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In a comprehensive analysis of the quantitative characteristics of economic growth, Mr. Kuznets illuminates the basic features of the modem economic epoch. He makes a detailled comparative enalysis of industrial structure, income dist r ibut ion among factors and by size, trends in patterns of product use, and growing international interdependance in the modem period.
The economic world no longer revolves about London and New York. Dozens of new nations are struggl ing toward economic independence end industrial growth under institutional arrangements quite unlike those of the West. That is why a major portion of the book is devoted to an investigation of internat ional diversity and the underdeveloped countries.
The big problem here is to know whether the economic principles tought in the West are realiy susceptible of general application or not.
This book provides a rethinking of particular branches of economics in the world perspective, combined w i th a bibliography of cvailable mater ial from many countries. It may help teachers to give their courses a broader and more comparative orientation.

The main task of this monograph is a review of the aggregative (chap. 2 ) , structural (chap. 3-5) and internat ional (chap. 6-9) characteristics of economic growth of nations in modem times.
Before describing the content of each chapter, it is impor tant to remember that this book has two main parts. The first one (chap. 2 - 6) concentrates on economically developed countries while the second part (chap. 7-9) deals wi th underdeveloped countries.
The first duty of M r. Kuznets has been to establish a general framework (chap. 1 ) including problems of definition and measurement. In chapter 2, the author deals with the aggregative characteristics (modem rates of increase in population, per capita product, etc) and compare them with what little is known of premodern rates.
Chapter 3 deals with trends in industrial structure i.e. the changing proportional contributions of the major sectors. Chapter 4 is devoted to a discussion of the distribution of product and income while the pat tern of product use is the topic of chapter 5. So chapter 3 -5 the trends in the internai structure of the developed economies in the course of their growth.
Chapter 6 concentrates on trends in international relations while chapter 7 deals with as much of the world as is covered by aggregative and st ructural data for recent years.
In chapter 8 the author provides a summary of the economic structure of underdeveloped countries in comparison with that of developed countries. Finally, in the last substantive chapter, the author touches the question of the spread of modem economic growth.

Simon Kuznets

Simon Smith Kuznets (1901 - 1985) was a Russian American economist at the Wharton School of the University of Pennsylvania who won the 1971 Nobel Memorial Prize in Economic Sciences "for his empirically founded interpretation of economic growth which has led to new and deepened insight into the economic and social structure and process of development".

Kuznets is credited with revolutionising econometrics, and this work is credited with fueling the so-called Keynesian "revolution". An important book of his is National Income and Its Composition, 1919–1938. Published in 1941, it contains a historically significant work on Gross National Product. His work on the business cycle (including his discovery of "Kuznets swings") and disequilibrium aspects of economic growth helped launch development economics. He also studied inequality over time, and his results formed the Kuznets Curve.

Another important development was Kuznets' empirical examination of Keynes’ 1936 Absolute Income Hypothesis. The hypothesis gave birth to what would become the first formal consumption function. However Kuznets shook the economic world by finding that Keynes' predictions, while seemingly accurate in short-run cross-sections, broke down under more rigorous examination. In his 1942 tome Uses of National Income in Peace and War, published by the National Bureau of Economic Research, Kuznets became the first economist to show that the Absolute Income Hypothesis gives inaccurate predictions in the long run (by using time-series data). Keynes had predicted that as aggregate income increases, so will marginal savings. Kuznets used new data to show that, over a longer span of time (1870's – 1940's) the savings ratio remained constant, despite large changes in income. This paved the way for Milton Friedman's Permanent Income Hypothesis, and several more modern alternatives such as the Life cycle hypothesis and the Relative Income Hypothesis.

There are two developments at Kuznets time: the emergence of econometrics and the Keynesian Revolution, both of which found in Kuznets's data an important resource for their advancement. Kuznets, however, was neither a Keynesian nor an econometrician—he took his cues from Mitchell's Institutionalism—as exemplified in his 1930 methodological pieces. Whereas Mitchell devoted his life to the study of business cycles, Kuznets turned to other fluctuations—seasonal ones and secular movements—then to national income estimation, and later to studies of economic growth. As a result, his initial work was on the empirical analysis of business cycles (1930)—a 15-20 year cycle he identified was later attached to his name, the "Kuznets Cycle". These cycles were referred to by Kuznets as long-cycles and long-swings.

Kuznets's life work was the collection and organization of the national income accounts of the United States (1934, 1941, and 1946). Kuznets was interested in statistical fact finding focusing specifically on seasonal fluctuations, secular movements, national income estimation, and economic growth. He computed national income back to 1869. He broke it down by industry, by final product, and by use. He also measured the distribution of income between rich and poor. Although Kuznets was not the first economist to try this, his work was so comprehensive and meticulous that it set the standard in the field.

Kuznets helped the U.S. Department of Commerce to standardize the measurement of GNP. He disapproved, however, of its use as a general indication of welfare, writing that "the welfare of a nation can scarcely be inferred from a measure of national income."

Kuznets was also one of the earliest workers on development economics, in particular collecting and analyzing the empirical characteristics of developing countries (1965, 1966, 1971, and 1979). His major thesis, which argued that underdeveloped countries of today possess characteristics different from those that industrialized countries faced before they developed, helped put an end to the simplistic view that all countries went through the same "linear stages" in their history and launched the separate field of development economics—which now focused on the analysis of modern underdeveloped countries' distinct experiences.

Among his several discoveries which sparked important theoretical research programs was his discovery of the inverted U-shaped relation between income inequality and economic growth (1955, 1963). In poor countries, economic growth increased the income disparity between rich and poor people. In wealthier countries, economic growth narrowed the difference. By noting patterns of income inequality in developed and underdeveloped countries, he proposed that as countries experienced economic growth, the income inequality first increases and then decreases. The reasoning was that in order to experience growth, countries had to shift from agricultural to industrial sectors. While there was little variation in the agricultural income, industrialization led to large differences in income. Additionally, as economies experienced growth, mass education provided greater opportunities which decreased the inequality and the lower income portion of the population gained political power to change governmental policies. He also discovered the patterns in savings-income behavior which launched the Life-Cycle-Permanent-Income Hypothesis of Modigliani and Friedman.