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Paul Samuelson

Paul Samuelson

Overview
Paul Anthony Samuelson was an American
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

 economist
Economist
An economist is a professional in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy...

, and the first American to win the Nobel Memorial Prize in Economic Sciences
Nobel Memorial Prize in Economic Sciences
The Nobel Memorial Prize in Economic Sciences, commonly referred to as the Nobel Prize in Economics, but officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel , is an award for outstanding contributions to the field of economics, generally regarded as one of the...

. The Swedish Royal Academies
Swedish Royal Academies
The Royal Academies are independent organisations, founded on Royal command, that act to promote the arts, culture, and science in Sweden. The Swedish Academy and Academy of Sciences are also responsible for the selection of Nobel Prize laureates in Literature, Physics, Chemistry, and the Prize in...

 stated, when awarding the prize, that he "has done more than any other contemporary economist to raise the level of scientific analysis in economic theory." Economic historian Randall E. Parker calls him the "Father of Modern Economics", and The New York Times
The New York Times
The New York Times is an American daily newspaper founded and continuously published in New York City since 1851. The New York Times has won 106 Pulitzer Prizes, the most of any news organization...

considered him to be the "foremost academic economist of the 20th century."

He was author of the largest-selling economics textbook of all time: Economics: An Introductory Analysis
Economics (textbook)
Economics is an influential introductory textbook by American economists Paul Samuelson and William Nordhaus. It was first published in 1948, and has appeared in nineteen different editions, the most recent in 2010. It was the best selling economics textbook for many decades and still remains...

, first published in 1948.
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Encyclopedia
Paul Anthony Samuelson was an American
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

 economist
Economist
An economist is a professional in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy...

, and the first American to win the Nobel Memorial Prize in Economic Sciences
Nobel Memorial Prize in Economic Sciences
The Nobel Memorial Prize in Economic Sciences, commonly referred to as the Nobel Prize in Economics, but officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel , is an award for outstanding contributions to the field of economics, generally regarded as one of the...

. The Swedish Royal Academies
Swedish Royal Academies
The Royal Academies are independent organisations, founded on Royal command, that act to promote the arts, culture, and science in Sweden. The Swedish Academy and Academy of Sciences are also responsible for the selection of Nobel Prize laureates in Literature, Physics, Chemistry, and the Prize in...

 stated, when awarding the prize, that he "has done more than any other contemporary economist to raise the level of scientific analysis in economic theory." Economic historian Randall E. Parker calls him the "Father of Modern Economics", and The New York Times
The New York Times
The New York Times is an American daily newspaper founded and continuously published in New York City since 1851. The New York Times has won 106 Pulitzer Prizes, the most of any news organization...

considered him to be the "foremost academic economist of the 20th century."

He was author of the largest-selling economics textbook of all time: Economics: An Introductory Analysis
Economics (textbook)
Economics is an influential introductory textbook by American economists Paul Samuelson and William Nordhaus. It was first published in 1948, and has appeared in nineteen different editions, the most recent in 2010. It was the best selling economics textbook for many decades and still remains...

, first published in 1948. It was the second American textbook to explain the principles of Keynesian economics
Keynesian economics
Keynesian economics is a school of macroeconomic thought based on the ideas of 20th-century English economist John Maynard Keynes.Keynesian economics argues that private sector decisions sometimes lead to inefficient macroeconomic outcomes and, therefore, advocates active policy responses by the...

 and how to think about economics, and the first one to be successful, and is now in its 19th edition, having sold nearly 4 million copies in 40 languages. James Poterba, former head of MIT's Department of Economics, noted that by his book, Samuelson "leaves an immense legacy, as a researcher and a teacher, as one of the giants on whose shoulders every contemporary economist stands." In 1996, when he was awarded the National Medal of Science
National Medal of Science
The National Medal of Science is an honor bestowed by the President of the United States to individuals in science and engineering who have made important contributions to the advancement of knowledge in the fields of behavioral and social sciences, biology, chemistry, engineering, mathematics and...

, considered America's top science honor, President Bill Clinton
Bill Clinton
William Jefferson "Bill" Clinton is an American politician who served as the 42nd President of the United States from 1993 to 2001. Inaugurated at age 46, he was the third-youngest president. He took office at the end of the Cold War, and was the first president of the baby boomer generation...

 commended Samuelson for his "fundamental contributions to economic science" for over 60 years.

He entered the University of Chicago
University of Chicago
The University of Chicago is a private research university in Chicago, Illinois, USA. It was founded by the American Baptist Education Society with a donation from oil magnate and philanthropist John D. Rockefeller and incorporated in 1890...

 at age 16, during the depths of the Great Depression
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...

, and received his PhD
PHD
PHD may refer to:*Ph.D., a doctorate of philosophy*Ph.D. , a 1980s British group*PHD finger, a protein sequence*PHD Mountain Software, an outdoor clothing and equipment company*PhD Docbook renderer, an XML renderer...

 in economics from Harvard. After graduating, he became an assistant professor of economics at Massachusetts Institute of Technology
Massachusetts Institute of Technology
The Massachusetts Institute of Technology is a private research university located in Cambridge, Massachusetts. MIT has five schools and one college, containing a total of 32 academic departments, with a strong emphasis on scientific and technological education and research.Founded in 1861 in...

 (MIT) when he was 25 years of age and a full professor at age 32. In 1966, he was named Institute Professor, MIT's highest faculty honor. He spent his career at MIT where he was instrumental in turning its Department of Economics into a world-renowned institution by attracting other noted economists to join the faculty, including Robert M. Solow, Paul Krugman
Paul Krugman
Paul Robin Krugman is an American economist, professor of Economics and International Affairs at the Woodrow Wilson School of Public and International Affairs at Princeton University, Centenary Professor at the London School of Economics, and an op-ed columnist for The New York Times...

, Franco Modigliani
Franco Modigliani
Franco Modigliani was an Italian economist at the MIT Sloan School of Management and MIT Department of Economics, and winner of the Nobel Memorial Prize in Economics in 1985.-Life and career:...

, Robert C. Merton
Robert C. Merton
Robert Carhart Merton is an American economist, Nobel laureate in Economics, and professor at the MIT Sloan School of Management.-Biography:...

 and Joseph E. Stiglitz
Joseph E. Stiglitz
Joseph Eugene Stiglitz, ForMemRS, FBA, is an American economist and a professor at Columbia University. He is a recipient of the Nobel Memorial Prize in Economic Sciences and the John Bates Clark Medal . He is also the former Senior Vice President and Chief Economist of the World Bank...

, all of whom went on to win Nobel Prizes. Samuelson was instrumental in the initial development of Indian Institute of Management Calcutta
Indian Institute of Management Calcutta
The Indian Institute of Management Calcutta is an institute of management located in Kolkata , India giving diplomas in management...

, the first Indian Institute of Management.

He served as an advisor to Presidents John F. Kennedy
John F. Kennedy
John Fitzgerald "Jack" Kennedy , often referred to by his initials JFK, was the 35th President of the United States, serving from 1961 until his assassination in 1963....

 and Lyndon B. Johnson
Lyndon B. Johnson
Lyndon Baines Johnson , often referred to as LBJ, was the 36th President of the United States after his service as the 37th Vice President of the United States...

, and was a consultant to the United States Treasury, the Bureau of the Budget and the President's Council of Economic Advisers
Council of Economic Advisers
The Council of Economic Advisers is an agency within the Executive Office of the President that advises the President of the United States on economic policy...

. Samuelson wrote a weekly column for Newsweek
Newsweek
Newsweek is an American weekly news magazine published in New York City. It is distributed throughout the United States and internationally. It is the second-largest news weekly magazine in the U.S., having trailed Time in circulation and advertising revenue for most of its existence...

magazine along with Chicago School
Chicago school (economics)
The Chicago school of economics describes a neoclassical school of thought within the academic community of economists, with a strong focus around the faculty of The University of Chicago, some of whom have constructed and popularized its principles...

 economist Milton Friedman
Milton Friedman
Milton Friedman was an American economist, statistician, academic, and author who taught at the University of Chicago for more than three decades...

, where they represented opposing sides: Samuelson took the Keynesian perspective, and Friedman represented the Monetarist
Monetarism
Monetarism is a tendency in economic thought that emphasizes the role of governments in controlling the amount of money in circulation. It is the view within monetary economics that variation in the money supply has major influences on national output in the short run and the price level over...

 perspective. Samuelson died on December 13, 2009, at the age of 94.

Biography


Samuelson was born in Gary, Indiana
Gary, Indiana
Gary is a city in Lake County, Indiana, United States. The city is in the southeastern portion of the Chicago metropolitan area and is 25 miles from downtown Chicago. The population is 80,294 at the 2010 census, making it the seventh-largest city in the state. It borders Lake Michigan and is known...

, on May 15, 1915, to Frank Samuelson, a pharmacist
Pharmacy
Pharmacy is the health profession that links the health sciences with the chemical sciences and it is charged with ensuring the safe and effective use of pharmaceutical drugs...

, and the former Ella Lipton. His family, he said, was “made up of upwardly mobile Jewish immigrants from Poland
Poland
Poland , officially the Republic of Poland , is a country in Central Europe bordered by Germany to the west; the Czech Republic and Slovakia to the south; Ukraine, Belarus and Lithuania to the east; and the Baltic Sea and Kaliningrad Oblast, a Russian exclave, to the north...

 who had prospered considerably in World War I
World War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...

, because Gary was a brand new steel town when my family went there.” In 1923 Samuelson moved to Chicago; he studied at the University of Chicago
University of Chicago
The University of Chicago is a private research university in Chicago, Illinois, USA. It was founded by the American Baptist Education Society with a donation from oil magnate and philanthropist John D. Rockefeller and incorporated in 1890...

 and received his Bachelor of Arts degree there in 1935. He then completed his Master of Arts degree in 1936, and his Doctor of Philosophy in 1941 at Harvard University
Harvard University
Harvard University is a private Ivy League university located in Cambridge, Massachusetts, United States, established in 1636 by the Massachusetts legislature. Harvard is the oldest institution of higher learning in the United States and the first corporation chartered in the country...

. As a graduate student at Harvard, Samuelson studied economics under Joseph Schumpeter
Joseph Schumpeter
Joseph Alois Schumpeter was an Austrian-Hungarian-American economist and political scientist. He popularized the term "creative destruction" in economics.-Life:...

, Wassily Leontief
Wassily Leontief
Wassily Wassilyovich Leontief , was a Russian-American economist notable for his research on how changes in one economic sector may have an effect on other sectors. Leontief won the Nobel Committee's Nobel Memorial Prize in Economic Sciences in 1973, and three of his doctoral students have also...

, Gottfried Haberler
Gottfried Haberler
Gottfried von Haberler was an economist. He worked in particular on international trade....

, and the "American Keynes" Alvin Hansen
Alvin Hansen
Alvin Harvey Hansen , often referred to as "the American Keynes," was a professor of economics at Harvard, a widely read author on current economic issues, and an influential advisor to the government who helped create the Council of Economic Advisors and the Social security system...

. Samuelson comes from a family of well-known economists, including brother Robert Summers
Robert Summers
Robert Summers is a U.S. economist and professor emeritus, University of Pennsylvania, where he taught from 1960. A widely cited early work by Summers is on the small-sample statistical properties of alternate regression estimators where analytical measures are unavailable.Summers received his...

, sister-in-law Anita Summers
Anita Summers
Anita Arrow Summers is an American educator of public policy, management, real estate and education and is Professor Emerita at the University of Pennsylvania.The daughter of Jewish immigrants from Romania...

, and nephew Larry Summers.

During his seven decades as an economist, Samuelson's professional positions included:
  • Assistant Professor of Economics at M.I.T, 1940, Associate Professor, 1944.
  • Member of the Radiation Laboratory 1944-1945.
  • 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 M.I.T. beginning in 1947 and Institute Professor beginning in 1962.
  • Vernon F. Taylor Visiting Distinguished Professor at Trinity University (Texas)
    Trinity University (Texas)
    Trinity University is a private, independent, primarily undergraduate, university in San Antonio, Texas. Its campus is located in the Monte Vista Historic District and adjacent to Brackenridge Park....

     in Spring 1989.

Death


Samuelson died after a brief illness on December 13, 2009, at the age of 94. His death was announced by the Massachusetts Institute of Technology
Massachusetts Institute of Technology
The Massachusetts Institute of Technology is a private research university located in Cambridge, Massachusetts. MIT has five schools and one college, containing a total of 32 academic departments, with a strong emphasis on scientific and technological education and research.Founded in 1861 in...

. James M. Poterba
James M. Poterba
James Michael "Jim" Poterba is an American economist, Mitsui Professor of Economics at the Massachusetts Institute of Technology, and current NBER president and chief executive officer.- Early years :...

, an economics professor at MIT and the president of the National Bureau of Economic Research
National Bureau of Economic Research
The National Bureau of Economic Research is an American private nonprofit research organization "committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community." The NBER is well known for providing start and end...

, 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". Susan Hockfield
Susan Hockfield
Susan Hockfield is the sixteenth and current president of the Massachusetts Institute of Technology. Hockfield's appointment was publicly announced on August 26, 2004, and she formally took office December 6, 2004, succeeding Charles M. Vest. Hockfield's official inauguration celebrations took...

, 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".

Impact


Samuelson is considered to be one of the founders of neo-Keynesian economics
Neo-Keynesian Economics
Neo-Keynesian economics is a school of macroeconomic thought that was developed in the post-war period from the writings of John Maynard Keynes. A group of economists , attempted to interpret and formalize Keynes' writings, and to synthesize it with the neo-classical models of economics...

 and a seminal figure in the development of neoclassical economics
Neoclassical economics
Neoclassical economics is a term variously used for approaches to economics focusing on the determination of prices, outputs, and income distributions in markets through supply and demand, often mediated through a hypothesized maximization of utility by income-constrained individuals and of profits...

. In awarding him the Nobel Memorial Prize in Economic Sciences
Nobel Memorial Prize in Economic Sciences
The Nobel Memorial Prize in Economic Sciences, commonly referred to as the Nobel Prize in Economics, but officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel , is an award for outstanding contributions to the field of economics, generally regarded as one of the...

 the committee stated:
He was also essential in creating the Neoclassical synthesis
Neoclassical synthesis
Neoclassical synthesis is a postwar academic movement in economics that attempts to absorb the macroeconomic thought of John Maynard Keynes into the thought of neoclassical economics...

, which incorporated Keynesian
Keynesian economics
Keynesian economics is a school of macroeconomic thought based on the ideas of 20th-century English economist John Maynard Keynes.Keynesian economics argues that private sector decisions sometimes lead to inefficient macroeconomic outcomes and, therefore, advocates active policy responses by the...

 and neoclassical
Neoclassical economics
Neoclassical economics is a term variously used for approaches to economics focusing on the determination of prices, outputs, and income distributions in markets through supply and demand, often mediated through a hypothesized maximization of utility by income-constrained individuals and of profits...

 principles and still dominates current mainstream economics
Mainstream economics
Mainstream economics is a loose term used to refer to widely-accepted economics as taught in prominent universities and in contrast to heterodox economics...

. In 2003, Samuelson was one of the 10 Nobel Prize winning economists signing the Economists' statement opposing the Bush tax cuts
Economists' statement opposing the Bush tax cuts
The Economists' statement opposing the Bush tax cuts was a statement signed by roughly 450 economists, including ten of the twenty-four American Nobel Prize laureates alive at the time, in February 2003 who urged the U.S. President George W. Bush not to enact the 2003 tax cuts; seeking and sought...

.

Thermodynamics and economics


Samuelson was one of the first economists to generalize and apply mathematical methods developed for the study of thermodynamics
Thermodynamics
Thermodynamics is a physical science that studies the effects on material bodies, and on radiation in regions of space, of transfer of heat and of work done on or by the bodies or radiation...

 to economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...

. As a graduate student at Harvard, he was the sole protégé of the polymath
Polymath
A polymath is a person whose expertise spans a significant number of different subject areas. In less formal terms, a polymath may simply be someone who is very knowledgeable...

 Edwin Bidwell Wilson
Edwin Bidwell Wilson
Edwin Bidwell Wilson was an American mathematician and polymath. He was the sole protégé of Yale's physicist Josiah Willard Gibbs and was mentor to MIT economist Paul Samuelson. He received his AB from Harvard College in 1899 and his PhD from Yale University in 1901, working under Gibbs.E.B...

, who had himself been a student of Yale physicist Willard Gibbs. Gibbs, the founder of chemical thermodynamics
Chemical thermodynamics
Chemical thermodynamics is the study of the interrelation of heat and work with chemical reactions or with physical changes of state within the confines of the laws of thermodynamics...

, was also mentor to American economist Irving Fisher
Irving Fisher
Irving Fisher was an American economist, inventor, and health campaigner, and one of the earliest American neoclassical economists, though his later work on debt deflation often regarded as belonging instead to the Post-Keynesian school.Fisher made important contributions to utility theory and...

 and he influenced them both in their ideas on the equilibrium of economic systems.

Samuelson also published one of the first papers on nonlinear dynamics in economic analysis.

Samuelson's 1947 magnum opus
Masterpiece
Masterpiece in modern usage refers to a creation that has been given much critical praise, especially one that is considered the greatest work of a person's career or to a work of outstanding creativity, skill or workmanship....

 Foundations of Economic Analysis
Foundations of Economic Analysis
Foundations of Economic Analysis is a book by Paul A. Samuelson published in 1947 by Harvard University Press. It sought to demonstrate a common mathematical structure underlying multiple branches of economics from two basic principles: maximizing behavior of agents and stability of equilibrium...

, from his doctoral dissertation, is based on the classical thermodynamic
Chemical thermodynamics
Chemical thermodynamics is the study of the interrelation of heat and work with chemical reactions or with physical changes of state within the confines of the laws of thermodynamics...

 methods of American thermodynamicist
Thermodynamicist
In thermodynamics, a thermodynamicist is one who studies thermodynamic processes and phenomena, i.e. the physics that deals with mechanical action and relations of heat...

 Willard Gibbs, specifically Gibbs' 1876 paper On the Equilibrium of Heterogeneous Substances
On the Equilibrium of Heterogeneous Substances
In the history of thermodynamics, On the Equilibrium of Heterogeneous Substances is a 300-page paper written by American mathematical-engineer Willard Gibbs...

.

In 1947, based on the Le Chatelier principle of thermodynamics, a principle taught to Samuelson by Wilson in lecture, he established the method of comparative statics in economics. This method explains the changes in the equilibrium solution of a constrained maximization problem (economic or thermodynamic) when one of the constraints is marginally tightened or relaxed. The Le Chatelier principle was developed by French chemist Henri Louis le Chatelier
Henri Louis Le Chatelier
Henri Louis Le Châtelier was an influential French chemist of the late 19th and early 20th centuries. He is most famous for devising Le Châtelier's principle, used by chemists to predict the effect a changing condition has on a system in chemical equilibrium...

, who is notable for being one of the first to translate Gibbs' equilibrium papers (in French, 1899). Samuelson's use of the Le Chatelier principle has proven to be a very powerful tool and found widespread use in modern economics. Attempts at neo-classical equilibrium economics analogies with thermodynamics generally, go back to Guillaume and Samuelson.

Publications



Samuelson's book Foundations of Economic Analysis
Foundations of Economic Analysis
Foundations of Economic Analysis is a book by Paul A. Samuelson published in 1947 by Harvard University Press. It sought to demonstrate a common mathematical structure underlying multiple branches of economics from two basic principles: maximizing behavior of agents and stability of equilibrium...

(1947, Enlarged ed. 1983), is considered his magnum opus
Masterpiece
Masterpiece in modern usage refers to a creation that has been given much critical praise, especially one that is considered the greatest work of a person's career or to a work of outstanding creativity, skill or workmanship....

. It is derived from his doctoral dissertation at Harvard University, and makes use of the classical thermodynamic
Chemical thermodynamics
Chemical thermodynamics is the study of the interrelation of heat and work with chemical reactions or with physical changes of state within the confines of the laws of thermodynamics...

 methods of American thermodynamicist
Thermodynamicist
In thermodynamics, a thermodynamicist is one who studies thermodynamic processes and phenomena, i.e. the physics that deals with mechanical action and relations of heat...

 Willard Gibbs. 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.

In the course of analysis, comparative statics
Comparative statics
In economics, comparative statics is the comparison of two different economic outcomes, before and after a change in some underlying exogenous parameter....

, (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
Welfare economics
Welfare economics is a branch of economics that uses microeconomic techniques to evaluate economic well-being, especially relative to competitive general equilibrium within an economy as to economic efficiency and the resulting income distribution associated with it...

 "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
Abram Bergson
Abram Bergson , born Abram Burk, was an American economist. He was born in New York City....

–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
Stanley Fischer
Stanley "Stan" Fischer is an American-Israeli economist and the current Governor of the Bank of Israel. He previously served as Chief Economist at the World Bank.-Biography:...

 (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
Economics (textbook)
Economics is an influential introductory textbook by American economists Paul Samuelson and William Nordhaus. It was first published in 1948, and has appeared in nineteen different editions, the most recent in 2010. It was the best selling economics textbook for many decades and still remains...

, first published in 1948, now in its 19th edition. The book has been translated into forty-one languages and sold over four million copies; it is considered the best-selling economics textbook in history. Written in the shadow of the Great Depression
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...

 and World War II, it helped to popularize the insights of John Maynard Keynes
John Maynard Keynes
John Maynard Keynes, Baron Keynes of Tilton, CB FBA , was a British economist whose ideas have profoundly affected the theory and practice of modern macroeconomics, as well as the economic policies of governments...

. 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." This reflected the concern of Keynes himself with the economic causes of war and the importance of economic policy in promoting peace. Samuelson's influential textbook has been criticized for including comparative growth rates
Economic growth
In economics, economic growth is defined as the increasing capacity of the economy to satisfy the wants of goods and services of the members of society. Economic growth is enabled by increases in productivity, which lowers the inputs for a given amount of output. Lowered costs increase demand...

 between the US and Soviet Union that were inconsistent with historical GNP differences. The 1967 edition extrapolates the possibility of Soviet/US real GNP parity between 1977 and 1995. Each subsequent edition extrapolated a date range further in the future until those graphs were dropped from the 1985 edition.

Samuelson is co-editor of Inside the Economist's Mind: Conversations with Eminent Economists (Blackwell Publishing, 2007), along with William A. Barnett
William A. Barnett
William Arnold Barnett is an American economist whose current work is in the field of chaos, bifurcation, and nonlinearity in socioeconomic contexts, as well as the study of the aggregation problem....

, a collection of candid interviews with top economists of the 20th century.

Fields of interest


As professor of economics at the Massachusetts Institute of Technology
Massachusetts Institute of Technology
The Massachusetts Institute of Technology is a private research university located in Cambridge, Massachusetts. MIT has five schools and one college, containing a total of 32 academic departments, with a strong emphasis on scientific and technological education and research.Founded in 1861 in...

, Samuelson worked in many fields including:
  • Welfare economics
    Welfare economics
    Welfare economics is a branch of economics that uses microeconomic techniques to evaluate economic well-being, especially relative to competitive general equilibrium within an economy as to economic efficiency and the resulting income distribution associated with it...

    , 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
    Public finance
    Public finance is the revenue and expenditure of public authoritiesThe purview of public finance is considered to be threefold: governmental effects on efficient allocation of resources, distribution of income, and macroeconomic stabilization.-Overview:The proper role of government provides a...

     theory, in which he is particularly known for his work on determining the optimal allocation
    Allocative efficiency
    Allocative efficiency is a theoretical measure of the benefit or utility derived from a proposed or actual selection in the allocation or allotment of resources....

     of resources in the presence of both public good
    Public good
    In economics, a public good is a good that is non-rival and non-excludable. Non-rivalry means that consumption of the good by one individual does not reduce availability of the good for consumption by others; and non-excludability means that no one can be effectively excluded from using the good...

    s and private good
    Private good
    A private good is defined in economics as "an item that yields positive benefits to people” that is excludable, i.e. its owners can exercise private property rights, preventing those who have not paid for it from using the good or consuming its benefits; and rivalrous, i.e. consumption by one...

    s.
  • International economics
    International economics
    International economics is concerned with the effects upon economic activity of international differences in productive resources and consumer preferences and the institutions that affect them...

    , 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
    Macroeconomics
    Macroeconomics is a branch of economics dealing with the performance, structure, behavior, and decision-making of the whole economy. This includes a national, regional, or global economy...

    , where he popularized the overlapping generations model
    Overlapping generations model
    An overlapping generations model, abbreviated to OLG model, is a type of economic model in which agents live a finite length of time and live long enough to endure into at least one period of the next generation's lives....

     as a way to analyze economic agents' behavior across multiple periods of time (Collected Scientific Papers, v. 1, ch. 21).
  • Consumer theory
    Consumer theory
    Consumer choice is a theory of microeconomics that relates preferences for consumption goods and services to consumption expenditures and ultimately to consumer demand curves. The link between personal preferences, consumption, and the demand curve is one of the most closely studied relations in...

    , he pioneered the Revealed Preference Theory
    Revealed preference
    Revealed preference theory, pioneered by American economist Paul Samuelson, is a method by which it is possible to discern the best possible option on the basis of consumer behavior. Essentially, this means that the preferences of consumers can be revealed by their purchasing habits...

    , which is a method by which it is possible to discern the best possible option, and thus define consumer's utility functions, by observing the consumer behaviour
    Consumer behaviour
    Consumer behaviour is the study of when, why, how, and where people do or do not buy a product. It blends elements from psychology, sociology, social anthropology and economics. It attempts to understand the buyer decision making process, both individually and in groups...

    .

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
David Ricardo
David Ricardo was an English political economist, often credited with systematising economics, and was one of the most influential of the classical economists, along with Thomas Malthus, Adam Smith, and John Stuart Mill. He was also a member of Parliament, businessman, financier and speculator,...

's theory of comparative advantage
Comparative advantage
In economics, the law of comparative advantage says that two countries will both gain from trade if, in the absence of trade, they have different relative costs for producing the same goods...

: That it is logically true need not be argued before a mathematician; that is not trivial is attested by the thousands of important and intelligent men who have never been able to grasp the doctrine for themselves or to believe it after it was explained to them.

For many years, Samuelson wrote a column for Newsweek
Newsweek
Newsweek is an American weekly news magazine published in New York City. It is distributed throughout the United States and internationally. It is the second-largest news weekly magazine in the U.S., having trailed Time in circulation and advertising revenue for most of its existence...

. 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.

Memberships

  • member of the American Academy of Arts and Sciences
    American Academy of Arts and Sciences
    The American Academy of Arts and Sciences is an independent policy research center that conducts multidisciplinary studies of complex and emerging problems. The Academy’s elected members are leaders in the academic disciplines, the arts, business, and public affairs.James Bowdoin, John Adams, and...

    , National Academy of Sciences
    United States National Academy of Sciences
    The National Academy of Sciences is a corporation in the United States whose members serve pro bono as "advisers to the nation on science, engineering, and medicine." As a national academy, new members of the organization are elected annually by current members, based on their distinguished and...

    , Fellow of Royal Society
    Royal Society
    The Royal Society of London for Improving Natural Knowledge, known simply as the Royal Society, is a learned society for science, and is possibly the oldest such society in existence. Founded in November 1660, it was granted a Royal Charter by King Charles II as the "Royal Society of London"...

     of London
  • fellow of the American Philosophical Society
    American Philosophical Society
    The American Philosophical Society, founded in 1743, and located in Philadelphia, Pa., is an eminent scholarly organization of international reputation, that promotes useful knowledge in the sciences and humanities through excellence in scholarly research, professional meetings, publications,...

     and the British Academy
    British Academy
    The British Academy is the United Kingdom's national body for the humanities and the social sciences. Its purpose is to inspire, recognise and support excellence in the humanities and social sciences, throughout the UK and internationally, and to champion their role and value.It receives an annual...

    ;
  • member and past President (1961) of the American Economic Association
    American Economic Association
    The American Economic Association, or AEA, is a learned society in the field of economics, headquartered in Nashville, Tennessee. It publishes one of the most prestigious academic journals in economics: the American Economic Review...

  • member of the editorial board and past-President (1951) of the Econometric Society
    Econometric Society
    The Econometric Society is an international society for the advancement of economic theory in its relation with statistics and mathematics. It was founded on December 29, 1930 at the Stalton Hotel in Cleveland, Ohio....

  • fellow, council member and past Vice-President of the Economic Society.
  • member of Phi Beta Kappa.

List of publications

  • 1947, Enlarged ed. 1983. Foundations of Economic Analysis
    Foundations of Economic Analysis
    Foundations of Economic Analysis is a book by Paul A. Samuelson published in 1947 by Harvard University Press. It sought to demonstrate a common mathematical structure underlying multiple branches of economics from two basic principles: maximizing behavior of agents and stability of equilibrium...

    , Harvard University Press.
  • 1948. Economics: An Introductory Analysis
    Economics (textbook)
    Economics is an influential introductory textbook by American economists Paul Samuelson and William Nordhaus. It was first published in 1948, and has appeared in nineteen different editions, the most recent in 2010. It was the best selling economics textbook for many decades and still remains...

    ,ISBN 0-07-074741-5; with William D. Nordhaus
    William Nordhaus
    William Dawbney "Bill" Nordhaus is the Sterling Professor of Economics at Yale University. Nordhaus lives in New Haven, Connecticut, with his wife Barbara.-Career:...

     (since 1985), 2009, 19th ed., McGraw–Hill. ISBN 9780071263832
  • 1952. "Economic Theory and Mathematics — An Appraisal," American Economic Review, 42(2), pp. 56-66.
  • 1954. "The Pure Theory of Public Expenditure". Review of Economics and Statistics, 36 (4): 387–389. doi:10.2307/1925895
  • 1958. Linear Programming and Economic Analysis with Robert Dorfman and Robert M. Solow, McGraw–Hill. Chapter-preview links.
  • The Collected Scientific Papers of Paul A. Samuelson, MIT Press. Article-preview links for vol. I-V and Contents links for vol. VI-VII.
1966. Vol. I, 1937–mid-1964.
1966. Vol. II, 1937–mid-1964.
1972. Vol. III, mid-1964–1970.
1977. Vol. IV 1971–76.
1986. Vol. V, 1977–1985.
2011. Vol. VI, 1986-2009. Description
2011. Vol. VII, 1986-2009.
  • Paul A. Samuelson Papers, 1930s-2010, Rubenstein Library, Duke University.
  • 2007. Inside the Economist's Mind: Conversations with Eminent Economists with William A. Barnett
    William A. Barnett
    William Arnold Barnett is an American economist whose current work is in the field of chaos, bifurcation, and nonlinearity in socioeconomic contexts, as well as the study of the aggregation problem....

    , Blackwell Publishing, ISBN 1405159170

See also

  • Guaranteed minimum income
    Guaranteed minimum income
    Guaranteed minimum income is a system of social welfare provision that guarantees that all citizens or families have an income sufficient to live on, provided they meet certain conditions. Eligibility is typically determined by citizenship, a means test and either availability for the labour...

  • Neoclassical economics
    Neoclassical economics
    Neoclassical economics is a term variously used for approaches to economics focusing on the determination of prices, outputs, and income distributions in markets through supply and demand, often mediated through a hypothesized maximization of utility by income-constrained individuals and of profits...

  • Social welfare function
    Social welfare function
    In economics, a social welfare function is a real-valued function that ranks conceivable social states from lowest to highest. Inputs of the function include any variables considered to affect the economic welfare of a society...

  • List of economists
  • List of Jewish Nobel laureates
  • History of economic thought
    History of economic thought
    The history of economic thought deals with different thinkers and theories in the subject that became political economy and economics from the ancient world to the present day...


External links