Otto Eckstein

Otto Eckstein (August 1, 1927 – March 22, 1984) was a German-American economist. He was a key developer and proponent of the theory of core inflation (Eckstein 1981), which proposed that in determining accurate metrics of long run inflation, the transitory price changes of items subject to volatile pricing, such as food and energy, are to be excluded from computation.

Eckstein was born in Ulm, Germany in 1927 to a Jewish family. His father, Hugo Eckstein is a businessman and the brother of the pediatrician Albert Eckstein. In 1938, when Otto Eckstein was 11 years old, he and several other family members fled the Nazi regime, first emigrating to England, and then, a year later, moving to the United States, where he made his permanent home.^[2] He studied at the Stuyvesant High School in New York City, where he graduated in 1946. He became a naturalized citizen in the United States in 1945.^[3] After one year's military service, Eckstein enrolled at Princeton University in 1947 and he received an A.B. in economics in 1951. He went on to obtain an M.A. and a Ph.D. in economics from Harvard University in 1952 and 1955, respectively.^[4] His PhD thesis, titled Water-Resource Development: The Economics of Project Evaluation, was later published as a book by the Harvard University Press in 1958.^[5]

After receiving his Ph.D., Eckstein became an instructor in economics at Harvard University in 1955. In 1957, he became an assistant professor in the same department. He was promoted to an associate professor in 1960 and a full professor in 1963 at Harvard University.^[3] Eckstein is an economic consultant to President Lyndon Baines Johnson in 1964, and a member of the President's Council of Economic Advisers from 1964 to 1966. In 1969, he and Donald Marron co-founded Data Resources Inc.,^[2][6][7] the largest non-governmental distributor of economic data in the world,^[2] which built and maintained the largest macroeconometric model of the era.^[8]

In 1969, Eckstein was elected as a Fellow of the Econometric Society.^[9] In 1975, he was elected as a Fellow of the American Statistical Association.^[10] In 1979 he sold DRI for over $100 million to McGraw Hill.^[11][12]

Eckstein was married to Harriet Mirkin in 1954, they had three children.^[4] He died of cancer in 1984, at the age of 56.^[2] Eckstein's brother Berhard Eckstein (1923-2017) was a chemist who worked in the industry.^[13][14]

• "Water and Resource Development," 1958
• "Inflation, the Wage-Price Spiral and Economic Growth", 1958, in Relationship of Prices to Economic Stability and Growth
• "Staff Report on Employment, Growth and Price Levels," 1959.
• "A Simulation of the U.S. Economy in Recession", with J. S. Duesenberry and G. Fromm, 1960, Econometrica
• "The Determination of Money Wages in American Industry", with T. Wilson, 1962, QJE
• "The Price Equation", with G. Fromm, 1968, AER
• "The Inflation Process in the United States", with R. Brinner, 1972,
• "Industry Price Equations", with D. Wyss, 1972, in Eckstein, editor, Econometrics of Price Determination
• "The Data Resources Model: Uses, structure, and the analysis of the US economy", with E.W. Green and A. Sinai, 1974, in Klein and Burmeister, editors, Econometric Model Performance
• "Econometric Models and the Formation of Business Expectations", 1976, Challenge
• "National Economic Information Systems for Developed Countries", 1977, in Perlman, editor, Organization and Retrieval of Economic Knowledge
• "The Great Recession," 1978
• "Long-Term Properties of the Price-Wage Mechanism in the United States, 1891 to 1977", with J. Girola, 1978, REStat
• "Public Finance," 1979.
• Eckstein, Otto (1981), Core inflation
• "Econometric Models for Forecasting and Policy Analysis: The present state of the art", 1981, in Kmenta, editor "Large-Scale Macroeconometric Models"
• Eckstein, Otto (1983), The DRI Model of the U.S. Economy
• Eckstein, Otto; Allen Sinai (1990), "1. The Mechanisms of the Business Cycle in the Postwar Period", in Robert J. Gordon (ed.), The American Business Cycle: Continuity and Change, University of Chicago Press, ISBN 978-0-226-30453-3

• Otto Eckstein, 1927-1984 profile at the New School