Richard Stone

Last updated

Sir Richard Stone
Richard Stone.jpg
Born(1913-08-30)30 August 1913
Died6 December 1991(1991-12-06) (aged 78)
Nationality British
Institution Cambridge University
Field Economics
Alma materCambridge University
Doctoral
students
James Mirrlees
Angus Deaton
Influences James Meade
Colin Clark
Contributions National accounts, input-output
Awards Nobel Memorial Prize in Economic Sciences (1984)
Information at IDEAS / RePEc

Sir John Richard Nicholas Stone CBE FBA (30 August 1913 – 6 December 1991) was an eminent British economist, educated at Westminster School, Cambridge University (Caius and King's), who in 1984 received the Nobel Memorial Prize in Economic Sciences for developing an accounting model that could be used to track economic activities on a national and, later, an international scale.

Fellow of the British Academy award granted by the British Academy to leading academics for their distinction in the humanities and social sciences

Fellowship of the British Academy (FBA) is an award granted by the British Academy to leading academics for their distinction in the humanities and social sciences. There are three kinds of fellowship:

  1. Fellows, for scholars resident in the United Kingdom
  2. Corresponding Fellows, for scholars not resident in the UK
  3. Honorary Fellows, an honorary academic title
United Kingdom Country in Europe

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.

Economist professional in the social science discipline of economics

An economist is a practitioner in the social science discipline of economics.

Contents

Early life

Richard Stone was born in London, UK on 30 August 1913. He received an English upper middle class education when he was a child as he attended Cliveden Place and Westminster School. [1] However, he had not been taught mathematics and science until secondary school. When he was 17 years old, he followed his father to India as his father was appointed as a judge in Madras. From India, he visited many Asian countries: Malaya, Singapore, and Indonesia. After travelling for one year, he went back to London and studied at Gonville and Caius College, Cambridge in 1931, where he studied law for two years.

Colonial India European rule in India

Colonial India was the part of the Indian subcontinent which was under the jurisdiction of European colonial powers, during the Age of Discovery. European power was exerted both by conquest and trade, especially in spices. The search for the wealth and prosperity of India led to the colonization of the Americas by Christopher Columbus in 1492. Only a few years later, near the end of the 15th century, Portuguese sailor Vasco da Gama became the first European to re-establish direct trade links with India since Roman times by being the first to arrive by circumnavigating Africa. Having arrived in Calicut, which by then was one of the major trading ports of the eastern world, he obtained permission to trade in the city from Saamoothiri Rajah.

Gonville and Caius College, Cambridge college of the University of Cambridge

Gonville & Caius College is a constituent college of the University of Cambridge in Cambridge, England. The college is the fourth-oldest college at the University of Cambridge and one of the wealthiest. The college has been attended by many students who have gone on to significant accomplishment, including fourteen Nobel Prize winners, the second-most of any Oxbridge college.

The young Stone then changed to reading economics. He was interested in economics as he taught that "if there were more economists, the world would be a better place". During the Great Slump of the 1930s, the level of unemployment was very high and it motivated him to know what caused it and how to overcome it. He faced a challenge from his parents as they were disappointed to his choice. However, Stone was very enthusiastic to be an economist and then enjoyed his time studying economics. At his new major, he got supervision from Richard Kahn and Gerald Shove. However, Stone's quantitative mind had been greatly influenced by Colin Clark, Stone's teacher in statistics at Cambridge. Colin then introduced Stone to his project in measuring the national income. This project then brought the greatest name for Stone as he received Nobel Prize because of this topic. After their meeting at Cambridge, Stone and Clark then became best friends.

Economics Social science that analyzes the production, distribution, and consumption of goods and services

Economics is the social science that studies the production, distribution, and consumption of goods and services.

The Great Depression in the United Kingdom, also known as the Great Slump, was a period of national economic downturn in the 1930s, which had its origins in the global Great Depression. It was Britain's largest and most profound economic depression of the 20th century. The Great Depression originated in the United States in late 1929 and quickly spread to the world. Britain did not experience the boom that had characterized the U.S., Germany, Canada and Australia in the 1920s, so its effect appeared less severe. Britain's world trade fell by half (1929–33), the output of heavy industry fell by a third, employment profits plunged in nearly all sectors. At the depth in summer 1932, registered unemployed numbered 3.5 million, and many more had only part-time employment.

Richard Ferdinand Kahn, Baron Kahn, CBE, FBA was a British economist.

Career

After graduating from Cambridge in 1935 and until World War II he worked at Lloyd's of London. [2] During the war, Stone worked with James Meade as a statistician and economist for the British Government. At the government's request they analyzed the UK's economy related to the current total resources of the nation for the war time. It was at this time that they developed the early versions of the system of national accounts. Their work resulted in the U.K.'s first national accounts in 1941.

World War II 1939–1945, between Axis and Allies

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.

Lloyds of London Insurance market located in the City of London

Lloyd's of London, generally known simply as Lloyd's, is an insurance and reinsurance market located in London, United Kingdom. Unlike most of its competitors in the industry, it is not an insurance company; rather, Lloyd's is a corporate body governed by the Lloyd's Act 1871 and subsequent Acts of Parliament and operates as a partially-mutualised marketplace within which multiple financial backers, grouped in syndicates, come together to pool and spread risk. These underwriters, or "members", are a collection of both corporations and private individuals, the latter being traditionally known as "Names".

James Meade British economist

James Edward Meade, was a British economist and winner of the 1977 Nobel Memorial Prize in Economic Sciences jointly with the Swedish economist Bertil Ohlin for their "pathbreaking contribution to the theory of international trade and international capital movements."

The collaboration between Stone and Meade was over after 1941 as their office was split into two different ones. They then worked separately, Meade being responsible for the Economic Section and Stone, for the national income. In his new office, the Central Statistical Office, Stone became John Maynard Keynes' assistant. Stone left working for the government when the war ended in 1945.

The Central Statistical Office (CSO) was a British government department charged with the collection and publication of economic statistics for the United Kingdom. It preceded the Office for National Statistics.

John Maynard Keynes English economist

John Maynard Keynes, 1st Baron Keynes, was a British economist, trained mathematician, whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments. He built on and greatly refined earlier work on the causes of business cycles, and was one of the most influential economists of the 20th century. Widely considered the founder of modern macroeconomics, his ideas are the basis for the school of thought known as Keynesian economics, and its various offshoots.

After the war, Stone took up an academic career when he worked at Cambridge as the director of the new Department of Applied Economics (1945–1955). As the director, Stone made the Department focus on research programmes about economic theory and statistical methodology. This strategy attracted many top economists in that era to join the Department. Some remarkable works at the Department were, for example, Durbin and Watson on testing serial correlation in econometrics, and Alan Prest and Derek Rowe on demand analysis. This condition made DAE become one of the leading quantitative economic research centres in the world in his era. [3] Stone himself had many projects in DAE: national accounting where he had employed Agatha Chapman as a research associate, [4] the analysis of consumer demand, and the system of socio-demographic account.

Agatha Chapman was a British-born economist at the Canadian Bureau of National Statistics from 1942–47. She was the only female to attend the first United Nations Sub-Committee on National Income Statistics in 1945, which led to the United Nations System of National Accounts.

In 1955, Stone gave up his Directorship at the department as he was appointed as the P.D. Leake Chair of Finance and Accounting at Cambridge (emeritus from 1980). Together with J.A.C. Brown he began the Cambridge Growth Project, which developed the Cambridge Multisectoral Dynamic Model of the British economy (MDM) . In building the Cambridge Growth Project, they used Social Accounting Matrices (SAM), which also formed computable equilibrium model which then developed at the World Bank. He was succeeded as leader of the Cambridge Growth Project by Terry Barker. In 1970, Stone was appointed as the Chairman of the Faculty Board of Economics and Politics for the next two years. A company founded by members of the Department and limited by guarantee, Cambridge Econometrics, was founded in 1978 with Stone as its first honorary president. The company continues to develop MDM and to use the model to make economic forecasts. Before retiring from Cambridge in 1980, Stone served as the President of the Royal Economic Society for 1978–1980.

Achievements

Stone in 1984 received the Nobel Memorial Prize in Economic Sciences for developing an accounting model that could be used to track economic activities on a national and, later, an international scale.

While he was not the first economist to work in this field, he was the first to do so with double entry accounting. Double entry accounting basically states that every income item on one side of the balance sheet must be met by an expenditure item on the opposite side of the accounting sheet therefore creating a system of balance. This double entry system is the basis of nearly all modern accounting today. This allowed for a reliable way of tracking trade and wealth transfer on a global scale.

He is sometimes known as the 'father of national income accounting', and is the author of studies of consumer demand statistics and demand modeling, economic growth, and input-output. [5]

During his acceptance speech Stone mentioned François Quesnay as well as the Tableau économique. Stone stated that it was one of the very first works in economics to examine various sectors on such a global level and how they are all interconnected.

Personal life

Stone married three times. In 1936, he married Winifred Mary Jenkins who was also from Cambridge. Both of them had a passion for Economics and started a monthly paper called Trends, which was a supplement to the periodical, Industry Illustrated. It contained articles about the British economic conditions. Soon after, in 1939, he was asked to join the Ministry of Economic Warfare. The couple's marriage dissolved in 1940.

Soon after, In 1941 Stone married his second wife Feodora Leontinoff. Feodora died in 1956.

In 1960, he married Giovanna Saffi, great-grandchild of Italian patriot Aurelio Saffi, who became his partner in many of his works. [6] They collaborated for some projects in economics, for example in rewriting his book "National Income and Expenditure" in 1961.

Death

Stone died on 6 December 1991 in Cambridge, aged 78. He was survived by his third wife Giovanna, and his daughter Caroline.

Selected publications

Related Research Articles

James Tobin American economist

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."

Gary Becker American economist

Gary Stanley Becker was an American economist and a Nobel laureate in economics. He was a professor of economics and sociology at the University of Chicago, and was a leader of the third generation of the Chicago school of economics.

Robert Emerson Lucas Jr. is an American economist at the University of Chicago, where he is currently the John Dewey Distinguished Service Professor Emeritus in Economics and the College. Widely regarded as the central figure in the development of the new classical approach to macroeconomics, he received the Nobel Prize in Economics in 1995 "for having developed and applied the hypothesis of rational expectations, and thereby having transformed macroeconomic analysis and deepened our understanding of economic policy". He has been characterized by N. Gregory Mankiw as "the most influential macroeconomist of the last quarter of the 20th century."

Myron Scholes Canadian economist

Myron Samuel Scholes is a Canadian-American financial economist. Scholes is the Frank E. Buck Professor of Finance, Emeritus, at the Stanford Graduate School of Business, Nobel Laureate in Economic Sciences, and co-originator of the Black–Scholes options pricing model. Scholes is currently the chairman of the Board of Economic Advisers of Stamos Capital Partners. Previously he served as the chairman of Platinum Grove Asset Management and on the Dimensional Fund Advisors board of directors, American Century Mutual Fund board of directors and the Cutwater Advisory Board. He was a principal and limited partner at Long-Term Capital Management, L.P. and a managing director at Salomon Brothers. Other positions Scholes held include the Edward Eagle Brown Professor of Finance at the University of Chicago, senior research fellow at the Hoover Institution, director of the Center for Research in Security Prices, and professor of finance at MIT’s Sloan School of Management. Scholes earned his PhD at the University of Chicago.

Nicholas Kaldor British/Hungarian economist

Nicholas Kaldor, Baron Kaldor, born Káldor Miklós, was a Cambridge economist in the post-war period. He developed the "compensation" criteria called Kaldor–Hicks efficiency for welfare comparisons (1939), derived the cobweb model, and argued for certain regularities observable in economic growth, which are called Kaldor's growth laws. Kaldor worked alongside Gunnar Myrdal to develop the key concept Circular Cumulative Causation, a multicausal approach where the core variables and their linkages are delineated. Both Myrdal and Kaldor examine circular relationships, where the interdependencies between factors are relatively strong, and where variables interlink in the determination of major processes. Gunnar Myrdal got the concept from Knut Wicksell and developed it alongside Nicholas Kaldor when they worked together at the United Nations Economic Commission for Europe. Myrdal concentrated on the social provisioning aspect of development, while Kaldor concentrated on demand-supply relationships to the manufacturing sector. Kaldor also coined the term "convenience yield" related to commodity markets and the so-called theory of storage, which was initially developed by Holbrook Working.

John Hicks British economist

Sir John Richard Hicks was a British economist. He was considered one of the most important and influential economists of the twentieth century. The most familiar of his many contributions in the field of economics were his statement of consumer demand theory in microeconomics, and the IS/LM model (1937), which summarised a Keynesian view of macroeconomics. His book Value and Capital (1939) significantly extended general-equilibrium and value theory. The compensated demand function is named the Hicksian demand function in memory of him.

Robert Solow American economist

Robert Merton Solow, GCIH, is an American economist, particularly known for his work on the theory of economic growth that culminated in the exogenous growth model named after him. He is currently Emeritus Institute Professor of Economics at the Massachusetts Institute of Technology, where he has been a professor since 1949. He was awarded the John Bates Clark Medal in 1961, the Nobel Memorial Prize in Economic Sciences in 1987, and the Presidential Medal of Freedom in 2014. Four of his PhD students, George Akerlof, Joseph Stiglitz, Peter Diamond and William Nordhaus later received Nobel Memorial Prizes in Economic Sciences in their own right.

Lawrence Klein American economist

Lawrence Robert Klein 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.

Chicago school of economics neoclassical school of economic thought associated with the work of the faculty at the University of Chicago, some of whom have constructed and popularized its principles

The Chicago school of economics is a neoclassical school of economic thought associated with the work of the faculty at the University of Chicago, some of whom have constructed and popularized its principles.

Sir James Alexander Mirrlees was a Scottish economist and winner of the 1996 Nobel Memorial Prize in Economic Sciences. He was knighted in the 1997 Birthday Honours.

Angus Deaton British microeconomist

Sir Angus Stewart Deaton is a British-American economist and academic. Deaton is currently a Senior Scholar and the Dwight D. Eisenhower Professor of Economics and International Affairs Emeritus at the Woodrow Wilson School of Public and International Affairs and the Economics Department at Princeton University. His research focuses primarily on poverty, inequality, health, wellbeing, and economic development.

William Nordhaus American economist

William Dawbney Nordhaus is an American economist and Sterling Professor of Economics at Yale University, best known for his work in economic modelling and climate change. He is one of the laureates of the 2018 Nobel Memorial Prize in Economic Sciences. Nordhaus received the prize "for integrating climate change into long-run macroeconomic analysis".

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 in the 21st Century. This field encompasses many disparate schools of economic thought. Ancient Greek writers such as the philosopher Aristotle examined ideas about the art of wealth acquisition, and questioned whether property is best left in private or public hands. In the Middle Ages, scholasticists such as Thomas Aquinas argued that it was a moral obligation of businesses to sell goods at a just price.

Ralph George Hawtrey British economist

Sir Ralph George Hawtrey was a British economist, and a close friend of John Maynard Keynes. He was a member of the Cambridge Apostles, the University of Cambridge intellectual secret society.

Terry Barker British academic

Terry Barker is a British economist and Director of the Cambridge Centre for Climate Change Mitigation Research (4CMR) part of the Department of Land Economy, University of Cambridge. He is also a member of the Tyndall Centre, the Chairman of Cambridge Econometrics, and chairman of the Cambridge Trust for New Thinking in Economics, which is a charitable organisation with a mission to promote new approaches to solving economic problems.

Outline of economics Overview of and topical guide to economics

The following outline is provided as an overview of and topical guide to economics:

Wynne Godley economist

Wynne Godley was an economist famous for his pessimism toward the British economy and his criticism of the British government.

The Faculty of Economics is one of the constituent departments of the University of Cambridge. It is composed of five research groups, in macroeconomics, microeconomic theory, economic history, econometrics, and empirical microeconomics. It is located in the Sidgwick Site in Cambridge, has been host to many distinguished economists, and is regarded as the birthplace of macro-economics. 19 students or members of the faculty have won the Nobel Memorial Prize in Economic Sciences.

References

  1. Pesaran, M. H. (2000). "Life and Work of John Richard Nicholas Stone 1913-1991". The Economic Journal. 110: 146–165. doi:10.1111/1468-0297.00511.
  2. "Janus: The Papers of John Richard Nicholas Stone". janus.lib.cam.ac.uk. Retrieved 27 January 2018.
  3. "Deaton: "Stone, John Richard Nicholas"" (PDF). Retrieved 27 January 2018.
  4. "The trial and tribulations of Miss Agatha Chapman: statistics in a Cold War climate". The Free Library. Retrieved 28 February 2014.
  5. "Counter-intuitively, the most cited of Richard Stone's works were his publications on consumer demand statistics and modeling. See Eugene Garfield: The 1984 Nobel Prizes in Economics and Literature are Awarded to Sir Richard Stone for Pioneering Systems of National Accounting and to Jaroslav Seifert, the National Poet of Czechoslovakia" (PDF). Retrieved 27 January 2018.
  6. "A summary biographical sketch of Sir Richard Stone (1913–1991)" (PDF). Archived from the original (PDF) on 25 January 2012. Retrieved 27 January 2018.
Awards
Preceded by
Gérard Debreu
Laureate of the Nobel Memorial Prize in Economics
1984
Succeeded by
Franco Modigliani