| Moses Abramovitz | |
| Birth Date: | 1 January 1912 |
| Birth Place: | Brooklyn, New York |
| Death Place: | Stanford, California |
| Nationality: | American |
| Field: | Economics and Education |
| Work Institution: | Stanford University |
| Alma Mater: | Harvard University and Columbia University |
| Known For: | Economic history |
Moses Abramovitz (January 1, 1912 – December 1, 2000) was a 20th-century American economist and professor. During his career, he made many contributions to the study of macroeconomic fluctuations and economic growth over time.[1]
Born and raised in a Jewish family in Brooklyn, New York, he completed his bachelor's degree in economics summa cum laude at Harvard University. He went to Harvard with the intention of becoming a lawyer and studied criminal justice as well as economics. However, he became more interested in economics because he was able to connect it to the world in which he was living. He earned his Ph.D. at Columbia University in 1939.[2] In 1985, he was awarded an honorary doctorate from the Faculty of Social Sciences at Uppsala University, Sweden.[3] In 1992, he was invited to Rome to become a fellow of the prestigious Accademia Nazionale Dei Lincei. He was awarded another doctorate from the University of Ancona in 1992. Abramovitz died at Stanford Hospital in California on December 1, 2000, at the age of 88, after contracting a gastrointestinal infection.
Abramovitz, called Moe by family and friends, was known for his modest personality and was described as one of the least ego-driven scholars in economics. He married Carrie Glasser, a Brooklyn-born painter and sculptor, in 1937. She died in 1999.[4]
Abramovitz started his career as a lecturer at Harvard in the mid-1930s. After finishing his doctorate at Columbia, he joined the National Bureau of Economic Research in New York, where he began his investigation of inventory investment cycles. During World War II, Abramovitz served on the War Production Board and in the Office of Strategic Services as chief of the European industry and trade section. In 1945 and 1946, he was an economic adviser to the United States representative on the Allied Reparations Commission.[5] He was also a founding faculty member of the Department of Economics at Stanford University, which he joined in the fall of 1948. He taught there for almost 30 years.[6] From 1962 to 1963, he was the adviser to the secretary general of the Organization for Economic Cooperation and Development in Paris. He then served as the organization chair from 1963 to 1965 and from 1971 to 1974. Over the course of his career, Abramovitz carried out many pioneering studies of macroeconomics and long-term growth. His 1986 article, "Catching Up, Forging Ahead and Falling Behind" is the second most cited of all the papers published by the Journal of Economic History.[7]
He referred to total factor productivity as a "measure of our ignorance about the causes of economic growth".
Abramovitz's catch-up growth hypothesis attempted to explain Western Europe's Golden Era of economic growth from 1948 to 1972. He essentially concluded that the key to the growth was Western Europe's ability to import and implement technology from the United States. The growth rate of a developing country will be higher than the growth rate of a developed country because the diminishing return of developing countries is much lower. If a country is trying to be industrialized, it can only be better off; it will grow much faster than countries that are already industrialized. In the process, the country creates more jobs and more capital, which means the economy's total revenue will increase more and more quickly.[8]
Abramovitz's theory does not guarantee that poor countries will catch up to developed countries, because the poor countries might fail to adapt to new technology, attract capital and participate in the global market.
If a country cannot adapt to the technology it is offered, it will not be able to generate more capital, which will cause the catch-up process to fail. If the country does not build relationships with developed nations, the process will also fail. Building such relationships is so important because it is developed countries that will purchase most of developing countries' capital. If the developing country sells more capital, it will grow. If it grows, it will catch up.[9]
During his time at the National Bureau of Economics Research, Abramovitz researched the role inventories play in business cycles. A business cycle is a fluctuation in economic activity over a period of time. The fluctuation may be good, as with a boom and economic expansion, or bad, as with a recession or depression. In his paper "The Role of Inventories in Business Cycles," Abramovitz wrote that inventory can play a negative role if there is a lag in the production of the inventory. A lag can occur for the following reasons:
Aggregate inventories of wholesalers and retailers also appear to have lagged behind sales by about six months. Detailed studies reveal that this lag reflects large differences in the ability of merchants in different trades to keep the rate at which they receive goods in line with the rate at which they can dispose of them. Some merchants' ability to adjust inventories to sales is so limited as to produce a long lag of stocks behind sales, or even an inverse relationship between sales and inventories. If these various lags are worked out, a country can stop the negative effect of inventories on the national market.
Selected publications in chronological order: