One of the first economists that made progress using mathematics was young Francis Plumpton Ramney. In his short life of only twenty-six years, he published three papers of relative importance. In 1928 he published "A Mathematical Theory of Saving," where he used calculus to devise a savings theory. Using a model of labor and capital he calculated the necessary ratio of output and consumption to the rate of interest in order to maximize a country's "satisfaction."
During the Great Depression some people turned to more quantitative solutions for unanswered questions. One of these men, Alfred Cowles, was looking to fund someone with answers. He soon discovered the newly forming international society, which eventually became the Econometric Society. Alfred then formed the Cowles Commission which organized a seminar each year with the elite economists around the world. They discussed economic, physics, mathematics, and electricity.
B for Mitch for poor editing.
ReplyDeleteRamsay's three papers are hardly of "relative" importance. He was 4 decades ahead of the pack, and in Ph.D. texts, Chapter 2 is colloquially called something like "Ramsay Models".
BTW: Ramsay was still completely forgotten when I was learning macro in school in the 1980's. Warsh says that Solow brought him back in the 1950's, but I didn't learn that.
Extra credit to the first person to hand deliver an explanation of why Warsh would drop Wittgenstein's name.