robert M. (1990). The Labor Market as a Social Institution. Blackwell. ISBN 978-1557860866.
Book chapters
- Solow, Robert M. (1960), "Investment and technical progress", in ISBN 9780804700214.
- Solow, Robert M. (2001), "After technical progress and the aggregate production function", in Hulten, Charles R.; Dean, Edwin R.; Harper, Michael J. (eds.), New developments in productivity analysis, Chicago, Illinois: University of Chicago Press, pp. 173–78, ISBN 9780226360645.
- Solow, Robert M. (2009), "Imposed environmental standards and international trade", in ISBN 9780199239979.
Journal articles
- Robert Merton Solow (January 1952). "On the Structure of Linear Models". Econometrica. 20 (1): 29–46. JSTOR 1907805.
- Solow, Robert M. (1955). "The Production Function and the Theory of Capital". The Review of Economic Studies: 103–107.
- Solow, Robert M. (February 1956). "A contribution to the theory of economic growth" (PDF). JSTOR 1884513.
- Solow, Robert M. (1957). "Technical change and the aggregate production function".
- Solow, Robert M. (May 1974). "The economics of resources or the resources of economics". The American Economic Review: Papers and Proceedings. 64 (2): 1–14. JSTOR 1816009.
- Solow, Robert M. (September 1997). "Georgescu-Roegen versus Solow/Stiglitz". .
- See also: Nicholas Georgescu-Roegen and Joseph Stiglitz.
- Solow, Robert M. (November 2003). "Lessons learned from U.S. welfare reform". Prisme. 2. Archived from the original on May 16, 2015.
- Solow, Robert M. (Spring 2007). "The last 50 years in growth theory and the next 10". .
See also
- List of economists
- List of Jewish Nobel laureates
- Backstop resources
- Basic income
- Growth accounting
- Solow Growth Model
- Solow residual
- Guaranteed minimum income
References
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Sources
- Greenwood, Jeremy; Krusell, Per; Hercowitz, Zvi (1997). "Long-run Implications of Investment-Specific Technological Progress". American Economic Review. 87: 343–362.
- Greenwood, Jeremy; Krusell, Per (2007). "Growth Accounting with Investment-Specific Technological Progress: A Discussion of Two Approaches". Journal of Monetary Economics. 54 (4): 1300–1310. .
- Jorgenson, Dale W. (1966). "The Embodiment Hypothesis". Journal of Political Economy. 74: 1–17. S2CID 154389143.
External links
- Robert M. Solow on Nobelprize.org
- Video Interview with Solow from NobelPrize.org
- Articles written by Solow for the New York Review of Books
- Robert M. Solow – Prize Lecture
- Toye, John (2009). "Solow in the Tropics". History of Political Economy. 41 (1): 221–40. .
- IDEAS/RePEc
- Robert M. Solow Papers, 1951–2011 and undated. Rubenstein Library, Duke University.
- "Robert Merton Solow (1924– )". Library of Economics and Liberty (2nd ed.). Liberty Fund. 2008.
- Appearances on C-SPAN
- Robert M. Solow at MIT Infinite History
- Biography of Robert M. Solow from the Institute for Operations Research and the Management Sciences