Robert Solow

Robert Merton Solow, GCIH (/ˈsoʊloʊ/; 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.[28][29] He is currently Emeritus Institute Professor of Economics at the Massachusetts Institute of Technology, where he has been a professor since 1949.[30] He was awarded the John Bates Clark Medal in 1961,[31] the Nobel Memorial Prize in Economic Sciences in 1987,[32] and the Presidential Medal of Freedom in 2014.[33] 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.[34][35][36]

Robert Solow
Solow in 2008
Born
Robert Merton Solow

(1924-08-23) August 23, 1924
Brooklyn, New York City, U.S.
Academic career
InstitutionMassachusetts Institute of Technology
FieldMacroeconomics
School or
tradition		Neo-Keynesian economics
Alma materHarvard University (AB, AM, PhD)
Columbia University
Doctoral
advisor		Wassily Leontief
Doctoral
students		George Akerlof[1]
Mario Baldassarri[2]
Francis M. Bator[3]
Charlie Bean[4]
Alan Blinder[5]
Vittorio Corbo
Peter Diamond[6]
Avinash Dixit[7]
Alain Enthoven[8]
Ray Fair[9]
Ronald Findlay[10]
Robert J. Gordon[11]
Robert Hall[12]
Michael Intriligator[13]
Katsuhito Iwai[14]
Ronald W. Jones[15]
Arnold Kling
Meir Kohn
Glenn Loury[16]
Herbert Mohring[17]
William Nordhaus[18]
George Perry[19]
Robert Pindyck
Arjun Kumar Sengupta[20]
Steven Shavell[21]
Eytan Sheshinski[22]
Jeremy Siegel[23]
Joseph Stiglitz[24]
Harvey M. Wagner[25]
Martin Weitzman[26]
Halbert White[27]
Other notable studentsMario Draghi
InfluencesPaul Samuelson
ContributionsExogenous growth model
AwardsJohn 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

Biography

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 despite their not being able to attend college due to the necessity to work.[37] He was well educated in the neighborhood public schools and excelled academically early in life.[38] 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.[38]

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.[39] He served briefly in North Africa and Sicily, and later in Italy until he was discharged in August 1945.[38][40] Shortly after returning, he proceeded to marry his girlfriend, Barbara Lewis, whom he had been dating for six months.[39]

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.[38]

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[38] 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.[41]

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.[42][43]

Solow was one of the signees of a 2018 amicus curiae brief that expressed support for Harvard University in the Students for Fair Admissions v. President and Fellows of Harvard College lawsuit. Signers of the brief include Alan B. Krueger, George A. Akerlof, Janet Yellen, and Cecilia Rouse.[44]

Solow is a Democrat, supporting Joe Biden's Inflation Reduction Act of 2022.[45]

Solow's model of economic growth

Solow's model of economic growth, often known as the Solow–Swan neoclassical 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.

Bill Clinton awarding Solow the National Medal of Science in 1999

Solow also was the first to develop a growth model with different vintages of capital.[46] 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.[39] 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.[46] 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.[46]

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.[47]

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.[46]

As of 2022, Solow is still an emeritus Institute Professor in the MIT economics department, and previously taught at Columbia University.[48]

MIT Economics (1960–1979)

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).[49]

Honors

Publications

Books
  • Dorfman, Robert; Samuelson, Paul; Solow, Robert M. (1958). Linear programming and economic analysis. New York: McGraw-Hill.
  • Solow, Robert M. (15 October 1970). Growth Theory: An Exposition (1970, second edition 2006). Oxford University Press. ISBN 978-0195012958.
  • Solow, Robert M. (1990). The Labor Market as a Social Institution. Blackwell. ISBN 978-1557860866.

Book chapters
  • Solow, Robert M. (1960), "Investment and technical progress", in Arrow, Kenneth J.; Karlin, Samuel; Suppes, Patrick (eds.), Mathematical models in the social sciences, 1959: Proceedings of the first Stanford symposium, Stanford mathematical studies in the social sciences, IV, Stanford, California: Stanford University Press, pp. 89–104, ISBN 9780804700214.
  • Solow, Robert M. (2001), "After technical progress and the aggregate production function", in Hulten, Charles R.; Dean, Edwin R.; Harper, Michael J. (eds.), New developments in productivity analysis, Chicago, Illinois: University of Chicago Press, pp. 173–78, ISBN 9780226360645.
  • Solow, Robert M. (2009), "Imposed environmental standards and international trade", in Kanbur, Ravi; Basu, Kaushik (eds.), Arguments for a better world: essays in honor of Amartya Sen | Volume II: Society, institutions and development, Oxford New York: Oxford University Press, pp. 411–24, ISBN 9780199239979.

Journal articles
See also: Nicholas Georgescu-Roegen and Joseph Stiglitz.

See also

References
  1. Akerlof, George A. (1966). Wages and capital (PDF) (Ph.D.). Massachusetts Institute of Technology. Retrieved 28 June 2017.
  2. Baldassarri, Mario (1978). Government investment, inflation and growth in a mixed economy : theoretical aspects and empirical evidence of the experience of Italian government corporation investments (Ph.D.). Massachusetts Institute of Technology. hdl:1721.1/99791.
  3. Bator, Francis M. (1956). Capital, Growth and Welfare—Theories of Allocation (Ph.D.). Massachusetts Institute of Technology. hdl:1721.1/97306.
  4. Bean, Charles Richard (1982). Essays in unemployment and economic activity (Ph.D.). Massachusetts Institute of Technology. Retrieved 30 June 2017.
  5. Blinder, Alan S. (1971). Towards an Economic Theory of Income Distribution (Ph.D.). Massachusetts Institute of Technology. Retrieved 1 July 2017.
  6. Peter A. Diamond – Autobiography – Nobelprize.org, PDF page 2
  7. Dixit, Avinash K. (1968). Development Planning in a Dual Economy (Ph.D.). Massachusetts Institute of Technology. Retrieved 1 July 2017.
  8. Enthoven, Alain C. (1956). Studies in the theory of inflation (Ph.D.). Massachusetts Institute of Technology. Retrieved 30 June 2017.
  9. Fair, Ray C. (1968). The Short Run Demand for Employment (Ph.D.). Massachusetts Institute of Technology. hdl:1721.1/80461.
  10. Findlay, Ronald Edsel (1960). Essays on Some Theoretical Aspects of Economic Growth (Ph.D.). Massachusetts Institute of Technology. Retrieved 30 June 2017.
  11. Gordon, Robert J. (1967). Problems in the measurement of real investment in the U.S. private economy (Ph.D.). MIT. hdl:1721.1/105586.
  12. Hall, Robert E. (1967). Essays on the Theory of Wealth (Ph.D.). Massachusetts Institute of Technology. Retrieved 5 July 2017.
  13. Intriligator, Michael D. (1963). Essays on productivity and savings (PhD thesis). MIT. OCLC 33811859.
  14. Iwai, Katsuhito (1972). Essays on Dynamic Economic Theory – Fisherian Theory of Optimal Capital Accumulation and Keynesian Short-run Disequilibrium Dynamics (Ph.D.). Massachusetts Institute of Technology. Retrieved 5 July 2017.
  15. Jones, Ronald Winthrop (1956). Essays in the Theory of International Trade and the Balance of Payments (Ph.D.). Massachusetts Institute of Technology. hdl:1721.1/106042.
  16. Loury, Glenn Cartman (1976). Essays in the Theory of the Distribution of Income (Ph.D.). Massachusetts Institute of Technology. hdl:1721.1/27456.
  17. Mohring, Herbert D. (1959). The life insurance industry: a study of price policy and its determinants (Ph.D.). Massachusetts Institute of Technology. hdl:1721.1/11790.
  18. Nordhaus, William Dawbney. (1967). A Theory of Endogenous Technological Change (Ph.D.). Massachusetts Institute of Technology. Retrieved 1 July 2017.
  19. Perry, George (1961). Aggregate wage determination and the problem of inflation (Ph.D.). Massachusetts Institute of Technology. Retrieved 4 July 2017.
  20. Sengupta, Arjun Kumar (1963). A study in the constant-elasticity-of-substitution production function (Ph.D.). Massachusetts Institute of Technology. Retrieved 4 July 2017.
  21. Shavell, Steven Mark (1973). Essays in Economic Theory (Ph.D.). Massachusetts Institute of Technology. Retrieved 5 July 2017.
  22. Sheshinski, Eytan (1966). Essays on the theory of production and technical progress (PDF) (Ph.D.). MIT. Retrieved 26 May 2018.
  23. Siegel, Jeremy J. (1971). Stability of a Monetary Economy with Inflationary Expectations (PDF) (Ph.D.). Massachusetts Institute of Technology. Retrieved 5 July 2017.
  24. Stiglitz, Joseph E. (1966). Studies in the Theory of Economic Growth and Income Distribution (PDF) (Ph.D.). MIT. p. 4. Retrieved 29 June 2017.
  25. Wagner, Harvey M. (1962). Statistical Management of Inventory Systems (Ph.D.). Massachusetts Institute of Technology. Retrieved 30 June 2017.
  26. Weitzman, Martin (1967). Toward a theory of iterative economic planning (Ph.D.). MIT. Retrieved 26 May 2018.
  27. Hausman, Jerry (2013), "Hal White: Time at MIT and Early Life Days of Research", in Chen, Xiaohong; Swanson, Norman R. (eds.), Recent Advances and Future Directions in Causality, Prediction, and Specification Analysis, New York: Springer, pp. 209–218, ISBN 978-1-4614-1652-4.
  28. "Robert M. Solow | American economist". Encyclopedia Britannica. Retrieved 8 June 2017.
  29. "Prospects for growth: An interview with Robert Solow". McKinsey & Company. September 2014. Archived from the original on 22 June 2017. Retrieved 8 June 2017.
  30. "MIT Economics Faculty". Massachusetts Institute of Technology. Retrieved 27 August 2017.
  31. "American Economic Association". www.aeaweb.org. Retrieved 8 June 2017.
  32. Solow, Robert M. "Robert M. Solow – Biographical". www.nobelprize.org. Retrieved 8 June 2017.
  33. Schulman, Kori (10 November 2014). "President Obama Announces the Presidential Medal of Freedom Recipients". whitehouse.gov. Retrieved 8 June 2017.
  34. Dieterle, David A (2017). Economics: The Definitive Encyclopedia from Theory to Practice. Vol. 4. Greenwood. p. 376. ISBN 978-0313397073.
  35. "MIT Libraries' catalog – Barton – Full Catalog – Full Record". library.mit.edu. Retrieved 10 October 2018.
  36. Ivana Kottasová. "Nobel Prize in economics awarded to William Nordhaus and Paul Romer". CNN. Retrieved 10 October 2018.
  37. Martin, Caine. "Robert Solow". youtube. InfiniteHistoryProjectMIT. Retrieved 13 November 2019.
  38. "Robert M. Solow – Autobiography". Nobelprize.org. 23 August 1924. Retrieved 17 April 2021.
  39. Martin, Caine. "Robert Solow". Youtube. InfiniteHistoryProjectMIT. Archived from the original on 18 November 2021. Retrieved 13 November 2019.
  40. "Robert M Solow – Middlesex Massachusetts – Army of the United States". wwii-army.mooseroots.com. Retrieved 8 June 2017.
  41. "Economists for Peace & Security". Archived from the original on 27 January 2020. Retrieved 21 January 2021.
  42. "RePEc Genealogy page for Robert M. Solow". Research Papers in Economics (RePEc). Retrieved 1 November 2014.
  43. "Top 5% Authors, as of September 2014: Strength of Students". Research Papers in Economics (RePEc). Retrieved 1 November 2014.
  44. "Economists amended brief" (PDF). admissionscase.harvard.edu. Archived from the original (PDF) on 22 October 2018. Retrieved 30 December 2018.
  45. "DocumentCloud".
  46. Haines, Joel D.; Sharif, Nawaz M. (2006). "A framework for managing the sophistication of the components of technology for global competition". Competitiveness Review. 16 (2): 106–21. doi:10.1108/cr.2006.16.2.106.
  47. Martin, Caine (February 1956). "A Contribution to the Theory of Economic Growth" (PDF). The Quarterly Journal of Economics. 70 (1): 65–94. doi:10.2307/1884513. hdl:10338.dmlcz/143862. JSTOR 1884513.
  48. "Faculty | MIT Economics".
  49. Boianovsky, Mauro; Hoover, Kevin D. (2014). "In The Kingdom Of Solovia: The Rise Of Growth Economics At MIT, 1956–70". History of Political Economy. 46: 198–228. doi:10.1215/00182702-2716172. hdl:10419/149695.
  50. "Cidadãos Nacionais Agraciados com Ordens Portuguesas". Página Oficial das Ordens Honoríficas Portuguesas. Retrieved 31 July 2017.
  51. "Robert Merton Solow". American Academy of Arts & Sciences. Retrieved 21 June 2022.
  52. "Robert M. Solow". nasonline.org. Retrieved 21 June 2022.
  53. "APS Member History". search.amphilsoc.org. Retrieved 21 June 2022.
  • Greenwood, Jeremy; Krusell, Per; Hercowitz, Zvi (1997). "Long-run Implications of Investment-Specific Technological Progress". American Economic Review. 87: 343–362.
  • Greenwood, Jeremy; Krusell, Per (2007). "Growth Accounting with Investment-Specific Technological Progress: A Discussion of Two Approaches". Journal of Monetary Economics. 54 (4): 1300–1310. doi:10.1016/j.jmoneco.2006.02.008.
  • Jorgenson, Dale W. (1966). "The Embodiment Hypothesis". Journal of Political Economy. 74: 1–17. doi:10.1086/259105. S2CID 154389143.
Wikiquote has quotations related to Robert Solow.
This article is issued from Wikipedia. The text is licensed under Creative Commons - Attribution - Sharealike. Additional terms may apply for the media files.