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Simon Kuznets

Born	April 30, 1901 Pinsk
Died	July 8, 1985 Cambridge, Massachusetts
Residence	United States
Nationality	Russian
Field	Economics
Institutions	NBER Harvard University (1960-1971) Johns Hopkins University (1954-1960)
Alma mater	Columbia University
Academic advisor	Wesley Clair Mitchell
Notable students	Robert Fogel Milton Friedman
Known for	National income data Empirical business cycle research Characteristics of economic growth
Notable prizes	Nobel Prize in Economics (1971)

Simon Smith Kuznets (April 30, 1901 – July 8, 1985) was an American economist at Wharton School of the University of Pennsylvania who won the 1971 Nobel Prize in Economics "for his empirically founded interpretation of economic growth which has led to new and deepened insight into the economic and social structure and process of development". Image File history File links Unbalanced_scales. ... Image File history File links Kuznets_portrait. ... is the 120th day of the year (121st in leap years) in the Gregorian calendar. ... 1901 (MCMI) was a common year starting on Tuesday (link will display calendar) of the Gregorian calendar (or a common year starting on Wednesday of the 13-day-slower Julian calendar). ... Pinsk (Belarusian: , Russian: ), a town in Belarus, in the Polesia region, travesed by the river Prypiać, at the confluence of the Strumen and Pina rivers. ... is the 189th day of the year (190th in leap years) in the Gregorian calendar. ... Year 1985 (MCMLXXXV) was a common year starting on Tuesday (link displays 1985 Gregorian calendar). ... Location in Massachusetts Coordinates: , Country United States State Massachusetts County Middlesex County Settled 1630 Incorporated 1636 Government  - Type Mayor-council city  - Mayor Kenneth Reeves (D) Area  - City  7. ... This article needs additional references or sources for verification. ... The National Bureau of Economic Research (NBER) is a private, nonprofit, nonpartisan research organization dedicated to studying the science and empirics of economics, especially the American economy. ... Harvard University (incorporated as The President and Fellows of Harvard College) is a private university in Cambridge, Massachusetts, USA and a member of the Ivy League. ... The Johns Hopkins University, founded in 1876, is a private institution of higher learning located in Baltimore, Maryland, United States. ... Columbia University is a private research university in the United States. ... Wesley Clair Mitchell (August 5, 1874 – October 29, 1948) was an American economist known for his empirical work on business cycles and for guiding the National Bureau of Economic Research in its first decades. ... Robert William Fogel (born July 1, 1926) is an American economic historian and scientist, and winner (with Douglass North) of the 1993 Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel. ... Milton Friedman (July 31, 1912 – November 16, 2006) was a prominent American economist and public intellectual. ... Measures of national income and output are used in economics to estimate the value of goods and services produced in an economy. ... // [edit] Introduction [edit] Definition If we were to take snapshots of an economy at different points in time, no two photos would look alike. ... This article needs additional references or sources to facilitate its verification. ... The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel[1] (Swedish: Sveriges Riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), commonly called the Nobel Prize in Economics, or more acurately the Nobel Memorial Prize in Economic Sciences, is a prize awarded each year for outstanding intellectual... is the 120th day of the year (121st in leap years) in the Gregorian calendar. ... 1901 (MCMI) was a common year starting on Tuesday (link will display calendar) of the Gregorian calendar (or a common year starting on Wednesday of the 13-day-slower Julian calendar). ... is the 189th day of the year (190th in leap years) in the Gregorian calendar. ... Year 1985 (MCMLXXXV) was a common year starting on Tuesday (link displays 1985 Gregorian calendar). ... Alan Greenspan, former chairman, United States Federal Reserve. ... The Wharton School of the University of Pennsylvania is a business school at the University of Pennsylvania, USA. The school was founded by Joseph Wharton, who also was one of the founders of Swarthmore College (founded in 1864), in 1881 as the first collegiate business school in the United States. ... This article is about the private Ivy League university in Philadelphia. ... Year 1971 (MCMLXXI) was a common year starting on Friday (link will display full calendar) of the 1971 Gregorian calendar. ... The Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel (in Swedish Sveriges Riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), is a prize awarded each year for outstanding intellectual contributions in the field of economics. ...

Biography

He was born into a Jewish family at Pinsk, Russia (now in Belarus) and was educated in Kharkov, Ukraine, but moved to the United States in 1922 and was educated at Columbia University and received his B.Sc. in 1923, M.A. in 1924, and Ph.D. in 1926. The word Jew ( Hebrew: יהודי) is used in a wide number of ways, but generally refers to a follower of the Jewish faith, a child of a Jewish mother, or someone of Jewish descent with a connection to Jewish culture or ethnicity and often a combination... Pinsk (Belarusian: , Russian: ), a town in Belarus, in the Polesia region, travesed by the river Prypiać, at the confluence of the Strumen and Pina rivers. ... Kharkov (rus: Ха́рьков) or Kharkiv (ukr: Ха́рків) is the second largest city in Ukraine, a center of Kharkivska oblast. It is situated in the northeast of the country and has a population of two million. ... Year 1922 (MCMXXII) was a common year starting on Sunday (link will display full calendar). ... Columbia University is a private research university in the United States. ...

From 1925 to 1926, Kuznets spent time studying economic patterns in prices as the Research Fellow at the Social Science Research Council. It was this work that led to his book Secular Movements in Production and Prices, published in 1930.

From 1931 until 1936, Kuznets was a part-time professor at the University of Pennsylvania and as professor of Economics and Statistics from 1936 until 1954. In 1954, Kuznets moved to Johns Hopkins University, where he was Professor of Political Economy until 1960. From 1960 until his retirement in 1971, Kuznets taught at Harvard University. The Johns Hopkins University, founded in 1876, is a private institution of higher learning located in Baltimore, Maryland, United States. ... Harvard University (incorporated as The President and Fellows of Harvard College) is a private university in Cambridge, Massachusetts, USA and a member of the Ivy League. ...

Simon Kuznets died on July 8, 1985, at the age of 84.

His work and its impact on Economics

Kuznets is credited with revolutionising econometrics, and this work is credited with fueling the so-called Keynesian "revolution". An important book of his is National Income and Its Composition, 1919–1938. Published in 1941, it contains a historically significant work on Gross National Product. His work on the business cycle and disequilibrium aspects of economic growth helped launch development economics. He also studied inequality over time, and his results formed the Kuznets Curve. Econometrics literally means economic measurement. It is a combination of mathematical economics and statistics. ... This article includes a list of works cited or a list of external links, but its sources remain unclear because it lacks in-text citations. ... Measures of national income and output are used in economics to estimate the value of goods and services produced in an economy. ... // [edit] Introduction [edit] Definition If we were to take snapshots of an economy at different points in time, no two photos would look alike. ... This article does not cite any references or sources. ... Kuznets curve is the graphical representation of Simon Kuznetss theory (Kuznets hypothesis) that economic inequality increases over time, then at a critical point begins to decrease. ...

Another important development was Kuznets' empirical examination of Keynes' 1936 Absolute Income Hypothesis. The hypothesis gave birth to what would become the first formal consumption function. However Kuznets shook the economic world by finding that Keynes' predictions, while seemingly accurate in short-run cross-sections, broke down under more rigorous examination. In his 1942 tome Uses of National Income in Peace and War, published by the National Bureau of Economic Research, Kuznets became the first economist to show that the Absolute Income Hypothesis gives inaccurate predictions in the long run (by using time-series data). Keynes had predicted that as aggregate income increases, so will marginal savings. Kuznets used new data to show that, over a longer span of time (1870's - 1940's) the savings ratio remained constant, despite large changes in income. This paved the way for Milton Friedman's Permanent Income Hypothesis, and several more modern alternatives such as the Life-cycle Income Hypothesis and the Relative Income Hypothesis. In economics, the consumption fuction calculates the amount of total consumption in an economy. ... The National Bureau of Economic Research (NBER) is a private, nonprofit, nonpartisan research organization dedicated to studying the science and empirics of economics, especially the American economy. ... In statistics, signal processing, and econometrics, a time series is a sequence of data points, measured typically at successive times, spaced at (often uniform) time intervals. ... Milton Friedman (July 31, 1912 – November 16, 2006) was a prominent American economist and public intellectual. ... To meet Wikipedias quality standards, this article or section may require cleanup. ...

There are two developments at Kuznets time: the emergence of econometrics and the Keynesian Revolution, both of which found in Kuznets's data an important resource for their advancement. Kuznets, however, was neither a Keynesian nor an econometrician - he took his cues from Mitchell's Institutionalism - as exemplified in his 1930 methodological pieces. Whereas Mitchell devoted his life to the study of business cycles, Kuznets turned to other fluctuations – seasonal ones and secular movements – then to national income estimation, and later to studies of economic growth. As a result, his initial work was on the empirical analysis of business cycles (1930) - a 15-20 year cycle he identified was later attached to his name, the "Kuznets Cycle". Wesley Clair Mitchell (August 5, 1874 – October 29, 1948) was an American economist known for his empirical work on business cycles and for guiding the National Bureau of Economic Research in its first decades. ... Measures of national income and output are used in economics to estimate the value of goods and services produced in an economy. ... This article needs additional references or sources to facilitate its verification. ...

Kuznets's life work was the collection and organization of the national income accounts of the United States (1934, 1941, and 1946). Kuznets was interested in statistical fact finding focusing specifically on seasonal fluctuations, secular movements, national income estimation, and economic growth. He computed national income back to 1869. He broke it down by industry, by final product, and by use. He also measured the distribution of income between rich and poor. Although Kuznets was not the first economist to try this, his work was so comprehensive and meticulous that it set the standard in the field. Measures of national income and output are used in economics to estimate the value of goods and services produced in an economy. ... This article needs additional references or sources to facilitate its verification. ...

Kuznets helped the U.S. Department of Commerce to standardize the measurement of GNP. In the late forties, however, he broke with the Commerce Department over its refusal to use GNP as a measure of economic well-being. The United States Department of Commerce is a Cabinet department of the United States government concerned with promoting economic growth. ... Measures of national income and output are used in economics to estimate the value of goods and services produced in an economy. ...

Kuznets was also one of the earliest workers on development economics, in particular collecting and analyzing the empirical characteristics of developing countries (1965, 1966, 1971, and 1979). His major thesis, which argued that underdeveloped countries of today possess characteristics different from those that industrialized countries faced before they developed, helped put an end to the simplistic view that all countries went through the same "linear stages" in their history and launched the separate field of development economics - which now focused on the analysis of modern underdeveloped countries' distinct experiences. This article does not cite any references or sources. ...

Among his several discoveries which sparked important theoretical research programs was his discovery of the inverted U-shaped relation between income inequality and economic growth (1955, 1963). In poor countries, economic growth increased the income disparity between rich and poor people. In wealthier countries, economic growth narrowed the difference. By noting patterns of income inequality in developed and underdeveloped countries, he proposed that as countries experienced economic growth, the income inequality first increases and then decreases. The reasoning was that in order to experience growth, countries had to shift from agricultural to industrial sectors. While there was little variation in the agricultural income, industrialization led to large differences in income. Additionally, as economies experienced growth, mass education provided greater opportunities which decreased the inequality and the lower income portion of the population gained political power to change governmental policies. He also discovered the patterns in savings-income behavior which launched the Life-Cycle-Permanent-Income Hypothesis of Modigliani and Friedman. Economic theories of intertemporal consumption seek to explain peoples preferences in relation to consumption and saving over the course of their life. ... Franco Modigliani (June 18, 1918 – September 25, 2003) was an Italian-American economist at the MIT Sloan School of Management, and winner of the Nobel Memorial Prize in Economics in 1985. ... Milton Friedman (July 31, 1912 – November 16, 2006) was a prominent American economist and public intellectual. ...

See also

• Capital formation
• Kuznets curve

Capital formation is a term used in national accounts statistics and macroeconomics. ... Kuznets curve is the graphical representation of Simon Kuznetss theory (Kuznets hypothesis) that economic inequality increases over time, then at a critical point begins to decrease. ...

References

• Fogel , Robert W. (2000). "Simon S. Kuznets: April 30, 1901-July 9, 1985". NBER Working Paper No. W7787

Robert William Fogel (born July 1, 1926) is an American economic historian and scientist, and winner (with Douglass North) of the 1993 Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel. ...

External links

• econlib.org - an efficient summary of Kuznets and his work
• nobel-winners.com
• cepa.newschool.edu
• his empirically founded interpretation of economic growth which has led to new and deepened insight into the economic and social structure and process of development.
• A recent biography of Kuznets.
• Limitations of space prevent the presentation of a documented summary