Oct. 22 (Bloomberg) -- Lawrence Klein, the University of Pennsylvania economist who won the 1980 Nobel Prize for his computer-based models that help governments forecast the future and act accordingly, has died. He was 93.
He died on Oct. 20 at his home in Gladwyne, Pennsylvania, according to the New York Times, citing his daughter, Hannah Klein.
The Royal Swedish Academy of Sciences awarded Klein the 1980 Nobel in economics “for the creation of econometric models and the application to the analysis of economic fluctuations and economic policies.” His Wharton Models, named for the University of Pennsylvania’s Wharton School, became widely used by nations and regions to predict gross national product, exports, investment and consumption, as well as the potential impact of government policies.
“Thanks to Klein’s contributions,” the Nobel committee said, econometrics -- the use of mathematics, statistics and theory to forecast fluctuations in business and the economy -- “is now to be found all through the world, not only at scientific institutions but also in public administration, political organizations and large enterprises.”
A former graduate student under Paul Samuelson at Massachusetts Institute of Technology, Klein taught at Penn for 33 years. One of his earliest models, in 1946, predicted that the end of World War II wouldn’t send the U.S. economy back into depression, which was a widespread fear, according to a 1980 article in Time magazine. Klein’s correct call helped win respectability for econometric models, Time said.
Klein was chief economic adviser to Jimmy Carter during his successful 1976 presidential campaign, then returned to academia rather than take a position in the new administration. In declining an appointment, he avoided controversy over his brief membership, in the 1940s, in the Communist Party.
“I have always believed that people have misjudged the accuracy of economic forecasting,” Klein wrote in an autobiography for the Nobel Foundation. In real-life tests such as the aftermath of wars, shifts in government economic policy and recessions, “econometric models outperformed other approaches,” he said.
Lawrence Robert Klein was born on Sept. 14, 1920, in Omaha, Nebraska, the second of three children of Leo and Blanche Klein, who worked for a wholesale grocer, according to a 1980 article in the New York Times. Growing up during the Great Depression “was to have a profound impact on my intellectual and professional career,” he wrote.
He earned his undergraduate degree from the University of California-Berkeley in 1942, then moved to MIT in Cambridge, Massachusetts, for his doctoral studies under Samuelson -- “the rising star of the period,” as he recalled. He got his Ph.D. in 1944.
He joined the econometrics team at the Cowles Commission of the University of Chicago, worked on modeling in Canada, visited economists in Europe, then returned to the U.S. to work at the National Bureau of Economic Research.
At the University of Michigan from 1950 to 1954, he lectured in economics and worked in its Survey Research Center to construct an influential business-forecasting model with his student, Arthur Goldberger.
After four years at Oxford University’s Institute of Statistics, where he built an economic model for the U.K., he moved to Philadelphia to join the faculty at Penn.
The American Economic Association awarded him the John Bates Clark Medal in 1957.
In the 1960s, Klein worked on econometric forecasting models first for the Brookings Institution and the Social Science Research Council, then for Penn’s Wharton School. The latter model became the foundation for Wharton Econometric Forecasting Associates Inc., a non-profit organization created to support the university’s economics department.
Klein also worked on models for nations including Japan, Israel and Mexico. Project Link, an effort he founded in 1969 to coordinate economic forecasting around the globe, now operates under the auspices of the United Nations and the University of Toronto.
Klein taught at Penn until 1991, when he became a professor emeritus. He continued his work at Wharton Econometrics, now part of IHS Global Insight Inc. He helped found Economists Against the Arms Race, now known as Economists for Peace and Security.
In addition to his daughter Hannah, survivors include his second wife, the former Sonia Adelson; daughters Rebecca Kennedy and Rachel Klein; a son, Jonathan Klein; and seven grandchildren and four great-grandchildren, according to a death notice on the website of Joseph Levine & Sons funeral home in Philadelphia.
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