|Born||September 14, 1920|
Omaha, Nebraska, U.S.
|Died||October 20, 2013 93) (aged|
Gladwyne, Pennsylvania, U.S.
|Institution|| Univ. of Pennsylvania |
University of Oxford
University of Michigan
|Field|| Macroeconomics |
|Alma mater|| MIT (Ph.D.)|
UC Berkeley (B.A.)
| Arthur Goldberger |
E. Roy Weintraub
|Contributions||Macroeconometric forecasting models|
|Awards|| John Bates Clark Medal (1959)|
Nobel Memorial Prize in Economic Sciences (1980)
|Information at IDEAS / RePEc|
|Part of a series on|
Lawrence Robert Klein (September 14, 1920 – October 20, 2013) was an American economist. For his work in creating computer models to forecast economic trends in the field of econometrics in the Department of Economics at the University of Pennsylvania, he was awarded the Nobel Memorial Prize in Economic Sciences in 1980 specifically "for the creation of econometric models and their application to the analysis of economic fluctuations and economic policies." Due to his efforts, such models have become widespread among economists. Harvard University professor Martin Feldstein told the Wall Street Journal that Klein "was the first to create the statistical models that embodied Keynesian economics," tools still used by the Federal Reserve Bank and other central banks.
Economics is the social science that studies the production, distribution, and consumption of goods and services.
Econometrics is the application of statistical methods to economic data in order to give empirical content to economic relationships. More precisely, it is "the quantitative analysis of actual economic phenomena based on the concurrent development of theory and observation, related by appropriate methods of inference". An introductory economics textbook describes econometrics as allowing economists "to sift through mountains of data to extract simple relationships". The first known use of the term "econometrics" was by Polish economist Paweł Ciompa in 1910. Jan Tinbergen is considered by many to be one of the founding fathers of econometrics. Ragnar Frisch is credited with coining the term in the sense in which it is used today.
The University of Pennsylvania is a private Ivy League research university in Philadelphia, Pennsylvania. It is one of the nine colonial colleges founded prior to the Declaration of Independence and the first institution of higher learning in the United States to refer to itself as a university. Benjamin Franklin, Penn's founder and first president, advocated an educational program that trained leaders in commerce, government, and public service, similar to a modern liberal arts curriculum.
Klein was born in Omaha, Nebraska, the son of Blanche (née Monheit) and Leo Byron Klein.He went on to graduate from Los Angeles City College, where he learned calculus; the University of California, Berkeley, where he began his computer modeling and earned a B.A. in Economics in 1942; he earned his Ph.D. in Economics at the Massachusetts Institute of Technology (MIT) in 1944, where he was Paul Samuelson's first doctoral student.
Omaha is the largest city in the state of Nebraska and the county seat of Douglas County. Omaha is in the Midwestern United States on the Missouri River, about 10 miles (15 km) north of the mouth of the Platte River. The nation's 40th-largest city, Omaha's 2018 estimated population was 466,061.
Los Angeles City College (LACC) is a public community college in East Hollywood, Los Angeles. A part of the Los Angeles Community College District, it is located on Vermont Avenue south of Santa Monica Boulevard on the former campus of the University of California, Los Angeles (UCLA). From 1947 to 1955, the college shared its campus with California State University, Los Angeles then known as Los Angeles State College of Applied Arts and Sciences, (LASCAAS) before the University moved to its present campus of 175 acres (71 ha) in the northeastern section of the City of Los Angeles, 5 miles (8 km) east of the Civic Center.
Calculus, originally called infinitesimal calculus or "the calculus of infinitesimals", is the mathematical study of continuous change, in the same way that geometry is the study of shape and algebra is the study of generalizations of arithmetic operations.
Klein then moved to the Cowles Commission for Research in Economics, which was then at the University of Chicago, now the Cowles Foundation. There he built a model of the United States economy to forecast the development of business fluctuations and to study the effects of government economic-political policy. After World War II Klein used his model to correctly predict, against the prevailing expectation, that there would be an economic upturn rather than a depression due to increasing consumer demand from returning servicemen.Similarly, he correctly predicted a mild recession at the end of the Korean War.
The University of Chicago is a private research university in Chicago, Illinois. Founded in 1890, the school is located on a 217-acre campus in Chicago's Hyde Park neighborhood, near Lake Michigan. The University of Chicago holds top-ten positions in various national and international rankings.
The Cowles Foundation for Research in Economics is an economic research institute at Yale University. It was created as the Cowles Commission for Research in Economics at Colorado Springs in 1932 by businessman and economist Alfred Cowles. In 1939, the Cowles Commission moved to the University of Chicago under Theodore O. Yntema. Jacob Marschak directed it from 1943 until 1948, when Tjalling C. Koopmans assumed leadership. Increasing opposition to the Cowles Commission from the department of economics of the University of Chicago during the 1950s impelled Koopmans to persuade the Cowles family to move the commission to Yale University in 1955 where it became the Cowles Foundation.
World War II, also known as the Second World War, was a global war that lasted from 1939 to 1945. The vast majority of the world's countries—including all the great powers—eventually formed two opposing military alliances: the Allies and the Axis. A state of total war emerged, directly involving more than 100 million people from more than 30 countries. The major participants threw their entire economic, industrial, and scientific capabilities behind the war effort, blurring the distinction between civilian and military resources. World War II was the deadliest conflict in human history, marked by 70 to 85 million fatalities, most of whom were civilians in the Soviet Union and China. It included massacres, the genocide of the Holocaust, strategic bombing, premeditated death from starvation and disease, and the only use of nuclear weapons in war.
Klein briefly joined the Communist Party during the 1940s, which led to trouble years later.[ citation needed ]
The Communist Party USA, officially the Communist Party of the United States of America (CPUSA), is a communist party in the United States established in 1919 after a split in the Socialist Party of America following the Russian Revolution.
At the University of Michigan, Klein developed enhanced macroeconomic models, in particular the famous Klein–Goldberger model with Arthur Goldberger, which was based on foundations laid by Jan Tinbergen of the Netherlands, later winner of the first economics prize in 1969. Klein differed from Tinbergen in using an alternative economic theory and a different statistical technique.
A macroeconomic model is an analytical tool designed to describe the operation of the problems of economy
of a country or a region. These models are usually designed to examine the comparative statics and dynamics of aggregate quantities such as the total amount of goods and services produced, total income earned, the level of employment of productive resources, and the level of prices.
The Klein–Goldberger model was an early macroeconometric model for the United States developed by Lawrence Klein and Arthur Goldberger, Klein's doctoral student at the University of Michigan, in 1955. Grounded in Keynesian macroeconomic theory, it describes the workings of the United States economy in terms of 20 simultaneous equations, using time series data from 1929 to 1952. The Klein–Goldberger model extended the pioneering work of Jan Tinbergen in the 1940s, and paved the way for even larger models such as the Wharton models of the 1960s, or the Brookings model, with almost 400 equations.
In 1954, Klein's brief membership in the Communist Party was made publicand he was denied tenure at the University of Michigan, in the wake of the McCarthy era. Klein moved to the University of Oxford, and developed an economic model of the United Kingdom known as the Oxford model with Sir James Ball. Additionally, at the Institute of Statistics Klein assisted with the creation of the British Savings Surveys, based upon the Michigan Surveys.
McCarthyism is the practice of making accusations of subversion or treason without proper regard for evidence. The term refers to U.S. senator Joseph McCarthy (R-Wisconsin) and has its origins in the period in the United States known as the Second Red Scare, lasting from the late 1940s through the 1950s. It was characterized by heightened political repression and a campaign spreading fear of communist influence on American institutions and of espionage by Soviet agents.
The University of Oxford is a collegiate research university in Oxford, England. There is evidence of teaching as early as 1096, making it the oldest university in the English-speaking world and the world's second-oldest university in continuous operation after the University of Bologna. It grew rapidly from 1167 when Henry II banned English students from attending the University of Paris. After disputes between students and Oxford townsfolk in 1209, some academics fled north-east to Cambridge where they established what became the University of Cambridge. The two 'ancient universities' are frequently jointly called 'Oxbridge'. The history and influence of the University of Oxford has made it one of the most prestigious universities in the world.
The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a sovereign country located off the north-western coast of the European mainland. The United Kingdom includes the island of Great Britain, the north-eastern part of the island of Ireland, and many smaller islands. Northern Ireland is the only part of the United Kingdom that shares a land border with another sovereign state, the Republic of Ireland. Apart from this land border, the United Kingdom is surrounded by the Atlantic Ocean, with the North Sea to the east, the English Channel to the south and the Celtic Sea to the south-west, giving it the 12th-longest coastline in the world. The Irish Sea separates Great Britain and Ireland. The United Kingdom's 242,500 square kilometres (93,600 sq mi) were home to an estimated 66.0 million inhabitants in 2017.
In 1958 Klein returned to the U.S. to join the Department of Economics at the University of Pennsylvania. In 1959 he was awarded the John Bates Clark Medal, one of the two most prestigious awards in the field of economics. In 1968 he became the Benjamin Franklin Professor of Economics and Finance at Penn.
In the early 1960s Klein became the leader of the major "Brookings-SSRC Project" to construct a detailed econometric model to forecast the short-term development of the U.S. economy.
Later in the '60s, Klein constructed the Wharton Econometric Forecasting Model. This model, considerably smaller than the Brookings model, achieved a very good reputation for its analysis of business conditions, used to forecast fluctuations including national product, exports, investments, and consumption, and to study the effect on them of changes in taxation, public expenditure, oil price, etc.
In 1969 Klein founded Wharton Econometric Forecasting Associates or WEFA (now IHS Global Insight), launching the econometric forecasting industry in the United States. Among his clients were General Electric Company, IBM, and Bethlehem Steel Corporation. He was the initiator of, and an active research leader in their LINK project, a consortium of model builders from many countries, which was also mentioned in his Nobel citation. The aim was to produce the world's first global economic model, linking models of many of the world's countries so that the effect of changes in the economy of one country are reflected in the other. LINK, which is now operated by the United Nations, is still meeting regularly, most recently in September 2018 in Santiago, Chile.
Klein served as a thesis advisor for numerous well-known economists including E. Roy Weintraub in the late 1960s.
During the 1976 United States presidential election, Klein coordinated Jimmy Carter's economic task force. He declined an invitation to join Carter's administration. Klein has also been president of the Econometric Society. the International Atlantic Economic Society (1989–1990), and the American Economic Association (in 1977).
His Nobel citation concludes that "few, if any, research workers in the empirical field of economic science, have had so many successors and such a large impact as Lawrence Klein".
In his final years, he was constructing short range "current quarter models" that use current economic indicators to get a handle on the rate of economic growth during the current and next quarter. In contrast to earlier efforts to model the economy structurally and to use constant adjustments and judgmental estimates for the exogenous variables, these systems are deliberately automatic and mechanical, simply translating available information into a statistically best estimate of current conditions. This represents a very different tradition from his earlier model building and applications.
After formal retirement and until his death he was engaged in macro econometric model building high-frequency models that project the economy in a monthly, quarterly frame. A publication on high frequency model containing countries such as US, China, Russia, India, Brazil, Mexico, Korea and Hong Kong was expected in 2008.
Klein was a founding trustee of Economists for Peace and Security.
He died at the age of 93 in his home on October 20, 2013.
James Tobin was an American economist who served on the Council of Economic Advisers and the Board of Governors of the Federal Reserve System, and taught at Harvard and Yale Universities. He developed the ideas of Keynesian economics, and advocated government intervention to stabilize output and avoid recessions. His academic work included pioneering contributions to the study of investment, monetary and fiscal policy and financial markets. He also proposed an econometric model for censored dependent variables, the well-known Tobit model. Along with fellow Neo-Keynesian economist James Meade in 1977, Tobin proposed nominal GDP targeting as a monetary policy rule in 1980. Tobin received the Nobel Memorial Prize in Economic Sciences in 1981 for "creative and extensive work on the analysis of financial markets and their relations to expenditure decisions, employment, production and prices."
Ragnar Anton Kittil Frisch was a Norwegian economist and the co-recipient of the first Nobel Memorial Prize in Economic Sciences in 1969. He is known for being one of the founders of the discipline of econometrics, and for coining the widely used term pair macroeconomics/microeconomics in 1933.
Franco Modigliani was an Italian-American economist and the recipient of the 1985 Nobel Memorial Prize in Economics. He was a professor at University of Illinois at Urbana–Champaign, Carnegie Mellon University, and MIT Sloan School of Management.
Jan Tinbergen was an important Dutch economist. He was awarded the first Nobel Memorial Prize in Economic Sciences in 1969, which he shared with Ragnar Frisch for having developed and applied dynamic models for the analysis of economic processes. He is widely considered to be one of the most influential economists of the 20th century and one of the founding fathers of econometrics. It has been argued that the development of the first macroeconometric models, the solution of the identification problem, and the understanding of dynamic models are his three most important legacies to econometrics. Tinbergen was a founding trustee of Economists for Peace and Security. In 1945, he founded the Bureau for Economic Policy Analysis (CPB) and was the agency's first director.
Paul Anthony Samuelson was an American economist. The first American to win the Nobel Memorial Prize in Economic Sciences, the Swedish Royal Academies stated, when awarding the prize in 1970, 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 has called him the "Father of Modern Economics", and The New York Times considered him to be the "foremost academic economist of the 20th century".
Wharton Econometric Forecasting Associates, Inc was a world-leading economics forecasting and consulting organisation founded by Nobel Prize winner Dr. Lawrence R. Klein.
Arthur Stanley Goldberger was an econometrician and an economist. He worked with Nobel Prize winner Lawrence Klein on the development of the Klein–Goldberger macroeconomic model at the University of Michigan. He died at the age of 79.
Edmund Strother Phelps is an American economist and the recipient of the 2006 Nobel Memorial Prize in Economic Sciences.
Henri (Hans) Theil was a Dutch econometrician, Professor at the Netherlands School of Economics in Rotterdam, known for his contributions to the field of econometrics.
Nariman Behravesh is Chief Economist at the consulting firm IHS Markit and author of Spin-Free Economics: A No-Nonsense, Nonpartisan Guide to Today's Global Economic Debates (McGraw-Hill). Directing the entire economic forecasting process at IHS Markit, he is responsible for developing the economic outlook and risk analysis for the United States, Europe, Japan, China and other emerging markets. He oversees the work of over 400 professionals, located in North America, Europe, Asia, Latin America, the Middle East and Africa who cover economic, financial and political developments in over 200 countries. Behravesh is quoted extensively in the media on such topics as the outlook for the US and global economies, exchange rates, the budget deficit, the trade deficit, globalization, country risk and sovereign debt crises. Dr. Behravesh is a featured speaker at many of the top global conferences each year, including IHS Cambridge Energy Research Associates CERA Week and the World Economic Forum in Davos.
Dynamic stochastic general equilibrium modeling is a method in macroeconomics that attempts to explain economic phenomena, such as economic growth and business cycles, and the effects of economic policy, through econometric models based on applied general equilibrium theory and microeconomic principles.
Nobuhiro Kiyotaki FBA is a Japanese economist and Professor of Economics at Princeton University especially known for proposing several models that provide deeper microeconomic foundations for macroeconomics, some of which play a prominent role in New Keynesian macroeconomics.
Macroeconomic theory has its origins in the study of business cycles and monetary theory. In general, early theorists believed monetary factors could not affect real factors such as real output. John Maynard Keynes attacked some of these "classical" theories and produced a general theory that described the whole economy in terms of aggregates rather than individual, microeconomic parts. Attempting to explain unemployment and recessions, he noticed the tendency for people and businesses to hoard cash and avoid investment during a recession. He argued that this invalidated the assumptions of classical economists who thought that markets always clear, leaving no surplus of goods and no willing labor left idle.
Following the development of Keynesian economics, applied economics began developing forecasting models based on economic data including national income and product accounting data. In contrast with typical textbook models, these large-scale macroeconometric models used large amounts of data and based forecasts on past correlations instead of theoretical relations. These models estimated the relations between different macroeconomic variables using regression analysis on time series data. These models grew to include hundreds or thousands of equations describing the evolution of hundreds or thousands of prices and quantities over time, making computers essential for their solution. While the choice of which variables to include in each equation was partly guided by economic theory, variable inclusion was mostly determined on purely empirical grounds. Large-scale macroeconometric model consists of systems of dynamic equations of the economy with the estimation of parameters using time-series data on a quarterly to yearly basis.
Carl Weinberg is an American economist. He is the founder, Chief Economist and managing director of High Frequency Economics, an economic research firm located in Valhalla, NY.
Charles Frederick Roos was an American economist who made contributions to mathematical economics. He was one of the founders of the Econometric Society together with American economist Irving Fisher and Norwegian economist Ragnar Frisch in 1930. He served as Secretary-Treasurer during the first year of the Society and was elected as President in 1948. He was director of research of the Cowles Commission from September 1934 to January 1937.
|Wikiquote has quotations related to: Lawrence Klein|
Theodore W. Schultz
Sir Arthur Lewis
| Laureate of the Nobel Memorial Prize in Economics |