Lawrence Klein

Life and career

Klein was born in Omaha, Nebraska, to Blanche and Leo Byron Klein. He graduated from Los Angeles City College, where he learned calculus, and earned a BA in Economics from the University of California, Berkeley in 1942. He completed his PhD in Economics at the Massachusetts Institute of Technology in 1944 as Paul Samuelson's first doctoral student. Klein then worked at the Cowles Commission for Research in Economics at the University of Chicago, building a model of the U.S. economy to forecast business fluctuations and study government economic policy. After World War II, he correctly predicted an economic upturn rather than a depression, contrary to prevailing expectations, due to consumer demand from returning servicemen. He also correctly predicted a mild recession after the Korean War. Klein briefly joined the Communist Party during the 1940s, which later caused difficulties. At the University of Michigan, he developed the Klein–Goldberger model with Arthur Goldberger, building on foundations by Jan Tinbergen but using different economic theory and statistical techniques. In 1954, his Communist Party membership became public, and he was denied tenure at Michigan during the McCarthy era. He moved to the University of Oxford, where he developed an economic model of the United Kingdom, the Oxford model, with Sir James Ball, and assisted with the British Savings Surveys. In 1958, Klein returned to the U.S. to join the Department of Economics at the University of Pennsylvania. He received the John Bates Clark Medal in 1959 and became the Benjamin Franklin Professor of Economics and Finance in 1968. In the early 1960s, he led the Brookings-SSRC Project to construct a detailed econometric model for short-term U.S. economic forecasting.