Robert Merton Solow earned his doctorate in economics from Harvard University, where he studied under Leontief. He is a professor of economics at Massachusetts Institute of Technology. He won the Nobel Prize in Economics in 1987 for his analysis of e conomic growth. He also won the John Bates Clark Award in 1961, which is awarded to the best economist under the age of forty. He was president of the American Economic Association in 1979.
Ever since Solow's famous article,"Technical Change and the Aggregate Production Function" came out in 1957, the use of the Cobb-Douglas production functions for measuring sources of economic growth has been widespread in the economics profession. In this paper, Solow showed that half of economic growth cannot be explained by increases in capital or labor. This unaccounted for portion is now known as the Solow residual, and according to Solow, is due to technological innovation. He was also the first to develop a growth model using different vintages of capital. He is a Keynesian economist with a great sense of humor. Of Milton Friedman, he said:"Everything reminds Milton of the money supply. Well, everything reminds me of sex, but I keep it out of the paper." The following is an excerpt from his article,"Notes on Coping" in, Eminent Economists: Their Life Philosophies:
"Pretty clearly, economic behavior depends on the nature of the social institutions (and on culturally determined attitudes and beliefs or, better still, on these attitudes and beliefs as filtered through social institutions) Believers in an economic Theory of Everything would say," Okay, but then we just have to include the choice of social institutions as an endogenous process." I think that response is wrong, not just hard to carry out, but wrong. Social institutions are not chosen, the y evolve. No doubt this evolution is subject to selective pressure; utterly dysfunctional social institutions are unlikely to survive. Just as surely, however, a wide range of institutional arrangements and behavior patterns will prove viable. This so rt of evolutionary indifference may occur because they are all more or less equivalent as far as survivability is concerned, or because they come in interconnected complexes that are very difficult to change, or because competitive pressure among such com plexes is not so very great anyway. Even in biological evolution, where selective pressure is undoubtedly much more intense, there appear to be many traits that persist for no particular reason so long as they are not actively harmful. In social evolut ion this must be even more the case. The talk about "optimal choice of institutions" is not just metaphor but bad metaphor. The consequence is that economics must pay close attention to local institutions, because they matter for behavior."
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