>From the FT. Full text, rather than link, because there are hoops to go through to fetch the article. Klein was ever a member of the CP, briefly, and then he testified against the Communists in one of those McCarthy witch-hunting exercises in Michigan (cf. http://archive.org/stream/investigationofc195401unit/investigationofc195401unit_djvu.txt).
* * * Lawrence Klein, economist, 1920-2013 By Ferdinando Giugliano [image: The 3rd Enterpriser Summit Opens in Shanghai...SHANGHAI, CHINA - JUNE 3: (CHINA OUT) American economist Lawrence Klein attends the 3rd enterpriser summit on June 3, 2006, Shanghai, China. (Photo by ChinaFotoPress/Getty Images).]©Getty<http://www.ft.com/servicestools/terms/getty> The American economist Lawrence Klein at a conference in Shanghai, China in 2006 If one person put together the plumbing from which modern economic forecasts flow, it was Lawrence Klein. The statistical models he built allowed policy making around the world no longer to be based on clairvoyance but to stem instead from a coherent take on the latest evidence. Thanks to Klein, who has died at 93, ministers and central bankers are increasingly able to appreciate what impact their actions – and external shocks – will reasonably have on big variables such as output, prices and employment. “Before Larry there were no large-scale models, only sparse equations,” says Francis Diebold, a professor of economics at the University of Pennsylvania, where Klein spent much of his academic career. More On this story - Obituary Hans Riegel, confectioner, 1923-2013<http://www.ft.com/cms/s/0/e918acc2-3673-11e3-aaf1-00144feab7de.html> - Obituary Patrice Chéreau, director, 1944-2013<http://www.ft.com/cms/s/0/ac59969c-31a1-11e3-a16d-00144feab7de.html> - Obituary Mauricio González-Gordon y Díez, 1923-2013<http://www.ft.com/cms/s/0/bf4047e6-2b99-11e3-a1b7-00144feab7de.html> - Obituary Marcel Reich-Ranicki<http://www.ft.com/cms/s/0/dd72feba-26a9-11e3-bbeb-00144feab7de.html> - Obituary Hiroshi Yamauchi, Nintendo president, 1927-2013<http://www.ft.com/cms/s/0/2129dd92-2207-11e3-9b55-00144feab7de.html> IN Obituaries - Lou Reed, a pioneer who kept his edge<http://www.ft.com/cms/s/0/41521226-3f56-11e3-b665-00144feabdc0.html> - Paul Reichmann<http://www.ft.com/cms/s/0/8bb8bf5a-3db6-11e3-9928-00144feab7de.html> - Anthony Caro, British sculptor, 1924-2013<http://www.ft.com/cms/s/0/18fefd46-3cab-11e3-a8c4-00144feab7de.html> - Tom Foley, former House speaker, dies<http://www.ft.com/cms/s/0/5d3fcca4-3825-11e3-8668-00144feab7de.html> The approach he pioneered, now known as econometrics, involves harvesting large quantities of data, then feeding them through complex systems of equations. Klein was awarded the 1980 Nobel memorial prize<http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1980/>for “the creation of econometric models and [their] application to the analysis of economic fluctuations and economic policies”. “He was convinced that these models could help governments to run economies better,” says Sir David Hendry, a professor of economics at Oxford. “After the disasters of economic policy making in the 1920s and 1930s in both Europe and the US, that seemed a sensible proposition.” All the same, in the 1970s the models Klein had inspired and in many instances personally constructed proved inadequate to describe the impact of big shocks such as the decade’s twin oil price spikes. Academics such as Robert Lucas, another Nobel laureate, attacked them for failing to acknowledge that individuals also change their spending, saving and investing behaviour as a result of government action. Yet Klein’s legacy lasted and econometrics – its models eternally tweaked, fine-tuned and finessed – is still firmly at the centre of academic and policy making debates. Lawrence Robert Klein was born on September 14 1920 in Omaha, Nebraska, the second of three children of Leo Byron Klein, an office clerk, and his wife Blanche. At the age of 10 he was hit by a car, an accident that permanently mangled his left leg and crushed his boyhood dream of becoming a baseball player. After graduating in economics from the University of California in 1942, he became the first doctoral student at the economics department of the Massachusetts Institute of Technology, studying under the future Nobel winner Paul Samuelson. The economics profession was then abuzz with the revolutionary ideas put forward by John Maynard Keynes. In his 1936 *General Theory of Employment, Interest and Money*, the Cambridge-based scholar had defied the conventional wisdom that market economies naturally return to full employment after a shock, making a forceful case for governments to step in and increase spending in a crisis. The young Klein believed Keynes’s ideas “cried out for empirical verification” and, under the Cowles Commission research institute at the University of Chicago, set out to design and test a mathematical model for the US economy. That enabled him to challenge the prevailing view that the end of the second world war would push the US into another Depression. Klein’s theory that returning soldiers would trigger a boom in housing and domestic consumption proved right. Large-scale computational models made Klein’s name. But they also arose suspicion in McCarthyist America. Many considered these models to be “at the communist end of academic research”, given their usefulness to central planners, Sir David says. In 1954 it was discovered that Klein had briefly been a member of the Communist party. The University of Michigan, where he was working, refused as a result to give him tenure, prompting him to leave for Britain. During a three-year academic asylum at the Institute of Statistics in Oxford, he built the first mathematical model of the UK economy. >From there he became the globetrotter of economic modelling. In 1963 he took a sabbatical year involving academic stints in Japan and Israel, intertwined with long sea crossings via the Philippines, India, Egypt and Italy. “He seemed to have a student in every port,” recalls his daughter Hannah, a professor of genetics at New York University. She survives him along with his wife Sonia, a son and two other daughters. During the 1976 US presidential campaign Klein was chief economic adviser to Jimmy Carter. In the early 1990s he provided the guidance that was sought by China’s State Planning Commission. Geographical boundaries mattered little to him. What counted was making an often detached subject relevant to the betterment of the planet.
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