Born in Cluj, Transylvania (now Romania, then part of Hungary) in 1902. In 1927, he enrolled in the mathematics department of the University of Vienna, receiving his PhD in 1931. He was one of Karl Menger's students and was quickly introduced to the Viennese banker and economist Karl Schlesinger who, in turn, introduced him to the problems of the sytem of Walras and Cassel being dealt with at the time by the Vienna Colloquium.
Wald wrote three papers (1935, 1936a,b) on the Walras-Cassel system, employing the important "Duality Principle" and complementary slackness conditions which he (together with Schlesinger) developed for the Walras-Cassel G.E. system - which did away with the counting-equations- and-unknowns method, but allowed the return of Wieser's imputation theory back into economics and the employment of linear programming. Wald's third paper was particularly important and contributed several factors besides linear programming. Wald's paper was also the first proof of the existence of an equilibrium in a G.E. setting in economics. It also introduced several important concepts: the weak axiom of revealed preference (WARP) - later employed and developed by Paul Samuelson. He also addressed (briefly) the issue of whether it would hold in the aggregate (a question ignored and unanswered until the mid-1970s). He also defined a primitive form of the idea of "gross substitution" and provided a proof of the uniqueness of equilibrium. He also used these tools to tackle the existence of an equilibrium in a Cournot duopoly model.
Wald was a mathematician and thus, naturally, had a tenuous understanding of the "economic" significance of his work. The impressive economic implications of his work were to be expanded later on by Samuelson, Arrow, Debreu and the Cowles Commission.
Wald also gravitated towards statistics during this time (both theory and practice in business cycle research and economic indexes). In 1938, after the Nazis took over Austria and Anchluss proceeded, the Vienna Colloquium was dispersed. Wald was himself dismissed immediately by the Nazis, which led him to leave Austria and accept an invitation from the Cowles Commission. He eventually gravitated to Columbia University, where he continued his work on statistical theory, making several seminal contributions, such as the development of "sequential analysis" (1947) and the famous "Wald Test" (1939) so often employed in modern econometrics.
Abraham Wald died at a tragically young age in a plane crash over India in 1950.
Major works of Abraham Wald
Resources on Abraham Wald