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Robert Solow is a statistician and economist from the United States famous for his model on economic growth. He won the 1987 Nobel Prize in Economic Sciences and received the U.S. Presidential Medal of Freedom from President Barack Obama in 2014 for his neoclassical growth theory and many other contributions to economic theory.

Childhood and Early Education

Robert Merton Solow was born on August 23, 1924, in Brooklyn, New York City. Both sets of Solow’s grandparents were Jewish immigrants. He was the first born son of their families’ first U.S.-born generation. His parents worked straight out of high school and did not earn a college degree.

Solow attended New York public schools and received quality education and demonstrated a natural talent for academia. He grew more interested in learning and knowledge during his senior year of high school. One of his literature teachers that year introduced him to 19th century Russian and French authors and encouraged him to take philosophical thought more seriously.[1]

University and Academic Career

In September 1940, Robert Solow enrolled at Harvard College after winning a scholarship to attend the university. He studied elementary economics, anthropology under Clyde Kluckhohn, and sociology under Talcott Parsons. He turned age 18 in 1942 and by the end of the year he decided to leave university and enroll in the U.S. Army[2] He completed basic training and then first served in North Africa, then Sicily, and then spent his remaining time in various places across mainland Italy. The Army honorably discharged him in 1945.

Robert Solow chose to study economics on little more than a whim and it earned him the Nobel Prize.

The same year, Solow returned to his studies at Harvard College. He haphazardly chose to focus on economics.[3] Wassily Leontief taught Solow when he returned and Leontief taught, mentored, and befriended Solow.[4] Leontief introduced Solow to the workings of modern economic theory as well as empirical work. As Leontief’s research assistant, Solow developed the input-output model’s first set of capital-coefficients.[5]

Robert Solow grew interested in probabilistic models and statistics during these later years. Frederick Mosteller, a professor in the Department of Social Relations, encouraged him to find an alternative institution with more resources to study statistics. Harvard did not think highly of the study at the time. Between 1949 and 1950, Solow entered Columbia University for a fellowship year. He heard lectures by statisticians T.W. Anderson and Jacob Wolfowitz and Hungarian mathematician Abraham Wald, with Jack Kiefer, his friend and fellow university student. He started work on his doctoral thesis during the fellowship.

The thesis attempted to create a model for changing distribution sizes of wage income by applying multiple Markoff processes for the wage and employment-unemployment rates. Harvard College awarded him the Wells Prize for his thesis. The prize came with a publication offer and $500 once completed, but Solow thought he could better the thesis with further research before publication. He never returned to the project.[6]

The Massachusetts Institute of Technology

Robert Solow accepted a position at the Massachusetts Institute of Technology (MIT) in 1950 as an assistant professor in the Economics Department. He first taught classes on econometrics and statistics. MIT gave Solow and office next to renowned economics professor Paul Samuelson and the two began to talk daily. Solow and Samuelson spoke about everyday life, politics, and economics. Their relationship encouraged Solow’s switch to macroeconomics.

Robert Solow’s many contributions to economics created the initial foundation for the study of modern economics.

During the late 1950s, Solow, E. Denison, and J. Kendrick worked exclusively on developing a model to illustrate economic growth’s true source. Solow’s contribution came from his elaborated neoclassical growth theory. In 1956, Solow published an article titled “A Contribution to the Theory of Economic Growth,” that detailed his creation of a neoclassical-like mathematical model highlight long-run growth. Solow employed critiques of the Keynesian Harrod-Domar model by introducing a ratio variable rather than using the standard fixed ratio.

Solow discovered the “Solow residual,” which explains the difference between growth attributed to growth in capital or labor and tangible income growth through calculating the current rate of technological change. This revolutionized economists’ understanding of where efficiency growth originated. Other important contributions to economics by Robert Solow include the productivity paradox addressing issues between new technologies and economic growth and the modification of the Philips curve to reflect the connection between the inflation rate and the unemployment rate.

U.S. President John F. Kennedy selected Solow to serve on his Council of Economic Advisors from 1960 to 1961. The government also contracted him as part of a commission looking into issues with welfare recipients. Solow directed the Federal Reserve Bank located in Boston, Massachusetts, for five years beginning in the late 1970s.[7]

Retirement from MIT and Later Work

In 1995, Robert Solow retired from teaching at MIT, but he still maintains his office next to Samuelson and remains an emeritus professor. He continued working on economic theories, including on macro-theory with Frank Hahn for several years. They proposed alternative models to the representative-agent models imposing mostly optimal characteristics on observed trajectories now standardly used in short-to-medium-run macroeconomics.

Solow serves as chairmen of the Manpower Demonstration Research Corporation’s Board of Directors. In the 1970s, he cofounded the nonprofit research group to meticulously test policy interventions aiming to improve the earning power and employment rates of disadvantaged demographics like mothers on welfare and high school drop-outs. It continues to provide vital data on these statistics under Solow’s direction.

The McKinsey Global Institute invited Robert Solow to participate in multiple studies on the occasional massive difference in performance internationally of varied industries. He worked with Martin Baily to combine standard data with further anecdotal evidence from those working within the industries. The pair wrote an article detailing their discoveries. In 1987, Robert M. Solow won the Nobel Prize in Economics for his growth model.

Solow took over as the Russel Sage Foundation Fellow from Robert K. Merton, the well-respected sociologist. His first research project investigated the U.S. economy’s great success from 1995 to 2000. He published the book The Roaring Nineties with the help of Alan Krueger. In 2005, Solow began work on a comparative study looking into the institutional background and nature of low-wage work in selected European nations and the U.S., along with their contrasting outcomes in the labor market.[8] On November 10, 2014, U.S. President awarded Robert Solow the Presidential Medal of Freedom for “laying the groundwork for much of modern economics.”[9]

References

Bibliography


Gonda, Ph.D., V. (2005). Profiles of World Economists - Robert M. Solow. BIATEC, XIII, 22–25.[2]


Solow, R. M. (2005, May). Robert M. Solow - Biographical. Nobel Prizes and Laureates.[3]

Footnotes

  1. Solow, 2005
  2. Solow, 2005
  3. Gonda, Ph.D., 2005
  4. Solow, 2005
  5. Gonda, Ph.D., 2005
  6. Solow, 2005
  7. Gonda, Ph.D., 2005
  8. Solow, 2005
  9. Schulman, K. (2014, November 10). President Obama announces the presidential medal of freedom recipients. The White House.[1]

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