Who Is Robert M. Solow?
Robert M. Solow is a notable American economist and a Professor Emeritus at the Massachusetts Institute of Technology. Solow was a winner of the Nobel Memorial Prize in Economic Sciences in 1987.
- Robert M. Solow is an American economist and Professor Emeritus at MIT
- Solow won the Nobel Prize for Economics in 1987.
- As a student at Harvard, Solow became a research assistant under professor and economist Wassily Leontief, and he made contributions to the input-output analysis method in economics, which Leontief helped develop.
- Solow is well-known for developing the concept of Solow residual, which explains the role of technology in productivity increases for an economy.
- In addition to academia, Solow has also served the government as a member of the Council of Economic Advisers (under President Kennedy) and on the President's Commission on Income Maintenance (under President Nixon).
Understanding Robert M. Solow
Solow is best known for his work on growth theory; he helped to develop the Solow-Swan Neo-Classical Growth Model, a groundbreaking theory within economics. He was awarded the Presidential Medal of Freedom in 2014 for his outstanding contributions to economic theory and practice.
Solow was born in Brooklyn in 1924 and won a scholarship to Harvard University at the age of sixteen. In 1942, Solow left Harvard to join the U.S. Army; he served in World War II in North Africa and Sicily before returning to Harvard in 1945.
As a student at Harvard, Solow became a research assistant under professor and economist Wassily Leontief, and he made contributions to the input-output analysis method in economics, which Leontief helped develop. In 1949, he was awarded a fellowship at Columbia; soon after, he became an assistant professor at MIT.
At MIT, Solow had an office located next door to Paul Samuelson, another prominent economist. Later, Samuelson incorporated Solow’s research in growth theory into the sixth edition of his book, Economics: An Introductory Analysis.
Solow's Contributions to the Field of Economics
One of the most important concepts that Solow is well-known for is the Solow residual. It accounts for the role of technology in an economy by measuring its productivity with respect to constant labor and capital. The concept has its roots in a 1957 article, called "Technical Change and Aggregate Production Function." Based on Gross National Product (GNP) data, Solow concluded that half of its overall growth occurred due to labor and capital. Technical change accounted for the remaining.
In 1958, Solow co-authored the book Linear Programming and Economic Analysis. He later published Growth Theory—An Exposition in 1970 and The Labor Market as a Social Institution in 1990. Solow’s collaborations with Samuelson bore much fruit, with the two economists developing work together on Von Neumann's Growth Theory, Theory of Capital, Linear Programming, and the Phillips Curve.
Solow's Other Contributions
In addition to his contributions to the academic field of economics, Solow also served the government as a member of the Council of Economic Advisers under President Kennedy and on the President's Commission on Income Maintenance under President Nixon.
According to Solow, the key drivers of sustainability (from an economist's perspective) are our decisions today about how much we consume versus how much we invest.
As a professor, Solow made innumerable contributions in guiding many of his students in their own careers as economists, including some additional Nobel Prize recipients (such as his former student, Peter Diamond, who received the award in 2010). While Solow officially retired in 1995, he still has an office at MIT and he continues to research and publish.
Robert Solow FAQs
Why Did Robert Solow Win the Nobel Prize?
Solow won the Nobel Prize for his contributions to the theory of economic growth. The award was in recognition of his exceptional contributions to the study of the factors which permit production growth and increased welfare.
What Is the Basic Theory of Robert Solow?
The basic theory of Solow is the Solow residual. The Solow residual is often described as a measure of productivity growth due to technological innovation; it is the portion of an economy’s output growth that cannot be attributed to the accumulation of capital and labor (the factors of production). It is also referred to as total factor productivity (TFP).
In the Solow Growth Model, When Does the Steady-State Occur?
The steady-state is a state where the level of capital per worker does not change. The steady-state is found by solving the following equation: k’ = k => (1 + g)k = (1 – d)k + sakb . (The production function takes the following form: Y = aKbL1-b where 0 < b < 1.)
What Does Robert M. Solow Associate With Sustainability?
Solow defines sustainability as the societal outcomes that allow future generations to be at least as well off as people are today. For Solow, sustainability does not require saving specific resources. However, a society must be able to ensure that there is sufficient capital (human, physical, and natural) for future generations to create living standards that are equivalent (or better) than ours.