Nobel Prize-winning economist Lawrence Klein dies

Counter to conventional wisdom, the scholar’s Wharton Models predicted economic stability following WWII

PITTSBURGH — Lawrence R. Klein, a longtime University of Pennsylvania professor who won the Nobel Prize in economics, has died. He was 93.

He died Sunday at his home in Gladwyne, near Philadelphia, his daughter, Hannah Klein, said Tuesday.

Born in Omaha, Nebraska, on Sept. 14, 1920, Klein studied at the University of California, Berkeley and the Massachusetts Institute of Technology before joining the Penn faculty in 1958. It was there that he developed the statistical models known as the “Wharton Models” which led to his Nobel Prize.

In a biographical essay Klein said that the experience of growing up during the Great Depression had a “profound impact” on his intellectual and professional career. According to Penn’s Wharton School, Klein used early version of his economic models to counter the conventional wisdom that the end of World War II would sink the US economy into a depression for a few years.

Nobel prize winner Lawrence R. Klein (photo credit: courtesy)

But in 1946 Klein correctly predicted that pent-up demand for consumer goods combined with the purchasing power of returning soldiers would ward off a depression, according to Wharton, and later he predicted correctly that the end of the Korean War would bring only a mild recession.