Simon Kuznets facts for kids

Quick facts for kids Simon Kuznets
Kuznets in 1971
Born	(1901-04-30)April 30, 1901 Pinsk, Russian Empire (now Belarus)
Died	July 8, 1985(1985-07-08) (aged 84) Cambridge, Massachusetts, U.S.
Nationality	American
Institution	NBER Columbia University, Harvard University (1960–1971) Johns Hopkins University (1954–1960) University of Pennsylvania (1930–1954)
Field	Econometrics, development economics
School or tradition	Institutional economics
Alma mater	Columbia University, Kharkiv Institute of Commerce
Doctoral advisor	Wesley Clair Mitchell
Doctoral students	Baidyanath Misra Milton Friedman Richard Easterlin Stanley Engerman Robert Fogel Subramanian Swamy Lance Taylor
Contributions	National income data Empirical business cycle research Characteristics of economic growth
Awards	Nobel Memorial Prize in Economic Sciences (1971)
Information at IDEAS / RePEc

Simon Smith Kuznets (born April 30, 1901 – died July 8, 1985) was an American economist and statistician. He won the 1971 Nobel Memorial Prize in Economic Sciences. He received this award for his work on understanding how economies grow. His research helped us learn more about the economy and how societies develop.

Kuznets played a big role in changing economics into a science that uses real-world data. He also helped create the study of economic history using numbers.

About Simon Kuznets

His Early Life and Education

Simon Kuznets was born in 1901 in Pinsk, which was part of the Russian Empire and is now Belarus. His family was Lithuanian-Jewish. He went to school in Rivne and then Kharkiv in what is now Ukraine.

In 1918, Kuznets started studying at the Kharkiv Institute of Commerce. He learned about economics, statistics, history, and math. His teachers helped him gain a deep understanding of these subjects. He learned that to understand economies, you need to look at how they connect with other areas. He also learned to use proper methods and real data. It was here that he first learned about Joseph Schumpeter's ideas on new inventions and how economies go through ups and downs.

During the Russian Civil War, his studies were interrupted. He worked for the Department of Labor and published his first paper. This paper looked at how wages changed for factory workers in Kharkiv in 1920.

Moving to the United States

In 1922, Kuznets and his family moved to the United States. He continued his studies at Columbia University. He earned his bachelor's degree in 1923, his master's in 1924, and his Ph.D. in 1926. His master's thesis was about Joseph Schumpeter's economic ideas.

From 1925 to 1926, Kuznets studied how prices changed over time. This work led to his book, "Secular Movements in Production and Prices," published in 1930.

His Career and Contributions

In 1927, Kuznets joined the National Bureau of Economic Research (NBER). He worked there until 1961. He also taught at several universities, including the University of Pennsylvania (1931–1954), Johns Hopkins University (1954–1960), and Harvard University (1961–1970).

Kuznets also worked with government groups. From 1931 to 1934, he led the NBER's work on measuring the U.S. national income. This was the first official estimate of how much money the U.S. economy made.

During World War II, from 1942 to 1944, Kuznets helped the War Production Board. He worked to figure out how much the country could increase its military production. After the war, he advised governments in countries like China, Japan, and India. He helped them set up their own systems for tracking economic information.

Kuznets was a respected leader in his field. He was the President of the American Economic Association in 1954. He was also the President of the American Statistical Association in 1949. He received the Medal of Francis Walker in 1977.

Simon Kuznets passed away on July 8, 1985, at 84 years old. In 2013, the Kharkiv National University of Economics, where he studied, was named after him. It is now called the Simon Kuznets Kharkiv National University of Economics.

Kuznets' Impact on Economics

Kuznets is known for helping to make modern economics a field that uses real data. He developed new ways to use statistics in research. His work helped create the study of economic history using numbers. Many believe his ideas helped start the Keynesian revolution in economics.

Kuznets believed in using data to test economic ideas. He was careful about ideas that were just based on guesses. He also liked to look at the economy by connecting it to history, population changes, and social trends. He was influenced by other thinkers like Joseph Schumpeter, who studied how technology affects business cycles.

Kuznets Cycles: Long Swings in the Economy

One of Kuznets' first big projects was studying long-term economic changes in the USA. He looked at data from 1865 to 1925, and some data even went back to 1770. He found that economies have medium-term cycles that last 15–25 years. These cycles were longer than typical business cycles but shorter than very long "Kondratyev waves."

He studied population changes, construction, and national income to understand these cycles. These economic ups and downs became known as "Kuznets cycles" or "long swings" in how fast an economy grows.

National Income Accounts: Measuring a Country's Wealth

In 1931, Kuznets took charge of measuring the national income of the U.S. In 1934, he provided the first estimate of the U.S. national income for 1929–1932. He later extended this data back to 1869. While others had tried this, Kuznets' work was so detailed and careful that it became the standard.

Kuznets solved many problems in measuring national income, like finding good data and developing clear ideas about what national income means. His methods for calculating national income are still used today. By looking at how income was shared among different groups, Kuznets suggested something interesting. He thought that in countries just starting to develop, income inequality would first increase. But as the country grew richer, inequality would then decrease. This idea led to the "Kuznets curve."

Kuznets also helped the U.S. Department of Commerce standardize how GNP (Gross National Product) is measured. However, he believed that GNP alone could not fully show how well a nation was doing. He wrote that "the welfare of a nation can scarcely be inferred from a measure of national income."

Kuznets also studied how much people save and spend. He looked at long-term economic data from 20 countries. He found that the amount people saved stayed constant over long periods, even when incomes changed a lot. This finding challenged some ideas from John Maynard Keynes and led to new theories about saving and spending.

Understanding Economic Growth

After World War II, Kuznets started researching how changes in income relate to economic growth. He studied how population growth, new knowledge, and international trade affect a country's economy. He wanted to understand why some countries developed quickly and others did not.

He collected and analyzed economic data from 14 countries in Europe, the U.S., and Japan over 60 years. His research showed that when a country's economy grows, its entire economic structure changes a lot. This includes how goods are made, where people work, how income is shared, and how the population changes. These changes are important for overall growth. Once they start, they shape how a country's economy develops in the future.

Kuznets' main idea was that today's less developed countries are different from how industrialized countries were before they developed. This idea helped create a new field of study called development economics. This field focuses on the unique experiences of modern underdeveloped countries.

The Kuznets Curve

One of Kuznets' most famous ideas is the Kuznets curve. This idea suggests that as a country's economy grows, income inequality first increases and then decreases. Imagine a U-shaped curve turned upside down.

Here's how it works: In poor countries, economic growth might first make the gap between rich and poor wider. This happens because countries often shift from farming to industry. Farming income doesn't vary much, but industrial jobs can create big differences in income. However, as economies continue to grow, things like widespread education offer more chances for everyone. Also, people with lower incomes gain more political power to change government policies. These factors help reduce inequality over time.

Kuznets studied this for many years and published his findings in 1963. His work also helped lead to other important ideas about how people save and spend throughout their lives.

Selected publications

• "Secular Movements in Production and Prices: Their Nature and Their Bearing upon Cyclical Fluctuations". (New York and Boston: Houghton Mifflin, 1930).
• "National Income and Capital Formation, 1919–1935". (1937)
• "National Income and Its Composition, 1919–1938". (1941) Assisted by Lillian Epstein and Elizabeth Jenks https://www.nber.org/chapters/c4224
• "Economic Growth and Income Inequality". American Economic Review 45 (March): 1–28. (1955)
• "Quantitative aspects of the economic growth of nations, VIII: The distribution of income by size", Economic Development and Cultural Change, 11, pp. 1–92. (1963)
• "Modern Economic Growth: Rate, Structure, and Spread". (1966)
• "Toward a Theory of Economic Growth, with Reflections on the Economic Growth of Modern Nations". (1968)
• "Economic Growth of Nations: Total Output and Production Structure". (1971)
• "Population, Capital and Growth". (1973)

See also

In Spanish: Simon Kuznets para niños