The Massachusetts Institute of Technology (MIT) Corporation yesterday elected Paul E. Gray, MIT's chancellor since 1971, as the MIT's 14th president.

He will take office when Jerome B. Wiesner, the current president, retires July 1, 1980.

Gray has been at MIT since 1950, when he entered the school as a freshman. He received his doctoral degree in electrical engineering in 1960, and became a full professor in 1967.

Since 1965 he served in various administrative posts including associate dean for student affairs, assistant and associate provost, and chancellor.

Gray was responsible for the development of undergraduate education at MIT, and for the improvement of teaching methods and facilities for undergraduates.

Gray said yesterday he does not expect any change in the relationship between Harvard and MIT. "I look forward to continuing a warm relationship with MIT's nearest neighbor," he said.

Gray said yesterday he plans to spend the next several months examining MIT and considering the functions of the university. He added, however, that MIT "doesn't need or seek significant change."

Gray said he cannot foresee any change in the trend of MIT students moving away from the humanities and social sciences as majors. But he added that "technical education and engineering education is more relevant today than it was ten years ago."

In a speech earlier this year, Gray said one broad concern at MIT is to "couple science and technology both with the social context and with the individual." He said many of MIT's science programs are "more concerned with the impact of technology on society."

Gray said MIT will maintain its position on the "terribly complicated" issue of divestiture of South Africa-related investments, adding that it is "appropraite for MIT to urge companies to hold to the Sullivan Principles." The multinational Sullivan Principles set guidelines for the conduct of corporations in developing countries.

The most difficult issue facing MIT is inflation, Gray said, adding that rising costs affect all facets of the university.

"This institution, and all universities which depend on endowment, must be terribly concerned with inflation," he said.

Gold Medallions

Wiesner, the current president, said he plans to remain at MIT, devoting himself to teaching and research.

Several MIT students were hesitant to express definite opinions on Graz. MIT junior Dan Hertzson said yesterday most students "like to withhold judgement until they know more," while student Barbara Locke said the change of presidents is "going to happen whether we like it or not.