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Samuelson, Paul Anthony

Professor Samuelson was appointed to the Chair of Economics at Massachusetts Institute of Technology in 1940. He served in the U.S. Treasury for seven years after the end of the Second World War. In 1970, Professor Samuelson received the Alfred Nobel Memorial Prize in Econornics. His publications include Foundations of Economic Analysis (1947), and Linear Programming and Economic Analysis (1958). Samuelson developed the Heckscher-Ohlin principle by showing how an increase in the price of a commodity can raise the income of the factor of production which is used most intensively in producing it. This led to his formulating the factor price equalization theorem, which states the conditions under which, as free trade in commodities narrows differences in commodity prices between countries, in so doing the prices (incomes) of factors of production are also brought into line. In other words, free trade is a substitute for the free mobility of factors of production. Professor Samuelson made important contributions to the development of mathematical economics, general equilibrium theory and the theory of consumer behaviour. To free the latter from what he considered to be the constraint of the traditional concept of utility, he invented revealed preference. In macroeconomic theory, he was, in an article in 1939, the first to formulate the interaction between the accelerator and the multiplier.

Reference: The Penguin Dictionary of Economics, 3rd edt.