Eugen Slutsky
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Evgeny "Eugen" Evgenievich Slutsky (russian: Евге́ний Евге́ньевич Слу́цкий; – 10 March 1948) was a Russian and Soviet mathematical statistician,
economist An economist is a professional and practitioner in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this field there are ...
and
political economist Political economy is the study of how economic systems (e.g. markets and national economies) and political systems (e.g. law, institutions, government) are linked. Widely studied phenomena within the discipline are systems such as labour m ...
.


Work in economics

Slutsky is principally known for work in deriving the relationships embodied in the very well known
Slutsky equation The Slutsky equation (or Slutsky identity) in economics, named after Eugen Slutsky, relates changes in Marshallian (uncompensated) demand to changes in Hicksian (compensated) demand, which is known as such since it compensates to maintain a fixed ...
which is widely used in microeconomic
consumer theory The theory of consumer choice is the branch of microeconomics that relates preferences to consumption expenditures and to consumer demand curves. It analyzes how consumers maximize the desirability of their consumption as measured by their pref ...
for separating the substitution effect and the income effect of a price change on the total quantity of a good demanded following a price change in that good, or in a related good that may have a cross-price effect on the original good quantity. There are many Slutsky analogs in
producer theory Production is the process of combining various inputs, both material (such as metal, wood, glass, or plastics) and immaterial (such as plans, or knowledge) in order to create output. Ideally this output (economics), output will be a goods and servi ...
. He is less well known by Western economists than some of his contemporaries, due to his own changing intellectual interests as well as external factors forced upon him after the
Bolshevik Revolution The October Revolution,. officially known as the Great October Socialist Revolution. in the Soviet Union, also known as the Bolshevik Revolution, was a revolution in Russia led by the Bolshevik Party of Vladimir Lenin that was a key moment ...
in 1917. His seminal paper in Economics, and some argue his last paper in Economics rather than probability theory, was published in 1915 (''Sulla teoria del bilancio del consumatore'').
Paul Samuelson Paul Anthony Samuelson (May 15, 1915 – December 13, 2009) was an American economist who was the first American to win the Nobel Memorial Prize in Economic Sciences. When awarding the prize in 1970, the Swedish Royal Academies stated that he " ...
noted that until 1936, he had been entirely unaware of Slutsky's 1915 "masterpiece" due to
World War I World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, the United States, and the Ottoman Empire, with fightin ...
and the paper's Italian language publication. R. G. D. Allen did the most to propagate Slutsky's work on consumer theory in published papers in 1936 and 1950. Vincent Barnett argues: :"A good case can be made for the notion that Slutsky is the most famous of all Russian economists, even more well-known han N. D. Kondratiev, L. V. Kantorovich, or
Mikhail Tugan-Baranovsky Mikhail Tugan-Baranovsky (russian: Михаил Иванович Туган-Барановский, uk, Михайло Іванович Туган-Барановський, romanized: ''Mykhailo Ivanovych Tuhan-Baranovskyi'') was a Ukrainian eco ...
. There are eponymous concepts such as the Slutsky equation, the Slutsky diamond, the Slutsky matrix, and the Slutsky-Yule effect, and a journals-literature search conducted on his name for the years 1980-1995 yielded seventy-nine articles directly using some aspect of Slutsky’s work... Moreover, many microeconomics textbooks contain prominent mention of Slutsky’s contribution to the theory of consumer behavior, most notably the Slutsky equation, christened by
John Hicks Sir John Richards Hicks (8 April 1904 – 20 May 1989) was a British economist. He is considered one of the most important and influential economists of the twentieth century. The most familiar of his many contributions in the field of economi ...
as the ‘Fundamental Equation of Value Theory'. Slutsky’s work is thus an integral part of contemporary mainstream economics and
econometrics Econometrics is the application of statistical methods to economic data in order to give empirical content to economic relationships. M. Hashem Pesaran (1987). "Econometrics," '' The New Palgrave: A Dictionary of Economics'', v. 2, p. 8 p. 8 ...
, a claim that cannot really be made by any other Soviet economist, perhaps even by any other Russian economist."


The Slutsky Effect

In the 1920s, Slutsky turned to working on probability theory and stochastic processes, but in 1927 he published his second famous article on economic theory, 'The Summation of Random Causes as a Source of Cyclical Processes'. This showed that it was possible for apparently cyclic behaviour to emerge as the result of random shocks to the economy if the latter were modelled using a stable stochastic difference equation with certain technical properties. This opened up a new approach to business cycle theory by hypothesising that the interaction of chance events could generate periodicity when none existed initially.


Mathematical statistics work

Slutsky's later work was principally in
probability theory Probability theory is the branch of mathematics concerned with probability. Although there are several different probability interpretations, probability theory treats the concept in a rigorous mathematical manner by expressing it through a set ...
and the theory of stochastic processes. He is generally credited for the result known as Slutsky's theorem. In 1928 he was an Invited Speaker of the ICM in Bologna.


References


Further reading

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External links

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New School

Oscar Sheynin on Slutsky: p. 105 of Russian Papers on the History of Probability and Statistics
{{DEFAULTSORT:Slutsky, Eugen 1880 births 1948 deaths People from Yaroslavl Oblast Statisticians from the Russian Empire Soviet mathematicians Russian economists