Eugen Slutsky


Evgeny "Eugen" Evgenievich Slutsky was a Russian and Soviet mathematical statistician, economist and political economist.

Work in economics

He is principally known for work in deriving the relationships embodied in the very well known Slutsky equation which is widely used in microeconomic consumer theory for separating the substitution effect and the income effect of a price change on the total quantity of a good demanded following a price change in that good, or in a related good that may have a cross-price effect on the original good quantity. There are many Slutsky analogs in producer theory.
He is less well known by Western economists than some of his contemporaries, due to his own changing intellectual interests as well as external factors forced upon him after the Bolshevik Revolution in 1917. His seminal paper in Economics, and some argue his last paper in Economics rather than probability theory, was published in 1915. Paul Samuelson noted that until 1936, he had been entirely unaware of Slutsky's 1915 "masterpiece" due to World War I and the paper's Italian language publication. R. G. D. Allen did the most to propagate Slutsky's work on consumer theory in published papers in 1936 and 1950.
Vincent Barnett argues:

The Slutsky Effect

In the 1920s Slutsky turned to working on probability theory and stochastic processes, but in 1927 he published his second famous article on economic theory, 'The Summation of Random Causes as a Source of Cyclical Processes'. This showed that it was possible for apparently cyclic behaviour to emerge as the result of random shocks to the economy if the latter were modelled using a stable stochastic difference equation with certain technical properties. This opened up a new approach to business cycle theory by hypothesising that the interaction of chance events could generate periodicity when none existed initially.

Mathematical statistics work

Slutsky's later work was principally in probability theory and the theory of stochastic processes. He is generally credited for the result known as Slutsky's theorem. In 1928 he was an Invited Speaker of the ICM in Bologna.