ADAM SMITH

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 ADAM SMITH
(Father of Economics)

Adam Smith was a great philosopher and economist of the 18th century.
He was one of the leading figures of the Scottish Enlightenment. Adam
Smith was the father of economics. Adam Smith was born in 1723 at
Kirckaldy in Scotland. (His exact date of birth is not known but he was
christened on 5 June). His father was also called Adam Smith and he
worked as a secretary but he died 5 months before his son was born.
Adam Smith junior was brought up by his mother Margaret Smith. Adam
Smith attended the local school then when he was 14 he went to Glasgow
College. Adam was particularly interested in mathematics. In 1740 he
went to Oxford and he spent 6 years there. In 1746 Adam Smith returned
to Kirkcaldy. Then in 1748 Adam Smith began giving lectures at Edinburgh
University. Finally in 1751 he moved to Glasgow where he became
professor of logic. In 1752 Smith also became professor of philosophy.

In 1759 Adam Smith published the first of his two great books, The Theory
of Moral Sentiments. However in 1764 smith resigned from the University
to become travelling tutor to the son of Charles Townsend while he was
touring Europe. The tour lasted 3 years. The tour lasted 3 years and Smith
returned to Scotland in 1766. In 1773 Smith was made a member of the
Royal Society of London.

In 1776 Adam Smith produced his second great work An Inquiry into the
Nature and Causes of the Wealth of Nations. In it Smith argued strongly
for free trade between nations. Smith argued that competition in a market
economy benefits the whole of society as each individual seeks his own
good. Adam Smith said that the market may appear chaotic but it is
actually guided by an invisible hand. Smith also argued that division of
labor will increase production. In 1778 Adam Smith was given a post as a
commissioner of customs in Edinburgh. He moved into a house called
Panmure House. Then in 1783 Smith became a founding member of the
Royal Society of Edinburgh. Adam Smith died on 17 July 1790. He was
buried in Canongate Churchyard on 22 July 1790. Smith never married
and left no children. Yet the ideas of Adam Smith have stood the test of
time. In 2007 the Bank of England put a picture of Adam Smith on the
back of a 20 note.

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PAUL SAMUELSON

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 PAUL SAMUELSON
(American Economist)

Born in Gary, Indiana, on May 15, 1915, Paul Samuelson became a

groundbreaking economist through his use of mathematical principles. He
wrote the best-selling textbook Economics in 1948, and was an adviser to
two U.S. presidents. In 1970, Samuelson became the first American to win
the Nobel Prize in Economic Sciences. A longtime professor at MIT, he
died on December 13, 2009, in Belmont, Massachusetts.

Early Years and Education:

Paul Anthony Samuelson was born on May 15, 1915, in Gary, Indiana, to
parents Frank and Ella. After his father, a pharmacist, encountered
financial difficulties in the years following World War I, the family moved to
Chicago, Illinois.
Samuelson entered the University of Chicago as a 16-year-old, later
claiming that he was "born as an economist on January 2, 1932," the first
day of a college lecture on 18th century British economist Thomas Robert
Malthus. After graduating with his bachelor's degree in 1935, Samuelson
began his graduate studies at Harvard University, receiving his master's
degree in 1936 and Ph.D. in 1941.

Groundbreaking Theories:

Samuelson became engrossed by the discrepancy between economic

theories and real-world applications in the wake of the Great Depression,
and sought to use mathematics to hammer home unifying principles.
Among his achievements were the development of the multiplier-
accelerator model, which captured the inherent tendency of market
economies to fluctuate, and the correspondence principle, which linked
the behavior of individuals and the aggregate stability of an entire
economic system.
Samuelson is perhaps most famous for his formation of neoclassical
synthesis, which merged the neoclassic macroeconomic belief in the
powers of the free market with British economist John Maynard Keynes's
arguments for government intervention. Samuelson demonstrated that
free-market theories were applicable during times of economic stability,
but government measures, such as tax cuts, were otherwise needed to
overcome inefficiencies and provide stimulation.
Samuelson's first book, Foundations of Economic Analysis, based on his
dissertation, earned him the John Bates Clark Medal by the American
Economic Association in 1947. However, it was his second

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book, Economics, published in 1948, that became his most famous written
work. With its easy-to-digest explanations of neoclassical synthesis and
other theories, it was reprinted in dozens of languages and became the
world's best-selling textbook for nearly 30 years.

Work and Recognition:

Named an assistant professor of economics at the Massachusetts Institute

of Technology in 1940, Samuelson eventually became an institute
professor during his longtime association with the university. He also
served as a consultant for several government divisions over the course of
his career, including the National Resources Planning Board, the Bureau
of the Budget and the United States Treasury.
Samuelson became a trusted adviser to Senator John F. Kennedy, later
advising the young president to push through tax cuts to help ward off a
recession, and remained an important voice in Lyndon B. Johnson's
administration. Recognized for his use of mathematics to provide clarity
about market complexities, he became the first American to win the Nobel
Prize in Economic Sciences in 1970.

Later Years and Legacy:

From the late 1960s through the early '80s, Paul Samuelson debated
economic viewpoints across from fellow former University of Chicago
student Milton Friedman in Newsweek. During this period, The Collected
Scientific Papers of Paul A. Samuelson was published over the course of
five volumes.
Meanwhile, the highly renowned economist continued to influence
generations of students at MIT, helping to reel in an all-star faculty that
included Nobel Prize laureates Robert Solow, Franco Modigliani and
Robert Merton.
Among the last generalists to make his mark across the economic
spectrum, Samuelson contributed fundamental insights in consumer
theory, welfare economics, international trade, finance theory, capital
theory and macroeconomics. He died on December 13, 2009, in Belmont,
Massachusetts.

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MICHAEL PORTER

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 MICHAEL PORTER
(American Economist)

Michael Eugene Porter was born on May 23, 1947 in Ann Arbor, Michigan,
United States. He graduated from Princeton University in 1969 with BSE
honors in mechanical and aerospace engineering. It was at Princeton that
he was elected to Phi Beta Kappa and Tau Beta Pi.
In 1971, he graduated from the Harvard Business School, obtaining an
MBA with a high distinction. Two years henceforth, he secured a Ph.D. in
business economics from Harvard University.

One of most influential management gurus of this century, Michael Porter

is widely regarded as the Father of Corporate Strategy and Management.
A testimony of the fact lies on the shelf of every successful CEO of the
world his books which are a magnum opus in the field of competitive and
company strategy. Serving as university professor at Harvard Business
School, Porters strategies have found universal acceptance. Furthermore,
his ideas have been included in the curriculum of every prestigious
business school of the world. He is responsible for building the foundation
for modern business strategy courses. He has also served as the strategic
adviser to many successful and leading U.S. companies and other
international companies. Over the years, he has authored over 18 books
and written various articles on business competition, competitive strategy
and advantage. Additionally, he has been a guest columnist for the Wall
Street Journal and has authored more than 125 articles on business
strategy.

Major Works

His book, Competitive Strategy was his seminal work that which was
named as the ninth most influential management book of the 20th century
by the Fellows of the Academy of Management.
His book Redefining Health Care: Creating Value-Based Competition On
Results, was the recipient of the James A. Hamilton Award conferred by
the American College of Healthcare Executives.
He has founded three major non-profit organizations: Initiative for a
Competitive Inner City ICIC, the Center for Effective Philanthropy and
FSG-Social Impact Advisors

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GERARD DEBREU

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 GERARD DEBREU
(French-American Economist)

I was born in 1921 in Calais, France, the son of Camille Debreu

and Fernande (ne Decharne) Debreu. My father was the business
partner of my maternal grandfather in lace manufacturing, a traditional
industry in Calais. My paternal grandfather managed, until his retirement,
the printing plant he had created in the small town of Marquise between
Calais and Boulogne.Gerard Debreu married Francoise Bled in June
1945. They had two daughters, Chantal, born in 1946 and Florence, born
in 1950. Gerard Debreu passed away at the age of 83, in Paris on New
Year eve, 2004, and was buried in the Pere Lachaise cemetery.

Gerard Debreus major achievements lie in his research on the

General Equilibrium Theory. He is an extremely skilled economist who is
responsible for solving the problem of invisible hands in the market by
theorizing the relation between the equilibrium of prices, demand and
production through his works. His most notable works are the Theory of
Value: An Axiomatic Analysis of Economic Equilibrium published in the
year 1959 and Mathematical Economics: Twenty Papers of Gerard
Debreu in 1983.

Major Works:

The Coefficient of Resource Utilization, 1951

A Social Equilibrium Existence Theorem, Proceedings of the National
Academy of Sciences, 1952
Definite and Semi-Definite Quadratic Forms, 1952, Econometrica
Non-negative Square Matrices along with I.N. Herstein, 1953,
Econometrica
Valuation Equilibrium and Pareto Optimum, 1954, Proceedings of the
National Academy of Sciences
Existence of an Equilibrium for a Competitive Economy, along with K.J.
Arrow, 1954, Econometrica
Representation of a Preference Ordering by a Numerical Function, 1954,
in Thrall et al., editors, Decision Processes
A Classical Tax-Subsidy Problem, 1954, Econometrica
Numerical Representations of Technological Change, 1954
Stochastic Choice and Cardinal Utility, 1958, Econometrica
Cardinal Utility for Even-Chance Mixtures of Pairs of Sure Prospects,
1959, RES
The Theory of Value: An axiomatic analysis of economic equilibrium, 1959

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Topological Methods in Cardinal Utility Theory, 1960, in Arrow, Karlin and
Suppes
On An Identity in Arithmetic, 1960, Proceedings of AMS
Economics Under Uncertainty, 1960, conomie Applique.
New Concepts and Techniques for Equilibrium Analysis, 1962, IER
On a Theorem by Scarf, 1963, RES
A Limit Theorem on the Core of an Economy, with H. Scarf, 1964, IER
Continuity Properties of Paretian Utility, 1964, IER
Integration of Correspondences, 1967, Proceedings of Fifth Berkeley
Symposium
Preference Functions of Measure Spaces of Economic Agents,1967,
Econometrica
Neighboring Economic Agents, 1969, La Dcision
Economies with a Finite Set of Equilibria, 1970, Econometrica
Smooth Preferences, 1972, Econometrica
The Limit of the Core of an Economy, with H. Scarf, 1972, in McGuire and
Radner, editors, Decision and Organization
Excess Demand Functions, 1974, J MathE
Four Aspects of the Mathematical Theory of Economic Equilibrium, 1974
The Rate of Convergence of the Core of an Economy, 1975, J MathE.
The Application to Economics of Differential Topology and Global
Analysis: Regular differentiable economies, 1976, AER
Least Concave Utility Functions, 1976, J MathE.
Additively Decomposed Quasiconcave Functions, with T.C. Koopmans,
1982
Existence of Competitive Equilibrium, 1982, in Arrow and Intriligator
Mathematical Economics: Twenty papers of Gerard Debreu, 1983
Economic Theory in a Mathematical Mode: the Nobel lecture, 1984, AER
Theoretic Models: Mathematical form and economic content, 1986,
Econometrica
The Mathematization of economic theory, The American Economic
Review 81
Innovation and Research: An Economist's Viewpoint on Uncertainty, 1994

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MILTON FRIEDMAN

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 MILTON FRIEDMAN
(American Economist)

Milton Friedman ,(born July 31, 1912, Brooklyn, New York, U.S.
died November 16, 2006, San Francisco California), American economist
and educator, one of the leading proponents of monetarism in the second
half of the 20th century. He was awarded the Nobel Prize for Economics in
1976.
Milton Friedman, recipient of the 1976 Nobel Prize for Economic Science,
was a Senior Research Fellow at the Hoover Institution, Stanford
University, from 1977 to 2006. He was also Paul Snowden Russell
Distinguished Service Professor Emeritus of Economics at the University
of Chicago, where he taught from 1946 to 1976, and was a member of the
research staff of the National Bureau of Economic Research from 1937 to
1981.
Professor Friedman was awarded the Presidential Medal of Freedom in
1988 and received the National Medal of Science the same year. He is
widely regarded as the leader of the Chicago School of monetary
economics, which stresses the importance of the quantity of money as an
instrument of government policy and as a determinant of business cycles
and inflation.
In addition to his scientific work, Professor Friedman had also written
extensively on public policy, always with primary emphasis on the
preservation and extension of individual freedom. His most important
books in this field are (with Rose D. Friedman) Capitalism and Freedom
(University of Chicago Press, 1962); Bright Promises, Dismal Performance
(Thomas Horton and Daughters, 1983), which consists mostly of reprints
of tri-weekly columns that he wrote for Newsweek from 1966 to 1983; and
(with Rose Friedman) Free to Choose (Harcourt Brace Jovanovich, 1980),
which complements a ten-part TV series of the same name, shown over
PBS in early 1980, and (with Rose D. Friedman) Tyranny of the Status
Quo (Harcourt Brace Jovanovich, 1984), which complements a three-part
TV series of the same name, shown over PBS in early 1984.
He was a member of the President's Commission on an All-Volunteer
Armed Force (1969-70) and of the President's Commission on White
House Fellows (1971-73). He was a member of President Reagan's
Economic Policy Advisory Board, a group of experts outside the
government, named in early 1981 by President Reagan.
He had also been active in public affairs, serving as an informal economic
adviser to Senator Goldwater in his unsuccessful campaign for the
presidency in 1964, to Richard Nixon in his successful campaign in 1968,
to President Nixon subsequently, and to Ronald Reagan in his 1980
campaign.

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He had published many books and articles, most notably A Theory of the
Consumption Function (University of Chicago Press, 1957), The Optimum
Quantity of Money and Other Essays (Aldine, 1969), and (with A. J.
Schwartz) A Monetary History of the United States (Princeton University
Press, 1963), Monetary Statistics of the United States (Columbia
University Press, 1970), and Monetary Trends in the United States and
the United Kingdom (University of Chicago Press, 1982).
Professor Friedman was a past president of the American Economic
Association, the Western Economic Association, and the Mont Pelerin
Society, and is a member of the American Philosophical Society and of
the National Academy of Sciences.
He also had been awarded honorary degrees by universities in the United
States, Japan, Israel, and Guatemala, as well as the Grand Cordon of the
First Class Order of the Sacred Treasure by the Japanese government in
1986.
Friedman received a B.A. in 1932 from Rutgers University, an M.A. in
1933 from the University of Chicago, and a Ph.D. in 1946 from Columbia
University.
He and his wife established the Milton and Rose D. Friedman Foundation,
for the purpose of promoting parental choice of the schools their children
attend. The Foundation is based in Indianapolis and its president and chief
operating officer is Gordon St Angelo.
He and his wife published their memoirs: Milton and Rose D. Friedman,
Two Lucky People: Memoirs (University of Chicago Press, 1998).
On November 16, 2006, Dr. Friedman passed away at the age of 94 in
San Francisco.

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JAN TINBERGEN

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 JAN TINBERGEN
(Dutch Economist)

Jan Tinbergen, (born April 12, 1903, The Hague, Neth.died June 9,
1994, Netherlands,), Dutch economist noted for his development of
econometric models. He was the cowinner (with Ragnar Frisch ) of the
first Nobel Prize for Economics, in 1969.
Tinbergen was the brother of the zoologist Nikolaas Tinbergen and was
educated at the University of Leiden. He served as a business-cycle
statistician with the Dutch governments Central Bureau of Statistics
(192936, 193845) before becoming the director of the Central Planning
Bureau (194555). From 1933 to 1973 he was also a professor of
economics at the Netherlands School of Economics (now part of Erasmus
University), Rotterdam, and he then taught for two years at the University
of Leiden before retiring in 1975.
While acting as an economic adviser to the League of Nations at Geneva
(193638), Tinbergen analyzed economic development in the United
States from 1919 to 1932. This pioneering econometric study offered a
foundation for his business-cycle theory and guidelines for economic
stabilization. He also constructed an econometric model that helped shape
both short-term and broader political-economic planning in the
Netherlands.
Because of the political nature of his economic analyses, Tinbergen was
one of the first to show that a government with multiple policy objectives,
such as full employment and price stability, must be able to draw on
multiple economic policy toolssay, monetary policy and fiscal policyto
achieve the desired results. Among his major works are Statistical Testing
of Business Cycles (1938), Econometrics (1942), Economic Policy (1956),
and Income Distribution (1975).

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JAMES TOBIN

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 JAMES TOBIN
(American Economist)

James Tobin, (born March 5, 1918, Champaign, Illinois, , U.S.

died March 11, 2002, New Haven, Connected), American economist
whose contributions to the theoretical formulation of investment behaviour
offered valuable insights into financial markets. His work earned him
the Nobel Prize for Economics in 1981.
After taking degrees from Harvard University (B.A., 1939; Ph.D., 1947),
Tobin spent 194142 as an economist with the Office of Price
Administration in Washington, D.C. During World War II he served in the
Naval Reserve, rising to second in command of the
destroyer USS Kearney. In 1950 he joined the faculty of Yale University,
where in 1957 he became the Sterling Professor of Economics. In addition
to teaching, he served as director of the Cowles Foundation for Research
in Economics from 1955 to 1961 and again from 1964 to 1965.
Tobin, regarded by many as the most distinguished
American Keynesian economist, argued that monetary policy is effective in
only one areacapital investmentand that interest rates are an
important factor in capital investment but not the only one. He introduced
Tobins q, the ratio of the market value of an asset to its replacement
cost. If an assets q is greater than one, then new investment in similar
assets will be profitable.
Tobin served as an adviser to Democratic presidential candidate George
McGovern in 1972. Like many economists across the political spectrum,
he pointed out the harmful consequences of government policies, such as
the effect of a high minimum wage on the job prospects for inner-city
youths. Tobin once wrote: We should be especially suspicious of
interventions that seem both inefficient and inequitable, for example, rent
controls in New York or Moscow or Mexico City, or price supports and
irrigation subsidies benefiting affluent farmers, or low-interest loans to
well-heeled students. Among his publications are The American Business
Creed (with others, 1961), National Economic Policy (1966),Essays in
Economics, 3 vol. (197182), and The New Economics One Decade
Older (1974).

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JOHN R. HICKS

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 JOHN R. HICKS
(English Economist)

Sir John R. Hicks, in full Sir John Richard Hicks (born April 8, 1904,
Leamington Spa, Warwickshire, Englanddied May 20, 1989, Blockley,
Gloucestershire), English economist who made pioneering contributions to
general economic equilibrium theory and, in 1972, shared (with Kenneth J
Arrow) the Nobel Prize for Economics. He was knighted in 1964.
Hicks made major contributions to many areas of 20th-century economics;
four, in particular, stand out. First, he showed that, contrary to what Karl
Marx had believed, labour-saving technological progress does not
necessarily reduce labours share of the income. Second, he devised a
diagramthe IS-LM diagramthat graphically depicts John M. Keyness
conclusion that an economy can be in equilibrium with less-than-full
employment. Third, through his book Value and Capital (1939), Hicks
showed that much of what economists believe about value theory (the
theory about why goods have value) can be reached without the
assumption that utility is measurable. Fourth, he came up with a way to
judge the impact of changes in government policy. He proposed a
compensation test that could compare the losses for the losers with the
gains for the winners. If those who gain could, in principle, compensate
those who loseeven if they do not actually and directly compensate
themthen, claimed Hicks, the change in policy would be efficient.

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HENRY GEORGE

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 HENRY GEORGE
(American Economist)

Henry George, (born Sept. 2, 1839, Philadelphiadied Oct. 29,

1897, New York City), land reformer and economist who in Progress and
Poverty (1879) proposed the single tax: that the state tax away all
economic rentthe income from the use of the bare land, but not from
improvementsand abolish all other taxes.
Leaving school before his 14th birthday, George worked for two years as a
clerk in an importing house and then went to sea. Back in Philadelphia in
1856, he learned typesetting and in 1857 signed up as a steward on
another ship, quitting it in San Francisco to join the gold rush in Canada,
where, however, he arrived too late. In 1858 he returned to California
where he worked for newspapers and took part in Democratic
Party politics until 1880. In 1871 he and two partners started the San
Francisco Daily Evening Post, but credit difficulties forced them to close it
in 1875. A political appointment as state gas-meter inspector enabled him
to work on Progress and Poverty, which caught the spirit of discontent that
had arisen from the economic depression of 187378. This popular book
was translated into many languages. Its vogue was enhanced by Georges
pamphlets, his frequent contributions to magazines, and his lecture tours
in both the United States and the British Isles.
As a basis for his argument, George gave new meaning to the orthodox,
or Ricardian (after English economist David Ricardo), doctrine of rent.
He applied the law of diminishing returns and the concept of margin of
productivity to land alone. He argued that since economic progress
entailed a growing scarcity of land, the idle landowner reaped ever greater
returns at the expense of the productive factors of labour and capital. This
unearned economic rent, he held, should be taxed away by the state.
George envisaged that the governments annual income from this single
tax would be so large that there would be a surplus for expansion of
public works. His economic argument was reinforced and dominated by
humanitarian and religious appeal.
Georges specific remedy had no significant practical result, and few
economists of reputation supported it. Critics have observed that taxes on
site values can reduce the incentive to make sites valuable, thereby
weakening the intent of the tax. Nevertheless, Georges forceful emphasis
on privilege, his demand for equality of opportunity, and his systematic
economic analysis proved a stimulus to orderly reform.

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KARL MARX

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 KARL MARX
(German Economist)

Marx was born in Trier, Prussia (now Germany), in 1818. He studied

philosophy at universities in Bonn and Berlin, earning his doctorate in
Jena at the age of twenty-three. His early radicalism, first as a member of
the Young Hegelians, then as editor of a newspaper suppressed for its
derisive social and political content, preempted any career aspirations in
academia and forced him to flee to Paris in 1843. It was then that Marx
cemented his lifelong friendship with Friedrich Engels. In 1849 Marx
moved to London, where he continued to study and write, drawing heavily
on works by DAVID RICARDO and ADAM SMITH. Marx died in London in 1883
in somewhat impoverished surroundings. Most of his adult life, he relied
on Engels for financial support.
At the request of the Communist League, Marx and Engels coauthored
their most famous work, The Communist Manifesto, published in 1848. A
call to arms for the proletariatWorkers of the world, unite!the
manifesto set down the principles on which communism was to evolve.
Marx held that history was a series of class struggles between owners of
capital (capitalists) and workers (the proletariat). As wealth became more
concentrated in the hands of a few capitalists, he thought, the ranks of an
increasingly dissatisfied proletariat would swell, leading to bloody
revolution and eventually a classless society.
It has become fashionable to think that Karl Marx was not mainly an
economist but instead integrated various disciplineseconomics,
sociology, political science, history, and so oninto his philosophy. But
Mark Blaug, a noted historian of economic thought, points out that Marx
wrote no more than a dozen pages on the concept of social class, the
theory of the state, and the materialist conception of history while he
wrote literally 10,000 pages on economics pure and simple.1
According to Marx, CAPITALISM contained the seeds of its own destruction.
Communism was the inevitable end to the process of evolution begun with
feudalism and passing through capitalism and SOCIALISM. Marx wrote
extensively about the economic causes of this process in Capital. Volume
one was published in 1867 and the later two volumes, heavily edited by
Engels, were published posthumously in 1885 and 1894.
The labor theory of value, decreasing rates of profit, and increasing
concentration of wealth are key components of Marxs economic thought.
His comprehensive treatment of capitalism stands in stark contrast,
however, to his treatment of socialism and communism, which Marx
handled only superficially. He declined to speculate on how those two
economic systems would operate.

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JOHN MAYNARD KEYNES

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 JOHN MAYNARD KEYNES
(British Economist)

John Maynard Keynes, (born June 5, 1883, Cambridge, Cambridge hire,

Eng.died April 21, 1946, Firle, Sussex), English economist, journalist,
and financier, best known for his economic theories (Keynesian
economics) on the causes of prolonged unemployment. His most
important work, The General Theory of Employment, Interest and
Money (193536), advocated a remedy for economic recession based on
a government-sponsored policy of full employment.
Key contributions
Keyness reputation at Cambridge was quite different. He was esteemed
as the most brilliant student of Marshall and fellow economist A.C. Pigou,
authors of large, definitive works explaining how competitive markets
functioned, how businesses operated, and how individuals spent their
incomes. After publication of The Economic Consequences of the Peace,
Keynes resigned his lecture post but stayed on as a fellow of Kings
College, dividing his time between Cambridge and London. Although the
tone of Keyness major writings in the 1920s was occasionally skeptical,
he did not directly challenge the conventional wisdom of the period that
favoured laissez-faireonly slightly tempered by public policyas the
best of all possible social arrangements. Two of Keyness opinions did
foreshadow the theoretical revolution he triggered in the 1930s. In 1925 he
opposed Britains return to the gold standard at the prewar dollarpound
ratio of $4.86; and, long before the Great Depression, Keynes expressed
concern over the persistent unemployment of British coal miners, shipyard
workers, and textile labourers. Reconciled by this time with Lloyd George
(who was never to return to office), he supported the Liberal Partys
program of public works to take the unemployed off welfare by placing
them in useful jobs. But respectable economists still expected the
automatic adjustments of the free market to solve these problems, and the
Treasury was convinced that public works were useless because any
increase in the government deficit would likely cause an equal decline in
private investment. Although Keynes could not offer a theoretical
refutation of his colleagues opinions, he agitated for public works
nevertheless.
It was only later, in The General Theory of Employment, Interest and
Money, that Keynes provided an economic basis for government jobs
programs as a solution to high unemployment. The General Theory, as it
has come to be called, is one of the most influential economics books in
history, yet its lack of clarity still causes economists to debate what
Keynes was really saying. He appeared to suggest that a reduction in
wage rates would not reduce unemployment; instead, the key to reducing

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unemployment was to increase government spending and to run a budget
deficit. Governments, many of them looking for excuses to increase
spending, wholeheartedly accepted Keyness views. Most of his
professional colleagues also accepted his views.
Later works and assessment
Keyness long-run influence has not been as significant as his short-run
impact. The Keynesian model was a core part of economics textbooks
from the late 1940s until the late 1980s. But as economists have become
more concerned about economic growth, and more informed about
inflation and unemployment, the Keynesian model has lost prominence.

The General Theory was Keyness last major written work. In 1937 he
suffered a severe heart attack. Two years later, though not completely
recovered, he returned to teaching at Cambridge, wrote three influential
articles on war finance entitled How to Pay for the War (1940; later
reprinted as Collected Writings, vol. 9, 1972), and served once more in the
Treasury as an all-purpose adviser. He also played a prominent role at
the Bretton Woods Conference in 1944. But the institutions that resulted
from that conference, the International Monetary Fund and the World
Bank, were more representative of the theories of the United States
Treasury than of Keyness thinking. His last major public service was his
negotiation in the autumn and early winter of 1945 of a multibillion-dollar
loan granted by the United States to Britain. Keynes died the following
year.

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ROSA LUXEMBURG

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 ROSA LUXEMBURG
(Polish-German Revolutionary)

Rosa Luxemburg was born in Zamosc, in Russian Poland, into a Jewish

middle-class family. At the age of five she became seriously ill. After
recovering she walked with a limp and later sciatic pain caused her
much trouble.
She was educated at the Warsaw Gimnazium and from the age of 16
participated in revolutionary activities. Her favourite writer during these
years was the Polish poet Adam Mickiewicz, whose patriotism and life in
political exile influenced her deeply.
In 1889 she moved to Switzerland to continued her studies. In part she
was forced to flee from Poland on account of her political
activities. Luxemburg entered the University of Zurich, where she
studied natural sciences and political economy.
She began her career as a journalist and became one of the leaders of
the Social Democratic Party of the Kingdom of Poland and Lithuania. In
1898 Luxemburg completed her doctorate; her dissertation was entitled
'The Industrial Development of Poland'.
1899 sae the appearance of Luxemburg's 'Reform or Revolution', her
defence of Marxism. It opposed Edward Bernstein's reformist position
and criticized Bernstein's revisionist theories in his 'Evolutionary
Socialism' (1898).
A German citizen by marriage Luxemburg became in 1898 a left wing
leader of the German Social Democratic Party (SDP) and participated in
the Second International and during the 1905 revolution in Russian
Poland.
The following year, 1906, she was arrested in Warsaw but ultimately
finally on health grounds. She returned to Germany where she taught at
the SDP school in Berlin until 1914, developing ideas about general
strike as a political weapon.
1912 brought the publication of her major theoretical work, 'The
Accumulation of Capital', in which she attempted to prove that capitalism
was doomed and would inevitably collapse on economic grounds.
Following differences with moderate German socialists Luxemburg
founded, with Karl Liebknecht, the radical Spartacus League in
1916. Two years later the organization became the German Communist
Party.

Page | 28
Luxemburg spent much of World War I in prison, meanwhile writing her
'Spartakusbriefe' and 'Die Russisce Revolution', where she welcomed
the October Revolution as a precursor of world revolution. In the wake
of the Spartacist uprising in Berlin against the government, in which she
proved a reluctant participant, Luxemburg and Liebknecht were arrested
in 1919.
While being transported to prison she and Liebknecht were murdered on
the night of 15/16 on January 1919 by German Freikorps
soldiers. Luxemburg's body was thrown into the Landwehr canal and
found several months later in May. She was buried on June 13 in
Friedrichsfeld cemetery where Liebknecht and other revolutionaries
were similalrly buried.
Luxemburg's lover Leo Jogiches was also murdered in 1919. Just
before his death he had decided with Clara Zetkin and Mathild Jacob to
publish Luxemburg's collected works. The project proceeded slowly on
account of objections lodged by Lenin to Luxemburg's work. Lenin
argued that Luxemburg had underestimated nationalist ideology,
underrated the role of the Communist party, and overly emphasised the
power of mass action.
Luxemburg in turn was critical about Lenin's acceptance of the idea of
national self-determination. Luxemburg's collected works were
eventually published in East Germany between 1970-75.
"The list of people with whom Simone Weil was politically associated
reads like an almanac of the French Left. Thvenon, Gurin, Battaille,
Serret. Simone saw in Rosa Luxemburg (d. 1919) a kindred soul. 'Her
life, her work, her letters affirm life and not death,' wrote Simone. 'Rosa
aspired to action, not to sacrifice. In this sense, there is nothing
Christian in her temperament.'"
(from 'The Left Hand of God' by Adolf Holl, 1997).
Thorough re-evaluation of Luxemburg's work began in her German
homeland in the 1970s. Her theories were increasingly considered an
alternative to Communism or Social Democracy. When Marxist study
began to lose its allure in the 1980s, Luxemburg arose still further
interest among feminist theorists.
Luxemburg herself did not involve herself with the women's rights
movement: female liberation was for her part and parcel of the liberation
from the oppression of capitalism.

Page | 29
FREIDERICH AUGUST VON
HAYEK

Page | 30
 FREIDERICH AUGUST VON HAYEK
(British Economist)

Friedrich von Hayek was born on 8 May 1899 in Vienna, the then capital
city of Austria. His father, August von Hayek was a renowned botanist and
a noted physician. Hayeks mother, Felicitas, was the daughter of Franz
von Juraschek, who was a professor and a high-flying civil servant.
Boasting of a noble lineage Hayek had an affluent upbringing. However,
after the Austrian law banned the titles of nobility in the year 1919, the
family had to sacrifice the noble tag of von from their family name.
Nevertheless, his father carried the familys scholarly tradition forward by
committing himself to botany and authoring several esteemed botanical
treatises.

Marriage

Friedrich August von Hayek married Helen Berta Maria von Fritsch in
August 1926. She was a secretary at the civil service office of the Austrian
government. They had two children. In July 1950, they divorced and he
tied knot with Helene Bitterlich.

Education

Friedrich had an insatiable yearning for knowledge and during his

university years, he took up extensive study of philosophy, psychology,
and economics and earned doctorates in law and political science. During
the brief time when University of Vienna remained shut, Hayek enrolled
himself in Constantin von Monakow's Institute of Brain Anatomy. During
this time, he spent more time in staining brain cells. The time spent in
Monakows laboratory gave rise to his deep curiosity in the work of Ernst
Mach that motivated the first academic project of Hayek, which was later
on published as The Sensory Order (1952). At the time, when he was
studying at the University of Vienna, Carl Mengers work on the
explanatory strategy of social science together with Friedrich von Wiesers
impressive and instructing existence in the tutorial room had a non-lasting
effect on Hayek. In 1923, he went to New York and registered in the Ph.
D. program at New York University, but in the mean while he had shortage
of money and thus he returned to Vienna. After coming back to Vienna, he
started working on economics.

Contribution to Economics

Friedrich August von Hayek had a great contribution in the field of

economics and is mainly popular for his work The Road to Serfdom

Page | 31
(1944) and for his outstanding work on knowledge in the 1930s and
1940s. He was also an expert of business-cycle theory. He had also
worked on psychology (1952), political philosophy (1960) and legal theory
(1973-79). Apart from this, his emphasis on impulsive order and his work
on intricate systems have been very significant and persuasive amongst
the Austrians.

Trade cycle theory

Hayeks earliest contribution was his development of a business

cycle theory that built on the earlier work by Swedish economist Knut
Wicksell and von Mises. Hayeks theory posits the natural interest rate as
an intertemporal price; that is, a price that coordinates the decisions of
savers and investors through time. The cycle occurs when the market rate
of interest (that is, the one prevailing in the market) diverges from this
natural rate of interest. This causes the structure of the capital stock to
become distorted, so that it no longer reflects the desires of savers and
investors as expressed in the market. His theory had the unfortunate
policy implication that attempts to counteract a recession, or period of high
unemployment, with an increase in the money supply would further distort
the structure of the capital stock. His remedy was simply to allow the
recession to play itself out, thereby permitting the market rate to return to
the natural rate.
While Hayeks trade cycle theory, articulated during the Great Depression,
has relatively few defenders today, some aspects of it remain valuable.
These include Hayeks conception of the interest rate as an intertemporal
price and his idea that changes in the money supply can be an important
cause of discoordination, particularly as those changes affect the ability of
prices to accurately reflect relative scarcities.

Page | 32
SIR CLIVE WILLIAM JOHN
GRANGER

Page | 33
 SIR CLIVE WILLIAM JOHN GRANGER
(British Economist)

Sir Clive William John Granger ; 4 September 1934 27 May 2009) was
a British economist, who taught in Britain at the University of
Nottingham and in the United States at the University of California, San
Diego. In 2003, Granger was awarded theNobel Memorial Prize in
Economic Sciences, in recognition that he and his co-winner, Robert F.
Engle, had made contributions to the analysis of time series data that had
changed fundamentally the way in which economists analyse financial and
macroeconomic data.
During World War II Granger moved with his mother to Cambridge, where
he went to the local primary school. He started secondary school in
Cambridge, but continued in Nottingham, where his family moved after the
war. During school, Granger showed talent for mathematics, developing a
strong interest in applied mathematics.
After secondary school Granger enrolled at the University of
Nottingham for a joint degree in economics and mathematics, but
switched to full mathematics in the second year. After receiving his BA in
1955, he remained at the University of Nottingham for a PhD in statistics
under the supervision of Harry Pitt.

In 1964 Granger and Hatanaka published the results of their research in a

book on Spectral Analysis of Economic Time Series (Tukey had
encouraged them to write this themselves, as he was not going to publish
the research results.) Granger also wrote in 1963 an article on "The typical
spectral shape of an economic variable", which appeared in 1966
in Econometrica. Both the book and the article proved influential in the
adoption of the new methods.
Granger also became a full professor at the University of Nottingham.
In a 1969 paper in Econometrica, Granger also introduced his concept
of Granger causality.
After reading, in 1968, a pre-print copy of the time series book by George
Box and Gwilym Jenkins, Granger became interested in forecasting. For
the next few years to follow he worked on this subject with his post-
doctoral student, Paul Newbold; and they wrote a book which became a
standard reference in time series forecasting (published in 1977). Using
simulations, Granger and Newbold also wrote the famous 1974 paper
on spurious regression; which lead to a re-evaluation of previous empirical
work in economics and to the econometric methodology.

Page | 34
In all, Granger spent 22 years at the University of Nottingham. In 2005, the
building that houses the Economics and Geography Departments was
renamed the Sir Clive Granger Building in honour of his Nobel
achievement.
In 1974 Granger moved to the United States, to the University of California
at San Diego. In 1975 he participated in a US Bureau of
Census committee chaired by Arnold Zellneron seasonal adjustment. At
UCSD, Granger continued his research on time series, collaborating
closely with Nobel prize co-recipient Robert Engle (whom he helped bring
to UCSD), Roselyne Joyeux (on fractional integration), Timo
Tersvirta (on nonlinear time series) and others. Working with Robert
Engle, he developed the concept of cointegration, introduced in a 1987
joint paper in Econometrica; for which he was awarded the Nobel prize in
2003.
Granger also supervised many PhD students, among whom was Mark
Watson (co-advisor with Robert Engle).
In later years, Granger also used the time series methods to analyse data
outside economics. Thus, he worked on a project concerned with
the Amazon rainforest and built a model to forecast deforestation. The
results were published in a 2002 book. Granger retired from UCSD in
2003 as a Professor Emeritus. He was a Visiting Eminent Scholar of
the University of Melbourne and Canterbury University.
Granger was married to Patricia (Lady Granger) from 1960 until his death.
He is survived by their son, Mark William John, and their daughter, Claire
Amanda Jane.
Granger died on 27 May 2009, at Scripps Memorial Hospital in La Jolla,
California.

Page | 35
HERBERT ALEXANDER SIMON

Page | 36
 HERBERT A. SIMON
(American Social Scientist)

Herbert A. Simon, in full Herbert Alexander Simon (born June 15,

1916, Milwaukee, Wis., U.S.died Feb. 9, 2001, Pittsburgh, Pa.),
American social scientist known for his contributions to a number of fields,
including psychology, mathematics,statistics, and operations research, all
of which he synthesized in a key theory that earned him the 1978 Nobel
Prize for Economics. Simon and his longtime collaborator Allen
Newell won the 1975 A.M. Turing Award, the highest honour in computer
science, for their basic contributions to artificial intelligence,
thepsychology of human cognition, and list processing.
Simon graduated from the University of Chicago in 1936 and earned a
doctorate in political science there in 1943. After holding various posts in
political science, he became a professor of administration and psychology
at the Carnegie Institute of Technology (now Carnegie Mellon University)
in 1949, later becoming the Richard King Mellon University Professor of
Computer Science and Psychology there.

He is best known for his work on the theory of corporate decision making
known as behaviourism. In his influential book Administrative
Behavior (1947), Simon sought to replace the highly simplified classical
approach to economic modelingbased on a concept of the single
decision-making, profit-maximizing entrepreneurwith an approach that
recognized multiple factors that contribute to decision making. According
to Simon, this theoretical framework provides a more realistic
understanding of a world in which decision making can affect prices and
outputs.

Crucial to this theory is the concept of satisficing behaviourachieving

acceptable economic objectives while minimizing complications and
risksas contrasted with the traditional emphasis on maximizing profits.
Simons theory thus offers a way to consider the psychological aspects of
decision making that classical economists have tended to ignore.
Later in his career, Simon pursued means of creating artificial intelligence
through computer technology. He wrote several books on
computers, economics, and management, and in 1986 he won the
U.S. National Medal of Science.

Page | 37
WILLIAM VICKREY

Page | 38
 WILLIAM VICKREY
(American Economist)

William Vickrey, in full William Spencer Vickrey (born June 21,

1914, Victoria, British Columbia, Canadadied October 11, 1996,
Harrison, New York, U.S.), Canadian-born American economist who
brought innovative analysis to the problems of incomplete, or
asymmetrical, information. He shared the 1996Nobel Prize for Economics
with British economist James A. Mirrlees.

Vickreys family moved from Canada to New York when he was three
months old. He was educated at Yale University (B.S., 1935)
and Columbia University(M.A., 1937; Ph.D., 1947), where he taught
throughout his career. A Quaker, he was a conscientious objector during
World War II and spent those years performing public service and
developing an inheritance tax for Puerto Rico.

Vickrey had a keen interest in human welfare, often choosing projects with
practical applications. His studies of traffic congestion concluded that
pricing on commuter trains and toll roads should vary according to usage,
with higher fees levied during peak-use periods. Thiscongestion pricing
was later adopted by electric and telephone utilities and airlines. In his
doctoral thesis, published as Agenda for Progressive Taxation (1947), he
advocated an optimal income tax that would be based on long-term
earnings rather than on yearly income.

In awarding him the 1996 Nobel Prize, the selection committee specifically
cited his novel approach toauctioneering (now known as a Vickrey
auction), which, through sealed bidding, awards the auctioned item to the
highest bidder but at the price submitted by the second highest bidder.
This method, said Vickrey, benefits both buyer and seller by guaranteeing
bids that reflect the fair value of the item. Vickrey did not live to receive the
Nobel Prize. In the flurry of activity that followed the Nobel announcement,
he died of a heart attack just three days after being named.

Page | 39
AMARTYA SEN

Page | 40
 AMARTYA SEN
(Indian Economist)

Amartya Sen, (born Nov. 3, 1933, Santiniketan, India), Indian economist

who was awarded the 1998 Nobel Prize in Economic Sciences for his
contributions towelfare economics and social choice theory and for his
interest in the problems of societys poorest members. Sen was best
known for his work on the causes offamine, which led to the development
of practical solutions for preventing or limiting the effects of real or
perceived shortages of food.
Sen was educated at Presidency College in Calcutta (now Kolkata). He
went on to study at Trinity College, Cambridge, where he received a B.A.
(1955), an M.A. (1959), and a Ph.D. (1959). He taught economics at a
number of universities in India and England, including the Universities of
Jadavpur (195658) and Delhi (196371), the London School of
Economics, the University of London (197177), and the University of
Oxford (197788), before moving to Harvard University(198898), where
he was professor of economics and philosophy. In 1998 he was appointed
master of Trinity College, Cambridgea position he held until 2004, when
he returned to Harvard as Lamont University Professor.
Welfare economics seeks to evaluate economic policies in terms of their
effects on the well-being of the community. Sen, who devoted his career
to such issues, was called the conscience of his profession. His
influential monograph Collective Choice and Social Welfare (1970)which
addressed problems such as individual rights, majority rule, and the
availability of information about individual conditionsinspired
researchers to turn their attention to issues of basic welfare. Sen devised
methods of measuring poverty that yielded useful information for
improving economic conditions for the poor. For instance, his theoretical
work on inequality provided an explanation for why there are fewer women
than men in some poor countries in spite of the fact that more women than
men are born and infant mortality is higher among males. Sen claimed
that this skewed ratio results from the better health treatment and
childhood opportunities afforded boys in those countries.
Sens interest in famine stemmed from personal experience. As a nine-
year-old boy, he witnessed the Bengal famine of 1943, in which three
million people perished. This staggering loss of life was unnecessary, Sen
later concluded. He believed that there was an adequate food supply in
India at the time but that its distribution was hindered because particular
groups of peoplein this case rural labourerslost their jobs and
therefore their ability to purchase the food. In his book Poverty and
Famines: An Essay on Entitlement and Deprivation (1981), Sen revealed
that in many cases of famine, food supplies were not significantly reduced.

Page | 41
Instead, a number of social and economic factorssuch as declining
wages, unemployment, rising food prices, and poor food-distribution
systemsled to starvation among certain groups in society.
Governments and international organizations handling food crises were
influenced by Sens work. His views encouraged policy makers to pay
attention not only to alleviating immediate suffering but also to finding
ways to replace the lost income of the pooras, for example, through
public-works projectsand to maintain stable prices for food. A vigorous
defender of political freedom, Sen believed that famines do not occur in
functioning democracies because their leaders must be more responsive
to the demands of the citizens. In order for economic growth to be
achieved, he argued, social reformssuch as improvements
in education and public healthmust precede economic reform.
Sen was a member of the Encyclopdia Britannica Editorial Board of
Advisors from 2005 to 2007. In 2008 India donated $4.5 million to Harvard
University to establish the Amartya Sen Fellowship Fund to enable
deserving Indian students to study at the institutions Graduate School of
Arts and Sciences. Sens other writings include Rationality and
Freedom (2002), a discussion of the social choice theory,The
Argumentative Indian: Writings on Indian History, Culture, and
Identity (2005), and AIDS Sutra: Untold Stories from India (2008), a
collection of essays on the AIDS crisis in India.

Page | 42
SIMONE WEIL

Page | 43
 SIMON WEIL
(French Philosopher)

Simone Weil, (born February 3, 1909, Paris, Francedied August 24,

1943,Ashford, Kent, England), French mystic, social philosopher, and
activist in the French Resistance during World War II, whose
posthumously published works had particular influence on French and
English social thought.

Intellectually precocious, Weil also expressed social awareness at an

early age. At five she refused sugar because the French soldiers at the
front during World War I had none, and at six she was quoting the French
dramatic poet Jean Racine (163999). In addition to studies in philosophy,
classical philology, andscience, Weil continued to embark on new learning
projects as the need arose. She taught philosophy in several girls schools
from 1931 to 1938 and often became embroiled in conflicts with school
boards as a result of her social activism, which entailed picketing, refusing
to eat more than those on relief, and writing for leftist journals.

To learn the psychological effects of heavy industrial labour, she took a

job in 193435 in an auto factory, where she observed the spiritually
deadening effect of machines on her fellow workers. In 1936 she joined an
anarchist unit near Zaragoza, Spain, training for action in the Spanish Civil
War, but after an accident in which she was badly scalded by boiling oil,
she went to Portugal to recuperate. Soon thereafter Weil had the first of
several mystical experiences, and she subsequently came to view her
social concerns as ersatz Divinity. After the German occupation of Paris
during World War II, Weil moved to the south of France, where she
worked as a farm servant. She escaped with her parents to the United
States in 1942 but then went to London to work with the French
Resistance. To identify herself with her French compatriots under German
occupation, Weil refused to eat more than the official ration in occupied
France. Malnutrition and overwork led to a physical collapse, and during
her hospitalization she was found to have tuberculosis. She died after a
few months spent in a sanatorium.

Weils writings, which were collected and published after her death, fill
about 20 volumes. Her most important works are La Pesanteur et la
grce (1947; Gravity and Grace), a collection of religious essays and
aphorisms; LEnracinement (1949; The Need for Roots), an essay upon
the obligations of the individual and the state; Attente de
Dieu (1950; Waiting for God), a spiritual autobiography; Oppression et
Libert (1955; Oppression and Liberty), a collection of political and
philosophical essays on war, factory work, language, and other topics; and

Page | 44
three volumes of Cahiers (195156; Notebooks). Though born of Jewish
parents, Weil eventually adopted a mystical theology that came very close
to Roman Catholicism. A moral idealist committed to a vision of social
justice, Weil in her writings explored her own religious life while also
analyzing the individuals relation with the state and God, the spiritual
shortcomings of modern industrial society, and the horrors of
totalitarianism.

Page | 45
THOMAS ROBERT MALTHUS

Page | 46
 THOMAS ROBERT MALTHUS
(English Economist)

Thomas Robert Malthus, (born Feb. 13/14, 1766, Rookery, near

Dorking, Surrey, Eng.died Dec. 29, 1834, St. Catherine, near Bath,
Somerset), English economist and demographer who is best known for his
theory that population growth will always tend to outrun the food supply
and that betterment of humankind is impossible without stern limits on
reproduction. This thinking is commonly referred to as Malthusianism.

In 1804 Malthus married Harriet Eckersall, and in 1805 he became a

professor of history and political economy at the East India Companys
college at Haileybury, Hertfordshire. It was the first time in Great Britain
that the words political economy had been used to designate an academic
office. Malthus lived quietly at Haileybury for the remainder of his life,
except for a visit to Ireland in 1817 and a trip to the Continent in 1825. In
1811 he met and became close friends with the economist David Ricardo.
In 1819 Malthus was elected a fellow of the Royal Society; in 1821 he
joined the Political Economy Club, whose members included Ricardo
andJames Mill; and in 1824 he was elected one of the 10 royal associates
of the Royal Society of Literature. In 1833 he was elected to the French
Acadmie des Sciences Morales et Politiques and to the Royal Academy
of Berlin. Malthus was one of the cofounders, in 1834, of the Statistical
Society of London.

Malthus was an economic pessimist, viewing poverty as mans

inescapable lot. The argument in the first edition of his work on population
is essentially abstract and analytic. After further reading and travels in
Europe, Malthus produced a subsequent edition (1803), expanding the
long pamphlet of 1798 into a longer book and adding much factual
material and illustration to his thesis. At no point, even up to the final and
massive sixth edition of 1826, did he ever adequately set out his premises
or examine their logical status. Nor did he handle his factual and statistical
materials with much critical or statistical rigour, even though statisticians in
Europe and Great Britain had developed increasingly sophisticated
techniques during Malthuss lifetime. American sociologist and
demographer Kingsley Davis remarked that, while Malthus based his
theories on a strong empirical foundation, the theories tended to be
weakest in their empiricism and strongest in their theoretical formulation.
For better or worse, the Malthusian theory of population was,
nevertheless, incorporated into theoretical systems of economics. It acted
as a brake on economic optimism, helped to justify a theory of wages
based on the wage earners minimum cost of subsistence, and
discouraged traditional forms of charity.

Page | 47
The Malthusian theory of population made a strong and immediate impact
on British social policy. It had been believed that fertility itself added to
national wealth; the Poor Laws perhaps encouraged large families with
their doles. If they had never existed, wrote Malthus, though there might
have been a few more instances of severe distress, the aggregate mass
of happiness among the common people would have been much greater
than it is at present. These laws limited the mobility of labour, he said,
and encouraged fecundity and should be abolished. For the most
unfortunate it might be reasonable to establish workhousesnot
comfortable asylums but places in which fare should be hard and
severe distress . . . find some alleviation.
He continued publishing a variety of pamphlets and tracts on economics.
In an approach less rigorous than Ricardos, Malthus discussed the
problem of price determination in terms of an institutionally determined
effective demand, a phrase that he invented. In his summary Principles
of Political Economy Considered with a View to Their Practical
Application (1820), Malthus went so far as to propose public works and
private luxury investment as possible solutions for economic distress
through their ability to increase demand and prosperity. He criticized those
who valued thrift as a virtue knowing no limit; to the contrary, he argued
that the principles of saving, pushed to excess, would destroy the motive
to production. To maximize wealth, a nation had to balance the power to
produce and the will to consume. In fact, Malthus, as an economist
concerned with what he called the problem of gluts (or, as they would be
called today, the problems of economic recession or depression), can be
said to have anticipated the economic discoveries made by John Maynard
Keynes in the 1930s.
Then again, a fundamental criticism of Malthus was his failure to anticipate
the agricultural revolution, which caused food production to meet or
exceed population growth and made prosperity possible for a larger
number of people. For example, the price of wheat in the United States,
adjusted for inflation, has fallen by about two-thirds in the last 200 years.
Since 1950, the worlds per capita food production has increased by about
1 percent per year. The incidence of famine has diminished, with famines
in the modern era typically caused by war or by destructive government
policies, such as price controls on food. Malthus also failed to anticipate
the widespread use of contraceptives that brought about a decline in the
fertility rate.

Page | 48
MERTON MILLER

Page | 49
 MERTON MILLER
(American Economist)

Merton H. Miller, in full Merton Howard Miller (born May 16,

1923, Boston,Massachusetts, U.S.died June 3, 2000, Chicago, Illinois),
American economist who, with Harry M. Markowitz and William F. Sharpe,
won the Nobel Prize for Economics in 1990. His contribution (and that of
his colleague Franco Modigliani, who received the Nobel Prize for
Economics in 1985), known as theModigliani-Miller theorem, was
pioneering work in the field of finance theory.
Miller attended Harvard University (B.A., 1944), worked at the U.S.
Treasury Department, and then graduated from Johns Hopkins
University in Baltimore, Maryland (Ph.D., 1952). He taught at the Carnegie
Institute of Technology (now Carnegie Mellon University) in Pittsburgh,
Pennsylvania, until 1961, when he accepted a position as a professor of
finance at the University of Chicagos Graduate School of Business
Administration.

Miller built upon the work of Markowitz (whose portfolio theory

established that wealth can best be invested in assets that vary in terms of
risk and expected return) and Sharpe (who developed the capital asset
pricing model to explain how securities prices reflect risks and potential
returns). TheModigliani-Miller theorem explains the relationship between a
companys capital asset structure and dividend policy and its market value
and cost of capital; the theorem demonstrates that how a manufacturing
company funds its activities is less important than the profitability of those
activities.

Miller was recognized as one of the most important developers of

theoretical and empirical analysis in the field of corporate finance. In
addition to being the business schools Robert R. McCormick
Distinguished Service Professor, Miller served as a director (19902000)
of the Chicago Mercantile Exchange.

Page | 50
ALAN GREENSPAN

Page | 51
 ALLAN GREENSPAN
(American Economist)

BORN: March 6, 1926

Washington Heights, New York City, New York, U.S

Political Party: Republican

Spouses: Joan Mitchell (1952-1953)
Andrea Mitchell (1997- present )

Education: Juilliard School

New York University
Columbia University

Alan Greenspan is an American economist who served as chairman of the

Federal Reserve of the U.S from 1987 to 2006. He had a successful
consulting career before he was appointed chairman by President Ronald
Reagan and reappointed at successive four year intervals until his
retirement, the second longest tenure in the position. A close friend of Ayn
Rand, he was greatly influenced by her thoughts and concepts. He
adopted her philosophy of individual effort, self-interest and laissez-faire
capitalism. As the Chairman of the Council of Economic Advisers, during
Gerald Fords presidency, he promoted policies that caused the rate of
inflation to drop drastically. As the Chairman of the Federal Reserve
Board, his monetary policy was aimed at avoiding the dangers of inflation
and recession. He realized that the rates of growth and the stock prices
would attain a point of saturation and warned the public about it. He is
credited with longest official economic expansion in American history. He
was recognized as one of the most powerful and influential persons
internationally and has been conferred many awards and honors.
However, in 2011 his image took a beating when the Financial Crisis
Inquiry Commission found many of his policies to be detrimental in the
long run.
Career

While studying at the New York University, Greenspan joined the Wall
Street investment bank Brown Brothers Harriman under Eugene
Banks, a managing director, in the firm's equity research department.
From 1948 to 1953, he served as an economic analyst at The National
Industrial Conference Board. The board was a business and industry
association in New York City.
In 1954, he became a partner with William Townsend in the consulting
firm, Townsend-Greenspan & Co., Inc. When Townsend died four

Page | 52
years later he bought out his share and became the president of the
company.
In 1968, he was introduced to Richard Nixon by a friend and helped
Nixon during his presidential election campaign. However, he turned
down positions in the administration after Nixon won the election.
He was appointed to the Commission for an All-Volunteer Armed
Forces, commonly known as the Gates Commission, in March 1969.
The Gates Commission recommended that the military draft be
abolished.
In 1974, President Nixon appointed him head of his Council of
Economic Advisers. Nixons successor, Ford didnt change his
appointment which eventually ended when Carter became President of
the United States.
In 1981, President Reagan appointed him the chairman of the newly
constituted National Commission on Social Security Reform. Two
years later, the Greenspan Commission issued its report on Social
Security reform.
In 1987, Reagan appointed him Chairman of the Board of Governors of
the Federal Reserve, following the resignation of Chairman Paul
Volcker. Many felt that he had lobbied to get this chairmanship.
In 1991, President Bush nominated him for a second term as Fed
chairman and for a full 14-year term as a member of the Fed's Board of
Governors which was confirmed by the Senate.
President Clinton also appointed him as Fed chairman for his third and
fourth tenures. His appointment by President George W. Bush for a
fifth term ended in 2006.
In 2011, the Financial Crisis Inquiry Commission declared that the
global financial crisis three years earlier was due to his failure to curtail
trade of securities during the housing bubble and his financial
deregulation.

Major Works
In 1987, The Dow Jones Industrial Average fell a record 508 points.
Greenspan who had just taken over command at the Fed, acted
quickly to ensure liquidity in the markets.
The Asian economies experienced a financial crisis and economic
slowdown in 1987. He lowered the U.S interest rates to protect the
economy, and hiked it two years later when the Asian economies
recovered.

Page | 53
SIR ARTHUR LEWIS

Page | 54
 SIR ARTHUR LEWIS
(Saint Lucian Economist)

Sir Arthur Lewis, in full Sir William Arthur Lewis (born Jan. 23,
1915, Castries, Saint Lucia, British West Indiesdied June 15,
1991, Bridgetown, Barbados), Saint Lucian economist who shared
(with Theodore W. Schultz, an American) the 1979Nobel Prize for
Economics for his studies of economic development and his construction
of an innovative model relating the terms of trade between less developed
and more developed nations to their respective levels of labour
productivity in agriculture.

Lewis attended the London School of Economics after winning a

government scholarship. He graduated in 1937 and received a Ph.D.
in economics there in 1940. He was a lecturer at the school from 1938 to
1947, professor of economics at the University of Manchester from 1947
to 1958, principal of University College of the West Indies in 195962, and
professor at Princeton University from 1963 to 1983. He served as adviser
on economic development to many international commissions and to
several African, Asian, and Caribbean governments. He helped establish,
and in 197073 headed, the Caribbean Development Bank. Lewis was
knighted in 1963.

Lewis wrote several books, including The Principles of Economic

Planning (1949), The Theory of Economic Growth (1955), Development
Planning (1966), Tropical Development 18801913 (1971), and Growth
and Fluctuations 18701913 (1978).

Page | 55
JOSEPH STIGLITZ

Page | 56
 JOSEPH STIGLITZ
(American Economist)

Joseph E. Stiglitz, (born February 9, 1943, Gary, Indiana, U.S.),

American economist who, with A. Michael Spence and George A. Akerlof,
won the Nobel Prize for Economics in 2001 for laying the foundations for
the theory of markets with asymmetric information.

After studying at Amherst College (B.A., 1964) in Massachusetts and the

Massachusetts Institute of Technology (Ph.D., 1967), Stiglitz taught at
several universities, including Yale, Harvard, and Stanford. He was an
active member of President Bill Clintons economic policy team; a member
of the U.S. Council of Economic Advisers (199397), of which he became
chairman in June 1995; and senior vice president and chief economist of
the World Bank(19972000). In 2001 he became professor of economics,
business, and international affairs at Columbia University in New York.

Stiglitzs research concentrated on what could be done by ill-informed

individuals and operators to improve their position in a market with
asymmetric information. He found that they could extract information
indirectly through screening and self-selection. This point was illustrated
through his study of the insurance market, in which the (uninformed)
companies lacked information on the individual risk situation of their
(informed) customers. The analysis showed that by offering incentives to
policyholders to disclose information, insurance companies were able to
divide them into different risk classes. The use of a screening process
enabled companies to issue a choice of policy contracts in which lower
premiums could be exchanged for higher deductibles.

Page | 57
WILLIAM BEVERIDGE

Page | 58
 WILLIAM BEVERIDGE
(British Economist)

William Henry Beveridge, 1st Baron Beveridge, (born March 5,

1879, Rangpur,Indiadied March 16,
1963, Oxford, Oxfordshire, England), economist who helped shape
Britains post-World War II welfare state policies and institutions through
his Social Insurance and Allied Services (1942), also known as
theBeveridge Report.

Beveridge, the son of a British civil servant in India, was educated at

Balliol College, Oxford. More than any other single figure, he brought
the welfare stateto Britain. His lifelong interest in the causes and cures
of unemployment began in 1903 with his appointment as subwarden
of Toynbee Hall, a London settlement house. At one of her famous
strategic dinner parties, British socialistBeatrice Webb introduced her
young protg, Beveridge, to Winston Churchill. Churchill then invited
Beveridge to serve as an adviser to the Board of Trade.
Beveridge continued to serve in government, next as director of Labour
Exchanges (190916) and later as permanent secretary of the Ministry of
Food (1919). He directed the London School of Economics and Political
Science from 1919 until 1937, when he was elected master of University
College, Oxford. He was knighted in 1919 and was created a baron in
1946.

In Unemployment: A Problem of Industry (1909), Beveridge argued

thatunemployment was in large measure caused by the organization of
industry. His revised views, set forth in Full Employment in a Free
Society (1944), were strongly influenced by Keynesian economics.
Beveridges most notable achievement came during World War II, when,
at the invitation of the government, he helped work out the blueprints of
the new British welfare state. His written works include Insurance for
All (1924), British Food Control (1928), Planning Under
Socialism (1936), Pillars of Security (1948), Power and Influence (1953),
and A Defence of Free Learning (1959).

Page | 59
FRANCO MODIGLIANI

Page | 60
 FRANCO MODIGLIANI
(American Economist)

Franco Modigliani, (born June 18, 1918, Rome, Italydied September

25, 2003,Cambridge, Massachusetts, U.S.), Italian-born American
economist and educator who received the Nobel Prize for Economics in
1985 for his work on householdsavings and the dynamics of financial
markets.
Modigliani was the son of a Jewish physician. He initially studied law, but
he fled fascist Italy in 1939 for the United States and became an American
citizen in 1946. He studied economics at the New School for Social
Research and obtained a doctorate there in 1944. Modigliani then taught
at a number of American universities, and he joined the faculty of the
Massachusetts Institute of Technology in 1962, becoming professor
emeritus in 1988.

Modigliani was awarded the Nobel Prize for his pioneering research in
several fields of economic theory that had practical applications. One of
these was his analysis of personal savings, termed the life-cycle theory.
The theory posits that individuals build up a store of wealth during their
younger working lives not to pass on these savings to their descendents
but to consume during their own old age. The theory helped explain the
varying rates of savings in societies with relatively younger or older
populations and proved useful in predicting the future effects of
various pension plans.

Modigliani also did important research with the American

economist Merton H. Miller on financial markets, particularly on the
respective effects that a companys financial structure (e.g., the structure
and size of its debt) and its future earning potential will have on
the market value of its stock. They found, in the so-called Modigliani-Miller
theorem, that the market value of a company depends primarily on
investors expectations of what the company will earn in the future; the
companys debt-to-equity ratio is of lesser importance. This dictum gained
general acceptance by the 1970s, and the technique Modigliani invented
for calculating the value of a companys expected future earnings became
a basic tool in corporate decision making and finance. In 2001 Modiglianis
autobiography,Adventures of an Economist, was published.

Page | 61
ROBERT LUCAS JR.

Page | 62
 ROBERT LUCAS JR.
(American Economist)

Robert E. Lucas, Jr., in full Robert Emerson Lucas, Jr. (born Sept. 15,
1937, Yakima, Wash., U.S.), American economist who won the
1995 Nobel Prize for Economics for developing and applying the theory of
rational expectations, an econometrichypothesis. Lucas found that
individuals will offset the intended results of national fiscal and monetary
policy by making private economic decisions based on past experiences
and anticipated results. His work, which gained prominence in the mid-
1970s, questioned the conclusions of John Maynard
Keynes in macroeconomics and the efficacy of government intervention in
domestic affairs.
Lucas attended the University of Chicago, earning degrees
in history (A.B., 1959) and economics (Ph.D., 1964). He taught
at Carnegie Mellon University from 1963 to 1974 before returning to
Chicago to become a professor of economics in 1975.
Lucas questioned the assumptions behind the Phillips curve, which had
been thought to show that a government can lower the rate
of unemployment by increasing inflation. According to the Phillips curve,
higher inflation causes wages to rise more quickly, thereby fooling
unemployed workers into thinking that the higher nominal wages are
generous when, in fact, they are simply inflation-adjusted wages.
Therefore, the unemployed take jobs more quickly, and
the unemployment rate falls.
Lucas argued, however, that workers cannot be fooled again and again;
higher inflation will ultimately fail to lead to lower unemployment. More
generally, Lucass work led to something called the policy ineffectiveness
proposition, the idea that if people have rational expectations, policies
that try to manipulate the economy by creating false expectations may
introduce more noise into the economy but will not improve the
economys performance. Lucas is also known for his contributions
toinvestment theory, international finance, and economic growth theory.
His Studies in Business-Cycle Theory (1981) collects his research from
the 1970s, and Models of Business Cycles (1987) provides an overview of
his economic theory.
Lucas edited or coedited several economics journals and served for a time
as president of the American Economic Association and the Econometric
Society. In 2001 Lucas published Lectures on Economic Growth, a
collection of his writings on economic growth.

Page | 63
MAURICE ALLAIS

Page | 64
 MAURICE ALLAIS
(French Economist)

Maurice Allais, (born May 31, 1911, Paris, Francedied October 9,

2010, Saint-Cloud), French economist who was awarded the Nobel
Prize for Economics in 1988 for his development of principles to guide
efficient pricing and resource allocation in large monopolistic enterprises.
Allais studied economics at the cole Polytechnique (Polytechnic School)
and then at the cole Nationale Suprieure des Mines de Paris (National
School of Mines in Paris). In 1937 he began working for the state-owned
French mine administration, and in 1944 he became a professor at the
cole des Mines. From the mid-1940s on, he directed an economics
research unit at the Centre de la Recherche Scientifique (National Centre
for Scientific Research).

In his groundbreaking theoretical work, Allais sought to balance social

benefits with economic efficiency in the pricing plans of state-
owned monopolies such as utility companies. His principles caused state
enterprises to consider ways that the pricing of goods or services could
achieve results formerly achieved through regulation alone. His work
proved particularly important in the decades following World War II, when
the state-owned monopolies of western Europe saw tremendous growth.
Allaiss work paralleled, and sometimes preceded, similar works by
Sir John Hicks and Paul Samuelson. According to Samuelson, Had
Allaiss earliest writings been in English, a generation of economic theory
would have taken a different course.

Allais received numerous honours and awards. He was a member of

several academies and learned societies, including the Institut de France,
the U.S. National Academy of Sciences, the Lincean Academy in Italy,
and the Russian Academy of Sciences. In 1977 he was named an officer
of the Legion of Honour, the premier order of the French republic; he was
made grand officer in 2005.

Page | 65
SIR RICHARD STONE

Page | 66
 SIR RICHARD STONE
(British Economist)

Sir Richard Stone, in full Sir John Richard Nicholas Stone (born Aug.
30, 1913,London, Eng.died Dec. 6, 1991, Cambridge, Cambridgeshire),
British economist who in 1984 received the Nobel Prize for Economics for
developing an accounting model that could be used to track economic
activities on a national and, later, an international scale. He is sometimes
known as the father ofnational income accounting.

Stone initially studied law at the University of Cambridge, but, under the
influence of economist John Maynard Keynes, he took a degree
in economics in 1935 (Sc.D., 1957). He worked for a brokerage firm in
London (193640), and in 1940, at the invitation of Keynes, he entered the
British governments Central Statistical Office. After World War II he was
appointed director of the new department of applied economics at
Cambridge. He retained that position until 1955, when he became P.D.
Leake professor of finance and accounting at Cambridge (195580;
professor emeritus from 1980). He was knighted in 1978.

The first official estimates of British national income and expenditures

were made according to Stones method in 1941. The greater part of
Stones work, however, was done in the 1950s, when he offered the first
concrete statistical means by which to measure investment, government
spending, and consumption; these models resulted in what was, in
essence, a national bookkeeping system. He went on to adapt his models
for such international organizations as the United Nations. He was
coauthor (with J.E. Meade) of National Income and Expenditure (1944;
10th ed., with Giovanna Stone, 1977) and author of several other works,
including InputOutput and National Accounts (1961), Mathematics in the
Social Sciences and Other Essays (1966), and Mathematical Models of
the Economy and Other Essays (1970). He was also general editor and
part author of the series A Programme for Growth 196274.

Page | 67
BENJAMIN GRAHAM

Page | 68
 BENJAMIN GRAHAM
(British Economist)

Benjamin Graham was born in London in 1894. (His original name

was Grossbaum, but he changed it as a young man, the better to fit
into the Wall Street environment.)

His parents moved to New York City when he was one year
old. Graham was a brilliant student and won a scholarship to
Columbia University. In 1914, he graduated second in his class, at
age 20, and was invited to teach at the school. But he refused. His
father had died, the family was poor, and Graham needed a larger
income to support the family. So he went to Wall Street and worked
for the firm of Newburger, Henderson and Loeb for $12 per week.

His early duties included being a runner, delivering securities and

checks, writing descriptions of bond issues, and later writing the
daily market letter of the firm. Before long, he began to analyze
companies, and at the age of 26 he was promoted to full partner.

In 1923, he left to set up his own partnership, and in 1928 he began

teaching investment classes at Columbia. Over time, working with
former student David Dodd, the lessons of his classes were
gathered into his first book, titled "Security Analysis," which was
published in 1934.

The book has sold over a million copies. Warren Buffet says he's
read it at least four times. I've only read mine once (it's the second
edition, published in 1940, with 851 pages), but it remains a
valuable reference. You can buy a fancy new leather-bound sixth
edition on Amazon for $132. Or you can get a used one for $31. Or
buy the Kindle electronic version for $42.53.

Or, you could simply read Graham's second book, the more user-
friendly "The Intelligent Investor," which was published in 1949 and
is less than half the size of its predecessor.

In 1950, a fellow named Warren Buffett enrolled in graduate school

at Columbia to study under Graham, and he learned well. In fact,
Buffett has often said that after his father, Benjamin Graham was
the most important influence in his life. Benjamin Graham passed
away in 1976 at the age of 82.

Page | 69
Grahams Work

In short, he systematized the entire process of evaluating

companies, all with the goal of finding low-risk (or no-risk)
investments that would reward over the long run.
Graham liked to analyze--and quantify--a business according to six
factors.

1. Profitability
2. Stability
3. Growth in earnings
4. Financial position
5. Dividends
6. Price history

More precisely, he required that a potential investment have the

following:

1. An earnings-to-price yield at least twice the AAA bond yield.

2. A P/E ratio less than 40% of the highest P/E ratio the stock had
over the previous five years.
3. A dividend yield of at least two-thirds the AAA bond yield.
4. A stock price below two-thirds of tangible book value per share.
5. A stock price below two-thirds of "net current asset value."
6. Total debt less than book value.
7. Current ratio greater than two.
8. Total debt less than twice "net current assets."
9. Annual earnings growth in the prior 10 years of at least 7%
annual compounded.
10. No more than two declines of 5% or more in year-end earnings
in the prior 10 years are permissible.

And this was all in the days before calculators! Granted, Graham
was a whiz with a slide rule, and no doubt he did a lot of the
calculations in his head. Nevertheless, that's a lot of work.

Page | 70
SIMON KUZNETS

Page | 71
 SIMON KUZNETS
(American Economist)

Simon Kuznets, in full Simon Smith Kuznets (born April 30 [April 17,
Old Style], 1901, Kharkov, Ukraine, Russian Empire [now Kharkiv,
Ukraine]died July 8, 1985, Cambridge, Massachusetts, U.S.), Russian-
born American economist and statistician who won the 1971 Nobel
Prize for Economics.
Kuznets immigrated to the United States in 1922, 15 years after the arrival
there of his father (who changed the family name to Smith, though the
young Kuznets preferred the original name). He was educated
at Columbia University, receiving his Ph.D. in 1926. In 1927 he joined
the National Bureau of Economic Research, working with its
founder, Wesley Mitchell. It was there that Kuznets developed his
pioneering studies of U.S. national income and his more general work on
economic time series, resulting in comprehensive studies of theeconomic
growth of nations. His study of American national income began with
statistics from 1869, encompassing a long-term approach that had never
been attempted. Out of this work came an understanding of how to
measure gross national product (GNP). Kuznetss research set high
standards for all similar studies that would follow. After his work with the
federal government, Kuznets taught at the University of
Pennsylvania (193054), Johns Hopkins University(195460),
and Harvard University (196071).
In all his research, Kuznets emphasized the complexity of fundamental
economic data by stressing that reliable results can be derived only
through large numbers of observations. Likewise, he criticized the
limitations inherent in simple economic models based, for example, on
one phase of historical experience. Kuznets insisted that economic data
must include information on population structure,technology, the quality
of labour, government structure, trade, and markets in order to provide an
accurate model. He broke convention by emphasizing, on the basis of the
statistical series that he accumulated, how little of economic growth could
actually be attributed to the accumulation of labour and capital. He also
identified cyclic variations in growth rates (now called Kuznets cycles)
and linked them with underlying factors such as population.
Kuznets received the Nobel Prize for empirical work that led him to identify
the nexus of modern economic development. According to Kuznets, the
epoch of modern economic growth began in northwestern Europe in the
last half of the 18th century and later spread south and east,
reachingRussia and Japan by the end of the 19th century. Through this
study Kuznets determined that per capita income rose by 15 percent or
more each decade, which had been unheard of in precapitalist societies

Page | 72
ALFRED MARSHALL

Page | 73
 ALFRED MARSHALL
(British Economist)

Alfred Marshall, (born July 26, 1842, London, Englanddied July 13,
1924,Cambridge, Cambridgeshire), one of the chief founders of the school
of Englishneoclassical economists and the first principal of University
College, Bristol (187781).
Marshall was educated at Merchant Taylors School and at St. Johns
College, Cambridge. He was a fellow and lecturer in political economy at
Balliol College, Oxford, from 1883 to 1885 and a professor of
political economy at the University of Cambridge from 1885 to 1908 and
thereafter devoted himself to his writing. From 1891 to 1894 he was a
member of the Royal Commission on Labour.
Marshalls Principles of Economics (1890) was his most important
contribution to economic literature. It was distinguished by the introduction
of a number of new concepts, such as elasticity of demand, consumers
surplus, quasirent, and the representative firmall of which played a
major role in the subsequent development of economics. In this work
Marshall emphasized that the price and output of a good are determined
by supply and demand, which act like blades of the scissors in
determining price. This concept has endured: modern economists trying to
understand changes in the price of a particular good start by looking for
factors that may have shifted the demand or supply curves.
Marshalls Industry and Trade (1919) studied industrial
organization; Money, Credit and Commerce(1923) was written at a time
when the economic world was deeply divided on the theory of value.
Marshall succeeded, largely by introducing the element of time as a factor
in analysis, in reconciling the classical cost-of-production principle with
the marginal-utility principle formulated by William Jevons and the Austrian
school of economics. Marshall is often considered to have been in the line
of notable English economists that includes Adam Smith, David Ricardo,
and John Stuart Mill.

Page | 74
DANIEL KAHNEMAN

Page | 75
 DANIEL KAHNEMAN
(Isralei-born Psychologist)

Daniel Kahneman, (born March 5, 1934, Tel Aviv, Israel), Israeli-born

psychologist, corecipient of the Nobel Prize for Economics in 2002 for his
integration of psychological research into economic science. His
pioneering work examined human judgment and decision making under
uncertainty. Kahneman shared the award with American
economist Vernon L. Smith.
Kahneman studied psychology at Hebrew University (B.A., 1954)
in Jerusalemand the University of California, Berkeley (Ph.D., 1961). He
was a lecturer (196170) and a professor (197078) of psychology at
Hebrew University; from 2000 he held a fellowship at that universitys
Center for Rationality. After teaching at the University of British
Columbia in Vancouver (197886) and the University of California,
Berkeley (198694), Kahneman in 1993 became the Eugene Higgins
Professor of Psychology at Princeton University and a professor of public
affairs at Princetons Woodrow Wilson School of Public and International
Affairs, eventually retiring as emeritus professor of both posts in 2007. He
was on the editorial boards of several academic journals, notably
the Journal of Behavioral Decision Making and the Journal of Risk and
Uncertainty.
Kahneman began his prizewinning research in the late 1960s. In order to
increase understanding of how people make economic decisions, he drew
on cognitive psychology in relation to the mental processes used in
forming judgments and making choices. Kahnemans research with Amos
Tversky on decision making under uncertainty resulted in the formulation
of a new branch of economics, prospect theory, which was the subject of
their seminal article Prospect Theory: An Analysis of Decisions Under
Risk (1979). Previously, economists had believed that peoples decisions
are determined by the expected gains from each possible future scenario
multiplied by its probability of occurring, but if people make an irrational
judgment by giving more weight to some scenarios than to others, their
decision will be different from that predicted by traditional economic
theory. Kahnemans research (based on surveys and experiments)
showed that his subjects were incapable of analyzing complex decision
situations when the future consequences were uncertain. Instead, they
relied on heuristic shortcuts, or rule of thumb, with few people evaluating
their underlying probability.
In 2011 Kahneman received the Talcott Parsons Prize from the American
Academy of Arts and Sciencesfor his contributions to the social sciences.
Also that year he published the best-selling book Thinking, Fast and Slow,
which provided an adept distillation of his work. In 2013 he was awarded
the U.S.Presidential Medal of Freedom

Page | 76
LUDWIG VON MISES

Page | 77
 LUDWIG VON MISES
(Economist & Sociologists)

Ludwig Heinrich Edler von Mises was born on September 29, 1881, in
Lemberg (then part of the Austro-Hungarian Empire and now the city of
Lviv, Ukraine), where his father was stationed as a construction engineer.
Both his father and mother came from prominent Viennese families. The
family was Jewish, and his grandfather was raised to nobility by Emperor
Franz-Josef in 1881, on the day Ludwig was born.
In the years from 1904 to 1914, von Mises attended lectures given by the
prominent Austrian economist Eugen von Boehm-Bawerk and, eventually,
was awarded his doctorate in 1906. He taught at the University of Vienna
without pay as Privatdozent in the years from 1913 to 1934, while also
serving as a principal economic adviser to the Austrian government. His
student, Friedrich von Hayek, explained, "he was a Jew, he was known to
be aggressive, and he was an anti-socialist (hence he had no chance of
getting a full professorship anywhere in Austria).
To avoid the influence of National Socialists in his Austrian homeland, in
1934, von Mises left forGeneva, Switzerland, where he was a professor at
the Graduate Institute of International Studies until 1940. In 1940, he
emigrated to New York City. He was a visiting professor at New York
University from 1948 until he retired in 1969. During those years, his
salary was paid by a private foundation. Ludwig von Mises died at the age
of 92, at St Vincent's hospital in New York City.

Contribution to the field of economics

Ludwig von Mises wrote and lectured extensively on behalf of classical

liberalism and is seen as one of the leaders of the Austrian School of
economics. He wrote many works on three closely related themes:
The differences between ideology and economics
Monetary economics, inflation, and free trade
Planned economies and government-controlled economies.

Page | 78
GEORGE JOSEPH STIGLER

Page | 79
 GEORGE JOSEPH STIGLER
(American Economist)

George J. Stigler, in full George Joseph Stigler (born Jan. 17,

1911, Renton, Wash., U.S.died Dec. 1, 1991, Chicago, Ill.), American
economist whose incisive and unorthodox studies of marketplace
behaviour and the effects of government regulation won him the
1982 Nobel Prize for Economics.
After graduating from the University of Washington in 1931, Stigler took a
business degree at Northwestern University in 1932 and a Ph.D.
in economicsat the University of Chicago in 1938. He taught at Iowa State
College in 193638, the University of Minnesota in 193846, Brown
University in 194647,Columbia University in 194758, and the University
of Chicago from 1958. From 1963 he was Charles R. Walgreen
distinguished service professor of American institutions, becoming
emeritus in 1981. At Chicago he founded in 1977 the Center for the Study
of the Economy and the State.
Among Stiglers notable contributions to economics were his study of the
economics of information, an important elaboration of the traditional
understanding of how efficient markets operate, and his studies of public
regulation, in which he concluded that at best it has little influence and that
it is usually detrimental to consumer interests. Stiglers publications
include The Theory of Price (1942), a textbook of microeconomics; The
Intellectual and the Market Place (1964); Essays in the History of
Economic Thought (1965); The Citizen and the State (1975); and The
Economist as Preacher, and Other Essays(1982).

Page | 80
GUNNAR MYRDRAL

Page | 81
 GUNNAR MYRDRAL
(Swedish Economist)

Gunnar Myrdal, in full Karl Gunnar Myrdal (born December 6, 1898,

Gustafs, Dalarna, Swedendied May 17, 1987, Stockholm), Swedish
economist and sociologist who was awarded the Nobel Prize for
Economics in 1974 (the cowinner was Friedrich A. Hayek). He was
regarded as a major theorist ofinternational relations and developmental
economics.
Myrdal was educated at Stockholm University, where he earned a law
degree in 1923 and a doctorate in economics in 1927. He married Alva
Reimer in 1924. After receiving a Rockefeller traveling fellowship in the
United States (192930), Myrdal became an associate professor at the
Institute of International Studies in Geneva (193031). He also was
professor of political economy (193350) and of
international economy (196067) at Stockholm University; in 1967 he
became professor emeritus.
Until the early 1930s Myrdal emphasized pure theory, in sharp contrast to
his later concern with applied economics and social problems. In his
doctoral dissertation he had examined the role of expectations
in price formation, an approach stemming from the work of Frank H.
Knight. He applied this theoretical approach to macroeconomics in 1931
when, as a member of theStockholm school of economics, he delivered
the lectures resulting in Monetary Equilibrium (1939). These lectures
illustrated the distinction between ex ante (or planned) and ex post (or
realized) savings and investment.
At the invitation of the Carnegie Corporation, Myrdal explored the social
and economic problems ofAfrican Americans in 193840 and wrote An
American Dilemma: The Negro Problem and Modern Democracy (1944).
In this work Myrdal presented his theory of cumulative causationthat is,
of povertycreating poverty. Myrdal also pointed out that two economic
policies implemented by PresidentFranklin D. Roosevelts administration
inadvertently destroyed jobs for hundreds of thousands ofAfrican
Americans. The first such policy involved restrictions on cotton production,
instituted to raise the incomes of farm owners. Myrdal wrote: It seems,
therefore, that the agricultural policies, and particularly the Agricultural
Adjustment program (A.A.A.), which was instituted in May, 1933, was the
factor directly responsible for the drastic curtailment in number of Negro
and white sharecroppers and Negro cash and share tenants. (Italics in
original.) The second policy was the minimum wage, which, Myrdal
pointed out, made employers less willing to hire relatively unskilled people,
many of whom were African American.

Page | 82
From 1947 to 1957 Myrdal was executive secretary of the United Nations
Economic Commission for Europe. In his writings on developmental
economics, Myrdal warned that economic development of rich and poor
countries might never converge. Instead, the two might possibly diverge,
with poor countries locked into producing less-profitable primary goods
while rich countries reaped the profits associated with economies of scale.
This pessimistic view, however, has not been borne out by events.

In other books Myrdal combined his economic research with sociological

studies. These include The Political Element in the Development of
Economic Theory (1930) and Beyond the Welfare State: Economic
Planning and Its International Implications (1960). The book Asian Drama:
An Inquiry into the Poverty of Nations (1968) represents a 10-year study of
poverty in Asia. Whereas Mydral was aMalthusian who thought that
population growth in Asia would stunt economic growth, conditions in the
early 21st century show that many Asian countries have experienced both
population growth and high economic growth.

Page | 83
JOHN HARSANYI

Page | 84
 JOHN HARSANYI
(American Economist)

John C. Harsanyi, in full John Charles Harsanyi (born May 29,

1920, Budapest, Hung.died Aug. 9, 2000, Berkeley, Calif., U.S.),
Hungarian-American economist who shared the 1994 Nobel Prize for
Economics with John F. Nash and Reinhard Selten for helping to
develop game theory, a branch of mathematics that attempts to analyze
situations involving conflicting interests and to formulate appropriate
choices and behaviours for the competitors involved.
Of Jewish descent, Harsanyi narrowly escaped deportation to a forced-
labour unit during World War II. After the war he received a doctorate in
philosophy from the University of Budapest (1947), where he later taught
sociology. An opponent of the countrys communist government, Harsanyi
fled to Austria in 1950 and later that year immigrated to Australia. He
attended Sydney University (M.A., 1953), studying economics, and then
immigrated to the United States, where he attended Stanford
University (Ph.D., 1959). From 1964 he was a professor at the Haas
School of Business of the University of California, Berkeley.
Harsanyi built on the work of Nash, who had established the mathematical
principles of game theory. He enhanced Nashs equilibrium model by
introducing the predictability of rivals action based on the chance that they
would choose one move or countermove over another. Harsanyi was also
an ethics scholar who conducted formal investigations on appropriate
behaviour and correct social choices among competitors.

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RAGNAR FRISCH

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 RAGNAR FRISCH
(Norwegian Economist)

Ragnar Frisch, in full Ragnar Anton Kittil Frisch (born March

1895, Oslo, Norwaydied January 31, 1973, Oslo),
Norwegian econometrician and economist who was a joint winner
(with Jan Tinbergen) of the 1969 Nobel Prize for Economics.
Frisch was educated at the University of Oslo (Ph.D., 1926), where he
was appointed to a specially created professorship in 1931, a post he held
until his retirement in 1965. He was a pioneer of econometricsthe
application of mathematical models and statistical techniques to economic
dataand coined this and many other economics terms. One of the
founders of the Econometric Society, he also was the editor
of Econometrica for 21 years. In an article onbusiness cycles, Frisch was
likely the first person to have referred to the study of individual firms and
industries as microeconomics. Moreover, he referred to the study of the
aggregate economy as macroeconomics.
Frisch is particularly famous for the development of large-scale
econometric modeling linked toeconomic planning and national income
accounting. Through this type of work, he helped many academically
trained economists gain entry into key civil service positions. Frisch was
involved with a range of macroeconomic topics, including the trade
cycle, production theory, consumer behaviour, and statistical theory. Many
of the papers he published are regarded as classics.

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JOHN STUART MILL

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 JOHN STUART MILL
(British Economist)

John Stuart Mill was born in Pentonville, London on May 20, 1806. His
father, James Mill was a notable historian, philosopher and economist. His
mother was Harriet Burrow. With the advice from the social reformers like
Jeremy Bentham and Francis Place, his father gave young John an
extremely strenuous upbringing. He was intentionally shielded from the
association with other children of his age. His father, who was an ardent
follower of Jeremy Bentham and the theory associationism, was trying to
create an intellectual genius who would further carry out the cause of
utilitarianism after him and Bentham. Mill was an exceptionally intelligent
child. At the very small age of three, he was taught Greek and by the age
of eight, he had read Aesop's Fables, Xenophon's Anabasis and the
Herodotus. He also knew Lucian, Diogenes Laertius, Isocrates and six
dialogues of Plato. He had been taught arithmetic and also read great deal
of history. At the tender age of eight, Mill began learning Latin, Euclid, and
algebra and could teach the younger children of the family. As he went to
read all the known authors of Latin and Greek language, he, at the age of
ten, could easily read the Plato and Demosthenes.
After 21 years of intimate friendship, Mill married to Harriet Taylor in 1851.
She had a great influence on Mills ideas and work. However, Harriet
Taylor died due to severe lung congestion in 1858, after seven years of
their marriage.
Mill died at Avignon in France in 1873. He was buried next to his wife.

Works

Mills On Liberty covers the nature and limits of power that can be
legitimately imposed by society on individual. One of the significant
achievements of Mill was developing the theory of harm principle. Harm
principle states that each individual has the right to act according to his
wants until his actions dont harm others. He also debates that free
discourse is a necessary condition for intellectual and social progress.
According to Mill, people can be allowed to give false opinion in two
cases. In the first case, individuals are more likely to leave erroneous
beliefs if they are engaged in an open exchange of ideas. In second case,
if other individuals are forced to re-examine and re-affirm their beliefs in
the process of debate, these beliefs will be kept from declining into mere
dogma.

Mill considered women issues important and thus, started writing in favor
of better rights for women. Due to his efforts, he can be tagged as one of
the earliest feminists. In his article The Subjection of Women, he wrote

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about the role of women in marriage and his views about the change
required. Mill said that there are three factors in the life of women that
were hindering them - society and gender construction, education, and
marriage. His book The Subjection of Women was one of the earliest
works on feminism by a male writer. In his view, oppression of women was
a set of ancient prejudices that was seriously hindering the progress of
humanity.

In his work Utilitarianism, Mill formulated his famous "greatest-happiness

principle". According to the principle, one must always act so as to
produce the greatest happiness for the greatest number of people, within
reason. His main contribution towards utilitarianism is his argument for the
qualitative separation of pleasures. His views differed from Bentham in the
fact that Bentham believed all forms of happiness were equal, whereas
Mill considered that intellectual and moral pleasures are superior to
physical forms of pleasure. According to Mill, happiness was a higher
value than contentment. He defined the difference between higher and
lower forms of happiness with the principle that those who have
experienced both tend to prefer one over the other.

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JEAN-BAPTISTE SAY

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 JEAN-BAPTISTE SAY
(French Economist)

J.-B. Say, in full Jean-Baptiste Say (born January 5,

1767, Lyon, FrancediedNovember 15, 1832, Paris), French economist,
best known for his law of markets, which postulates that supply creates its
own demand.
After completing his education, Say worked briefly for an insurance
company and then as a journalist. In 1794 he became an editor of a new
magazine dedicated to the ideas of the French Revolution; he later
became editor in chief of the magazine. He was appointed to the
Tribunate under the consulate in 1799 but was later dismissed by
Napoleon. In 1807 he started a cotton-spinning mill, which he sold in
1813. Next he held a chair in industrial economy at the Conservatory of
Arts and Crafts from 1817 to 1830, and he was a professor ofpolitical
economy at the Collge de France from 1830 until his death. His major
publication was Trait dconomie politique (1803; A Treatise on Political
Economy).
Say attributed economic depression not to a general weakness in demand
but to temporary overproduction in some markets and underproduction in
others. Any imbalance would adjust automatically, he believed, because
overproducers must either redirect their production to meet their
customers preferences or be forced out of business.
There are two versions of Says lawone proved to be true, the other
false. The true version states that a glut of goods cannot persist over a
long term because the production of goods will motivate producers to buy
other goods. In Says words, Products are always exchanged for
products. This represented a significant new understanding of markets
because economists before Say had worried about the possibility of a
long-term glut. There is, however, the false version of Says law, which
Say appears to have also believed; it states that there cannot be an
overproduction of goods in the short term. British economist Thomas
Malthus, with whom Say was acquainted, attacked this version in the 19th
century, as did John Maynard Keynes in the 20th century.
Say was the best-known expositor of Adam Smiths views in both Europe
and the United States. But he disagreed with Smiths labour theory of
value. Say was one of the first economists to realize that the value of a
good derives from its utility to its usernot from the labour used to
produce it. This insight was not systematized until the early 1870s,
when Carl Menger, William Stanley Jevons, and Friedrich von
Wieser gave it further attention.

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DAVID RICARDO

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 DAVID RICARDO
(British Economist)

David Ricardo, (born April 18/19, 1772, London, England

died September 11, 1823, Gatcombe Park, Gloucestershire), English
economist who gave systematized, classical form to the
rising science of economics in the 19th century. His laissez-faire doctrines
were typified in his Iron Law of Wages, which stated that all attempts to
improve the real income of workers were futile and that wages perforce
remained near the subsistence level.
Ricardo was the third son born to a family of Sephardic Jews who had
emigrated from the Netherlands to England. At the age of 14 he entered
into business with his father, who had made a fortune on the London
Stock Exchange. By the time he was 21, however, he had broken with his
father over religion, become a Unitarian, and married a Quaker. He
continued as a member of the stock exchange, where his talents and
character won him the support of an eminent banking house. He did so
well that in a few years he acquired a fortune, which allowed him to pursue
interests in literature and science, particularly in the fields of mathematics,
chemistry, and geology.
Ricardos interest in economic questions arose in 1799 when he
read Adam Smiths Wealth of Nations. For 10 years he studied
economics, somewhat offhandedly at first and then with greater
concentration. His first published work was The High Price of Bullion, a
Proof of the Depreciation of Bank Notes (1810), an outgrowth of letters
Ricardo had published in the Morning Chronicle the year before. His book
refueled the controversy then surrounding the Bank of England: freed from
the necessity of cash payment (strains from the wars with France
prompted the government to bar the Bank of England from paying its
notes in gold), both the Bank of England and the rural banks had
increased their note issues and the volume of their lending. The directors
of the Bank of England maintained that the subsequent increase in prices
and the depreciation of the pound had no relation to the increase in
bank credit. Ricardo and others, however, asserted that there indeed was
a link between the volume of bank notes and the level of prices.
Furthermore, they argued that the price levels in turn affected foreign
exchange rates and the inflow or outflow of gold.
It followed, then, that the bank, as custodian of the central gold reserve of
the country, had to shape its lending policy according to general economic
conditions and exercise control over the volume ofmoney and credit. The
controversy was therefore critical to the development of theories
concerning central banking. A committee appointed by the House of
Commons, known as the Bullion Committee, confirmed Ricardos views
and recommended the repeal of the Bank Restriction Act.

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At this time Ricardo began to acquire friends who influenced his further
intellectual development. One of these was the philosopher and
economist James Mill (father of John Stuart Mill), who became his political
and editorial counselor. Another friend was
the Utilitarian philosopher Jeremy Bentham. Still another was Thomas
Malthus, best known for his theory that population tends to increase faster
than the food supplyan idea that Ricardo accepted.
In 1815 another controversy arose over the Corn Laws, which regulated
the import and export of grain. A decline in wheat prices had
led Parliament to raise the tariff on imported wheat. This provoked a
popular outcry and caused Ricardo to publish his Essay on the Influence
of a Low Price of Corn on the Profits of Stock (1815), in which he argued
that raising the tariff on grain imports tended to increase the rents of the
country gentlemen while decreasing the profits of manufacturers. One
year before his Corn Law essay, at the age of 42, he had retired from
business and taken up residence in Gloucestershire, where he had
extensive landholdings.
Later, in Principles of Political Economy and Taxation (1817), Ricardo
analyzed the laws determining the distribution of everything that could be
produced by the three classes of the communitynamely, the landlords,
the workers, and the owners of capital. As part of his theory of distribution,
he concluded that profits vary inversely with wages, which rise or fall in
line with the cost of necessities. Ricardo also determined that rent tends to
increase as population grows, owing to the higher costs of cultivating more
food for the larger population. He supposed that there was little tendency
to unemployment, but he remained guarded against rapid population
growth that could depress wages to the subsistence level, which would
thereby limit both profits and capital formation by extending the margin of
cultivation. He also concluded that trade between countries was
influenced by relative costs of production and by differences in internal
price structures that could maximize the comparative advantages of the
trading countries.
Although he built in part upon the work of Smith, he defined the scope of
economics more narrowly than had Smith and included little explicit social
philosophy. In 1819 Ricardo purchased a seat in the House of Commons,
as was done in those times, and entered Parliament as a member for
Portarlington. He was not a frequent speaker, but so great was his
reputation in economic affairs that his opinions onfree trade were received
with respect, even though they did not represent the dominant thinking in
the House. Illness forced Ricardo to retire from Parliament in 1823. He
died that year at the age of 51.
Despite his relatively short career and the fact that most of it was
preoccupied with business affairs, Ricardo achieved a leading position
among the economists of his time. His views won considerable support in
England despite the abstract style in which he set them forth and in the

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face of heavy counterfire from his opponents. Although his ideas have
long since been superseded or modified by other work and by new
theoretical approaches, Ricardo retains his eminence as the thinker who
first systematized economics. He also treated monetary questions and
taxation at length. Writers of various persuasions drew heavily upon his
ideas, including those who favoured laissez-faire capitalism and those,
such as Karl Marx and Robert Owen, who opposed it.

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EDWARD PRESCOTT

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 EDWARD PRESCOTT
(American Economist)

Edward C. Prescott , (born Dec. 26, 1940, Glens Falls, N.Y., U.S.),
American economist who, with Finn E. Kydland, won the Nobel Prize in
Economic Sciences in 2004 for contributions to two areas of
dynamic macroeconomics: the time consistency of economic policy and
the driving forces behind business cycle fluctuations.
Prescott studied mathematics at Swarthmore College (B.A.,
1962), operations research at Case Western Reserve University (M.S.,
1963), and economics at Carnegie Mellon University(Ph.D., 1967). From
1966 to 1971 he taught economics at the University of Pennsylvania, and
he then joined the faculty at Carnegie Mellon (1971), where he advised
Kydland on his doctorate. Prescott, who also taught at the University of
Minnesota and Arizona State University, was named an adviser to the
Federal Reserve Bank of Minneapolis in 1980.
Prescott and Kydland, working separately and together, influenced the
monetary and fiscal policies of governments and laid the basis for the
increased independence of many central banks, notably those in Sweden,
New Zealand, and the United Kingdom. In their seminal article Rules
Rather than Discretion: The Inconsistency of Optimal Plans (1977), they
demonstrated how a declared commitment to a low inflation rate by policy
makers might create expectations of low inflation and unemployment
rates. If this monetary policy is then changed and interest rates are
reducedfor example, to give a short-term boost to employmentthe
policy makers (and thus the governments) credibility will be lost and
conditions worsened by the discretionary policy. In Time to Build and
Aggregate Fluctuations (1982), the two economists established the
microeconomic foundation for business cycle analyses, demonstrating that
technology changes or supply shocks, such as oil price hikes, could be
reflected in investment and relative price movements and thereby create
short-term fluctuations around the long-term economic growth path.
In addition to winning the Nobel Prize, Prescott was a fellow of
the Brookings Institution, the Guggenheim Foundation, the Econometric
Society, and the American Academy of Arts and Sciences; he was elected
a member of the National Academy of Sciences in 2008. He was an editor
of several journals, including the International Economic Review (1980
90), and his extensive writings covered such wide-ranging topics as
business cycles, economic development, general equilibrium theory, and
finance.

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