Paul Samuelson

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Paul Samuelson

Paul Anthony Samuelson (May 15, 1915December 13, 2009) was an American economist. He was the first American to win the Nobel Prize in Economics.

Quotes[edit]

1950s-1990s[edit]

  • Econometrics may be defined as the quantitative analysis of actual economic phenomena based on the concurrent development of theory and observation, related by appropriate methods of inference.
    • Paul Samuelson, Tjalling Koopmans, and Richard Stone. "Report of the evaluative committee for Econometrica." Econometrica- journal of the Econometric Society. (1954): 141-146.
  • The stock market has forecast nine of the last five recessions.
    • Paul Samuelson (1966), quoted in: John C Bluedorn et al. Do Asset Price Drops Foreshadow Recessions? (213), p. 4
  • What good does it do a black youth to know that an employer must pay him $2 an hour if the fact that he must be paid that amount is what keeps him from getting a job?
    • Economics (1970 edition), p. 372
  • After 1929 it was the sturdy middle classes, and not just the lumpen proletariat, who were down and out. It was not all that unfashionable or disreputable to be bankrupt. By the last Hoover years, the states and localities had run out of money for relief. In middle-class neighborhoods like mine, you constantly had children at the door, asking by mouth or with a note for a dime, a quarter, or a potato: saying, in a believable fashion, we are starving.
  • The recent market run-up that appreciated run-of-the- mill shares also chanced to send up those token gold holdings. Pure luck, undeserved and unlikely to reoccur. Good questions outrank easy answers.
    • In: Paul Anthony Samuelson, ‎Kate Crowley (1986), The Collected Scientific Papers, Volume 5, p. 561
  • I can claim that in talking about modern economics I am talking about me. My finger has been in every pie. I once claimed to be the last generalist in economics, writing about and teaching such diverse subjects as international trade and econometrics, economic theory and business cycles, demography and labor economics, finance and monopolistic competition, history of doctrines and locational economics.
    • in William Breit and Roger W. Spencer (ed.) Lives of the laureates
  • I reproach myself for a gross error. But I would reproach myself more if I had persisted in an error after observations revealed it clearly to be that. I made a deal of money in the late 1940s on the bull side, ignoring Satchel Paige’s advice to Lot’s wife, “Never look back.” Rather I would advocate Samuelson’s Law: “Always look back. You may learn something from your residuals. Usually one’s forecasts are not so good as one remembers them; the difference may be instructive.” The dictum “If you must forecast, forecast often,” is neither a joke nor a confession of impotence. It is a recognition of the primacy of brute fact over pretty theory. That part of the future that cannot be related to the present’s past is precisely what science cannot hope to capture. Fortunately, there is plenty of work for science to do, plenty of scientific tasks not yet done.
    • in William Breit and Roger W. Spencer (ed.) Lives of the laureates
  • My mind is ever toying with economic ideas and relationships. Great novelists and poets have reported occasional abandonment by their muse. The well runs dry, permanently or on occasion. Mine has been a better luck. As I have written elsewhere, there is a vast inventory of topics and problems floating in the back of my mind. More perhaps than I shall ever have occasion to write up for publication. A result that I notice in statistical mechanics may someday help resolve a problem in finance.
    • in William Breit and Roger W. Spencer (ed.) Lives of the laureates

"Maximum Principles in Analytical Economics," 1970[edit]

"Maximum Principles in Analytical Economics," Prize Lecture, Lecture to the memory of Alfred Nobel, December 11, 1970

  • The very name of my subject, economics, suggests economizing or maximizing. But Political Economy has gone a long way beyond home economics. Indeed, it is only in the last third of the century, within my own lifetime as a scholar, that economic theory has had many pretensions to being itself useful to the practical businessman or bureaucrat. I seem to recall that a great economist of the last generation, A. C. Pigou of Cambridge University, once asked the rhetorical question, “Who would ever think of employing an economist to run a brewery?” Well, today, under the guise of operational research and managerial economics, the fanciest of our economic tools are being utilized in enterprises both public and private.
    • p. 62: Lead paragraph
  • With the assistance of mathematics, I can see a property of the ninety-nine dimensional surfaces hidden from the naked eye. If an increase in the price of fertilizer alone always increases the amount the firm buys of caviar, from that fact alone I can predict the answer to the following experiment which I have never seen performed and upon which I have no observations: an increase in the price of caviar alone will increase the amount the firm buys of fertilizer. In thermodynamics such reciprocity or integrability conditions are known as Maxwell Conditions; in economics they are known as Hotelling conditions in honor of Harold Hotelling’s 1932 work.
    • p. 67
  • There is really nothing more pathetic than to have an economist or a retired engineer try to force analogies between the concepts of physics and the concepts of economics. How many dreary papers have I had to referee in which the author is looking for something that corresponds to entropy or to one or another form of energy. Nonsensical laws, such as the law of conservation of purchasing power, represent spurious social science imitations of the important physical law of the conservation of energy; and when an economist makes reference to a Heisenberg Principle of indeterminacy in the social world, at best this must be regarded as a figure of speech or a play on words, rather than a valid application of the relations of quantum mechanics.
    • p. 69
  • An American economist of two generations ago, H. J. Davenport, who was the best friend Thorstein Veblen ever had (Veblen actually lived for a time in Davenport’s coal cellar) once said: “There is no reason why theoretical economics should be a monopoly of the reactionaries.” All my life I have tried to take this warning to heart, and I dare call it to your favorable attention.
    • p. 76

New millennium[edit]

  • Economics never was a dismal science. I should be a realistic science.
    • Samuelson, Paul Anthony; Puttaswamaiah, K. (2002). Paul Samuelson and the Foundations of Modern Economics. p. 10. 
  • Globalization presumes sustained economic growth. Otherwise, the process loses its economic benefits and political support.
    • Quoted in: Richard Duncan (2011) The Dollar Crisis, p. 232

Quotes about Paul Samuelson[edit]

  • Generally speaking, Samuelson's contribution has been that, more than any other contemporary economist, he has contributed to raising the general analytical and methodological level in economic science. He has in fact simply rewritten considerable parts of economic theory. He has also shown the fundamental unity of both the problems and analytical techniques in economics, partly by a systematic application of the methodology of maximization for a broad set of problems. This means that Samuelson's contributions range over a large number of different fields.
  • Samuelson is an artist; he brought undergraduates pretty well up to the level of the state of knowledge in the profession.
    • Edward C. Prescott, interview in Brian Snowdon and Howard R. Vane. Modern macroeconomics: its origins, development and current state. (2005)
  • There have been hedgehogs; there have been foxes; and then there was Paul Samuelson. (...) I’m referring, of course, to Isaiah Berlin’s famous distinction among thinkers – foxes who know many things, and hedgehogs who know one big thing. What distinguished Paul Samuelson as an economic thinker, making him like nobody else, past or present, was the fact that he knew – and taught us – many big things. No economist has ever had so many seminal ideas.
    • Paul Krugman, "Paul Samuelson: The incomparable economist" (2009)
  • One recent history of economic thought (Jürg Niehans’s A History of Economic Theory) devotes twenty-four pages to Samuelson’s ideas. Adam Smith only gets thirteen. Samuelson’s work on stock markets and the random walk takes up less than two of those twenty-four pages. He was “the last generalist in economics,” as he liked to say, and for him financial market studies were just a side project that he at times seemed deeply ambivalent about. His intervention was, however, crucial to the triumph of the random walk. Here was one of the most important economists of all time, and he didn’t think the relationship between coin flips and the stock market was a dinner-speech triviality.
    • Justin Fox, ch. 4 "A Random Walk from Paul Samuelson to Paul Samuelson", Myth of Rational Market (2009)
  • Many principles of economics were hidden in obscure verbiage of previous generations; he reformulated and extended them with crystal clarity in the language of mathematics.
    • Avinash Dixit, "Paul Samuelson's Legacy" (2012)

External links[edit]

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