Richard Stone
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Sir John Richard Nicholas Stone (30 August 1913 – 6 December 1991) was an eminent
British British may refer to: Peoples, culture, and language * British people, nationals or natives of the United Kingdom, British Overseas Territories, and Crown Dependencies. ** Britishness, the British identity and common culture * British English, ...
economist An economist is a professional and practitioner in the social sciences, 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 ...
, educated at
Westminster School (God Gives the Increase) , established = Earliest records date from the 14th century, refounded in 1560 , type = Public school Independent day and boarding school , religion = Church of England , head_label = Hea ...
and
Gonville and Caius College Gonville and Caius College, often referred to simply as Caius ( ), is a constituent college of the University of Cambridge in Cambridge, England. Founded in 1348, it is the fourth-oldest of the University of Cambridge's 31 colleges and one of th ...
and King's College at the
University of Cambridge , mottoeng = Literal: From here, light and sacred draughts. Non literal: From this place, we gain enlightenment and precious knowledge. , established = , other_name = The Chancellor, Masters and Schola ...
. In 1984, he was awarded the
Nobel Memorial Prize in Economic Sciences The Nobel Memorial Prize in Economic Sciences, officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel ( sv, Sveriges riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), is an economics award administered ...
for developing an accounting model that could be used to track economic activities on a national and, later, an international scale.


Early life

Richard Stone was born in London, UK on 30 August 1913. He received an English upper middle class education when he was a child as he attended Cliveden Place and Westminster School. However, he had not been taught mathematics and science until secondary school. When he was 17 years old, he followed his father to
India India, officially the Republic of India (Hindi: ), is a country in South Asia. It is the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on the so ...
as his father was appointed as a judge in
Madras Chennai (, ), formerly known as Madras ( the official name until 1996), is the capital city of Tamil Nadu, the southernmost Indian state. The largest city of the state in area and population, Chennai is located on the Coromandel Coast of th ...
. From India, he visited many Asian countries: Malaya, Singapore, and Indonesia. After travelling for one year, he went back to London and studied at
Gonville and Caius College, Cambridge Gonville and Caius College, often referred to simply as Caius ( ), is a constituent college of the University of Cambridge in Cambridge, England. Founded in 1348, it is the fourth-oldest of the University of Cambridge's 31 colleges and one of th ...
in 1931, where he studied law for two years. The young Stone then changed to studying
economics Economics () is the social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and intera ...
. He was interested in economics as he thought that "if there were more economists, the world would be a better place". During the Great Slump of the 1930s, unemployment was very high and this motivated him to know what caused it and how to overcome it. He faced a challenge from his parents as they were disappointed to his choice. However, Stone was very enthusiastic to be an economist and then enjoyed his time studying economics. At his new major, he got supervision from Richard Kahn and Gerald Shove. However, Stone's quantitative mind had been greatly influenced by Colin Clark, Stone's teacher in
statistics Statistics (from German language, German: ''wikt:Statistik#German, Statistik'', "description of a State (polity), state, a country") is the discipline that concerns the collection, organization, analysis, interpretation, and presentation of ...
at Cambridge. Clark then introduced Stone to his project in measuring the national income. This project then brought the greatest name for Stone as he received
Nobel Prize The Nobel Prizes ( ; sv, Nobelpriset ; no, Nobelprisen ) are five separate prizes that, according to Alfred Nobel's will of 1895, are awarded to "those who, during the preceding year, have conferred the greatest benefit to humankind." Alfr ...
because of this topic. After their meeting at Cambridge, Stone and Clark then became best friends.


Career

After graduating from Cambridge in 1935 and until
World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...
he worked at
Lloyd's of London Lloyd's of London, generally known simply as Lloyd's, is an insurance and reinsurance market located in London, England. Unlike most of its competitors in the industry, it is not an insurance company; rather, Lloyd's is a corporate body gov ...
. During the war, Stone worked with
James Meade James Edward Meade, (23 June 1907 – 22 December 1995) was a British economist and winner of the 1977 Nobel Memorial Prize in Economic Sciences jointly with the Swedish economist Bertil Ohlin for their "pathbreaking contribution to the ...
as a statistician and economist for the British Government. At the government's request they analyzed the UK's economy related to the current total resources of the nation for the war time. It was at this time that they developed the early versions of the system of national accounts. Their work resulted in the U.K.'s first national accounts in 1941. The collaboration between Stone and Meade was over after 1941 as their office was split into two different ones. They then worked separately, Meade being responsible for the Economic Section and Stone, for the national income. In his new office, the Central Statistical Office, Stone became
John Maynard Keynes John Maynard Keynes, 1st Baron Keynes, ( ; 5 June 1883 – 21 April 1946), was an English economist whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments. Originally trained in ...
' assistant. Stone left working for the government when the war ended in 1945. After the war, Stone took up an academic career when he worked at Cambridge as the director of the new Department of Applied Economics (1945–1955). As the director, Stone made the Department focus on research programmes about economic theory and statistical methodology. This strategy attracted many top economists in that era to join the Department. Some remarkable works at the Department were, for example, Durbin and Watson on testing serial correlation in econometrics, and
Alan Prest Alan may refer to: People * Alan (surname), an English and Turkish surname * Alan (given name), an English given name **List of people with given name Alan ''Following are people commonly referred to solely by "Alan" or by a homonymous name.'' * ...
and Derek Rowe on demand analysis. This condition made DAE become one of the leading quantitative economic research centres in the world in his era. Stone himself had many projects in DAE:
national accounting National accounts or national account systems (NAS) are the implementation of complete and consistent accounting techniques for measuring the economic activity of a nation. These include detailed underlying measures that rely on double-entry ...
where he had employed Agatha Chapman as a research associate, the analysis of consumer demand, and the system of socio-demographic account. In 1955, Stone gave up his Directorship at the department as he was appointed as the P.D. Leake Chair of Finance and Accounting at Cambridge (emeritus from 1980). Together with J.A.C. Brown he began the Cambridge Growth Project, which developed th
Cambridge Multisectoral Dynamic Model of the British economy (MDM)
. In building the Cambridge Growth Project, they used Social Accounting Matrices (SAM), which also formed computable equilibrium model which then developed at the
World Bank The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Interna ...
. He was succeeded as leader of the Cambridge Growth Project by
Terry Barker Terry Barker is a British economist and former Director of the Cambridge Centre for Climate Change Mitigation Research (4CMR) part of the Department of Land Economy, University of Cambridge. He is also a member of the Tyndall Centre, the Chairma ...
. In 1970, Stone was appointed as the Chairman of the Faculty Board of Economics and Politics for the next two years. A company founded by members of the Department and limited by guarantee
Cambridge Econometrics
was founded in 1978 with Stone as its first honorary president. The company continues to develop MDM and to use the model to make economic forecasts. Before retiring from Cambridge in 1980, Stone served as the President of the Royal Economic Society for 1978–1980.


Achievements

Stone in 1984 received the
Nobel Memorial Prize in Economic Sciences The Nobel Memorial Prize in Economic Sciences, officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel ( sv, Sveriges riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), is an economics award administered ...
for developing an accounting model that could be used to track economic activities on a national and, later, an international scale. While he was not the first economist to work in this field, he was the first to do so with
double entry accounting A double is a look-alike or doppelgänger; one person or being that resembles another. Double, The Double or Dubble may also refer to: Film and television * Double (filmmaking), someone who substitutes for the credited actor of a character * ...
. Double entry accounting basically states that every income item on one side of the balance sheet must be met by an expenditure item on the opposite side of the accounting sheet therefore creating a system of balance. This double entry system is the basis of nearly all modern accounting today. This allowed for a reliable way of tracking trade and wealth transfer on a global scale. He is sometimes known as the 'father of national income accounting', and is the author of studies of consumer
demand In economics, demand is the quantity of a good that consumers are willing and able to purchase at various prices during a given time. The relationship between price and quantity demand is also called the demand curve. Demand for a specific item ...
statistics and demand modeling,
economic growth Economic growth can be defined as the increase or improvement in the inflation-adjusted market value of the goods and services produced by an economy in a financial year. Statisticians conventionally measure such growth as the percent rate of ...
, and
input-output In computing, input/output (I/O, or informally io or IO) is the communication between an information processing system, such as a computer, and the outside world, possibly a human or another information processing system. Inputs are the signals ...
. During his acceptance speech Stone mentioned François Quesnay as well as the ''Tableau économique''. Stone stated that it was one of the first works in economics to examine various sectors on such a global level and how they are all interconnected.


Personal life

Stone married three times. In 1936, he married Winifred Mary Jenkins who was also from Cambridge. Both of them had a passion for Economics and started a monthly paper called ''Trends'', which was a supplement to the periodical, ''Industry Illustrated''. It contained articles about the British economic conditions. Soon after, in 1939, he was asked to join the
Ministry of Economic Warfare The Minister of Economic Warfare was a British government position which existed during the Second World War. The minister was in charge of the Special Operations Executive and the Ministry of Economic Warfare. See also * Blockade of Germany (193 ...
. The couple's marriage dissolved in 1940. Soon after, In 1941 Stone married his second wife Feodora Leontinoff. Feodora died in 1956. In 1960, he married Giovanna Saffi, great-grandchild of
Italian Italian(s) may refer to: * Anything of, from, or related to the people of Italy over the centuries ** Italians, an ethnic group or simply a citizen of the Italian Republic or Italian Kingdom ** Italian language, a Romance language *** Regional Ita ...
patriot Aurelio Saffi, who became his partner in many of his works. They collaborated for some projects in economics, for example in rewriting his book "National Income and Expenditure" in 1961.


Death

Stone died on 6 December 1991 in Cambridge, aged 78. He was survived by his third wife Giovanna, and his daughter Caroline.


Selected publications

* Richard Stone and Giovanna Saffi Stone, ''Social Accounting and Economic Models'' (1959) * Richard Stone and Giovanna Saffi Stone, ''National Income and Expenditure'' (1961).


References


External links

* * * {{DEFAULTSORT:Stone, Richard 1913 births 1991 deaths Alumni of Gonville and Caius College, Cambridge Fellows of King's College, Cambridge British statisticians Commanders of the Order of the British Empire Knights Bachelor Nobel laureates in Economics Institute for Advanced Study visiting scholars People educated at Westminster School, London English Nobel laureates 20th-century British economists Fellows of the Econometric Society Presidents of the Econometric Society Fellows of the British Academy