10 APRIL 2002
Renowned economist Prof. Wolfgang F. Stolper, whose recommendations saw the post-independence establishment of the Central Bank of Malta, passed away last week at the age of 89 in Ann Arbor Michigan where he lived and lectured.
Stolper would be remembered by many Maltese as the United Nations economic advisor who in 1964 first recommended the establishment of the Central Bank of Malta. Stolpers suggestion, which materialised with setting up of the Central Bank of Malta in 1968, was based largely on the fact that following Maltas independence there were serious gaps in Maltas financial arrangements, particularly in terms of advice to government on financial and monetary matters.
In what is now known as the Stolper Report, Stolper and his team had concluded that the 'multiplier effect' of the British Services Rundown 'could only be counter-balanced by a major injection of capital investment in manufacturing industry, tourism, and to a lesser extent in agriculture.'
The mission's report had also suggested that the governments emigration programme had to be stepped up, per capita income would have to fall, and that Malta's absorptive capacity could not be expanded beyond what was achieved during the previous five years.
However, Stolper was best known for the 1941 Stolper-Samuelson Theorem, done in collaboration with Paul A. Samuelson, which changed existing notions about the effect of open trade on the economies of trading nations.
The theorys central theme held that while trade stimulates economic growth, it's not always beneficial to all workers. The 60-year-old theory still is in use today.
Stolper was born May 13, 1912 in Vienna, Austria. His family moved to Berlin after World War I, but left Germany in 1933 after the Nazis came to power. Most of the family eventually ended up in the United States.
Stolper attended Harvard University, where he received a master's degree and a doctorate in economics. He had attended universities in many countries and later served as a guest professor at several universities.
Stolper taught at Harvard, Radcliffe and Swarthmore before settling at the University of Michigan, where he was a professor from 1949-1982. He also served as associate director of the Centre for Research and Economic Development at Michigan.
He wrote numerous books and papers, including "Budget, Economic Policy and Economic Performance in Underdeveloped Countries," and a book about his mentor, Joseph A. Schumpeter, called "Joseph Alois Schumpeter: The Public Life of a Private Man" and had just finished a book based on letters written to his first wife while he was in Nigeria.