GDP! The right concept of economy-wide output, accurately measured. The U.S. and the world rely on it to tell where we are in the business cycle and to estimate long-run growth. It is the centerpiece of an elaborate and indispensable system of social accounting, the national income and product accounts. This is surely the signal innovative achievement of the Commerce Department in the 20th century. I was fortunate to become an economist in the 1930's when Kuznets, Nathan, Gilbert, and Jaszi were creating this most important set of economic time series. In economic theory, macroeconomics was just beginning at the same time. Complementary, these two innovations deserve much credit for the improved performance of the economy in the second half of the century.
Simon KuznetsRelated topics
beginning business centerpiece century complementary concept credit cycle department economist half national output right second series set tell macroeconomics GDPRelated quotes
We had to dispel the notion that the way to economic success lies through a sort of fiscal levitation. That was the abiding post-war delusion-that governments could spend and borrow their way to prosperity, and fine-tune the performance of the economy through something known pretentiously as demand management...It used to be an establishment nostrum that you need a budget deficit to get economic growth. That was the belief which lay behind the notorious letter by 364 economists in March 1981. We have given the lie to that, decisively. There can no longer be any argument about it. Everyone-or almost everyone-now accepts that the proper role of macro-economic policy is to keep downward pressure on inflation and to maintain a stable framework in which the private sector can expand.
Nigel Lawson
I am confident that the enactment of the right bill next year will in due course increase our gross national product by several times the amount of taxes actually cut. Profit margins will be improved and both the incentive to invest and the supply of internal funds for investment will be increased. There will be new interest in taking risks, in increasing productivity, in creating new jobs and new products for long-term economic growth. Other national problems, moreover, will be aided by full employment. It will encourage the location of new plants in areas of labor surplus and provide new jobs for workers that we are retraining and facilitate the adjustment which will be necessary under our new trade expansion bill and reduce a number of government expenditures.
John F. Kennedy
The Smokies seem to be in the process of losing most of their mussels. The National Park Service actually has something of a tradition of making things extinct. Bryce Canyon National Park is perhaps the most interesting-certainly the most striking-example. It was founded in 1923 and in less than half a century under the Park Service's stewardship lost seven species of mammal-the white-tailed jackrabbit, prairie dog, pronghorn antelope, flying squirrel, beaver, red fox, and spotted skunk. Quite an achievement when you consider that these animals had survived in Bryce Canyon for tens of millions of years before the Park Service took an interest in them. Altogether, forty-two species of mammal have disappeared from America's national parks this century.
Bill Bryson
With the publication of J. M. Keynes's General Theory in 1936 and the mathematical formalizations of his theory by J. R. Hicks (1937) and others, the language of macro-economic theory became systems of simultaneous equations. These are general equilibrium systems of interdependence in the sense that the relationships describe an entire national economy, not just a particular industry or sector. The systems are usually not completely closed; they depend on exogenous parameters including instruments controlled by policy-makers. Seeking definite relationships of economic outcomes to policies and other exogenous variables, qualitative and quantitative, these models sacrifice detail and generality, limiting the number of variables and equations by aggregations over agents, commodities, assets, and time.
James Tobin
The distribution of wealth is one of today's most widely discussed and controversial issues. But what do we really know about its evolution over the long term? Do the dynamics of private capital accumulation inevitably lead to the concentration of wealth in ever fewer hands, as Karl Marx believed in the nineteenth century? Or do the balancing forces of growth, competition, and technological progress lead in later stages of development to reduced inequality and greater harmony among the classes, as Simon Kuznets thought in the twentieth century? What do we really know about how wealth and income have evolved since the eighteenth century, and what lessons can we derive from that knowledge for the century now under way?
Thomas Piketty