It is an approach that does not rely on external, non- economic forces in initiating and maintaining the business cycle. He sought the economic foundations for this vision of fluctuations in the works of the classical economists - Ricardo, in particular - in Marx, Schumpeter, Keynes and Harrod. In work of supreme technical virtuosity and aesthetic elegance, he framed his economic theories of fluctuations in the language of unusually powerful and deceptively simple mathematical tools.
Goodwin was born in Newcastle, Indiana and attended local schools before going to Harvard in 1930. He spent three years from 1934 as a Rhodes Scholar at Oxford and returned to Harvard where, from 1938 to 1950, he was a member of the Economics Department, but also taught Physics. Fleeing Harvard from the increasing difficulties of the "McCarthy era", and with the help of Richard Stone, then Director of the Department of Applied Economics, he found refuge at Cambridge.
He spent the next three decades at Cambridge, as a Fellow of Peterhouse and, finally, as Reader in Economic Theory in the Faculty of Economics and Politics. On retirement in 1980 he took up a Professorship in the Department of Economics at the ancient University of Siena, which enabled him to return in a formal way to his beloved Italy.
Although formal retirement in Siena came at the age of 75, he continued to teach there till very recently and was an active and interested participant of graduate seminars which were, appropriately, held in the Sala Goodwin which was tastefully adorned with some of his own paintings.
His guiding principle in constructing mathematical models for understanding macroeconomic fluctuations were circumscribed by the need to encapsulate the one most obvious stylised fact of the long-run development of advanced industrial economies. These economies experienced irregular fluctuations in economic activity, sometimes intolerably large, but never to the extent that the whole system collapsed - at least not in the "Keynesian era".
This seemed to imply, as Goodwin saw it, that the economic system was subject to what the natural scientist would call conservation laws, expressed in the constancy of "great ratios", during a period long enough to abstract away from institutional changes. The most significant of these great ratios, again as a stylised fact, was the share of national income going to the various factors of production, conventionally designated as capital, labour, natural resources etc.
He was literally trying to fashion an economic law of conservation, a law that had been perceived by Ricardo, passionately promulgated by Marx, and amply confirmed by experience, but impossible to tame with the existing box of tools available to even the most advanced mathematical economists of the time. Chance intervened copiously in the ensuing saga which enabled this purist to train himself in the use of unusual mathematical tools to tackle and take important steps towards the solution of the problem of modelling endogenous economic fluctuations.
These tools, commonplace today - even among economists - in view of the almost banal popularity of chaos, dynamic complexity and catastrophe theories, were used by Goodwin with a deftness that befits an artist and an economic intuition tempered by an understanding of the political economy of the institutions of society.
Goodwin, in personal conversations, felt that his most important contribution to business cycle theory was the demonstration that the two hypotheses of full employment of resources at the upper end of economic activity and disinvestment at the gross rate of physical depreciation of resources at the lower end, were not necessary to account for the boundedly fluctuating behaviour of economies.
Sir John Hicks had developed a pseudo-endegenous theory of the business cycle which depended on the existence of such "ceilings" and "floors" to economic activity. Goodwin, in a masterly review of Hicks's classic study, demonstrated that that one of these bounds was sufficient, provided the expansiory phase of the economy was significantly larger than its contractionary phase. This latter issue was a matter of empirical fact and not an arbitrary hypothesis.
It is, ironically, one of the great unwritten chapters of the development of modern applied mathematics that Goodwin's economically motivated use of, and contribution to, non-linear dynamical systems theory in connection with the above demonstration, was instrumental in partially resolving the 16th, one of the most obdurate of the 23 "Mathematical Problems" posed by David Hilbert in 1900, as challenges to the mathematicians of the 20th century.
Goodwin contributed significantly to the fruitful forging of analytical links between the aggregative structure of Keynesian economics built on expenditure relations and the production-based edifice of Leontief's simplification of the standard Walrasian system. Here too he harnessed mathematical tools and results of unusual potent to develop economic frameworks of surprising flexibility and applicability, ranging from conventional national accounting analysis to intricate problems of planning growth paths for developing economies.
Richard Goodwin's lectures were works of art. The most intricate of economic propositions were explained with beautiful, freehand, geometric constructions on the blackboard, with mechanical constructions on the floor of the classroom (using, for example, the celebrated Phillips hydraulic machine, built to explain the flow of national income and expenditure) or, more recently, computer graphics. These innovative teaching methods, far ahead of their time, took even the novice too economic theory literally by the hand to its frontiers.
The student did not often realise that underlying these geometric, mechanical and computer devices and displays were the sophisticated mathematical theories associated with legendary mathematicians: Frobenius and Perron; Rayleigh and van der Pol; Pontryagin and Bellman. We felt, as students, that we were being introduced to the art of building economic models to understand the way the great theorists, from Ricardo and Marx to Schumpeter and Keynes, grappled with attempts to devise economic concepts to tame the unruly stylised facts of industrial economies.
Little did we realise that we were being exposed to the arcane and unteachable art of pure research. But we were left in no doubt that here was a master who combined respect for the wisdom of the classics with an understanding of the contours of experience to temper the forging of tools to learn from them.
These three pillars, the wisdom of the classics, the countours of experience and the mastering of the use of tools, were the foundations on which legions of students from all corners of the world were encouraged to build their education as economists. It is therefore not surprising that one can count a Nobel laureate, Central Bank Directors, a distinguished Research Director of the World Bank, Cabinet ministers and plain, simple university professors and bread-and-butter economists in every walk of society among former students of Richard Goodwin.
He was, moreover, a painter of considerable talent and reputation. His paternal aunt, Helen Goodwin, was an impressionist painter of distinction, from whom as a young boy he first learned the rudiments of painting. Later, during the years as a Rhodes Scholar, he also spent one year at the Ruskin Art School in Oxford. His paintings, reflecting perhaps his passion for the vividness of Tuscany and parts of North India, were notable for the dominant effect of colour and abstract, almost mathematical, form. They could, perhaps, be described as abstract expressionist paintings, although he would have resisted any such classification.
One of the greatest pleasures of his life, he once told me, was to have as students in his class on business cycle theory, in the Harvard of the late 1940s, two of the giants of the subject: Joseph Schumpeter and Gottfried Haberler. When the issue of his tenure came up, Schumpeter is reputed to have told him that he could count on only two "sure votes": his own and that of Haberler; the two European emigres, not known for being particularly liberal in their political beliefs, supporting the active, passionately left-wing academic out of a commitment to intellectual freedom. He was denied tenure.
Goodwin was a modest man with exquisite tastes and wide interests. He read German, French and Italian with great ease. He was a celebrated wine connoisseur, had a magnificnt personal cellar, and also managed the cellars at Peterhouse with distinction for many years. (When I had successfully completed my doctoral dissertation, under his supervision, at Cambridge in 1979, he presented me with a Chateau Leoville-Barton, 1949). On the other hand, he had, as J.K. Galbraith poignantly noted, "a morbid lack of interest in the ordinary manifestations of material well-being".
He divided his last years between winters in India, summers in England, and springs and autumns in Italy. His years in Italy, after retirement from Cambridge in 1980, were perhaps the happiest ones. He was surrounded by the warmth of admirers, devotion of students and colleagues and, simply, the enchantment of Tuscany. It was fitting that death, when it came, found him in Siena.
He is survived by his wife of over half-a-century, Jackie.
K. Vela Velupillai
Richard Murphey Goodwin, economist: born Newcastle, Indiana 24 February 1913; Assistant Professor, Harvard University 1938-50; Assistant Lecturer, Lecturer, and Reader in Economic Theory, Cambridge University and Fellow of Peterhouse 1950-80; Professor of Economic Theory and Professor of Economics (Emeritus), University of Siena 1980-96; married 1937 Jacqueline Wynmalen; died Siena, Italy 6 August 1996.Reuse content