Maurice Félix Charles Allais (31 May 1911 – 9 October 2010) was a French physicist and economist, the 1988 winner of the Nobel Memorial Prize in Economic Sciences "for his pioneering contributions to the theory of markets and efficient utilization of resources", for Maurice Allais contribution, along with John Hicks (Value and Capital, 1939) and Paul Samuelson (The Foundations of Economic Analysis, 1947), to neoclassical synthesis. They formalize the self-regulation of markets, that Keynes refuted, while reiterating some of his ideas.
Born in Paris, France, Allais attended the Lycée Lakanal, graduated from the École Polytechnique in Paris and studied at the École nationale supérieure des mines de Paris. His academic and other posts have included being Professor of Economics at the École Nationale Supérieure des Mines de Paris (since 1944) and Director of its Economic Analysis Centre (since 1946). In 1949, he received the title of doctor-engineer from the University of Paris, Faculty of Science. He also held teaching positions at various institutions, including at the University of Paris X-Nanterre. His first works oriented him towards the sciences of the concrete and the experiments of fundamental physics, on which he will also publish numerous works, notably on pendular oscillations and the laws of gravitation. It's after a trip in 1933 to the United States during the Great Depression, that he decides to make the economy. Allais died at his home in Saint-Cloud, near Paris, at the age of 99.
Allais considered Leon Walras, Wilfredo Pareto, and Irving Fisher to be his primary influences. He was reluctant to write in or translate his work into English, and many of his major contributions became known to the dominant community only when they were independently rediscovered or popularized by English-speaking economists. At the same time, he claimed Keynes's liberalism and declared himself in favor of an important public sector. Allais attended the inaugural meeting of the Mont Pelerin Society, but he was alone among the attendees to refuse to sign the statement of aims because of a disagreement over the extent of property rights. He exerted an important influence, at the end of the war, on French economists such as Gérard Debreu, Jacques Lesourne, Edmond Malinvaud and Marcel Boiteux.
Paul Samuelson said "Had Allais earliest writings been in English, a generation of economic theory would have taken a different course", and felt the Nobel Prize should have been awarded to him much earlier. Assar Lindbeck, the chairman of the selection committee considered Allais as "a giant within the world of economic analysis".
photographed by Studio Harcourt, Paris
|Born||31 May 1911|
|Died||9 October 2010 (aged 99)|
|Alma mater||École Polytechnique|
École Nationale Supérieure des Mines de Paris
University of Paris
|Influences||Léon Walras |
|Contributions||Overlapping generations model|
golden rule of optimal growth
Transaction demand for money rule
|Awards||Nobel Prize in Economics (1988)|
|Information at IDEAS / RePEc|
Author of several theoretical and applied economics studies, his work has focused on the development of mathematical economics, especially in the fields of general equilibrium theory, capital theory, decision theory, and monetary policy. A pioneer in macroeconomic monetary analyses, the economist has been authoritative for his theoretical studies of risk, illustrated by his famous paradox: "the less the risk is, the more speculators flee." He has also been a pioneer in various fields such as the role of central banks and the pricing of public services.
His first book develops the microeconomic aspect. With Traité d'économie pure, which he wrote between January 1941 and July 1943, based on his contributions, along with Hicks and Samuelson, to the concept of neoclassical synthesis. He anticipates several of the propositions and theorems put forward by Hicks, Samuelson and others, sometimes giving them a more general and rigorous formulation. In particular, he demonstrates the equivalence theorems that Kenneth Arrow and Gerard Debreu will find in 1954: "Every equilibrium situation in a market economy is a situation of maximum efficiency, and reciprocally, every situation of maximum efficiency Is a equilibrium situation in a market economy. " The market thus ensures economic efficiency and optimal distribution of income in the nation. At the same time, Samuelson exposed the process of trial and error which leads to the equilibrium of markets.
In 1947, in the second part of his work Économie et Intérêt, Allais introduced time and currency and thus tackled the dynamics and growth of capitalist economies. Again, he made several proposals, that would be later attributed to other, better-known economists. He introduced the first overlapping generations model(OLG model) (later popularized and attributed to Paul Samuelson in 1958), introduced the golden rule of optimal growth before Trevor Swan and Edmund Phelps, show that an interest rate equal to the growth rate maximizes consumption. He also described the transaction demand for money rule before William Baumol and James Tobin
He was also responsible for early work in Behavioral economics, which in the US is generally attributed to Daniel Kahneman and Amos Tversky. In the 1940s, Allais worked on "decision theory" (or "theory of choice") under uncertainty and developed a theory of cardinal utility. Due to war conditions and his commitment to publish in French, his work was undertaken independently of Theory of games and economic behavior developed by John von Neumann and Oskar Morgenstern. He formulated the Allais paradox in 1953, which questions the traditional model of rationality of choices and contradicts the expected utility hypothesis. It shows that when confronted with a lottery, an individual does not maximize his hoped-for gains, but rather aims at certainty.
Although he participated in the Mont Pelerin Society, Allais was convinced of an affinity between liberalism and socialism, stating: "‘For the true liberal, as for the true socialist, it matters little whether the means of production are privately or collectively owned, so long as the essential goals they pursue, namely efficiency and justice, are achieved." He advocated "competitive planning" as a "possible synthesis of liberalism and socialism." In 1959, he and other French members of Mont Pelerin such as Jacques Rueff established an organization called Mouvement pour une société libre which spoke readily of a social liberalism that would go "beyond laissez-faire and socialism."
Finally he criticizes the drifts of a discipline that privileges according to him, mathematical virtuosity at the expense of realism. With this "new scholastic totalitarianism" he moved away, in the 60s, from the analysis of the general equilibrium developed by Walras and replace it with a study focusing on real markets rather than a utopian market, favoring the study of imbalance and based on the idea of surplus. The economic dynamics are thus characterized by the research, the realization and the distribution of a surplus and there is a general equilibrium when there is no longer any realizable surplus.
Allais’s Hereditary, Relativist and Logistic (HRL) theory of monetary dynamics contains an original theory of expectations formation that is a genuine alternative to both adaptive and rational expectations. It was praised by Milton Friedman in 1968 with the following words: "This work [the HRL formulation] introduces a very basic and important distinction between psychological time and chronological time. It is one of the most important and original paper that has been written for a long time … for its consideration of the problem of the formation of expectations". Allais's contribution has nevertheless been "lost": it has been absent from the debate about expectations.
On the first page, he dedicates his book La mondialisation: destruction des emplois et de la croissance (1990), Globalization: destruction of jobs and growth, "To the countless victims worldwide of the free-trade ideology, ideology as fatal as it is erroneous, and to all those who are not blind to some partisan passion". Allais believes that Ricardo's theory is valid only in a steady state, but disappears when the specializations evolve and when the capital is mobile.
According to him, "Globalization can only bring everywhere instability, unemployment, injustices [...] and "widespread globalization is neither inevitable nor necessary nor desirable". He considers that "unemployment arise from the offshoring, themselves due to the excessive differences in wages"; "reasoned protectionism between countries with very different incomes, is not only justified but absolutely necessary"; and the absence of protection will destroy all activities of each country with higher incomes.
In his opinion, crisis and globalization are linked: "The financial and banking crisis which, is only the spectacular symptom of a deeper economic crisis: the deregulation of competition in the global labor market". "Current unemployment is due to this total liberalization of trade[...] As such, it constitutes a major foolishness, starting from an unbelievable contradiction. Just as attributing the crisis of 1929 to protectionist causes is a historical contradiction. The true origin was already in the careless development of credit in the years preceding it."
In 1992, Maurice Allais criticised the Maastricht Treaty for its excessive emphasis on free trade. He also expressed reservations on the single European currency. In 2005, he expressed similar reservations concerning the European constitution.
Besides his career in economics, he performed experiments between 1952 and 1960 in the fields of gravitation, special relativity and electromagnetism, to investigate possible links between the fields. He reported three effects:
Robert M. Solow
| Laureate of the Nobel Memorial Prize in Economics
was a common year starting on Sunday of the Gregorian calendar and a common year starting on Saturday of the Julian calendar, the 1911th year of the Common Era (CE) and Anno Domini (AD) designations, the 911th year of the 2nd millennium, the 11th year of the 20th century, and the 2nd year of the 1910s decade. As of the start of 1911, the Gregorian calendar was
13 days ahead of the Julian calendar, which remained in localized use until 1923.
A highlight was the race for the South Pole.Académie des Sciences Morales et Politiques
The Académie des Sciences Morales et Politiques (French pronunciation: [akademi de sjɑ̃s mɔʁal e pɔlitik], Academy of Moral and Political Sciences) is a French learned society. It is one of the five academies of the Institut de France.
The académie was founded in 1795, suppressed in 1803, and reestablished in 1832 through the appeal of Guizot to King Louis Philippe. It is divided into five sections and has for its chief purpose the discussion of mental philosophy, law and jurisprudence, political economy and statistics, general and philosophical history, and politics, administration, and finance. It has the Baujour, Faucher, Halphen, Bordin, and other prizes at its distribution, publishes Mémoires, and its annual meeting is held in December.Aether drag hypothesis
In the 19th century, the theory of the luminiferous aether as the hypothetical medium for the propagation of light was widely discussed. An important part of this discussion was the question concerning the state of motion of Earth with respect to this medium. The aether drag hypothesis dealt with the question of whether or not the luminiferous aether is dragged by or entrained within moving matter. According to the first variant no relative motion exists between Earth and aether; according to the second one, relative motion exists and thus the speed of light should depend on the speed of this motion ("aether wind"), which should be measurable by instruments at rest on Earth's surface. Specific aether models were invented by Augustin-Jean Fresnel who in 1818 proposed that the aether is partially entrained by matter. The other one was proposed by George Stokes in 1845, in which the aether is completely entrained within or in the vicinity of matter.
While Fresnel's almost stationary theory was apparently confirmed by the Fizeau experiment (1851), Stokes' theory was apparently confirmed by the Michelson–Morley experiment (1881, 1887). This contradictory situation was resolved by the works of Hendrik Antoon Lorentz (1895, 1904) whose Lorentz ether theory banished any form of aether dragging, and finally with the work of Albert Einstein (1905) whose theory of special relativity doesn't contain the aether as a mechanical medium at all.Allais
Allais is a French surname. Notable people with the surname include:
Alphonse Allais (1854–1905), French writer and humorist
David Allais (born 1933), American businessman and inventor
Émile Allais (1912–2012), French alpine ski racer
Jean-Jacques Allais (born 1969), French professional footballer
Lucy Allais, philosopher
Maurice Allais (1911–2010), French economist
Nicolas Viton de Saint-Allais (1773–1842), French genealogist and littérateur
Pierre Allais (c. 1700–1782), French painter and pastel artistAllais effect
The Allais effect is the alleged anomalous behavior of pendulums or gravimeters which is sometimes purportedly observed during a solar eclipse. The effect was first reported as an anomalous precession of the plane of oscillation of a Foucault pendulum during the solar eclipse of June 30, 1954 by Maurice Allais, a French polymath who went on to win the Nobel Prize in Economics. Allais reported another observation of the effect during the solar eclipse of October 2, 1959 using the paraconical pendulum he invented. This study earned him the 1959 Galabert Prize of the French Astronautical Society and made him a laureate of the U.S. Gravity Research Foundation for his 1959 memoir on gravity. The veracity of the Allais effect remains controversial among the scientific community, as its testing has frequently met with inconsistent or ambiguous results over more than five decades of observation.Allais paradox
The Allais paradox is a choice problem designed by Maurice Allais (1953) to show an inconsistency of actual observed choices with the predictions of expected utility theory.Baumol–Tobin model
The Baumol–Tobin model is an economic model of the transactions demand for money as developed independently by William Baumol (1952) and James Tobin (1956). The theory relies on the tradeoff between the liquidity provided by holding money (the ability to carry out transactions) and the interest forgone by holding one’s assets in the form of non-interest bearing money. The key variables of the demand for money are then the nominal interest rate, the level of real income that corresponds to the number of desired transactions, and the fixed transaction costs of transferring one’s wealth between liquid money and interest-bearing assets. The model was originally developed to provide microfoundations for aggregate money demand functions commonly used in Keynesian and monetarist macroeconomic models of the time. Later, the model was extended to a general equilibrium setting by Boyan Jovanovic (1982) and David Romer (1986).
For decades, debate raged between the students of Baumol and Tobin as to which deserved primary credit. Baumol had published first, but Tobin had been teaching the model well before 1952. In 1989, the two set the matter to rest in a joint article, conceding that Maurice Allais had developed the same model in 1947.CNRS Gold medal
The CNRS Gold medal is the highest scientific research award in France. It is presented annually by the French National Centre for Scientific Research (CNRS) and was first awarded in 1954. Moreover, Silver Medals are given to researchers for originality, quality, and importance, while Bronze Medals recognize initial fruitful results.Corps des mines
The Corps des mines is the foremost of the technical Grand Corps of the French State (grands corps de l'Etat). It is formed of the State Engineers of the Mines. The Corps is attached to the French ministry in charge of economy, industry and employment. Its purpose is to entice the brightest French students in mathematics and physics to serve the government and train them for executive careers in France.
People entering the Corps are educated at the École nationale supérieure des mines de Paris, also known as Mines ParisTech, with a special curriculum distinct from that of ordinary students. Each year, the Corps recruits between 10 and 20 new members. Most of them are from École polytechnique; these are known as X-Mines and are usually among the top 10 students of École Polytechnique; others come from École normale supérieure (ENS), Télécom ParisTech (former ENST) or the regular curriculum of the École nationale supérieure des mines de Paris. Upon graduation, Corps des Mines engineers hold executive positions in the French administration.
Corps des Mines engineers tend to hold top executive positions in France's major industrial companies in the course of their career.
Being admitted to the Corps des Mines program is considered a significant fast-track for executive careers in France.Edmond Malinvaud
Edmond Malinvaud (25 April 1923 – 7 March 2015) was a French economist. He was the first president of the Pontifical Academy of Social Sciences.Trained at the École Polytechnique and at the École Nationale de la Statistique et de l'Administration Économique (ENSAE) in Paris, Malinvaud was a student of Maurice Allais.
In 1950, Malinvaud left Allais to join the Cowles Commission in the United States. At Cowles, Malinvaud produced work in many directions. His famous article, "Capital Accumulation and the Efficient Allocation of Resources" (1953), provided an intertemporal theory of capital for general equilibrium theory and introduced the concept of dynamic efficiency. He became director of the ENSAE (1962–1966), director of the forecast department of French Treasury (1972–1974), director of the INSEE (1974–1987) and Professor at the Collège de France (1988–1993).
He also worked on uncertainty theory, notably the theory of "first order certainty equivalence" (1969) and the relationship between individual risks and social risks (1972, 1973). His 1971 microeconomics textbook and his econometrics textbook, Statistical Methods in Econometrics, have since become classics.
Malinvaud's main contribution to macroeconomics is represented in his slim 1977 book, Theory of Unemployment Reconsidered which provided a clear and unified reconstruction of dynamic "disequilibrium" macroeconomics; this theory built on previous results of Clower, Leijonhufvud, and "Non-Walrasian" theory. Malinvaud's influence on the subsequent generation of European economists has been profound.Generalized expected utility
Generalized expected utility is a decision-making metric based on any of a variety of theories that attempt to resolve some discrepancies between expected utility theory and empirical observations, concerning choice under risky (probabilistic) circumstances.
The expected utility model developed by John von Neumann and Oskar Morgenstern dominated decision theory from its formulation in 1944 until the late 1970s, not only as a prescriptive, but also as a descriptive model, despite powerful criticism from Maurice Allais and Daniel Ellsberg who showed that, in certain choice problems, decisions were usually inconsistent with the axioms of expected utility theory. These problems are usually referred to as the Allais paradox and Ellsberg paradox.
Beginning in 1979 with the publication of the prospect theory of Daniel Kahneman and Amos Tversky, a range of generalized expected utility models were developed with the aim of resolving the Allais and Ellsberg paradoxes, while maintaining many of the attractive properties of expected utility theory.
Important examples were anticipated utility theory, later referred to as rank-dependent utility theory, weighted utility (Chew 1982), and expected uncertain utility theory. A general representation, using the concept of the local utility function was presented by Mark J. Machina. Since then, generalizations of expected utility theory have proliferated, but the probably most frequently used model is nowadays cumulative prospect theory, a rank-dependent development of prospect theory, introduced in 1992 by Daniel Kahneman and Amos Tversky.
Given its motivations and approach, generalized expected utility theory may properly be regarded as a subfield of behavioral economics, but it is more frequently located within mainstream economic theory.List of economists
This is an incomplete alphabetical list by surname of notable economists, experts in the social science of economics, past and present. For a history of economics, see the article History of economic thought. Only economists with biographical articles in Wikipedia are listed here.List of École Polytechnique alumni
This is a list of notable people affiliated with the École Polytechnique. Alumni of the École Polytechnique are traditionally referred to as "X", or "Xnnnn", where nnnn stands for the year of admission into the school.Michael Szenberg
Michael Szenberg (born 1934) is a professor emeritus and past Chairman of the Finance and Economics department at Pace University's Lubin School of Business. He was the editor of The American Economist.Mont Pelerin Society
The Mont Pelerin Society (MPS) is an international classical liberal organization composed of economists, philosophers, historians, intellectuals and business leaders. The members see the MPS as an effort to interpret in modern terms the fundamental principles of economic society as expressed by classical Western economists, political scientists and philosophers. Its founders included Friedrich Hayek, Frank Knight, Karl Popper, Ludwig von Mises, George Stigler and Milton Friedman. The society advocates freedom of expression, free market economic policies and the political values of an open society. Further, the society seeks to discover ways in which free enterprise can replace many functions currently provided by government entities.Neoclassical synthesis
The neoclassical synthesis was a post-World War II academic movement in economics that worked towards absorbing the macroeconomic thought of John Maynard Keynes into neoclassical economics. The resultant macroeconomic theories and models are termed Neo-Keynesian economics. Mainstream economics is largely dominated by the synthesis, being largely Keynesian in macroeconomics and neoclassical in microeconomics.Much of Neo-Keynesian economic theory was developed by John Hicks and Maurice Allais, and popularized by the mathematical economist Paul Samuelson. The process began soon after the publication of Keynes' General Theory with the IS/LM model (investment saving–liquidity preference money supply) first presented by John Hicks in a 1937 article. It continued with adaptations of the supply and demand model of markets to Keynesian theory. It represents incentives and costs as playing a pervasive role in shaping decision making. An immediate example of this is the consumer theory of individual demand, which isolates how prices (as costs) and income affect quantity demanded.
Samuelson appears to have coined the term "neoclassical synthesis", and helped disseminate the resultant work, partly through his technical and academic writing, and also via his influential textbook, Economics.Paraconical pendulum
Paraconical pendulum was invented around 1950s by Maurice Allais, a French researcher. During the 1950s, Maurice Allais conducted six marathon series of long-term observations, during each of which his team manually operated and manually monitored his pendulum non-stop over about a month. The objective was to investigate possible changes over time of the characteristics of the motion, hypothesized to yield information about asymmetries of inertial space (sometimes described as "aether flow").Sceaux, Hauts-de-Seine
Sceaux (French pronunciation: [so]) is a commune in the southern suburbs of Paris, France. It is located 9.7 km (6.0 mi) from the center of Paris.Trygve Haavelmo
Trygve Magnus Haavelmo (13 December 1911 – 28 July 1999), born in Skedsmo, Norway, was an economist whose research interests centered on econometrics. He received the Nobel Memorial Prize in Economic Sciences in 1989.
|New classical macroeconomics|
|Real business cycle school|