Moses Abramovitz (January 1, 1912 – December 1, 2000) was a distinguished American economist, best known for his pioneering work on the sources of economic growth, business cycles, and long-term economic development. He was a professor emeritus of economics at Stanford University and a prominent figure associated with the National Bureau of Economic Research (NBER). Abramovitz is particularly famous for identifying the "residual" in economic growth, often termed the "Abramovitz residual" or "measure of our ignorance," which highlighted the importance of factors beyond traditional inputs of capital and labor, such as technological progress and improvements in efficiency.

1. Early Life and Education
2. Academic Career
3. Major Economic Contributions
   3.1. Economic Growth and the "Residual"
   3.2. Business Cycles
   3.3. Long Swings (Kuznets Cycles)
   3.4. Convergence and "Catch-Up" Growth
   3.5. Social Capability and Institutions
4. Methodology and Approach
5. Influence and Legacy
6. List of Major Works
7. See Also

Moses Abramovitz was born in Brooklyn, New York, to Jewish immigrant parents from Bessarabia (then part of the Russian Empire, now Moldova). He grew up in a modest household that valued education. He attended Harvard University, where he received his A.B. degree in economics in 1932, graduating summa cum laude.

He then pursued graduate studies at Columbia University, where he was influenced by Wesley Clair Mitchell, a founder of the NBER and a leading figure in business cycle research. Abramovitz received his Ph.D. in economics from Columbia in 1939. His dissertation, "Price Theory for a Changing Economy," reflected his early interest in economic dynamics.

Abramovitz had a long and distinguished academic career:

• He began his teaching career at Harvard University as an instructor.
• During World War II, he served with the War Production Board and the Office of Strategic Services, contributing his economic expertise to the war effort.
• After the war, in 1948, he joined the faculty of Stanford University as a professor of economics. He remained at Stanford for the rest of his academic career, becoming professor emeritus in 1977. He played a significant role in building Stanford's economics department into a leading center for research.
• He was closely associated with the National Bureau of Economic Research (NBER) for many decades, serving as a staff member and contributing significantly to its research programs on economic growth and business cycles.
• He served as President of the American Economic Association in 1980.
• He was a Fellow of the American Academy of Arts and Sciences and the Econometric Society.

Abramovitz's research focused on understanding the long-run dynamics of economic growth and fluctuations in industrialized economies.

Abramovitz's most famous contribution came from his empirical work on the sources of U.S. economic growth.

• In his influential 1956 paper, "Resource and Output Trends in the United States since 1870," he attempted to quantify the contributions of traditional inputs (capital and labor) to the growth of output per capita.
• He found that increases in the quantity of capital and labor per capita could explain only a relatively small portion (around 15%) of the observed growth in output per capita. The majority of the growth was attributable to a large unexplained component, which he famously termed the "residual" or, more evocatively, a "measure of our ignorance."
• This "residual" (later often associated with Total Factor Productivity or TFP) highlighted the critical importance of factors beyond simple input accumulation, such as:
  • Technological progress
  • Improvements in education and human capital
  • Economies of scale
  • Advances in organizational efficiency and management practices
  • Other unmeasured improvements in the quality of inputs.
• This finding spurred a vast amount of subsequent research aimed at understanding and measuring the components of this residual, significantly shaping the field of growth economics.

Following in the tradition of Wesley Clair Mitchell and the NBER, Abramovitz conducted extensive research on business cycles.

• His work Inventories and Business Cycles, with Special Reference to Manufacturers' Inventories (1950) was a meticulous empirical study of the role of inventory investment in cyclical fluctuations, demonstrating its significant contribution to the volatility of economic activity.
• He emphasized the importance of careful empirical measurement and the identification of regularities in cyclical behavior.

Abramovitz also contributed to the study of "long swings" or "Kuznets cycles" – medium-term fluctuations in economic growth rates lasting approximately 15-25 years, identified by Simon Kuznets.

• He investigated the interplay between population growth, labor force changes, capital formation, and construction activity in generating these long swings in the American economy during the 19th and early 20th centuries.

In his later work, Abramovitz focused on the phenomenon of economic convergence – the tendency for poorer countries to grow faster than richer countries and thus "catch up" in terms of per capita income.

• He argued that the potential for catch-up growth depends not only on technological backwardness (which provides an opportunity to adopt existing advanced technologies) but also on a country's "social capability."

Abramovitz emphasized that a country's ability to absorb and effectively utilize advanced technology and achieve sustained economic growth depends crucially on its social capability. This broad concept includes:

• Education levels and technical competence of the population.
• Political and social institutions that are stable, support property rights, enforce contracts, and foster trust.
• Economic institutions such as well-functioning markets, financial systems, and business organizations.
• Openness to foreign trade, investment, and ideas. He argued that countries lacking adequate social capability would find it difficult to realize their catch-up potential, even if they were technologically backward. This insight highlighted the importance of institutional factors in economic development, prefiguring later work in New Institutional Economics.

Abramovitz's work was characterized by:

• Empirical Rigor: A strong emphasis on careful quantitative analysis of historical data, often drawing on the extensive datasets compiled by the NBER.
• Historical Perspective: A deep appreciation for the importance of historical context in understanding economic phenomena. He believed that economic theories needed to be tested against and informed by historical experience.
• Skepticism of Overly Abstract Theory: While well-versed in economic theory, he was cautious about theories that were not well-grounded in empirical evidence.
• Focus on Long-Run Dynamics: A primary concern with understanding the long-term processes of growth, development, and structural change.

• Moses Abramovitz was a highly respected and influential figure in 20th-century economics.
• His identification of the "residual" in economic growth fundamentally changed the way economists thought about the sources of prosperity and spurred decades of research into technological change, human capital, and productivity.
• His work on business cycles, particularly on inventory investment, remains a significant contribution to that field.
• His concept of "social capability" provided a crucial framework for understanding why some countries succeed in catching up with advanced economies while others fail, emphasizing the role of institutions and human capital in development.
• He was a mentor to many students at Stanford and a guiding figure at the NBER, shaping the direction of empirical economic research in the United States.

• Price Theory for a Changing Economy (1939) – His Ph.D. dissertation.
• "Inventories and Business Cycles, with Special Reference to Manufacturers' Inventories" (1950)
• "Resource and Output Trends in the United States since 1870" (American Economic Review, Vol. 46, No. 2, Papers_ and _Proceedings, NBER, May 1956, pp. 5–23) – The seminal paper on the "residual."
• The Growth of Public Employment in Great Britain (1961, with Vera F. Eliasberg)
• Evidences of Long Swings in Aggregate Construction Since the Civil War (1964)
• "The Retreat from Economic Advance: Changing Ideas About Economic Progress" (in Economics and Human Welfare: Essays in Honor of Tibor Scitovsky, 1979)
• "Rapid Growth Potential and Its Realization: The Experience of Capitalist Economies in the Postwar Period" (in Economic Growth and Resources, Vol. 1, The Major Issues, ed. Edmond Malinvaud, 1979)
• "Catching Up, Forging Ahead, and Falling Behind" (Journal of Economic History, Vol. 46, No. 2, June 1986, pp. 385–406) – A key paper on convergence and social capability.
• Thinking About Growth, And Other Essays on Economic Growth and Welfare (1989) – A collection of his major essays.
• "The Search for the Sources of Growth: Areas of Ignorance, Old and New" (Journal of Economic History, Vol. 53, No. 2, June 1993, pp. 217–243)
• Revolutions in U.S. Economic Policy: An Essay on the Relation Between Ideas and Policy in the Shaping of the U.S. Economy (1999, The Royer Lectures, University of California, Berkeley)

• Economic growth
• Total Factor Productivity (TFP) / Solow residual (though Abramovitz's work predates Solow's formal model)
• Business cycles
• Kuznets cycle
• Convergence (economics)
• National Bureau of Economic Research (NBER)
• Wesley Clair Mitchell
• Simon Kuznets
• Robert Solow