I have not been able in one lecture even to scratch the surface of the role of maximum principles in analytic economics.
— Paul Samuelson
The very name of my subject, economics, suggests economizing or maximizing. But Political Economy has gone a long way beyond home economics.
The dream of any scholar has, for me, come true by virtue of this award. The Nobel Prizes are justly famous in the hard sciences, in literature, and for peace.
Often, when I became a consultant to a federal agency, that precipitated its demise.
People have the wrong idea that God will forgive Reagan. They say he didn't know what he was doing. It's true he didn't know a lot of what was going on, but he was directly responsible.
You're not making a decision if you come to a fork in the road. There is no 'it' to take. It's one or the other.
I can tell you, because I serve on so many nonprofit boards - where half of us are academics and half of us are from Wall Street - that there's no CEO who understands at all a derivative. All they know is that somebody tells them in their organization, 'We've got a wonderful profit center.'
I think that it's more important for an economist to be wise and sophisticated in scientific method than it is for a physicist because with controlled laboratory experiments possible, they practically guide you; you couldn't go astray. Whereas in economics, by dogma and misunderstanding, you can go very sadly astray.
The Malthusian Theory - that mankind, for biological and sociological reasons, is so fertile, so fecund, that if you started out with the new continent and plenty of land for everybody, in several generations we would multiply our numbers.
I think economics - and this is what I've tried to impart - has a tremendous amount of human interest in it.
It is indeed true that the stock market can forecast the business cycle.
U.S. capital formation, which has been pretty high in the '90s and very high in the late 1990s, is what is being financed by the savings of the rest of the world, generally poorer than ourselves, because our deficit on current account, chronic deficit, is their surplus, and they have been willingly bringing that to the American market.
Let those who will - write the nation's laws - if I can write its textbooks.
In this age of specialization, I sometimes think of myself as the last 'generalist' in economics, with interests that range from mathematical economics down to current financial journalism. My real interests are research and teaching.
It is dead wrong about necessary surplus of winnings over losings.
I did not throw out my education lightly, but what I was being taught was of no use in explaining what I saw around me. It was the Great Depression.
In well-functioning markets, price equals opportunity cost. Meaning that the proper way to price out and charge us for things is to charge us what those resources could otherwise have produced. This is a lesson the Soviet Union never learned at all, and the rest is history.
One of the pleasing things about science is that we do all climb towards the heavens on the shoulders of our predecessors. Economics, like physics, has its heroes, and the letter 'H' that I used in my mathematical equations was not there to honor Sir William Hamilton, but rather Harold Hotelling.
Let me acknowledge that I realize that, in honoring me, the Committee of the Royal Academy of Sciences is in fact saying a good word for all of those of my generation who have been laboring in the same vineyard.
Investing should be dull. It shouldn't be exciting.
To a person of analytical ability, perceptive enough to realise that mathematical equipment was a powerful sword in economics, the world of economics was his or her oyster in 1935. The terrain was strewn with beautiful theorems begging to be picked up and arranged in unified order.
American society was economically ill-run in the 1980s. Our society has been on a consumption binge. If the American people had a town meeting and said, 'What do we care about posterity? Posterity hasn't done anything for us; we're going to whoop it up now,' that is a rational judgment. But nobody ever did that.
What I say is, 'If you're so rich, how come you're so dumb?'
My belief is that nothing that can be expressed by mathematics cannot be expressed by careful use of literary words.
Economics is not an exact science. It's a combination of an art and elements of science. And that's almost the first and last lesson to be learned about economics: that in my judgment, we are not converging toward exactitude, but we're improving our data bases and our ways of reasoning about them.
When I was a kid, I reckoned things in Hershey bars. Is this worth three Hershey bars to me?
A temporary reduction in tax rates on individual incomes can be a powerful weapon against recession.
Rent control created deadweight loss.
I believe, in the stock market - that's one of my fields - that most people are irrational. And to be irrational, you can be irrational in so many different ways that, practically, the result is indeterminate.
Avoiding inflation is not an absolute imperative but rather is one of a number of conflicting goals that we must pursue and that we may often have to compromise.
Today we see how utterly mistaken was the Milton Friedman notion that a market system can regulate itself... Everyone understands now, on the contrary, that there can be no solution without government.
In 1936, money had no important role. Interest rates were one-eighth of one-eighth of one per cent. I did some research, and I found that the interest on one million dollars of ninety-day Treasuries was $37. People didn't even bother to collect it. The Fed wasn't important.
There's nothing in Keynesian economics that would allow you to solve stagflation. But there's nothing in neoclassical economics that would allow you to solve stagflation, either.
'There are no easy pickings.' That would be a more accurate, less dramatic statement than 'There's no such thing as a free lunch.'
What is it that the scientist finds useful in being able to relate a positive description of behavior to the solution of a maximizing problem? That is what a good deal of my own early work was about.
In the jargon of American vaudeville, Professors Frisch and Tinbergen are a 'hard act to follow.' But then, all my life, I have been following such great scholars and policy advisors as these.
I decided that there was only one place to make money in the mutual fund business, as there is only one place for a temperate man to be in a saloon: behind the bar and not in front of it.
People had J.F.K. all wrong. They thought of him as a dashing, deciding type. He was an extremely hesitant person who checked the ice in front of him all the time.
The contrafactual history is what it would have been the other way. Think of the Kennedy triumph in the missiles crisis. Worked out fine. Khrushchev blinked and so forth. The other road, you don't want to think too hard about. You could have had nuclear missiles wiping out a tenth of the globe.
I'm not speaking in favor of killing innovation. I'm speaking in favor of centrist use of the market, which involves necessarily a considerable degree of regulation. Markets by themselves will get themselves inevitably into inequality and into their own destruction. It will happen again and again.
The parts of physics that are exact are the parts of physics that are exact. The parts that are inexact are vastly greater. Sensible scientists don't waste their time pushing against doors that endlessly will not give. They are opportunistic and go where they can, but there are pitfalls in that.
Charles Darwin got his theory, his notion of natural selection, evolution, and so did its independent discoverer, Alfred Wallace, from reading Malthus.
Actually, in my advanced, high-falutin' frontier economics, I often work with what I define as 'money metric utility,' and I ask people, 'Do you really want that? What are you willing to pay for that?'
Women are men without money.
We've become a debtor nation. I don't mean just on fixed-loan terms, but we own increasingly less abroad than is owned from abroad here.
I can't think of a president who has been overburdened by a knowledge of economics.
The history of the twentieth century - America's century! - has been pretty much a history of rising prices.
The remarkable fact is not how much government does to control economic activity, but how much it does not do.
Keynes's contribution was not just to advocate spending government money in the middle of a recession. Every government had done that going back to the days of the Irish potato famine. What he gave to us was a way of thinking about the magnitude and the dimensions and so forth.
Time is our ultimate scarcity. Isaac Newton can give us more electricity, but he can't give us more than 24 hours of the day of time. And so we're constantly having to sacrifice alternate activities to get the one that pleases us most.
