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Remembering Economist Paul Samuelson

Update: You can read economics correspondent Paul Solman’s reflections on Samuelson’s life and work here on Making Sen$e.

The world lost one of the giants in modern economics Sunday when Nobel laureate Paul Samuelson died at his home in Belmont, Mass., at the age of 94.

Samuelson became the first American to win a Nobel Prize in economics in 1970 for his pivotal work in bringing mathematical analysis to economics. But Samuelson was known for much more than that: A well-known liberal, Samuelson was an economist who was influential in both the academic world and the real world. He advised and influenced Democrats, including President John F. Kennedy; he helped spread the ideas of Keynesian economics and the notion of government spending and tax cuts when required; his textbook was read by millions of college students; and it could be argued that along with Milton Friedman and John Kenneth Galbraith, he was one of the most influential economists of his generation.

He once told an interviewer that he aimed to make economics “enjoyable and understandable.” That was true of his seminal textbook, which has sold more than 4 million copies. And it was true of his wide-ranging work over eight decades, his theories analyzing everything from the fluctuation of markets and of business cycles to the impact of trade to the idea of public goods — goods or services that could only be provided by the government or a collective action.

In awarding him the Nobel in 1970, the committee wrote, “More than any other contemporary economist, he has contributed to raising the general analytical and methodological level in economic science… He has in fact simply rewritten considerable parts of economic theory.”

His mathematical analysis had a huge impact. Robert Lucas, the Nobel Prize winning economist at the University of Chicago, put it this way in his memoir, “I came to the position that mathematical analysis is not one of many ways of doing economic theory: It is the only way. Economic theory is mathematical analysis. Everything else is just pictures and talk.”

Our economics correspondent Paul Solman knew Samuelson and interviewed him at MIT many times over the years. When I spoke with Paul earlier today, he recalled how Samuelson continued to work in recent years and how he “was still so sharp, sharp as a tack” when they talked this year.

Paul will provide his own remembrance of Samuelson on his Making Sen$e site tomorrow. For the moment, his most recent interview with Samuelson last year is well worth your time and gives you some feeling for the intellectual vitality that Samuelson displayed well into his nineties. They discussed what led to the financial crisis of 2008.

More tributes will continue in the days ahead, but here’s a small sampling of statements made today:

Larry Summers, the head of President Obama’s National Economic Council and a nephew of Samuelson’s, said: “Above all else, Paul Samuelson was a scholar. He used to proudly remark that he had never spent a full week in Washington. But through his research, teaching, and writing he had more impact on the economic life of this country and the world than any government economic official and many presidents. We will not see his likes again.”

Federal Reserve Chairman Ben Bernanke studied at MIT and was once a student of Samuelson’s. He called him a “path-breaking and prolific economic theorist and one of the greatest teachers that economics has ever known.”

And Paul Krugman, who won the Nobel in 2008, wrote on his blog today: “Its hard to convey the full extent of Samuelson’s greatness. Most economists would love to have written even one seminal paper – a paper that fundamentally changes the way people think about some issue. Samuelson wrote dozens.”

Both Chairman Bernanke and Krugman gave one other tribute: They both noted that they keep Samuelson’s textbook in their offices. Krugman even posted a picture of it.

This is all just a small summary of the man’s accomplishments. The New York Times has a much fuller appreciation of Samuelson up on its Web site, which is worth a look.

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