Economic giant Robert Solow died on December 21 at his home in Lexington, Massachusetts. I have had the privilege, over the past forty years, to interact with many brilliant economic researchers. All have sought, and often succeeded, in inventing new models or paradigms which allow us both to better understand economic phenomena and to better adapt to them. For example, how to explain, in order to overcome them, financial crises, unemployment, inflation, secular stagnation… However, economic models are a bit like animal species or like wines, certain models resist better than others to test of time, they better survive the Darwinian test imposed both by economic history which never stops and by the process of “creative destruction” by virtue of which new generations of economists constantly seek to propose new models that can supplant dominant paradigms.
What makes Robert Solow a champion of longevity is not so much the fact that, born in Brooklyn in 1924 from a modest family without higher education, he lived to the age of 99. Nor did he teach at the prestigious Massachusetts Institute of Technology (MIT) for nearly fifty years since he joined this institution in 1949 (let us recall in passing that Robert Solow, in team with Paul Samuelson, built the economics department from MIT to make it the best in the world). Above all, it is the fact that Solow founded a new field of research, growth economics, by producing in 1956 a surprisingly simple and elegant model, a luminous model which allows us to think like never before, to identify and measure the determinants of gross domestic product (GDP) growth. Let’s summarize it this way: is growth due mainly to the accumulation of capital, to demographic growth, or to technical progress which increases the productivity of labor and/or that of capital?
The Solow model has played a major role in development economics, providing keys to understanding why certain countries grow faster than others, and to explaining persistent differences in standard of living (GDP per capita) between countries. This model is taught in all universities around the world, and even at the secondary level, notably to all our final year students in the economics and social sciences option. It was therefore very natural that Robert Solow was awarded a “Nobel Prize” in 1987.
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