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October 20, 2010

Pioneering economist Lionel McKenzie remembered

Lionel McKenzie

Lionel McKenzie, one of the chief architects of modern general equilibrium theory and an “economist’s economist” revered for the clarity and rigor of his work, died Oct. 12. He was 91.

 McKenzie’s theories and mathematical proofs have provided economists for the past half-century with a way to understand and predict how changes in one area of the economy, such as raising or lowering taxes, will affect other areas of the economy.

“He was one of the great leaders in the field of economics in the ’'50s, ’60s, and on into the  ’'70s,” says Jerry Green, a professor of economics at Harvard University and one of McKenzie’s PhD students at Rochester. “He was a pioneer in general equilibrium theory, demand theory, and welfare measurement, and the theory of economic growth—all central topics in economic theory in those days. He was one of the best.”

 McKenzie’s contributions were to “high mathematical theory—the nuts and bolts of what economists learn—the core of their craft,” says E. Roy Weintraub, a professor of economics at Duke University who has written a retrospective on McKenzie’s work. He was the first to provide the now most widely employed proof for how economies, through competitive pricing, find a state in which the amount of every good supplied is equal to the demand, a condition economists call general equilibrium, says Weintraub. “Every economics graduate student today has to learn that proof.”

At Rochester, the legendary professor is remembered by colleagues, friends, and students for his generosity, wit, and grace. “Lionel was a scholar of uncommon brilliance who was an inspiration to generations of colleagues and students,” says President Joel Seligman. “He was the pivotal figure in the development of our outstanding Department of Economics and a man whose wisdom and generosity of spirit I will truly miss.”

 McKenzie founded the University’s doctoral program in economics in 1957 when he joined the economics department. By 1995 it was ranked among the top 10 in the country by the National Research Council.

“He had a vision for the department,” says Ronald Jones, Xerox Professor of Economics at Rochester and McKenzie’s first hire to the fledgling program. McKenzie hired talented young faculty who, like himself, knew how to apply mathematics and theory to the science of economics.

“But, Lionel’s view was broader than that,” Jones adds. He wanted to bring quantitative and theoretical approaches to areas like economic history and labor economics, where they had yet to be applied.

Those cutting-edge applications helped to make Rochester a hotbed of innovation in the field. Among the rising stars McKenzie recruited to the department were the late Sherwin Rosen, who became a pioneering labor economist, and Robert Fogel, who went on to win the 1993 Nobel Prize in economics for “having renewed research in economic history by applying economic theory and quantitative methods.” A key part of Fogel’s research was on the economics of slavery, work he coauthored with another McKenzie hire, Stanley Engerman, the John Munro Professor of Economics at Rochester.

To his graduate students, McKenzie “was a wonderful advisor primarily by his example,” says Green. “He was a scholar’s scholar. He taught us that if you stick with a problem, and you work hard, eventually you will get the answer.”

A Rhodes Scholar, McKenzie began his academic career as an assistant professor at Duke University. He was elected a distinguished fellow of the American Economic Association, a member of the National Academy of Sciences, and a fellow of the Center for Advanced Research in the Behavioral Sciences. During his career, he published more than 45 academic papers, including the seminal study, “On Equilibrium in Graham’s Model of World Trade and Other Competitive Systems” in Econometrica (1954). In 2002, he completed his general survey called Classical General Equilibrium Theory. McKenzie was also a key developer of turnpike theory, showing that the most efficient path to an economic goal like capital accumulation may not be the most direct.

Professor McKenzie lived in Rochester. He is survived by his son, David.

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