Simon Kuznets

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Lore & Background

Simon Kuznets was born on April 30, 1901, in Pinsk, the capital of Pinsky Uyezd in Minsk Governorate of the Russian Empire (present-day Belarus), to a Jewish family. He completed schooling at the Realschule in Rovno and then Kharkov (present-day Ukraine). In 1918, he entered the Kharkov Institute of Commerce, studying economic sciences, statistics, history, and mathematics under professors including P. Fomin, A. Antsiferov, V. Levitsky, S. Bernstein, and V. Davats. There he began to study economics and was exposed to Joseph Schumpeter's theory of innovation and the business cycle. In 1922, the Kuznets family emigrated to the United States. He studied at Columbia University under Wesley Clair Mitchell, earning a B.S. in 1923, M.A. in 1924, and Ph.D. in 1926. His magister thesis was 'Economic system of Dr. Schumpeter, presented and analyzed', written in Kharkov. From 1925 to 1926, he studied economic patterns in prices as a Research Fellow at the Social Science Research Council, leading to his book 'Secular Movements in Production and Prices', defended as a doctoral thesis and published in 1930. In 1927, Kuznets became a member of the research staff of the National Bureau of Economic Research (NBER), where he worked until 1961. From 1931 to 1934, at Mitchell's behest, he took charge of the NBER's work on U.S. national income accounts, giving the first official estimation of the US national income. He was a part-time professor at the University of Pennsylvania from 1931 to 1936, then full-time from 1936 to 1954. In 1936, he took the lead in establishing the Conference on Research, Income and Wealth. During World War II, between 1942 and 1944, he became associate director of the Bureau of Planning and Statistics of the War Production Board, assessing the country's capacity to expand military production. After the war, he advised the governments of China, Japan, India, Korea, Taiwan, and Israel in establishing their national systems of economic information. He taught at Johns Hopkins University from 1954 to 1960, and at Harvard University from 1961 until his retirement in 1970. Kuznets died on July 8, 1985, at the age of 84.

Reader's Guide

Simon Kuznets' significance lies in his foundational role in making economics an empirical discipline. He pioneered the concept of gross domestic product, which seeks to capture all economic production in a state by a single measure. His first major research project was the study of long series of economic dynamics in the US, begun in the mid-1920s, covering data from 1865 to 1925 and for some indices from 1770. Applying Gompertz and logistic curves, he identified medium-term extended cycles of economic activity lasting 15–25 years, known as Kuznets cycles or 'long swings', analyzing population, construction, capital, and national income data. In 1931, at Mitchell's behest, Kuznets took charge of the NBER's work on U.S. national income accounts. In 1934, he gave an assessment of the national income of the United States for 1929–1932, later extended to 1919–1938 and then to 1869. He explicitly notes his work as an update of W.I. King's 1930 'The National income and Its Purchasing Power', and acknowledges contributions from Lillian Epstein, Elizabeth Jenks, and Edna Ehrenberg. In 1936, he helped establish the Conference on Research, Income and Wealth, and in 1947 its international counterpart, the International Association for Research in Income and Wealth. During World War II, he used national income accounting with a rough form of linear programming to measure production potential and identify binding constraints. After the war, he advised the governments of China, Japan, India, Korea, Taiwan, and Israel. Kuznets was elected President of the American Economic Association (1954), President of the American Statistical Association (1949), and awarded the Medal of Francis Walker (1977). In 2013, the Kharkiv National University of Economics was named after him.

Did You Know?

• Kuznets published his first scientific paper, 'Monetary wages and salaries of factory workers in Kharkov in 1920', while working for the Department of Labor of UZHBURO (South Bureau) of the Central Council of Trade Unions.
• He was elected a fellow of the American Statistical Association in 1937 and served as its President in 1949.
• During World War II, Kuznets served as associate director of the Bureau of Planning and Statistics of the War Production Board from 1942 to 1944.
• Kuznets was a member of the board of trustees and honorary chairman of the Maurice Falk Institute for Economic Research in Israel from 1963.
• In 2013, the Kharkiv National University of Economics was named after him.