Monday, 21 December 2009

Paul Samuelson

It would be a shame if we did not to mention in this blog the recent death of Paul Samuelson, the "Father of Modern Economics", who passed away on December 13th, age 94. The legacy of Samuelson is inmense. The breadth of his work, astounding. He changed completely every single field in which he worked, either Microeconomics, Macroeconomics, Public Finance or International Economics. He was responsible for ideas and concepts now essential to every economist, like revealed preference, comparative statics, social welfare functions, and jointly with Robert Solow, he made explicit the conjecture behind the Philips´curve. He also contributed to the incorporation of mathematical tools (from thermodynamics in particular) into economic analysis, and he laid down the two main features that distinguish Economics from other social sciences: That agents hold well-defined objectives that they seek to attain and the notion of equilibrium. His book Economics (1948) has been studied by dozens of generations of undergraduate economists.

The Great Depression motivated him to become an economist. The hardships of those turbulent times left a longlasting impression on him. He was economic advisor to John F. Kennedy and Lyndon B. Johnson. As a Neo-Keynesian, he always advocated the necessity of the intervention of the State in the operations of markets. Last year, just after the explosion of the financial crisis, he wrote "Farewell to Friedman-Hayek libertarian capitalism," an incendiary piece against the Bush administration, the free-market triumphalists and their theorists. Reading it is a good way to remember this giant and to preserve his legacy.

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