Paul Samuelson

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Paul Anthony Samuelson ^[1] (born May 15, 1915, in Gary, Indiana) is an American economist known for his work in many fields of Economics. He was awarded the "David A. Wells Prize" in 1941 by Harvard University and the "John Bates Clark Medal" by the American Economic Association in 1947, as the living economist under forty "who has made the most distinguished contribution to the main body of economic thought and knowledge".

He was the sole recipient of the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel ^[2] (alias "Nobel Prize in Economics" ) in 1970, the second year of the Prize, "for 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".

His book "Economics: An Introductory Analysis" ^[3], first published in 1948, was the most successful principles textbook ever and helped teach the fundaments of Economics to the majority of students during the second half of the XX century. It became one of the great textbooks on Economics, has been translated to 41 languages and ranks with the most successful textbooks ever published in the field, including the works of Adam Smith, David Ricardo ^[4], John Stuart Mill ^[5] and Alfred Marshall ^[6].

I often took Paul as a role model, the expansiveness of his learning, the breadth of his work, its originality and penetration. He wrote forcefully and beautifully. Joseph E. Stiglitz, Autobiography, 2001

Biography[edit]

Paul Samuelson was born in Gary, Indiana, in 1915. He received the degree of Bachelor of Arts from Chicago University in 1935, and the degrees of Master of Arts in 1936, and Doctor of Philosophy in 1941 from Harvard University. He was a Social Science Research Council predoctoral fellow from 1935-1937, a member of the Society of Fellows, Harvard University, 1937-1940, and a Ford Foundation Research Fellow from 1958-1959. He received honorary Doctor of Laws degrees from Chicago University and Oberlin College in 1961, and from Indiana University and East Anglia University (Eng.) in 1966.

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

Professor Samuelson worked for the National Resources Planning Board from 1941-1943 (in charge of war-time planning for continuing full employment); 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. He was a member of the National Task Force on Economic Education from 1960-1961 and has been a consultant to the Rand Corporation since 1949. He is an informal consultant for the United States Treasury and the Council of Economic Advisors. He is also a consultant to the Federal Reserve Bank. He was Economic Advisor to Senator, candidate, and President-elect Kennedy and was the author of the January 5, 1961 "Samuelson Report on the State of the American Economy to President-elect Kennedy." His consultation for the government has brought him national recognition as an economic advisor. In 1965 he was elected president of the International Economic Association.

As an economist[edit]

Samuelson's Foundations of Economic Analysis ^[7] (1947), helped revive Neoclassical ^[8] economics and launched the era of the mathematization of economics. Samuelson contributed to the Paretian revival ^[9] in microeconomics and the Neo-Keynesian Synthesis ^[10] in macroeconomics during the post-war period. Having studied under Schumpeter ^[11] and Leontief ^[12] at Harvard, Samuelson had a grasp of economic theory which has since become legendary. Paul Samuelson built on the M.I.T. a powerful economics departments around himself, where he was soon joined by R.M. Solow ^[13].

In this age of specialization, I sometimes think of myself as the last 'generalist' in economics, with interests that range from mathematical economics down to current financial journalism. My real interests are research and teaching (...)Paul Samuelson.

Samuelson developed broad frameworks, such as the neoclassical synthesis, a mixed economy, and the surrogate production function, which provided practitioners with a vision for research. Samuelson's specific contributions to economics have been far too many to be listed here ^[14]. His main method was: "with every economic problem (1) reduce the number of variables and keep only a minimum set of simple economic relations; (2) if possible, rewrite it as a constrained optimization problem". Samuelson created the theory of revealed preference (1938, 1947) in microeconomics. His efforts on the question of utility measurement and integrability (1937, 1950) opened the way for future developments by Debreu, Georgescu-Roegen and Uzawa. Samuelson introduced the use of comparative statics and dynamics through his "correspondence principle" (1947) which he used in his contributions to the dynamic stability of general equilibrium (1941, 1944). Samuelson developed the "Bergson-Samuelson social welfare functions" (1947, 1950, 1956) which became responsible for the harnessing of "public goods" into Neoclassical theory (1954, 1955, 1958). Samuelson made important contributions in establishing the modern theory of theory of production ^[15]. In his Foundations (1947) he solved the envelope theorem and the full characterization of the cost function ^[16].

He also contributed to the theory of technical progress (1972) and on the theory of capital. He demonstrated one of the first "Non-Substitution" theorems (1951) and, with Solow (1953), began the analysis of dynamic Leontief systems. Samuelson made a clear introduction to the "turnpike" conjecture of linear von Neumann systems ^[17]. He worked on the Stolper-Samuelson Theorem and the Factor Price Equalization theorem (1948, 1949, 1953) in international trade theory, and finally resolved the age-old "transfer problem". relating terms of trade and capital flows a well as the Marxian transformation problem (1971). In macroeconomics, Samuelson's created the multiplier-accelerator macrodynamic model ^[18] (1939) and presented an easy to understand version of the Phillips Curve ^[19] (1960). Samuelson popularized Allais's ^[20] "overlapping generations".

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