Intellectuals & Academics » Economists » SIMON KUZNETS
|Full name||: Simon Kuznets|
|Alias||: Simon Kuznets|
|Wife||: Edith Handler|
|Children||: Paul Kuznets, Judith Stein|
|Education||: Columbia University Columbia University School of General Studies|
Simon Kuznets is known to set a standard that made him stand special among all the other economists of his time because of his meticulous and comprehensive works on national income and its components. This led him to the path of the formulation of the Gross National Product that was widely accepted. Prior to his remarkable theories and discoveries, the calculations of Gross National Product were usually done on guess estimates. At that time, neither the government agencies nor the researchers were bothered to collect empirical data for the computation of GNP systematically except for Simon Kuznets. He presented the concept of this formulation in a repSimon Smith Kuznets was born in Belarus in the town of Pinsk to Belarusian-Jewish parents, in the year 1901. He completed his schooling, first in Ukraine at the Kharkiv Commercial Institute and, in 1922, after immigrating to the United States, at the Columbia University. Before he moved to the states, he worked for a short duration as a section head in the bureau of labor statistics of Ukraine. His father had moved to the United States before the World War I and he joined him there after about 15 years. In the year 1923, he completed his B.Sc. and the next year his M.A from the Columbia University and, in 1926, he received his doctorate. He considered himself fortunate to have worked with a person like Wesley C. Mitchell who was the founder of the National Bureau of Economic Research (NBER) and was an important figure in his life both academically and as a friend.
ort that was sent to the U.S Congress, titled ‘National income’, 1929-1935, which was widely cited. His works sparked a flurry of research programs, which in turn led to more theories and discoveries based on his findings. Kuznets’ painstaking efforts in collecting and organizing data resulted in significant growth in his field. Scroll down further to know more about this brilliant economist.
From 1925 to 1926, Simon Kuznets engaged himself in studying the economic pattern of prices. This work was done while he was at the Social Science Research Council as a Research Fellow. The work was the basis of his book, ‘Secular Movements in Production and Prices’ published in 1930. In 1927, Simon Kuznets joined the National Bureau of Economic Research and had a chance to work with its founder, Wesley Mitchell. Here, Kuznets found an arena for carrying his works forward and contributed effectively on his studies of national income of the United States. His generalized work on the economic time series led him to the track of broadly studying the economic growth of nations. The understanding of the calculation of the Gross National Product (GNP) was brought into effect based on his studies on the American national income.
In 1930, his initial work involved the empirical analysis of business cycles which led to the discovery of ‘Kuznets Cycle’, a medium range economic wave. At the same time, Kuznets was also involved in teaching at the University of Pennsylvania during 1930-1954. Initially, he worked there as a part time professor till 1936 and afterwards became a full time faculty of economics until 1954. Later he moved to the John Hopkins University to teach Political Economy and continued till 1960 after which he moved to the Harvard University and retired in 1971. Kuznets was one of the foremost economists to start working on the development of economics particularly in collecting the empirical statistics of developing countries.
Simon Kuznets’ main research work was based on the complexities involved in the fundamental economic data. He also inferred that the results can be made reliable only after going through a number of observations. Also, he figured certain limitations in the other simple economic models and claimed that the economic data has to include statistics on the structure of population, quality of labor, trade, government structure and markets. According to him, these statistics were relevant in providing a model that was highly accurate and reliable. He accumulated certain statistical series and emphasized that the economic growth credited to the accumulation of labor and capital was considerably less. He also researched on varying growth rates which were cyclic and connected them with factors such as population. These cyclic variations were then referred to as ‘Kuznets Cycle’.
Simon Smith Kuznets was born in Belarus in the town of Pinsk to Belarusian-Jewish parents, in the year 1901. He completed his schooling, first in Ukraine at the Kharkiv Commercial Institute and, in 1922, after immigrating to the United States, at the Columbia University. Before he moved to the states, he worked for a short duration as a section head in the bureau of labor statistics of Ukraine. His father had moved to the United States before the World War I and he joined him there after about 15 years. In the year 1923, he completed his B.Sc. and the next year his M.A from the Columbia University and, in 1926, he received his doctorate. He considered himself fortunate to have worked with a person like Wesley C. Mitchell who was the founder of the National Bureau of Economic Research (NBER) and was an important figure in his life both academically and as a friend.
During 1934, 1941 and 1946, Simon Kuznets was involved in collecting and organizing the national income accounts of the U.S, which was an achievement that was considered to parallel the work of Richard Stone and James Meade in Great Britain, setting the standards in this field. The emergence of development economics and econometrics largely due to his work enormously boosted the Keynesian revolution and led to a further advancement of Kuznets works. The major crux of his thesis strongly argued that the underdeveloped countries follow different growth characteristics as compared to industrialized countries during their underdevelopment stages. This helped to demolish the widely accepted theory held at that time that all countries grow in the same ‘linear stages’ in their history. This led to the birth of development economics to focus on the analysis of the distinct growth and other characteristics of modern underdeveloped countries.
In 1941, one of his most important works the ‘National Income and Its Composition, 1919-1938’ was published. This book is considered to be a historically important work on Gross National Product (GNP) till date.
He acquired most of his experience and insight in domestic economics during his tenure at the National Bureau of Economic Research from 1927 to 1960. His notable works on disequilibrium aspects of economic growth and business cycle helped him to introduce development economics. He researched extensively about inequality over time and his works lead to the development of the ‘Kuznets Curve’. In 1954, he was elected to the post of the President of the American Economic Association. He was awarded the ‘Nobel Prize’ for economics for his outstanding work on economic growth in 1971. According to him, ‘Modern economic growth’, as he titled the new economic era, is rooted in Europe and spread towards the east and the south.
Contribution In Economics
Simon Kuznets was considered to be one of the earliest economists to work on the concept of development economics. His findings were significantly based on the economic growth on the distribution of income. He found that in poor countries, the economic growth leads to increased disparity between the rich and the poor while this disparity decreases in developed countries. Kuznets also enumerated the cyclic nature of production and prices over a span of 15-20 years known as Kuznets Cycle.
His discovery of the inverted U-shaped relation between income inequality and economic growth was the most important of all his discoveries that sparked many research programs. The patterns in savings-income characteristics discovered by Kuznets was instrumental in introducing the Life-Cycle-Permanent-Income hypothesis of Modigliani and Friedman and also many other alternatives such as the ‘Relative Income Hypothesis’.
Simon Kuznets’ outstanding research led him to understand the connecting link of the modern economic development. It is for his noteworthy works that he was awarded the Nobel Memorial Prize for economics in the year 1971 while he was at Harvard. The Nobel Prize cited that the prize was ‘for his empirically founded interpretation of economic growth which has led to new and deepened insight into the economic and social structure and process of development’.