The U.S. is a superpower, and it has retained this title for quite some time now. One group of people that have played a significant role to make that happen is the economists. From time to time, several economists have contributed to shaping U.S. monetary policy. However, only a few of them have changed the direction of economic theory across the world. In this article, we will discuss the ten most influential U.S. economists, who with their work have made a meaningful impact in the field of economics.
Ten most influential U.S. economists
Our list of the ten most influential U.S. economists is based on the contributions, theoretical work, the relevance of their work and popularity of the U.S. economists. Following are the ten most influential U.S. economists:
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James Tobin (1918-2002)
Tobin is regarded as the greatest American economist from the Keynesian School. Most of his work focused on providing investors with tools to determine where to invest their money. He is known for developing "Tobin's Q," which is the ratio of an asset’s market value to its replacement cost. Tobin served as the director of the Cowles Foundation for Research in Economics and won the Nobel Prize for his work in 1981.
Carmen Reinhart (1955-Present)
Reinhart is a professor of the International Financial System at Harvard's elite Kennedy School. She has also worked as the Vice President and the Chief Economist at the Bear Stearns investment bank. Reinhart has worked for the IMF as well. Her book – This Time is Different: Eight centuries of Financial Folly – has been translated into more than 20 languages and was awarded the Paul A. Samuelson TIAA-CREF Institute Award in 2010.
Elinor Ostrom (1933-2012)
Ostrom was an American political economist who championed New Institutional Economics. In this branch of economics, one needs to study the background political context to understand the economics behind it. She was the lead researcher of the government's SANREM CRSP program, which focused on studying natural resource management. In 2009, Ostrom became the first woman to receive the Nobel Prize in economics.
Robert Lucas Jr. (1937-Present)
Lucas is regarded as one of the leading figures in neo-classical economics. He has taught at the University of Chicago and Carnegie Mellon University. Lucas came up with the idea that microeconomic behavior should be seen as foundational to macroeconomic behavior. He also focused on the theory of rational expectations, and his work won him the Nobel Prize in 1995.
Lawrence Robert Klein (1920-2013)
Klein was a MIT trained economist, who worked in developing new macro-econometric computer models. He is also responsible for bringing a mathematical approach to the field of economics. Klein made several correct economic predictions following World War II. He was awarded the Nobel Prize in 1980 and the John Bates Clark Medal in 1959. Several of his models are still used by the Federal Reserve, central banks around the world, as well as the IMF (International Monetary Fund).
Alice Rivlin (1931–2019)
Rivlin is also one of the few leading female economists in the world. She is regarded as a leading expert on U.S. budget policy. Rivlin was the first female director of the Office of Management and Budget and the founding director of the CBO (Congressional Budget Office). She played a significant role in transforming CBO into a powerful and respected institution. During her time at the Brookings Institution, Rivlin focused primarily on fiscal policy and federal budget issues.
Irving Fisher (1867-1947)
Fisher made significant contributions to modern financial economics, and is often referred to as “America’s first mathematical economist.” His theoretical workings, such as related to money supplies and price levels, contributed immensely to the founding of monetarism. Fisher also defined the value of capital as the PV (present value) of net income that the asset generates. He was the first economist to differentiate between nominal and real interest rates.
Janet Yellen (1946–Present)
Yellen, in 2014, became the first woman to lead the U.S. Federal Reserve. In the same year, she was also named by Forbes as the second-most powerful woman in the world, next only to Angela Merkel. Also, she was included in Bloomberg’s 2016 Most Influential list. During her tenure as the chair of the U.S. Federal Reserve, Yellen focused primarily on reducing unemployment, giving it a priority even over controlling inflation.
Alan Greenspan (1926–Present)
Greenspan served as chair of the U.S. Federal Reserve for 19 years and oversaw one of the most prosperous periods in American history. He focused mainly on reducing interest rates, as well as controlling prices to avert the risk of an economic downturn. However, questions were raised over his policies at the time of the 2008 economic crisis. Greenspan’s policy of cutting rates is seen as a major cause that triggered the 2008 meltdown.
Milton Friedman (1912–2006)
Friedman is seen as the figurehead for laissez-faire economic policy and one of the most significant economic thinkers of the 20th century. He was a proponent of free-market monetarism and the belief that money supply in the economy is an essential determinant of economic growth. His theories were in direct opposition to Keynesian economics, which proposed the use of government spending as a tool to control the volatility of the business cycle.