Arnold Harberger facts for kids

Arnold Carl Harberger, born on July 27, 1924, is a famous American economist. An economist studies how people and countries make choices about money and resources. Mr. Harberger believed in teaching economics using tools that could solve real-world problems. He is well-known for something called the "Harberger triangle." This is a simple drawing that helps show how much money or resources are wasted when markets are not perfectly fair or competitive.

Life and Education

Arnold Harberger studied economics at Johns Hopkins University. He earned his first degree there. Later, he went to the University of Chicago. There, he earned a master's degree in international relations in 1947. He then completed his Ph.D. in economics in 1950.

After finishing his studies, Mr. Harberger taught at Johns Hopkins. He then returned to the University of Chicago. He taught there full-time from 1953 to 1982. He also taught part-time from 1984 to 1991. Since 1984, he has been a professor at the University of California, Los Angeles. He became a professor emeritus in 2014, which means he is a retired professor who still holds an honored title.

Family and Global Connections

In 1958, Mr. Harberger married Anita Valjalo from Chile. They were together until she passed away in 2011.

Mr. Harberger speaks Spanish very well. He is known for staying in touch with his former students. Many of these students became important government leaders in Latin America. This was especially true in Chile. About 15 of his former students became central-bank presidents. Around 50 became government ministers. He is proud of how they helped improve economies in many countries.

Some people have questioned his advice to certain governments. However, in Chile, his influence was through his former students. These students were called the Chicago Boys. They worked to fix a big economic problem in Chile. The good economic changes they started have continued even after 1990.

One of his former students, Ricardo Ffrench-Davis, said Mr. Harberger was fair-minded. He believed Mr. Harberger did not let his personal beliefs get in the way of his economic advice.

Arnold Harberger turned 100 years old on July 27, 2024.

Harberger's Economic Work

Mr. Harberger's main studies were about international economics. But he became famous for his work on taxes. He also studied how to measure the costs and benefits of different economic choices.

Understanding Monopoly Costs

One of Mr. Harberger's important studies looked at the cost of monopoly. A monopoly is when one company controls an entire market. He estimated that the money wasted because of monopolies in U.S. manufacturing was very small. It was less than 0.1% of the country's total economic output (GDP).

He believed that if a company made very high profits, it had more market power. He showed that industries with high profits produced too little. Industries with low profits produced too much. The wasted money came from this imbalance. If resources were moved to balance things, the economy would be more efficient.

His study suggested that monopolies were not a huge problem in the U.S. economy. He thought the manufacturing sector was mostly competitive.

How Taxes Affect Everyone

Mr. Harberger also did important work on how taxes affect an entire economy. He looked at the corporate income tax. This is a tax on the profits of companies. He used a model to show how this tax affects different parts of the economy.

In his model, he showed that capital (like money and machines) can move between different parts of the economy. If the corporate tax makes returns lower in one area, capital will move to another. This movement changes how much is produced in different sectors. It also affects wages and prices.

His research showed that the burden of the corporate tax might not just fall on the companies. It could also affect workers and other capital owners. For example, if capital moves out of the taxed sector, wages might fall. This means workers could end up paying part of the tax through lower earnings.

He also looked at how this works in countries that trade with the world. He found that if a country can easily get capital from other countries, then capital owners might not bear much of the tax burden. Instead, workers might bear most of it. His ideas changed how economists thought about who really pays taxes.

Honors and Awards

• Fellow, Econometric Society
• Fellow, American Academy of Arts and Sciences
• Special Ambassador, U.S. Department of State (1984)
• National Academy of Sciences of the United States
• President, Western Economic Association (1989–1990)
• Foreign Honorary Member, Chilean Academy of Social Sciences
• President, American Economic Association (1997)
• Distinguished Fellow, American Economic Association
• Simon Kuznets Memorial Lecturer, Yale University (2000)
• Daniel M. Holland Medal, National Tax Association (2002)
• President, Society for Benefit-Cost Analysis (2008–2009)
• Bradley Foundation Prize (2009)
• Life for Freedom Award, Roads to Freedom Foundation (Mexico)

See also

In Spanish: Arnold Harberger para niños

• Chicago Boys
• Harberger Tax