Paul Samuelson

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My real interests are research and teaching…said Paul Samuelson, a diversified, modern economist whose work in economics straddles a rainbow of topics. From modern welfare economics, linear programming, Keynesian economics, economic dynamics, international trade theory, logic choice and maximization. Mathematical economics especially attracted Paul Samuelson, which earned him the Alfred Nobel Prize in 1970. Paul Samuelson does not claim that mathematics is the cure-all or end-all of economic analysis, but he insists that mathematics is essential to an understanding of what economics is all about. Paul Samuelson’s greatest gift to the world was his ability to unify the world of economics by clarifying and bridging many of the conflicts and confusions. After a career marked by distinguished scores, prizes, and international recognition, Paul Samuelson developed what he called: neoclassical synthesis. This synthesis of ancient and modern economic findings argues that nations today can successfully control either depression or inflation by fiscal and monetary policies. In 1940 Paul Samuelson began his teaching career at MIT, in Cambridge, Massachusetts (MA). But that was only the beginning of his participation in shaping the best minds of this nation. Quickly, presidents like John F. Kennedy, as well as, various organizations sought his advice. The US treasury. Political and economic committees. Education boards. Conglomerates.When a symposium sponsored by the Committee for Economic Development asked him in 1958 what he thought was the biggest problem America would face, he replied with: The threat of inflation. Which in retrospect was quite accurate. Then in 1960 Paul Samuelson identified a new kind of inflation, he dubbed cost-push inflation. This is how Samuelson explained cost-push inflation: As contrasted to the familiar kind of inflation – where too much spending power pulls up prices and wages – cost-push inflation is a force that operates year-in and year-out, whenever we are at high employment, to push up prices. It’s a price creep, not a price gallop; but the bad thing about it is that, instead of setting in only after you have reached overfull employment, the suspicion is dawning that it may be a problem that plagues us even when we haven’t arrived at a satisfactory level of employment. In true Keynesian fashion, Paul Samuelson was for increasing employment by assuring the buyer affordability and by dealing with economic adversity on a short-term basis. Samuelson was for lower interest rates, mortgage discounts, insurance fees, and extension of maximum amortization periods, and a step-up in the Federal National Mortgage Association mortgage purchasing program. In monetary policy he again stressed more reliance upon short term issues, and urged decisive actions to improve our international balance of payments. When asked about employment, Paul Samuelson replied that it’s our responsibility as a society to try and keep unemployment in the 4%. He saw 6% unemployment or more as cyclical and a serious obstruction to economic growth. Though he believed in the government enacting both fiscal and monetary policies, he thought that the ailments of society, social and economic, are the domain of the individual. Today Paul Samuelson lives in Belmont, MA, with his wife and six children — three of whom are triplets.

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