Klein, Lawrence Robert

▪ American economist

born September 14, 1920, Omaha, Nebraska, U.S.

      American economist whose work in developing macroeconometric models for national, regional, and world economies won him the 1980 Nobel Prize for Economics.

      After graduating from the University of California, Berkeley, in 1942, Klein studied under economist Paul Samuelson (Samuelson, Paul) at the Massachusetts Institute of Technology, taking his Ph.D. in 1944. From 1944 to 1947 he was involved in econometric research at the University of Chicago, and from 1948 to 1950 he was on the staff of the National Bureau of Economic Research. Subsequently he was associated with the Survey Research Center of the University of Michigan in 1949–54, the Institute of Statistics at the University of Oxford in 1954–58, and the Wharton School of the University of Pennsylvania from 1958. In 1968 he became Benjamin Franklin Professor of Economics and Finance at the Wharton School. Klein was one of the pioneers in building macroeconomic (macroeconomics) models. One of his earliest successes was in forecasting economic conditions at the end of World War II. Whereas many economists speculated that the war's end would bring another depression, Klein predicted that the unsatisfied demand for consumer goods throughout the war, combined with the purchasing power of returning soldiers, would likely prevent a depression. He was right.

      Klein's research produced a series of increasingly detailed and sophisticated models of economic activity. The Wharton Models found wide use in forecasting gross national product, exports, investment, and consumption. A more ambitious effort, the LINK project, incorporated data gathered from a large number of industrialized, centrally planned, and developing countries to forecast trade and capital movements and to test the effects of proposed changes in political and economic policies.

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