Lawrence Klein quotes
Lawrence Klein was an American economist renowned for his pioneering work in econometric modeling and forecasting. His contributions greatly advanced the ability to predict economic trends and analyze policy impacts. He was awarded the Nobel Prize in Economics for his innovative approaches and lasting influence on the field. Here are 24 of his quotes:
The centrally planned economies, dissatisfied with the outcome of their own efforts to achieve good economic growth performance, have changed strategy and decided to import high technology from the West. as well as necessary grains to supplement their domestic agicultural supplies. This new approach has opened their economies to Western inflation because imports have been reflecting rising world price. Gold and oil sales at correspondingly rising prices have been used by the Soviet Union to finance part of their import needs. but they are fully enmeshed in world inflation accounting in balancing rising export prices.
Lawrence Klein
I have always believed that people have misjudged the accuracy of economic forecasting... During the 1980s and 1990s, I researched and applied methods of high frequency economic forecasting, to be used by themselves, and for objective establishment of initial conditions for longer range forecasts from structural dynamic models that carry forward the pioneering contributions of Jan Tinbergen.
Lawrence Klein
People say monetary policy is easy and quick to implement. It can even be done overnight on the telephone, they say fiscal policy drags out in political and congressional debate in our country. It might take months to implement. But the point is that once fiscal policy is implemented, it might go to work much faster than monetary policy.
Lawrence Klein
It is my firm belief that the only satisfactory test of economics is the ability to predict, and in crucial predictive situations such as reconversion after World War II, the settlement of the Korean War, the settlement of the Vietnam War, the abrupt economic policy switch of the Nixon Administration in August 1972, the oil shock of 1973 (forecast of a world-wide succession by LINK), the recession of 1990. In these crucial periods, econometric models outperformed other approaches, yet there is considerable room for improvement, and that is precisely what is being examined in development of high-frequency models that aim to forecast the economy, every week, every fortnight, or every month, depending on the degree of fineness of the information flow.
Lawrence Klein
I think the Kennedy-Johnson tax cut was a marvelous success in 1964. It was too bad it was not implemented a little sooner, and Kennedy died, of course. After that, Johnson dallied for a while about raising taxes to pay for the war in Vietnam. The stimulus did not get reversed until the tax increase and expenditure cap of 1969, and that had a quick effect once it was enacted. As you know, we had a recession in 1969–1970.
Lawrence Klein
Balancing fiscal and monetary policies is a problem. If you do just one thing, it is not necessarily enough-neither monetary policy alone nor fiscal policy alone, and neither tax cuts nor expenditure increases alone. You need to mix policy. By having the right balance, you can get high employment and stable prices.
Lawrence Klein
