University of Rochester economist 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 yesterday. He was 91.
Professor 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, professor of economics at Harvard University and one of Professor McKenzie's Ph.D. 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," says Green.
Professor 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, professor of economics at Duke University who has written a retrospective on Professor 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 Professor 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 University 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."
Professor McKenzie was the founder of the University's doctoral program in economics, a program he launched in 1957 when he joined the economics department and which by 1995 was ranked among the top 10 in the country by the National Research Council. "Economics the way we study economics is like physics the way the physicists study physics," Professor McKenzie explained in a 2007 interview.
"He had a vision for the department," says Ronald Jones, Xerox Professor of Economics at Rochester and Professor 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," added Professor Jones. 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 Professor 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 Professor 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, Professor 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."
Many of Professor McKenzie's doctoral students hailed from Japan, where his influence is celebrated. He is known as "the father of Japanese mathematical economists," according to the Kyoto Newspaper. He was inducted into the prestigious Order of the Rising Sun, a governmental honor rarely given to American professors. And he received honorary degrees from Kyoto University and from Tokyo's Keio University. Rochester's first doctorate in economics was awarded to the late Akira Takayama, the first of more than 50 doctoral degrees to be earned by students from Japan.
Professor McKenzie's late wife, Blanche, also deserves much of the credit for nurturing this long-term international relationship, says Professor Jones. An economist herself and a naturally warm person, she reached out to the foreign students, welcoming them to gatherings at their house and helping them feel at home.
A Rhodes Scholar, Professor 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, like the roundabout path of a turnpike, the most efficient path to an economic goal like capital accumulation may not be the most direct.
A replica of Professor McKenzie's personal office, complete with original copies of his books, photographs, papers, and DVDs, is preserved at Kyoto University in Japan, where scholars from around the world can sift through the 2,200-piece collection. Professor McKenzie's collected papers documenting his work from 1942 to 2004 are housed at Duke University.
Professor McKenzie lived in Rochester and he is survived by his son, David.