Paul Samuelson

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Paul Samuelson

Born	May 15, 1915 Gary, Indiana
Residence	USA
Nationality	American
Field	Economics
Institution	MIT
Alma Mater	Harvard University (PH.D.) University of Chicago (B.A.)
Academic Advisor	Edwin Bidwell Wilson
Notable Students	Lawrence Klein Robert C. Merton
Known for	Mathematical economics Economic methodology Revealed preferences theory International trade theory Economic growth theory Public goods theory
Notable Prizes	John Bates Clark Medal (1947) Nobel Memorial Prize (1970)

Paul A. Samuelson (born May 15, 1915, in Gary, Indiana) is an American economist known for his work in many fields of economics. He was awarded the John Bates Clark Medal in 1947 and Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel (often incorrectly called "Nobel Prize in Economics") in 1970.

Contents 1 Biography 2 Academic accomplishments 3 Professional positions 4 Consultancy 5 Membership of honorary and professional organizations 6 Fields of interest 7 Publications 8 Miscellaneous 9 Impact 10 Other prominent family members 11 See also 12 Books by Paul Samuelson 13 References 14 External links

[edit] Biography

Paul was born in 1915 in Gary, Indiana. His father was a pharmacist and was brought up to a practicing Jewish family. Paul moved to Chicago in 1923 where he studied at the University of Chicago.

[edit] Academic accomplishments

• Received the degree of Bachelor of Arts from University of Chicago in 1935 (where studied under Knight and Viner)
• Received degrees of Master of Arts in 1936 and Doctor of Philosophy in 1941 from Harvard University (where he studied under Schumpeter and Leontief)
• A Social Science Research Council predoctoral fellow from 1935-1937
• A member of the Society of Fellows, Harvard University, 1937-1940
• A Ford Foundation Research Fellow from 1958-1959
• Received honorary Doctor of Laws degrees from the University of Chicago and Oberlin College in 1961, and from Indiana University and East Anglia University (England) in 1966.
• Received National Medal of Science, 1996
• Received honorary Doctor of Social Sciences degree from Yale University in 2005.

[edit] Professional positions

• Came to M.I.T. in 1940 as an Assistant Professor of Economics and was appointed Associate Professor in 1944.
• Served as a staff member of the Radiation Laboratory from 1944-1945
• Professor of International Economic Relations (part-time) at the Fletcher School of Law and Diplomacy in 1945.
• Professor at M.I.T. in 1947 and is now an Institute Professor.
• Guggenheim Fellow from 1948-1949.

[edit] Consultancy

• The War Production Board and Office of War Mobilization and Reconstruction in 1945 (economic and general planning program)
• The United States Treasury, 1945-1952
• The Bureau of the Budget in 1952
• The Research Advisory Panel to the President's National Goals Commission from 1959-1960
• The Research Advisory Board Committee for Economic Development in 1960.
• A member of the National Task Force on Economic Education from 1960-1961
• A consultant to the Rand Corporation since 1949.
• An informal consultant for the United States Treasury and the Council of Economic Advisors.
• Was a consultant to the Federal Reserve Bank.
• An Economic Advisor to Senator, candidate, and President-elect Kennedy, and later to President Lyndon B. Johnson
• His consultation for the government brought him national recognition as an economic advisor.
• In 1965 he was elected president of the International Economic Association.

[edit] Membership of honorary and professional organizations

• A member of the American Academy of Arts and Sciences
• A fellow of the American Philosophical Society and the British Academy;
• A member and past President (1961) of the American Economic Association
• A member of the editorial board and past-President (1951) of the Econometric Society
• A fellow, council member and past Vice-President of the Economic Society.
• A member of Phi Beta Kappa.

[edit] Fields of interest

As professor of economics at the Massachusetts Institute of Technology, Samuelson has worked in fields including:

• Welfare economics, in which he popularised the Lindahl-Bowen-Samuelson conditions (criteria for deciding whether an action will improve welfare) and demonstrated in 1950 the insufficiency of a national-income index to reveal which of two social options was uniformly outside the other's (feasible) Possibility function (Collected Scientific Papers, v. 2, ch. 77; Fischer, 1987, p. 236).
• Public finance theory, in which he is particularly known for his work on determining the optimal allocation of resources in the presence of both public goods and private goods.
• 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).
• Macroeconomics, where he devised the overlapping generations model as a way to analyze economic agents' behavior across multiple periods of time (Collected Scientific Papers, v. 1, ch. 21).

[edit] Publications

Samuelson's book Foundations of Economic Analysis (1947, Enlarged ed. 1983), from his doctoral dissertation, is his magnum opus. Its purposes were to:

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

Thus, "a general theory of economic theories" (Samuelson, 1983, p. xxvi). The book showed how these purposes could be parsimoniously and fruitfully met in the language of the mathematics applied to diverse fields. 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 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).

There are 388 papers to date 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 is also author (and since 1985 co-author) of an influential principles textbook, Economics, first published in 1948, now in its 18th edition. The book has been translated into forty-one languages and sold over four million copies.

[edit] Miscellaneous

Stanislaw Ulam once challenged Samuelson to name one theory in all of the social sciences which is both true and nontrivial. Several years later, Samuelson responded with David Ricardo's theory of comparative advantage.

Famous Quotes:

"Economists have correctly predicted nine of the last five recessions." - Paul Samuelson

"Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas." - Paul Samuelson

[edit] Impact

Along with Kenneth Arrow, Samuelson is considered one of the founders of modern neoclassical economics. The following is an excerpt on the reasons for awarding him the Nobel Prize:

More than any other contemporary economist, Samuelson has helped to raise the general analytical and methodological level in economic science. He has simply rewritten considerable parts of economic theory. He has also shown the fundamental unity of both the problems and analytical techniques in economics, partly by a systematic application of the methodology of maximization for a broad set of problems. This means that Samuelson's contributions range over a large number of different fields.

[edit] Other prominent family members

Paul Samuelson is an uncle of the former Harvard President Larry Summers. According to the book Harvard Rules, Summers's father (himself a distinguished economist) changed his family name from Samuelson to Summers following the example of his oldest brother, who changed the name in order to sound less Jewish in a time when succeeding in the economic world was easier for those of other religions.

[edit] See also

• Neoclassical economics
• Social welfare function
• List of economists

[edit] Books by Paul Samuelson

• Foundations of Economic Analysis, Harvard University Press (1947, Enlarged ed. 1983)
• The Collected Scientific Papers of Paul A. Samuelson, MIT Press

v. 1 & 2, 1937-mid-1964 (1966)

v. 3., mid-1964-1970 (1970)

v. 4, 1971-76 (1977)

v. 5, 1977-1985 (1986)

v. 6 & 7, 1986- (in preparation)

• with Robert Dorfman and Robert M. Solow, Linear Programming and Economic Analysis, McGraw-Hill (1958)
• Economics: An Introductory Analysis, McGraw-Hill (1948) ISBN 0070747415
• with William D. Nordhaus (since 1985), Economics, McGraw-Hill (18th ed., 2004) ISBN 0072872055

[edit] References

• Stanley Fischer, 1987, “Samuelson, Paul Anthony," The New Palgrave: A Dictionary of Economics, v. 4, Macmillan, pp. 234-41
• Leonard Silk, The Economists New York : Basic Books, (1976).
• Robert Sobel, The Worldly Economists New York: Free Press, (1980).

[edit] External links

• Great Minds in Economics: Paul Samuelson - an interview by the Yale Economic Review
• Biography at the Nobel e-Museum
• 1970 Press Release, Nobel Prize in Economics
• "Maximum Principles in Analytical Economics", link to Nobel Prize lecture
• A History of Economic Thought biography
• Profile, Including a list of major works
• the scientific work through which he has developed static and dynamic economic theory and actively contributed to raising the level of analysis in economic science.
• Yale Honorand Biography