Robert Solow

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Robert Solow
Exogenous growth model
AwardsJohn 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,

Institute Professor Emeritus of Economics at the Massachusetts Institute of Technology, where he was a professor from 1949 on.[30] He was awarded the John Bates Clark Medal in 1961,[31] the Nobel Memorial Prize in Economic Sciences in 1987,[32] and the Presidential Medal of Freedom in 2014.[33] Four of his PhD students, George Akerlof, Joseph Stiglitz, Peter Diamond, and William Nordhaus, later received Nobel Memorial Prizes in Economic Sciences in their own right.[34][35][36]

Biography

Robert Solow was born in Brooklyn, New York, into a

Jewish family on August 23, 1924, the oldest of three children. He regarded his parents as being very intelligent despite their not being able to attend college due to the necessity to work.[37] He was well educated in the neighborhood public schools and excelled academically early in life.[38] In September 1940, Solow went to Harvard College with a scholarship at the age of 16. At Harvard, his first studies were in sociology and anthropology as well as elementary economics.[38]

In 1941, Solow left the university and joined the

U.S. Army. Because he was fluent in German, the Army put him on a task force whose primary purpose was to intercept, interpret, and send back German messages to base.[39] He served briefly in North Africa and Sicily, and later in Italy until he was discharged in August 1945.[38][40] Shortly after returning, he proceeded to marry his girlfriend, Barbara Lewis (died 2014), whom he had been dating for six months.[39]

Solow returned to Harvard in 1945, and studied under

Markov processes for employment-unemployment and wage rates.[38]

In 1949, just before going off to Columbia, he was offered and accepted an assistant professorship in the

(1960).

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

John Bates Clark Award, given to the best economist under age forty. In 1979 he served as president of that association. In 1987, he won the Nobel Prize for his analysis of economic growth[38] and in 1999, he received the National Medal of Science. In 2011, he received an honorary degree in Doctor of Science from Tufts University.[41]

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

Harvey Wagner. He was ranked 23rd among economists on RePEc in terms of the strength of economists who have studied under him.[43][44]

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

exogenous
" growth models is the saving rate is taken to be exogenously given. Subsequent work derives savings behavior from an inter-temporal utility-maximizing framework. Using his model, Solow (1957) calculated that about four-fifths of the growth in US output per worker was attributable to technical progress.

Bill Clinton awarding Solow the National Medal of Science in 1999

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

Robert Lucas, Jr. subsequently developed alternatives to Solow's neoclassical growth model.[48]

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

MIT economics department, and had previously taught at Columbia University.[50]

Honors

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. .
  • Solow, Robert M. (1990). The Labor Market as a Social Institution. Blackwell. .

Book chapters

Journal articles

See also: Nicholas Georgescu-Roegen and Joseph Stiglitz.

See also

References

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  6. ^ Peter A. Diamond – Autobiography – Nobelprize.org Archived April 1, 2012, at the Wayback Machine, PDF page 2
  7. ^ Dixit, Avinash K. (1968). Development Planning in a Dual Economy (Ph.D.). Massachusetts Institute of Technology. Retrieved July 1, 2017.
  8. ^ Enthoven, Alain C. (1956). Studies in the theory of inflation (Ph.D.). Massachusetts Institute of Technology. Retrieved June 30, 2017.
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  12. ^ Hall, Robert E. (1967). Essays on the Theory of Wealth (Ph.D.). Massachusetts Institute of Technology. Retrieved July 5, 2017.
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  14. ^ Iwai, Katsuhito (1972). Essays on Dynamic Economic Theory – Fisherian Theory of Optimal Capital Accumulation and Keynesian Short-run Disequilibrium Dynamics (Ph.D.). Massachusetts Institute of Technology. Retrieved July 5, 2017.
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  18. ^ Nordhaus, William Dawbney. (1967). A Theory of Endogenous Technological Change (Ph.D.). Massachusetts Institute of Technology. Retrieved July 1, 2017. 18. Turgay Özkan|Turkish| date 1979| thesis: Rational Expectations- A game theoretic approach
  19. ^ Perry, George (1961). Aggregate wage determination and the problem of inflation (Ph.D.). Massachusetts Institute of Technology. Retrieved July 4, 2017.
  20. ^ Sengupta, Arjun Kumar (1963). A study in the constant-elasticity-of-substitution production function (Ph.D.). Massachusetts Institute of Technology. Retrieved July 4, 2017.
  21. ^ Shavell, Steven Mark (1973). Essays in Economic Theory (Ph.D.). Massachusetts Institute of Technology. Retrieved July 5, 2017.
  22. (PDF) from the original on August 6, 2020. Retrieved May 26, 2018.
  23. ^ Siegel, Jeremy J. (1971). Stability of a Monetary Economy with Inflationary Expectations (PDF) (Ph.D.). Massachusetts Institute of Technology. Archived (PDF) from the original on August 20, 2017. Retrieved July 5, 2017.
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  25. ^ Wagner, Harvey M. (1962). Statistical Management of Inventory Systems (Ph.D.). Massachusetts Institute of Technology. Retrieved June 30, 2017.
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  28. ^ "Robert M. Solow | American economist". Encyclopedia Britannica. Archived from the original on August 1, 2017. Retrieved June 8, 2017.
  29. ^ "Prospects for growth: An interview with Robert Solow". McKinsey & Company. September 2014. Archived from the original on June 22, 2017. Retrieved June 8, 2017.
  30. ^ "MIT Economics Faculty". Massachusetts Institute of Technology. Archived from the original on August 17, 2017. Retrieved August 27, 2017.
  31. ^ "American Economic Association". www.aeaweb.org. Archived from the original on August 1, 2017. Retrieved June 8, 2017.
  32. ^ Solow, Robert M. "Robert M. Solow – Biographical". www.nobelprize.org. Archived from the original on December 12, 2017. Retrieved June 8, 2017.
  33. ^ Schulman, Kori (November 10, 2014). "President Obama Announces the Presidential Medal of Freedom Recipients". whitehouse.gov. Archived from the original on January 21, 2017. Retrieved June 8, 2017.
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  35. ^ "MIT Libraries' catalog – Barton – Full Catalog – Full Record". library.mit.edu. Archived from the original on December 21, 2023. Retrieved October 10, 2018.
  36. ^ Ivana Kottasová. "Nobel Prize in economics awarded to William Nordhaus and Paul Romer". CNN. Archived from the original on October 9, 2018. Retrieved October 10, 2018.
  37. ^ Martin, Caine. "Robert Solow". youtube. InfiniteHistoryProjectMIT. Retrieved November 13, 2019.
  38. ^ a b c d e "Robert M. Solow – Autobiography". Nobelprize.org. August 23, 1924. Archived from the original on April 17, 2021. Retrieved April 17, 2021.
  39. ^ a b c Martin, Caine. "Robert Solow". Youtube. InfiniteHistoryProjectMIT. Archived from the original on November 18, 2021. Retrieved November 13, 2019.
  40. ^ "Robert M Solow – Middlesex Massachusetts – Army of the United States". wwii-army.mooseroots.com. Retrieved June 8, 2017.[permanent dead link]
  41. ^ "Honorary Degree Recipients 2011". Commencement. Archived from the original on December 22, 2023. Retrieved December 22, 2023.
  42. ^ "Economists for Peace & Security". Archived from the original on January 27, 2020. Retrieved January 21, 2021.
  43. ^ "RePEc Genealogy page for Robert M. Solow". Research Papers in Economics (RePEc). Archived from the original on August 6, 2014. Retrieved November 1, 2014.
  44. ^ "Top 5% Authors, as of September 2014: Strength of Students". Research Papers in Economics (RePEc). Archived from the original on November 1, 2014. Retrieved November 1, 2014.
  45. ^ "Economists amended brief" (PDF). admissionscase.harvard.edu. Archived from the original (PDF) on October 22, 2018. Retrieved December 30, 2018.
  46. ^ "DocumentCloud". Archived from the original on August 9, 2022. Retrieved August 9, 2022.
  47. ^ Hershey, Robert; Weinstein, Michael (December 21, 2023). "Robert M. Solow, Groundbreaking Economist and Nobelist, Dies at 99". The New York Times. Archived from the original on December 21, 2023. Retrieved December 21, 2023.
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  49. (PDF) from the original on July 31, 2020. Retrieved November 13, 2019.
  50. ^ "Faculty | MIT Economics". Archived from the original on October 29, 2022. Retrieved October 29, 2022.
  51. ^ "Cidadãos Nacionais Agraciados com Ordens Portuguesas". Página Oficial das Ordens Honoríficas Portuguesas. Archived from the original on February 8, 2012. Retrieved July 31, 2017.
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  53. ^ "Robert M. Solow". nasonline.org. Archived from the original on August 14, 2022. Retrieved June 21, 2022.
  54. ^ "APS Member History". search.amphilsoc.org. Archived from the original on June 21, 2022. Retrieved June 21, 2022.

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

Awards
Preceded by
James M. Buchanan Jr.
Laureate of the Nobel Memorial Prize in Economics

1987
Succeeded by