Decisions and Dynamics: Postwar Theoretical Problems and the MIT Style of Economics

Abstract

Several of the articles in this volume discuss the development of a peculiar MIT style of economics, which complemented MIT's heavy concentration in engineering. However, characterizations of this style remain vague. It is certainly associated with the arrival of Paul Samuelson at MIT after World War II, and the mathematical rigor he applied to economic reasoning. Among all the students of economics in America, MIT's engineering students were clearly unusually capable of comprehending its technicalities. Beyond formalization, the MIT style also connotes a policy-oriented practicality, which stands in contrast with other, more abstract varieties of formalized neoclassical economics, particularly contemporaneous work surrounding general equilibrium theory. 1 In this volume, Verena Halsmayer elucidates this aspect of the MIT style for the case of Robert Solow's dynamic theory of growth and his conceptualization of it as analogous to "engineering in the design sense."

A Century of Economics and Engineering at Stanford

“…Previous research has documented diverging intra-university dynamics. At MIT, Paul Samuelson and Robert Solow tapped the administrative requirements that all students receive substantial training in mathematics and physics to support the development of a more formalized "new economics," but the lack of substantial collaboration between economists and engineers in OR or energy pricing is striking (Weintraub 2014, Thomas 2014 (this volume)). At Carnegie, Judy Klein (2015; this volume) documents remarkable tool transfers, with optimal control and dynamic programming techniques developed for missile guidance finding their way into macroeconomic modeling.…”