Robert Solow

Robert Solow

Overview
Robert Merton Solow is 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...

 particularly known for his work on the theory of economic growth
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...

 that culminated in the exogenous growth model
Exogenous growth model
The neoclassical growth model, also known as the Solow–Swan growth model or exogenous growth model, is a class of economic models of long-run economic growth set within the framework of neoclassical economics...

 named after him. He was awarded the John Bates Clark Medal
John Bates Clark Medal
The John Bates Clark Medal is awarded by the American Economic Association to "that American economist under the age of forty who is adjudged to have made a significant contribution to economic thought and knowledge"...

 (in 1961) and the 1987 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...

.

Robert Solow was born in Brooklyn
Brooklyn
Brooklyn is the most populous of New York City's five boroughs, with nearly 2.6 million residents, and the second-largest in area. Since 1896, Brooklyn has had the same boundaries as Kings County, which is now the most populous county in New York State and the second-most densely populated...

, New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...

 in a Jewish family on August 23, 1924, the oldest of three children. He was well educated in the neighborhood public schools of New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...

 and excelled academically early in life.
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Encyclopedia
Robert Merton Solow is 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...

 particularly known for his work on the theory of economic growth
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...

 that culminated in the exogenous growth model
Exogenous growth model
The neoclassical growth model, also known as the Solow–Swan growth model or exogenous growth model, is a class of economic models of long-run economic growth set within the framework of neoclassical economics...

 named after him. He was awarded the John Bates Clark Medal
John Bates Clark Medal
The John Bates Clark Medal is awarded by the American Economic Association to "that American economist under the age of forty who is adjudged to have made a significant contribution to economic thought and knowledge"...

 (in 1961) and the 1987 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...

.

Biography


Robert Solow was born in Brooklyn
Brooklyn
Brooklyn is the most populous of New York City's five boroughs, with nearly 2.6 million residents, and the second-largest in area. Since 1896, Brooklyn has had the same boundaries as Kings County, which is now the most populous county in New York State and the second-most densely populated...

, New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...

 in a Jewish family on August 23, 1924, the oldest of three children. He was well educated in the neighborhood public schools of New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...

 and excelled academically early in life. In September 1940, Solow went to Harvard College
Harvard College
Harvard College, in Cambridge, Massachusetts, is one of two schools within Harvard University granting undergraduate degrees...

 with a scholarship. At Harvard, his first studies were in sociology
Sociology
Sociology is the study of society. It is a social science—a term with which it is sometimes synonymous—which uses various methods of empirical investigation and critical analysis to develop a body of knowledge about human social activity...

 and anthropology
Anthropology
Anthropology is the study of humanity. It has origins in the humanities, the natural sciences, and the social sciences. The term "anthropology" is from the Greek anthrōpos , "man", understood to mean mankind or humanity, and -logia , "discourse" or "study", and was first used in 1501 by German...

 as well as elementary economics.

By the end of 1942, Solow left the university and joined the U.S. Army. He served briefly in North Africa
North Africa
North Africa or Northern Africa is the northernmost region of the African continent, linked by the Sahara to Sub-Saharan Africa. Geopolitically, the United Nations definition of Northern Africa includes eight countries or territories; Algeria, Egypt, Libya, Morocco, South Sudan, Sudan, Tunisia, and...

 and Sicily
Sicily
Sicily is a region of Italy, and is the largest island in the Mediterranean Sea. Along with the surrounding minor islands, it constitutes an autonomous region of Italy, the Regione Autonoma Siciliana Sicily has a rich and unique culture, especially with regard to the arts, music, literature,...

, and later served in Italy
Italy
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...

 during World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...

 until he was discharged in August 1945.

He returned to Harvard in 1945, and studied under 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...

. As his research assistant he produced the first set of capital-coefficients for the input-output model
Input-output model
In economics, an input-output model is a quantitative economic technique that represents the interdependencies between different branches of national economy or between branches of different, even competing economies. Wassily Leontief developed this type of analysis and took the Nobel Memorial...

. Then he became interested in statistics
Statistics
Statistics is the study of the collection, organization, analysis, and interpretation of data. It deals with all aspects of this, including the planning of data collection in terms of the design of surveys and experiments....

 and probability
Probability
Probability is ordinarily used to describe an attitude of mind towards some proposition of whose truth we arenot certain. The proposition of interest is usually of the form "Will a specific event occur?" The attitude of mind is of the form "How certain are we that the event will occur?" The...

 models
Statistical model
A statistical model is a formalization of relationships between variables in the form of mathematical equations. A statistical model describes how one or more random variables are related to one or more random variables. The model is statistical as the variables are not deterministically but...

. From 1949–50, he spent a fellowship year at Columbia University
Columbia University
Columbia University in the City of New York is a private, Ivy League university in Manhattan, New York City. Columbia is the oldest institution of higher learning in the state of New York, the fifth oldest in the United States, and one of the country's nine Colonial Colleges founded before the...

 to study statistics more intensively. During that year he was also working on his Ph.D. thesis, an exploratory attempt to model changes in the size distribution of wage income using interacting Markov process
Markov process
In probability theory and statistics, a Markov process, named after the Russian mathematician Andrey Markov, is a time-varying random phenomenon for which a specific property holds...

es for employment-unemployment and wage rates.

In 1949, just before going off to Columbia he was offered and accepted an Assistant Professorship in the Economics Department at Massachusetts Institute of Technology
MIT Department of Economics
The MIT Department of Economics is a department of the Massachusetts Institute of Technology in Cambridge, Massachusetts.Undergraduate studies in economics were introduced in the 19th century by institute president Francis Amasa Walker. The department's Ph.D...

. At M.I.T. he taught courses in statistics and econometrics
Econometrics
Econometrics has been defined as "the application of mathematics and statistical methods to economic data" and described as the branch of economics "that aims to give empirical content to economic relations." More precisely, it is "the quantitative analysis of actual economic phenomena based on...

. Solow’s interest gradually changed to 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...

. For almost 40 years, Solow and Paul Samuelson
Paul Samuelson
Paul Anthony Samuelson was an American economist, and the first American to win the Nobel Memorial Prize in Economic Sciences. The Swedish Royal Academies stated, when awarding the prize, that he "has done more than any other contemporary economist to raise the level of scientific analysis in...

 worked together on many landmark theories: von Neumann growth theory (1953), Theory of capital (1956), linear programming
Linear programming
Linear programming is a mathematical method for determining a way to achieve the best outcome in a given mathematical model for some list of requirements represented as linear relationships...

 (1958) and the Phillips Curve
Phillips curve
In economics, the Phillips curve is a historical inverse relationship between the rate of unemployment and the rate of inflation in an economy. Stated simply, the lower the unemployment in an economy, the higher the rate of inflation...

 (1960).

Solow also held several government positions, including senior economist for the 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...

 (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 was president of that association.

In 1987, Robert Solow won the Nobel Prize
Nobel Prize
The Nobel Prizes are annual international awards bestowed by Scandinavian committees in recognition of cultural and scientific advances. The will of the Swedish chemist Alfred Nobel, the inventor of dynamite, established the prizes in 1895...

 for his analysis of economic growth.

In 1999, he received 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...

.

Solow is President of the Cournot Centre for Economic Studies, which he co-founded in 2000.

He is a trustee of the Economists for Peace and Security
Economists for Peace and Security
Economists for Peace and Security is a United Nations-registered, New York-based NGO which links economists interested in peace and security issues. Inspired by International Physicians for the Prevention of Nuclear War, it was founded in 1989 as Economists Against the Arms Race , before becoming...

.

In 2011, he received an honorary degree in Doctor of Science from Tufts University
Tufts University
Tufts University is a private research university located in Medford/Somerville, near Boston, Massachusetts. It is organized into ten schools, including two undergraduate programs and eight graduate divisions, on four campuses in Massachusetts and on the eastern border of France...

.

Economic contributions


Solow's model of economic growth
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...

, often known as the Solow-Swan neo-classical growth model
Exogenous growth model
The neoclassical growth model, also known as the Solow–Swan growth model or exogenous growth model, is a class of economic models of long-run economic growth set within the framework of neoclassical economics...

 as the model was independently discovered by Trevor W. Swan
Trevor Swan
Trevor Winchester Swan was an Australian economist. He is best known for his work on the neoclassical model of economic growth, published simultaneously with that of Robert Solow, for his work on integrating internal and external balance, represented by the Swan diagram and for pioneering work in...

 and published in "The Economic Record" in 1956, allows the determinants of economic growth to be separated out into increases in inputs (labour and capital
Capital (economics)
In economics, capital, capital goods, or real capital refers to already-produced durable goods used in production of goods or services. The capital goods are not significantly consumed, though they may depreciate in the production process...

) and technical progress. Using his model, Solow calculated that about four-fifths of the growth in US output per worker was attributable to technical progress.
Solow also was the first to develop a growth model with different vintages of capital. 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. 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. Both Paul Romer
Paul Romer
Paul Michael Romer is an American economist, entrepreneur, and activist. He is currently the Henry Kaufman Visiting Professor at New York University Stern School of Business and will be joining NYU as a full time professor beginning in 2011...

 and Robert Lucas, Jr.
Robert Lucas, Jr.
Robert Emerson Lucas, Jr. is an American economist at the University of Chicago. He received the Nobel Prize in Economics in 1995 and is consistently indexed among the top 10 economists in the Research Papers in Economics rankings. He is married to economist Nancy Stokey.He received his B.A. in...

 subsequently developed alternatives to Solow's neo-classical growth model.

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. In the 1980s efforts have focused on the role of technological progress in the economy, leading to the development of endogenous growth theory
Endogenous growth theory
Endogenous growth theory holds that economic growth is primarily the result of endogenous and not external force. In Endogenous growth theory investment in human capital, innovation and knowledge are significant contributors to economic growth. The theory also focus on positive externalities and...

 (or new growth theory). Today, economists use Solow's sources-of-growth accounting to estimate the separate effects on economic growth of technological change
Technological change
Technological change is a term that is used to describe the overall process of invention, innovation and diffusion of technology or processes. The term is synonymous with technological development, technological achievement, and technological progress...

, capital
Capital (economics)
In economics, capital, capital goods, or real capital refers to already-produced durable goods used in production of goods or services. The capital goods are not significantly consumed, though they may depreciate in the production process...

, and labor.

Solow currently is an emeritus Institute Professor
Institute Professor
Institute Professor is the highest title that can be awarded to a faculty member at the Massachusetts Institute of Technology, a research university located in Cambridge, Massachusetts, United States...

 in the MIT economics department, and previously taught at Columbia University
Columbia University
Columbia University in the City of New York is a private, Ivy League university in Manhattan, New York City. Columbia is the oldest institution of higher learning in the state of New York, the fifth oldest in the United States, and one of the country's nine Colonial Colleges founded before the...

.

Quotations


  • "Everything reminds 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...

     of the money supply. Everything reminds me of sex, but I try to keep it out of my papers."
  • "You can see the computer age everywhere but in the productivity statistics."
  • "Over the long term, places with strong, distinctive identities are more likely to prosper than places without them. Every place must identify its strongest most distinctive features and develop them or run the risk of being all things to all persons and nothing special to any...Livability is not a middle-class luxury. It is an economic imperative."
  • "If it is very easy to substitute other factors for natural resources, then there is, in principle, no problem. The world can, in effect, get along without natural resources."
  • "There is no evidence that God ever intended the United States of America to have a higher per capita income than the rest of the world for eternity."
  • "Every discussion among economists of the relatively slow growth of the British economy compared with the Continental economies ends up in a blaze of amateur sociology."

See also


  • List of economists
  • List of Jewish Nobel laureates
  • Backstop resources
    Backstop resources
    Backstop resources theory states that as a heavily used limited resource becomes expensive, alternative resources will become cheap by comparison, therefore making the alternatives economically viable options...

  • Basic income
    Basic income
    A basic income guarantee is a proposed system of social security, that regularly provides each citizen with a sum of money. In contrast to income redistribution between nations themselves, the phrase basic income defines payments to individuals rather than households, groups, or nations, in order...

  • Growth accounting
    Growth accounting
    Growth accounting is a procedure used in economics to measure the contribution of different factors to economic growth and to indirectly compute the rate of technological progress, measured as a residual, in an economy...

  • Solow Growth Model
  • 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...



External links