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Klein was born in Omaha, Nebraska of Jewish descent. For his work in creating computer models to forecast economic trends in the field of econometrics at the University of Pennsylvania, he was awarded the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel in 1980. Specifically "for the creation of economic models and their application to the analysis of economic fluctuations and economic policies." Thanks to his work such models became widespread among economists.
Professor Klein is a graduate of the University of California, Berkeley, where he began his computer modeling, and gained his PhD at the Massachusetts Institute of Technology (MIT) in 1944.
After MIT Klein moved to the Cowles Commission for Research in Economics , which was then at the University of Chicago, now the Cowles Foundation. Here he built a model of the United States economy to forecast the development of business fluctuations and to study the effects of government economic-political policy. After World War II Klein correctly predicted, against the prevailing expectation and using his model, that there would be an economic upturn rather than a depressionA recession is usually defined in macroeconomics as a fall of a country's Gross National Product in two successive quarters. This is a simplified version of that of the business-cycle dating committee of the National Bureau for Economic Research, a U.. Similarly, he correctly predicted a mild recession at the end of the Korean WarThe Korean War from June 25, 1950 to July 27, 1953, was a conflict between communist North Korea and anti-communist South Korea. It was also a proxy war between the United States and the Soviet Union. The principal combatants were North and South Korea..
In 1959Events January-February January 1 Cultivars of plants named after this date must be named in a modern language, not in Latin. January 1 Cuba: Fulgencio Batista flees Havana when forces of Fidel Castro advance January 2 CBS Radio cuts four soap operas: Bac Klein was awarded the John Bates Clark MedalThe John Bates Clark Medal is awarded biannually by the American Economic Association to "that American economist under the age of forty who is adjudged to have made a significant contribution to economic thought and knowledge". Named after the American N, one of the two most prestigious awards in the field of economics.
At the University of MichiganThe University of Michigan, Ann Arbor is a public coeducational university located in Ann Arbor, Michigan. It is the oldest and main campus of the University of Michigan, which also includes branches University of Michigan-Dearborn and University of Michi, Klein developed enhanced macroeconomic modelsA model in macroeconomics is designed to simulate the operation of a national or international economy in terms of factors including the total amount of goods and services produced, total income earned, the level of employment of productive resources, and, in particular the famous Klein-Goldberger model with Arthur GoldbergerArthur Goldberger is an economist. He worked with Nobel Prize winner Lawrence Klein on the development of the famous Klein-Goldberger economic computer model at the University of Michigan. Goldberger, Arthur., which was based on foundations laid by Professor Jan TinbergenJan Tinbergen ( The Hague, April 12, 1903 June 9, 1994), Dutch economist, was awarded the first Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel (often called erroneously Nobel Prize in Economics) in 1969, which he shared with Ragnar Fr of the Netherlands, later winner of the first economics prize in 1969. Klein differed from Tinbergen by using an alternative economic theory and a different statistical technique.
Klein moved to England in 1954. This was prompted by Senator Joseph McCarthy's anti- communist " witch-hunt", and the fact that his continuing tenure at Michigan was denied him. Klein had been a member of the American Communist Party in 1946 and 1944 while in Chicago; he later said that this was the result of youthful naivete.
In England, Klein developed a model of the United Kingdom economy at the University of Oxford, before returning to the USA in 1958 to join the Department of Economics at the University of Pennsylvania, then became " Benjamin Franklin Professor of Economics and Finance" at their Wharton Business School in 1968.
At the beginning of the 1960's Klein became the leader of the major "Brookings-SSRC Project", to construct a detailed econometric model to forecast the short-term development of the American economy.
Later in the 60's, Klein constructed the "Wharton Econometric Forecasting Model". This model, considerably smaller than the Brookings model, achieved a very good reputation for its analysis of business conditions, used to forecast fluctuations including national product, exports, investments, and consumption, and to study the effect on them of changes in taxation, public expenditure, oil price, etc.
Professor Klein founded Wharton Econometric Forecasting Associates or WEFA, (now Global Insight). At the end of the 1960s he was initiator and an active research leader in their LINK project, which was also mentioned in his Nobel citation. The aim of this was to produce the world's first global economic model, linking models of many of the world's countries so that the effect of changes in the economy of one country are reflected in other countries.
In 1976 Klein was coordinator of Jimmy Carter's economic task force before the US presidential election. He declined an invitation to join Carter's administration. Klein has also been president of the Econometric Society and the American Economic Association (in 1977).
His Nobel citation concludes that "few, if any, research workers in the empirical field of economic science, have had so many successors and such a large impact as Lawrence Klein".