Biographical Memoirs Volume 79 (2001) / Chapter Skim
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Simon S. Kuznets
Simon S. Kuznets
Pages 202-231
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Among the issues consiclerec! are his contribution to the clevelopment of the empirical traclition in economics, his transformation of the fielcl of national income accounting, his use of national income accounting during World War II to set production targets for both the military en cl civilian sectors of the economy en cl to guide the implementation of those targets, his development of a theory of economic growth, his investigation of the interrelationship between economic growth en cl population growth, his contribution to methods of measurement in economics, en cl his legacy to the economics profession.
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During WorIcl War II he served as the associate director of the Bureau of Planning en cl Statistics of the War Production Board. Kuznets was instrumental in establishing in 1936 the Conference on Research in Income en cl Wealth (which brought together government officials en c!
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Kuznets's intellectual contributions were acknowlecigec! by his colleagues in many ways, inclucling his election as president of the American Statistical Association in 1949 en cl of the American Economic Association in 1954.
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Ely, an economist at the University of Wisconsin, en c! other academic leaclers of the Social Gospel movement (the name given by historians to a religious/ political movement that was influential between ISS0 en cl 1930)
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fecleral troops to quell them (with large losses of life en cl property) , en cl the increasing severity in business cycles, culminating with the depression of IS93-9S, when one out of every six workers was unemployed.
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to construct national income accounts, collect information on business cycles, en cl to stucly the distributions of the national income among househoicis, with the aim of making such information available to both public en cl private agencies that couIcl use them in the formulation of their policies. The leacler of the NBER from its inception to 1946 was Wesley C
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The main engine of this process, he saicI, was technological change, although he also acknowlecigecl the role of population growth en cl changes in clemancI. Another important aspect of Secular Movements was Kuznets's discovery of "secondary trencI," a cyclical movement much longer than a business cycle, which typically ran 3 to 5 years.
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national income accounts. Resiclual tasks in this line of work, concerned mainly with the measurement of capital formation, continued clown to 1961.
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the national income accounts back to IS69. Kuznets transformed the fielcl of national income accounting by bringing to it a far greater precision than hac!
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gross capital formation because, among other reasons, capital replacement frequently involvecl technological improvements. The depth of Kuznets's theoretical probing was well unclerstoocl by other specialists in national income accounting.
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In 1940 Robert Nathan, a former student of Kuznets en c! subsequently chief of the National Income Section of the Department of Commerce, became the chief of military requirements en cl inclustrial studies in the Defense Commission (later caller!
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the focus of his research to making use of national aggregate data to analyze international differences in the process of modern economic growth. His analysis focuses!
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In these volumes Kuznets set forth a historically basecl theory of moclern economic growth. The moclern epoch of growth, which began toward the end of the eighteenth century, was clefinecl as a sustained increase in per capita income accompanies!
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This complex interaction between scientific knowlecige, technological applications, and rapicl economic growth, Kuznets arguccI, required a proper cultural en cl institutional environment, which in turn requires! a new set of attitudes.
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population growth as fully as Kuznets. He was impressed more by the salutary effects of rapid population growth than by its negative effects.
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out the economic significance of the fact that acceleratecl population growth was clue primarily to a clecline in cleath rates. The associated clecline in morbiclity rates server!
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1970s when it was apparent that a number of Asian nations hacl entered onto the paths of both rapid population growth (due to rapidly declining mortality en c! rapic!
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still produce reliable estimates of key economic variables en cl parameters. That skill cannot be encapsulatecl in a simple list of rules, because the circumstances uncler which a given set of defects in the ciata is tolerable clepencis on the issues being aciciressecI, on the statistical en cl analytical procedures being employocI, en cl on the sensitivity of the results to systematic errors in the ciata, to the choice of behavioral moclels, en cl to the choice of statistical procedures.
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Adequate understanding involved detailed historical knowledge of the changing institutions, conventions, anct practices that affected the procluction of the primary ciata but were clifficult to ascertain en c! to quantify.
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about imposing so much structure on the ciata that the a priori assumptions of the investigation overwhelm whatever information there is in the ciata. He was skeptical about fitting simple high-order curves to data sets with relatively few observations of questionable quality.
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with the detection en c! measurement of systematic errors in the ciata: systematic misreporting, sample selection biases, the impact on results of the unclerlying behavioral moclels that circumscriber!
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KUZNETS'S LEGACY Kuznets's greatest legacy is his theory of moclern economic growth. The proposition that the high growth rate since the eighteenth century in population en cl per capita income, the sharp changes in the structure of the economy, en cl the concomitant changes in social institutions en cl culture are a unique epoch in human history is no longer a theory.
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These new finclings, mainly for Englancl but also for France, provicle a stronger connection between rising productivity and declining mortality rates in the nations that initiated moclern economic growth. The high plateau of mortality rates cluring the micicIle of the nineteenth century now appears to be a pause in a clownwarcl secular trencl that was more than a century oIcl when it resumed.
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the clecline in age-specific chronic clisabilities has obscured the continuing acceleration in the secular trend of economic growth. Also obscured is the exceedingly high rate of capital formation clue to the remarkable expansion of human capital relative to physical capital.
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Although regression analysis remains a powerful tool, its limitations en cl the virtues of less structural forms of data analysis are now widely recognized by empirical economists.
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Dunlop, Tohn Kenneth Galbraith, Mark Guglielmo, Katharine T Hamerton, Max R
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Income from Independent Professional Practice. New York: National Bureau of Economic Research.
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New York: National Bureau of Economic Research. 1973 Modern economic growth: Findings and reflections (Nobel address)
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