On 18 October 1984, the Royal Swedish Academy of Sciences awarded the London economist Richard Stone the Nobel Prize in Economics for “work of fundamental importance for the development of national accounting systems, which has radically improved the basis of empirical economic analysis”.
He was born on 30 August 1931 in London. He received a classical education with little or no scientific disciplines at Westminster School during his secondary schooling. It was also in England that he entered university, Cambridge University to be precise. He studied law for two years, but after the Great Depression, he turned to economics. Professors such as Richard Kahn and Colin Clark (the latter taught him statistics) greatly influenced him. He had the opportunity to attend seminars given by Keynes on the book he was preparing at the time, The General Theory.
He subsequently joined a Lloyds insurance brokerage firm, having turned down a research grant. When the war was declared, Richard Stone joined the Ministry of War Economics, taking charge of shipping and oil statistics. In 1940 (that summer), he worked in the Central Economic Information Service of the War Office under James Meade (Nobel Prize for Economics in 1977), preparing a report on the economic and financial situation of the country. These reports form the second part of a “white paper” at Keynes’s request, which was presented with the 1941 budget.
The “white paper” presented in 1941 consisted of three tables presenting data on national expenditure and income, household income, consumption and saving, and the financing capacities and needs of private agents and the state.
At the end of the war, he was chosen to be the first director of the newly established Centre for Applied Economics at Cambridge. Before taking up this post, he spent three years at Princeton University, where he wrote a report on the problems of defining and measuring economic aggregates, which was published in 1974 by the United Nations.
In 1955 Stone left the Centre and moved to Cambridge University, where he was appointed P.D. Leakes Professor of Finance and Accounting. A position that allowed him to advance his knowledge of his speciality should also be noted that Stone’s reputation among his students was that he did not like teaching very much and that he hardly participated in the training programmes offered at his university.
The work of Richard Stone
The first official estimates of British national income and expenditure were made following Stone’s method. But the bulk of Stone’s work focused on the first concrete statistical means of measuring investment, public expenditure and consumption, which brought to light a national accounting system. In 1944 he co-authored National Income and Expenditure with Giovanna Stone.
From 1961 onwards, he was the author of works such as:
- In 1961 – Input-Output and National Accounts.
- 1966 – Mathematics in the Social Sciences
- In 1970 – Mathematical Models of Economics and Other Essays