Who Was Lawrence Klein?

Lawrence R. Klein was an American economist who won the Nobel Prize for economics for his work building statistical models, eventually dubbed the Wharton models, that more accurately forecast economic activity such as gross national product, exports, investment, and consumption.

Key Takeaways

  • Lawrence Klein was an American economist who won the Nobel Prize for economics for his pioneering work creating statistical models to predict economic cycles.
  • Klein first gained renown by accurately predicting that an economic boom would follow the end of World War II.
  • Klein said his experience growing up during the Great Depression made him want to understand how the economy works.
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What Is Econometrics?

Lawrence Klein's Biography

Klein was born in Omaha, Nebraska, in 1920, and said his experience growing up during the Great Depression had a profound impact on his life and career, fueling a fascination with economics from an early age. He said he entered the field of economics because of a desire to understand why the Great Depression occurred

After attending public high school in Omaha, Klein graduated from the University of California, Berkeley, where he studied both economics and mathematics. Klein earned his Ph.D. at the Massachusetts Institute of Technology (MIT), where he studied under economist and fellow Nobel laureate Paul A. Samuelson, a trailblazer in theoretical economics. Klein credited Samuelson with giving him a "good grasp of economics and mathematical ways of dealing with significant problems of the subject."

Klein also earned a master's degree at Oxford University and served as a professor in the economics department at the University of Pennsylvania for more than three decades and was an economic adviser to President Jimmy Carter during Carter's first campaign. At times, he was also affiliated with the University of Chicago, Oxford, and the National Bureau of Economic Research.

Klein died in 2013 at the age of 93.

Lawrence Klein's Groundbreaking Work

Klein first gained renown by predicting that an economic boom would follow the end of World War II. At the time, most economists were predicting that the war's end would bring another depression. But Klein accurately forecast that pent-up demand for consumer goods and the purchasing power of returning American soldiers would fuel growth.

Klein became a pioneer in using public survey data to build statistical models, or econometrics, to predict economic activity. His work became the foundation of the Michigan Model and the Wharton Models, renowned econometric models. The Wharton Models were widely used to forecast national output, exports, and consumption.

Klein also founded Wharton Econometric Forecasting Associates Inc., a forecasting and consulting firm. He traveled widely, working on economic models for multiple other countries. These included Japan, Israel, and Mexico.