Klein, Lawrence
Klein, Lawrence 1920-
Lawrence R. Klein was born in Omaha, Nebraska, in 1920, graduated from the University of California at Berkeley in 1942, and went on to receive in 1944 the first PhD awarded by a Department of Economics at MIT that was, like himself, at the very beginning of a long and eminent career. Klein’s first post was a three-year stint as research associate of the Cowles Commission at the University of Chicago; Cowles was then strongly oriented to econometrics, and was certainly an important influence on Klein’s early research interests. In 1949 he migrated to teaching and research posts at the University of Michigan. He was driven from Ann Arbor, and from the United States, by the McCarthy witch hunt, and went in 1954 to the Institute of Statistics at Oxford. In 1958 he became professor of economics at the University of Pennsylvania, then University Professor and Benjamin Franklin Professor, until his formal retirement in 1991.
Klein’s long and distinguished career led to an enormous list of articles, many books, thirty or more honorary degrees, a series of visiting professorships, the presidency of the Econometric Society in 1960 and the American Economic Association in 1977, the John Bates Clark Medal of the American Economic Association in 1959, and the Alfred Nobel Memorial Prize in Economic Sciences in 1980. It is safe to say that what honors were available, he has had.
Beginning with the publication of Economic Fluctuations in the United States, 1921–1941 (1950), Klein succeeded the Dutch economist Jan Tinbergen (1903–1994) as the preeminent macroeconometric model builder in the United States and the world. With a series of coauthors, he produced a larger and improved model of the United States in 1955 and a model of the United Kingdom in 1961, participated in the Brookings quarterly econometric model of the United States (1965, 1969, 1975), and was the guiding force in the Wharton model of the United States (1967, 1968). From its start in 1968, Klein led a large group of participants in Project LINK, a systematic effort to link together, through explicit trade and capital flows, as many national econometric models as could be mustered. In his eightieth year, Klein was actively engaged in the econometric modeling of the Chinese economy.
His first macroeconometric models were Keynesian in inspiration, drawing on The Keynesian Revolution (1947, based on his PhD thesis). They were primarily models of aggregate demand. Later versions began to add a supply side and a model of inflation. In view of later controversies in academic macroeconomics, it is useful to note that one of Klein’s earliest articles (1946) was on “Macroeconomics and the Theory of Rational Behavior.” In those days, attention to “microfoundations” amounted to asking if this or that macro-equation could arise from the approximate aggregation of the behavior of rational agents. That still seems more sensible than the current tendency to a much more literal interpretation that leads to the casual acceptance of extreme assumptions for no better reason.
From the beginning, Klein was motivated by the possibility that empirical macromodels could be used to guide fiscal and monetary policy, and to estimate the effects of other policy measures. Sixty years later, the technique is still highly imperfect. But nothing better has been found in practice; and central banks, government agencies, and international agencies all over the world maintain and use econometric models that are direct descendants of Klein’s lifework.
BIBLIOGRAPHY
PRIMARY WORKS
Klein, Lawrence. 1946. Macroeconomics and the Theory of Rational Behavior. Econometrica 14: 93–108.
Klein, Lawrence. 1950. Economic Fluctuations in the United States, 1921–1941. New York: Wiley.
Klein, Lawrence. [1947] 1966. The Keynesian Revolution. 2nd ed. New York: Macmillan.
Klein, Lawrence. 1976. Five-Year Experience of Linking National Econometric Models and of Forecasting International Trade. In Quantitative Studies of International Economic Relations, ed. Herbert Glejser. Amsterdam: North-Holland.
Klein, Lawrence, R. James Ball, Arthur Hazlewood, and Peter Vandome. 1961. An Econometric Model of the United Kingdom. Oxford: Blackwell.
Klein, Lawrence, James Duesenberry, Gary Fromm, and Edwin Kuh, eds. 1965. The Brookings Quarterly Econometric Model of the United States. Chicago: Rand McNally.
Klein, Lawrence, and Michael K. Evans. 1968. The Wharton Econometric Forecasting Model. 2nd ed. Philadelphia: Wharton School of Finance and Commerce.
Klein, Lawrence, and Arthur S. Goldberger. 1955. An Econometric Model of the United States, 1929–1952. Amsterdam: North Holland.
Klein, Lawrence, and Shinichi Ichimura, eds. 2000. Econometric Modeling of China. Singapore: World Scientific.