Basic academic courses at the Institute helped him to acquire "exceptional" erudition in economics, as well as in history, demography, statistics and natural sciences.

According to the institute's curriculum, development of national economies had to be analyzed in the wider context of changes in "connected spheres" and with the involvement of proper methods and empirical data.

[8][9][10][11][12][13] At the turn of the decade, the normal work in the institute was interrupted by the events of the Civil War; reorganizations were undertaken by the Soviet authorities in the sphere of the higher education.

There is no precise information whether Kuznets continued his studies at the institute, but it is known that he joined the Department of Labor of UZHBURO (South Bureau) of the Central Council of Trade Unions.

Researchers used national income accounting, together with a rough form of linear programming, to measure the potential for increased production and the resources from which it would come, and to identify the materials that were binding constraints on expansion.

[17] After the war, he worked as an advisor for the governments of China, Japan, India, Korea, Taiwan, and Israel in the establishment of their national systems of economic information.

At the same time, Kuznets tended to analyze economy in connection with the wider context of historical situation, demographic, and social processes, a method that was peculiar to the Kharkiv academics at the beginning of the 20th century[citation needed].

Kuznets was influenced by the work of such leading theorists as Joseph A. Schumpeter (who probed the relationship between technological change and business cycles), A. C. Pigou (who identified circumstances under which markets failed to maximize economic welfare), and Vilfredo Pareto (who propounded a law governing the distribution of income among households).

The first major research project in which Kuznets was involved was the study of long series of economic dynamics in the USA undertaken in the mid-1920s.

Fitting trend curves to data and analysis of the time series, comparison of theoretical and empirical levels, allowed him to identify medium-term extended cycles of economic activity, which lasted 15–25 years and had an intermediate position between the Kondratyev "long waves" and short business cycles.

Aspiring to determine the nature of these cycles, Kuznets analyzed the dynamics of population, the construction industry performance, capital, national income data and other variables.

These movements became known among economists and economic historians as "Kuznets cycles", and alternatively as "long swings" in the economy's growth rate (following the work of Moses Abramovitz [1912–1999]).

Kuznets had success to solve numerous problems ranging from lack of sources of information and bias assessments, to the development of the theoretical concept of national income.

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.

Kuznets used new data to show that, over a longer span of time (1870s – 1940s) the savings ratio remained constant, despite large changes in income.

By the end of the Second World War Kuznets moved into a new research area, related to the tie between changes in income and growth.

The central theme of these empirical studies is that the growth of the aggregated product of the country necessarily implies a profound transformation of the whole of its economic structure.

Such changes, in his opinion, are essential for overall growth and, once started, shape, constrain or support the subsequent economic development of the country.

Among his several observations which sparked important theoretical research programs was the Kuznets curve, an inverted U-shaped relation between income inequality and economic growth (1955, 1963).

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.