Robert Merton Solow
August 23, 1924
|Institution||Massachusetts Institute of Technology|
|Alma mater|| Harvard University (BA, MA, PhD)|
| George Akerlof |
Francis M. Bator
Robert J. Gordon
Ronald W. Jones
Arjun Kumar Sengupta
Harvey M. Wagner
|Other notable students||Mario Draghi|
|Contributions||Exogenous growth model|
|Awards|| John Bates Clark Medal (1961)|
Nobel Memorial Prize in Economic Sciences (1987)
National Medal of Science (1999)
Presidential Medal of Freedom (2014)
|Information at IDEAS / RePEc|
Robert Merton Solow, GCIH ( // ; born August 23, 1924) is an American economist whose work on the theory of economic growth 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.
Robert Solow was born in Brooklyn, New York, into a Jewish family on August 23, 1924, the oldest of three children. He regarded his parents as being very intelligent people but were not able to go to college due to the necessity to work.He was well educated in the neighborhood public schools and excelled academically early in life. In September 1940, Solow went to Harvard College with a scholarship at the age of 16. At Harvard, his first studies were in sociology and anthropology as well as elementary economics.
In 1941, Solow left the university and joined the U.S. Army. Because he was fluent in German, the Army put him on a task force whose primary purpose was to intercept, interpret, and send back German messages to base.He served briefly in North Africa and Sicily, and later in Italy until he was discharged in August 1945. Shortly after returning, he proceeded to marry his girlfriend, Barbara Lewis, whom he had only been dating for six months.
He returned to Harvard in 1945, and studied under Wassily Leontief. As Leontief's research assistant he produced the first set of capital-coefficients for the input–output model. Then he became interested in statistics and probability models. From 1949 to 1950, he spent a fellowship year at Columbia University to study statistics more intensively. During that year he also worked on his Ph.D. thesis, an exploratory attempt to model changes in the size distribution of wage income using interacting Markov processes 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. At M.I.T. he taught courses in statistics and econometrics. Solow's interest gradually changed to macroeconomics. For almost 40 years, Solow and Paul Samuelson worked together on many landmark theories: von Neumann growth theory (1953), theory of capital (1956), linear programming (1958) and the Phillips curve (1960).
Solow also held several government positions, including senior economist for the Council of Economic Advisers (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 served as president of that association. In 1987, he won the Nobel Prize for his analysis of economic growth [ citation needed ]and in 1999, he received the National Medal of Science. In 2011, he received an honorary degree in Doctor of Science from Tufts University.
Solow is the founder of the Cournot Foundation and the Cournot Centre. After the death of his colleague Franco Modigliani, Solow accepted an appointment as new Chairman of the I.S.E.O Institute, an Italian nonprofit cultural association which organizes international conferences and summer schools. He is a founding trustee of the Economists for Peace and Security.
Solow's past students include 2010 Nobel Prize winner Peter Diamond, as well as Michael Rothschild, Halbert White, Charlie Bean, Michael Woodford, and Harvey Wagner. He is ranked 23rd among economists on RePEc in terms of the strength of economists who have studied under him.
Solow was one of the signees of a 2018 amici curiae brief that expressed support for Harvard University in the Students for Fair Admissions v. Harvard lawsuit. Signers of the brief include Alan B. Krueger, George A. Akerlof, Janet Yellen, and Cecilia Rouse.
Solow's model of economic growth, often known as the Solow–Swan neo-classical growth model as the model was independently discovered by Trevor W. Swan and published in "The Economic Record" in 1956, allows the determinants of economic growth to be separated into increases in inputs (labour and capital) and technical progress. The reason these models are called "exogenous" growth models is the saving rate is taken to be exogenously given. Subsequent work derives savings behavior from an inter-temporal utility-maximizing framework. Using his model, Solow (1957) 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. He first states that capital must be a finite entity because all of the resources on the earth are indeed limited. 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. The idea lay dormant for some time perhaps because Dale W. Jorgenson (1966) argued that it was observationally equivalent with disembodied technological progress, as advanced earlier in Solow (1957). It was successfully advanced in subsequent research by Jeremy Greenwood, Zvi Hercowitz and Per Krusell (1997), who argued that the secular decline in capital goods prices could be used to measure embodied technological progress. They labeled the notion investment-specific technological progress. Solow (2001) approved. Both Paul Romer and Robert Lucas, Jr. subsequently developed alternatives to Solow's neo-classical growth model.
To better communicate the meaning behind his work, Solow used a graphical design to illustrate his concepts. On the x-axis he puts capital per worker and for the y-axis he uses output per worker. The reason for graphing capital and output per worker is due to his assumption that the nation is at full employment. The first (top) curve represents the output produced at each given level of capital. The second (middle) curve shows the depreciating nature of capital which remains constantly positive. The third curve (bottom) conveys savings/investment per worker. As the old machinery wears down and breaks, new capital goods must be bought to replace the old. The point where the two lines meet is known as the steady state level, which means that the nation is producing just enough to be able to replace the old capital. Countries that are closer to the steady state level, on the left side, grow more slowly when compared to countries closer to the vertex of the graph. However, when countries are to the right of the steady state level, they are not growing because all the returns they create needs to go to replacing and repairing their old capital.
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. For example, rather than assuming, as Solow did, that people save at a given constant rate, subsequent work applied a consumer-optimization framework to derive savings behavior endogenously, allowing saving rates to vary at different points in time, depending on income flows, for example. In the 1980s efforts have focused on the role of technological progress in the economy, leading to the development of endogenous growth theory (or new growth theory). Today, economists use Solow's sources-of-growth accounting to estimate the separate effects on economic growth of technological change, capital, and labor.
Solow currently[ when? ] is an emeritus Institute Professor in the MIT economics department, and previously taught at Columbia University.[ citation needed ]
In the early 1960s the Massachusetts Institute of Technology (MIT) was the home of the "growthmen." Its leading light, Paul Samuelson, had published a pathbreaking undergraduate textbook, Economics: An Introductory Analysis. In the sixth edition of Economics, Samuelson (1964) added a "new chapter on the theory of growth." Samuelson drew on the work on growth theory of his younger colleague Robert Solow (1956)—an indication that growthmanship was taking an analytical turn. The MIT economists were thus growthmen in two senses: in seeing growth as an absolutely central policy imperative and in seeing the theory of growth as a focus for economic research. What the MIT growthmen added was a distinctive style of analysis that made it easier to address the dominant policy concerns in tractable formal models. Solow's (1956) model was the perfect exemplar of the MIT style. It provided the central framework for the subsequent developments in growth theory and secured MIT as the center of the universe in the golden age of growth theory in the 1960s (Boianovsky and Hoover 199–200).
Macroeconomics is a branch of economics dealing with the performance, structure, behavior, and decision-making of an economy as a whole. For example, using interest rates, taxes and government spending to regulate an economy’s growth and stability. This includes regional, national, and global economies.
Economic growth can be defined as the increase in the inflation-adjusted market value of the goods and services produced by an economy over time. Statisticians conventionally measure such growth as the percent rate of increase in real gross domestic product, or real GDP.
Rüdiger "Rudi" Dornbusch was a German economist who worked in the United States for most of his career.
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".
Jerry Allen Hausman is the John and Jennie S. MacDonald Professor of Economics at the Massachusetts Institute of Technology and a notable econometrician. He has published numerous influential papers in microeconometrics. Hausman is the recipient of several prestigious awards including the John Bates Clark Medal in 1985 and the Frisch Medal in 1980.
Stanley Fischer is an Israeli American economist and former vice chairman of the Federal Reserve. Born in Northern Rhodesia, he holds dual citizenship in Israel and the United States. He served as governor of the Bank of Israel from 2005 to 2013. He previously served as chief economist at the World Bank. On January 10, 2014, United States President Barack Obama nominated Fischer to be Vice-Chairman of the US Federal Reserve Board of Governors. On September 6, 2017, Stanley Fischer announced that he was resigning as Vice-Chairman for personal reasons effective October 13, 2017.
Robert Joseph Barro is an American macroeconomist and the Paul M. Warburg Professor of Economics at Harvard University. Barro is considered one of the founders of new classical macroeconomics, along with Robert Lucas, Jr. and Thomas J. Sargent. He is currently a senior fellow at Stanford University's Hoover Institution and co-editor of the influential Quarterly Journal of Economics.
The Solow–Swan model is an economic model of long-run economic growth set within the framework of neoclassical economics. It attempts to explain long-run economic growth by looking at capital accumulation, labor or population growth, and increases in productivity, commonly referred to as technological progress. At its core is a neoclassical (aggregate) production function, often specified to be of Cobb–Douglas type, which enables the model "to make contact with microeconomics". The model was developed independently by Robert Solow and Trevor Swan in 1956, and superseded the Keynesian Harrod–Domar model.
Paul Michael Romer is an American economist at the NYU Stern School of Business, Department of Economics, and School of Law. He is also the co-recipient of the Nobel Memorial Prize in Economic Sciences in 2018 for his contributions to endogenous growth theory. He was awarded the prize "for integrating technological innovations into long-run macroeconomic analysis".
Oliver Simon D'Arcy Hart is a British-born American economist, currently the Lewis P. and Linda L. Geyser University Professor at Harvard University. Together with Bengt R. Holmström, he received the Nobel Memorial Prize in Economic Sciences in 2016.
Glenn Cartman Loury is an American economist, academic, and author. In 1982, at the age of 33, he became the first African American tenured professor of economics in the history of Harvard University. He is the Merton P. Stoltz Professor of the Social Sciences and Professor of Economics at Brown University.
Olivier Jean Blanchard is a French economist and professor who is a senior fellow at the Peterson Institute for International Economics. He was the chief economist at the International Monetary Fund from September 1, 2008, to September 8, 2015. Blanchard was appointed to the position under the tenure of Dominique Strauss-Kahn; he was succeeded by Maurice Obstfeld. He also is a Robert M. Solow Professor of Economics emeritus at the Massachusetts Institute of Technology (MIT). He is one of the most cited economists in the world, according to IDEAS/RePEc.
Evsey David Domar was a Russian American economist, famous as developer of the Harrod–Domar model.
Peter Arthur Diamond is an American economist known for his analysis of U.S. Social Security policy and his work as an advisor to the Advisory Council on Social Security in the late 1980s and 1990s. He was awarded the Nobel Memorial Prize in Economic Sciences in 2010, along with Dale T. Mortensen and Christopher A. Pissarides. He is an Institute Professor at the Massachusetts Institute of Technology. On June 6, 2011, he withdrew his nomination to serve on the Federal Reserve's board of governors, citing intractable Republican opposition for 14 months.
James Michael "Jim" Poterba, FBA is an American economist, Mitsui Professor of Economics at the Massachusetts Institute of Technology, and current NBER president and chief executive officer.
Oded Galor is an Israeli economist who is currently Herbert H. Goldberger Professor of Economics at Brown University. He is the founder of unified growth theory. Galor has contributed to the understanding of process of development over the entire course of human history and prehistory, and the role of deep-rooted factors in the transition from stagnation to growth and in the emergence of the vast inequality across the globe. Moreover, he has pioneered the exploration of the impact of human evolution, population diversity, and inequality on the process of development over most of human existence.
Miguel Sidrauski was an Argentine economist who made important contributions to the theory of economic growth by developing a modified version of the Ramsey–Cass–Koopmans model to describe the effects of money on long-run growth. He also published an article on exchange rate determination. Sidrauski taught economics at Massachusetts Institute of Technology.
Franklin Marvin Fisher was an American economist. He taught economics at the Massachusetts Institute of Technology from 1960 to 2004.
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.
The Cambridge capital controversy, sometimes called "the capital controversy" or "the two Cambridges debate", was a dispute between proponents of two differing theoretical and mathematical positions in economics that started in the 1950s and lasted well into the 1960s. The debate concerned the nature and role of capital goods and a critique of the neoclassical vision of aggregate production and distribution. The name arises from the location of the principals involved in the controversy: the debate was largely between economists such as Joan Robinson and Piero Sraffa at the University of Cambridge in England and economists such as Paul Samuelson and Robert Solow at the Massachusetts Institute of Technology, in Cambridge, Massachusetts, United States.
|Wikiquote has quotations related to: Robert Solow|
James M. Buchanan Jr.
| Laureate of the Nobel Memorial Prize in Economics |