Prof. Dr. Paul Samuelson was born in Gary, Indiana, in 1915 on 15 May. . 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 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."
Confronted by contradictions, overlaps, and fallacies in the classical language of economics, he sought unification - and clarification - in mathematics. In his first major work, Foundations of Economic Analysis, published in 1947, he demonstrated that this approach worked. He did not claim mathematics as the cure-all or end-all of economic analysis, but he was insisting that mathematics was essential to an understanding of what economics was all about.
His Economics: An Introductory Analysis, first published in 1948, has become the best selling economics textbook of all time. The textbook has sold more than a million copies and has been translated into French, German, Italian, Hungarian, Polish, Korean, Portuguese, Spanish and Arabic. "The book's emphasis on different themes has changed with the changing of the nation's economic problems," Some economists regard Samuelson's authorship of the book as a great contribution that competes for importance with his research publications. It has gone a long way toward giving the world a common economic language."
He was co-author of Readings in Economics, published in 1955, and has co-authored numerous other works in the field. His book, Linear Programming and Economic Analysis, was written in collaboration with Robert Dorfman and Robert Solow. Mathematical economics is applied to practical problems in international trade, transportation and marketing, competitive strategy in business and government, industrial production, and defense planning. Such complex problems of choice can now be analyse analysed by the mathematical economics which Professor Samuelson has developed.
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.
Professor Samuelson has served widely as a consultant. He 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.
Samuelson gave the opinion that inflation is a major problem in the years to come. "The history of the twentieth century," he wrote, " - America's century! - has been pretty much a history of rising prices... inflation is itself a problem. But the legitimate and hysterical fears of inflation are - quite aside from the evil of inflation itself - likely, in their own right, to be problems. In short, I fear inflation. And I fear the fear of inflation. Avoiding inflation is not an absolute imperative, but rather is one of a number of conflicting goals that we must pursue and that we may often have to compromise. Even if the military outlook were serene - and it is not - modern democracies must expect in the future to be much of the time at, or near, the point where inflation is a concern. Our greatest economic problem will be to face that concern realistically, to weigh inflation's quantitative evil against the evils of actions taken against it, to develop methods of adjusting to the residue of inflation which attainment of the 'golden mean' might involve. The challenge is great but the prognosis is cheerful."
In an interview in 1960 with U.S. News World Report, Professor Samuelson talked about a new kind of inflation - what he called "cost-push." As contrasted to the familiar kind of inflation - where too much spending power pulls up prices and wages - cost-push inflation is "a force that operates year-in and year-out, whenever we are at high employment, to push up prices. It's a price creep, not a price gallop; but the bad thing about it is that, instead of setting in only after you have reached overfull employment, the suspicion is dawning that it may be a problem that plagues us even when we haven't arrived at a satisfactory level of employment."
In his report to President-elect Kennedy in 1961 on the state of the American economy, he wrote: "Various experts, here and abroad, believe that the immediate postwar inflationary climate has now been converted into an epoch of price stability. One hopes this cheerful diagnosis is correct. However, a careful survey of the behavior of prices and costs shows that our recent stability in the wholesale price index has come in a period of admittedly high unemployment and slackness in our economy. For this reason it is premature to believe that the restoration of high employment will no longer involve problems concerning the stability of prices.
In this report to President-elect Kennedy, Professor Samuelson made certain minimal policy recommendations "that need to be pushed hard even if the current recession turns out to be one that can be reversed by next summer at the latest." He urged strong support of pledged expenditure programs, including: increasing defense expenditures and foreign aid on a basis of merit and need, vigorously pushing educational programs, high priority for urban renewal and health and welfare programs, highest priority on improving unemployment compensation, acceleration of useful public works and highway construction programs, help for depressed areas programs, and natural resource development projects.
To stimulate residential housing, he recommended reducing mortgage rates, mortgage discounts, insurance fees, and extension of maximum amortization periods, and a step-up in the Federal National Mortgage Association mortgage purchasing program. In monetary policy he specifically urged more reliance upon short term issues (to nudge a reduction in long term rates), and decisive actions to improve our international balance of payments position.
On the question of unemployment levels, Professor Samuelson commented in December, 1960: "I think, without question, that unemployment of more than 6 per cent is something to be concerned about."
A further question in the interview asked what degree of responsibility the government has to insure high employment. Replied Professor Samuelson: "I think I would say simply that the American people have expressed the choice that it is their concern to see that large departures from high employment will not be tolerated... I never look upon the government as something in Washington that does something to us or for us. I think of public policy as a way in which we organize our affairs, and so I do think it is part of fiscal responsibility and monetary-policy responsibility to be discontented with the sort of unemployment we had in the prewar decade, and with the sort of exuberant booms leading to crises and panics that we have had throughout the history of our capitalistic system."
Professor Samuelson has been active in a number of honorary and professional organizations. He is a member of the American Academy of Arts and Sciences, a fellow of the American Philosophical Society and the British Academy; he is a member and past President (1961) of the American Economic Association; he is a member of the editorial board and past-President (1951) of the Econometric Society; he is a fellow, council member and past Vice-President of the Economic Society.
He is the author of hundreds of articles in journals and magazines.
Sources:
http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1970/samuelson-bio.html
Summary of Some of Chapters from Samuelson Book - Principles of Economics
Economics - Revision Articles
Nobel Memorial Lecture by Paul Samuelson - 11 December 1970
Maximum Principles in Analytical Economics
http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1970/samuelson-lecture.pdf
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."
Confronted by contradictions, overlaps, and fallacies in the classical language of economics, he sought unification - and clarification - in mathematics. In his first major work, Foundations of Economic Analysis, published in 1947, he demonstrated that this approach worked. He did not claim mathematics as the cure-all or end-all of economic analysis, but he was insisting that mathematics was essential to an understanding of what economics was all about.
His Economics: An Introductory Analysis, first published in 1948, has become the best selling economics textbook of all time. The textbook has sold more than a million copies and has been translated into French, German, Italian, Hungarian, Polish, Korean, Portuguese, Spanish and Arabic. "The book's emphasis on different themes has changed with the changing of the nation's economic problems," Some economists regard Samuelson's authorship of the book as a great contribution that competes for importance with his research publications. It has gone a long way toward giving the world a common economic language."
He was co-author of Readings in Economics, published in 1955, and has co-authored numerous other works in the field. His book, Linear Programming and Economic Analysis, was written in collaboration with Robert Dorfman and Robert Solow. Mathematical economics is applied to practical problems in international trade, transportation and marketing, competitive strategy in business and government, industrial production, and defense planning. Such complex problems of choice can now be analyse analysed by the mathematical economics which Professor Samuelson has developed.
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.
Professor Samuelson has served widely as a consultant. He 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.
Samuelson gave the opinion that inflation is a major problem in the years to come. "The history of the twentieth century," he wrote, " - America's century! - has been pretty much a history of rising prices... inflation is itself a problem. But the legitimate and hysterical fears of inflation are - quite aside from the evil of inflation itself - likely, in their own right, to be problems. In short, I fear inflation. And I fear the fear of inflation. Avoiding inflation is not an absolute imperative, but rather is one of a number of conflicting goals that we must pursue and that we may often have to compromise. Even if the military outlook were serene - and it is not - modern democracies must expect in the future to be much of the time at, or near, the point where inflation is a concern. Our greatest economic problem will be to face that concern realistically, to weigh inflation's quantitative evil against the evils of actions taken against it, to develop methods of adjusting to the residue of inflation which attainment of the 'golden mean' might involve. The challenge is great but the prognosis is cheerful."
In an interview in 1960 with U.S. News World Report, Professor Samuelson talked about a new kind of inflation - what he called "cost-push." As contrasted to the familiar kind of inflation - where too much spending power pulls up prices and wages - cost-push inflation is "a force that operates year-in and year-out, whenever we are at high employment, to push up prices. It's a price creep, not a price gallop; but the bad thing about it is that, instead of setting in only after you have reached overfull employment, the suspicion is dawning that it may be a problem that plagues us even when we haven't arrived at a satisfactory level of employment."
In his report to President-elect Kennedy in 1961 on the state of the American economy, he wrote: "Various experts, here and abroad, believe that the immediate postwar inflationary climate has now been converted into an epoch of price stability. One hopes this cheerful diagnosis is correct. However, a careful survey of the behavior of prices and costs shows that our recent stability in the wholesale price index has come in a period of admittedly high unemployment and slackness in our economy. For this reason it is premature to believe that the restoration of high employment will no longer involve problems concerning the stability of prices.
In this report to President-elect Kennedy, Professor Samuelson made certain minimal policy recommendations "that need to be pushed hard even if the current recession turns out to be one that can be reversed by next summer at the latest." He urged strong support of pledged expenditure programs, including: increasing defense expenditures and foreign aid on a basis of merit and need, vigorously pushing educational programs, high priority for urban renewal and health and welfare programs, highest priority on improving unemployment compensation, acceleration of useful public works and highway construction programs, help for depressed areas programs, and natural resource development projects.
To stimulate residential housing, he recommended reducing mortgage rates, mortgage discounts, insurance fees, and extension of maximum amortization periods, and a step-up in the Federal National Mortgage Association mortgage purchasing program. In monetary policy he specifically urged more reliance upon short term issues (to nudge a reduction in long term rates), and decisive actions to improve our international balance of payments position.
On the question of unemployment levels, Professor Samuelson commented in December, 1960: "I think, without question, that unemployment of more than 6 per cent is something to be concerned about."
A further question in the interview asked what degree of responsibility the government has to insure high employment. Replied Professor Samuelson: "I think I would say simply that the American people have expressed the choice that it is their concern to see that large departures from high employment will not be tolerated... I never look upon the government as something in Washington that does something to us or for us. I think of public policy as a way in which we organize our affairs, and so I do think it is part of fiscal responsibility and monetary-policy responsibility to be discontented with the sort of unemployment we had in the prewar decade, and with the sort of exuberant booms leading to crises and panics that we have had throughout the history of our capitalistic system."
Professor Samuelson has been active in a number of honorary and professional organizations. He is a member of the American Academy of Arts and Sciences, a fellow of the American Philosophical Society and the British Academy; he is a member and past President (1961) of the American Economic Association; he is a member of the editorial board and past-President (1951) of the Econometric Society; he is a fellow, council member and past Vice-President of the Economic Society.
He is the author of hundreds of articles in journals and magazines.
Sources:
http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1970/samuelson-bio.html
Summary of Some of Chapters from Samuelson Book - Principles of Economics
Economics - Revision Articles
Nobel Memorial Lecture by Paul Samuelson - 11 December 1970
Maximum Principles in Analytical Economics
http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1970/samuelson-lecture.pdf
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