Political Arithmetic
Among the most important issues in economics are how to measure the wealth and health of an economy and the factors that contribute to economic growth. The rigorous study of these topics traces its roots back to Simon Kuznets who pioneered the development of national accounts, such as Gross National Product, and whose foundational insights into the causes of economic development led to his being awarded third Nobel Prize in Economic Science in 1971.  In this intriguing book, Robert Fogel, himself a Nobel Prize winner, and his colleagues place Kuznets in the context of the evolution of economics as a discipline. They focus on Kuznets’s emphasis on empirical data rather than theories as the starting point of analysis and discuss how this influenced his association with the newly established National Bureau of Economic Research (NBER), which was created to be an objective collector and analyzer of economic data that would be useful to policymakers. During World War II Kuznets was in the American government and played a leading role in demonstrating the power of national accounting as a guide to the allocation of available resources between military needs and the civilian economy. Consistent across these activities was Kuznets’s general concern about the interrelationships among political issues of economic growth, stability, and equity. He also believed that an important foundation for policy decisions was empirical measurement, or the need for data, as well as analytical tools fitted to process and analyze the data. These concerns are illustrated in his work on economic development and its relationship to income inequality, which led to the famous \u201cKuznets’s curve\u201d that shows that while income inequality increases at the earlier stages of growth, it decreases as growth continues. After tracing Kuznets’s intellectual trajectory and contributions, the authors look at his continuing legacy and influence among scholars. Â
Authors: | Fogel, Robert William |
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Institutions: | University of Chicago Press |
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