Peter Diamond Biography

Peter Diamond was born in 1940 in Brooklyn New York. His father at the time was selling shoes during the day and getting his law degree during the evenings at Brooklyn Law School. He continued his law practices through his 80s. His mom earned 15$ a day bookkeeping, but once Peter and his brother were born, she eventually stopped working, joined many organizations, and mainly focused on raising her two sons.

Peter originally started school in a public school in the Bronx, but soon after, switched to a public school in 2nd grade once his family made the move to Woodmore, Long Island.

After high school, Peter decided to attend Yale University. Having first pursued a major in engineering, he eventually decided switch into mathematics. While in the math department, Diamond learned how to do a proof of a fixed-point theorem that proves to be vital in some economic analyses.

After this class, Peter's interest in economic material significantly rose. During his second year at Yale, he decided to take a year long introductory economics course. Then the following year, decided to take the intermediate year-long course which caused him to drop his love of learning French completely.

Diamond's first job as an economist came int the summer of 1960. He agreed to start a research assistant job. Soon after starting this job, he was promoted to co-author for his first publication by going up and beyond what he was being asked to do. He was told to create an example of functions with certain properties. Instead, he produced certain classes with desired properties rather than simply doing one small example.

Eventually, Peter applied to graduate schools, and got accepted into MIT. There he took classes in both micro and macro economics and after just a few weeks, landed on economic graduate school rather than mathematic graduate school. He soon realized what he truly loved about the study of economics. The general theories and simple generalizations of economics made learning dull for peter; however, he was extremely fascinated by the models that generate new insights. So, his experimentation ended after just one short semester.

In 1963, Peter landed on a job in UC Berkley as one of four assistant professors (three of the four have Nobel Prizes). At Berkley, he taught both micro and macro economic classes as well as public finance courses. Also, it was at this point were he met his future wife Kate and got married within the year. Later on, Kate gave birth to two sons, Matt and Andy.  Soon after, Peter was offered to come back to MIT and he accepted.

In 1969, Peter and Kate decided to finally go on their honeymoon. They decided on Jerusalem and Kenya and Peter loved every second of it.

Moving forward a bit, in 1974, Peter was offered to join the Panel on Social Security Financing consulting to the U.S Senate Finance Committee. With his expertise in policy analysis, he eventually became the first holder of the Paul A. Samuelson chair and stood strong there for 5 years.

To back up a bit, we need to know how Peter came to receive one of the most prestigious awards one could win on this planet, the Nobel Prize. Peter prided himself on the ability to have keen awareness of the limitations imbedded in the general equilibrium theory. The limitation that interested hi the most was the completeness of the coordination of agents that happens with complete competitive markets. The Arrow-Debreu equilibrium theory doesn't have process for an economy to achieve its equilibrium allocation. In the 1960s there were many efforts to try and find this convergence. Peter realized though that everybody was asking the wrong questions. Peter decided to find the allocation to which a plausible process would converge. Eventually he wrote his research paper, with all of the proofs, and evidence needed to fid the "impossible." This eventually landed him the Nobel Prize.