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JOSEPH EUGENE STIGLITZ (/ˈstɪɡlɪts/ ; born February 9, 1943) is
an American economist and a professor at
In 2000, Stiglitz founded the
Initiative for Policy Dialogue (IPD), a
think tank on international development based at Columbia University.
He has been a member of the Columbia faculty since 2001, and received
that university's highest academic rank (university professor ) in
2003. He was the founding chair of the university's Committee on
Global Thought. He also chairs the
University of Manchester
Stiglitz has received more than 40 honorary degrees, including from Cambridge and Harvard, and he has been decorated by several governments including Korea, Colombia, Ecuador, and most recently France, where he was appointed a member of the Legion of Honor, order Officer.
In 2011 Stiglitz was named by Time magazine as one of the 100 most influential people in the world . Stiglitz's work focuses on income distribution from a Georgist perspective, asset risk management, corporate governance, and international trade. He is the author of several books, the latest being The Euro: How a Common Currency Threatens the Future of Europe (2016), The Great Divide: Unequal Societies and What We Can Do About Them (2015), Rewriting the Rules of the American Economy: An Agenda for Growth and Shared Prosperity (2015), and Creating a Learning Society: A New Approach to Growth Development and Social Progress (2014).
* 1 Life and career
* 2 Contributions to economics
* 3 Government
* 3.1 Clinton administration * 3.2 Initiative for Policy Dialogue * 3.3 Commission on the Measurement of Economic Performance and Social Progress * 3.4 Commission of Experts on Reforms of the International Monetary and Financial System * 3.5 Greek debt crisis * 3.6 Scotland * 3.7 The Labour Party
* 4 Economic views
* 4.1 Support for anti-austerity movement in Spain * 4.2 Criticism of rating agencies * 4.3 Criticism of Trans-Pacific Partnership and Transatlantic Trade and Investment Partnership * 4.4 Regulation * 4.5 Land value tax (Georgism) * 4.6 Views on the eurozone
* 4.7 Views on Free Trade
* 4.7.1 Advice for the eurozone countries
* 4.7.2 Advice for
* 5 Books
* 5.1 The Euro: How a Common Currency Threatens the Future of Europe
* 5.2 The Great Divide: Unequal Societies and What We Can Do About
* 5.3 Creating a Learning Society: A New Approach to Growth,
Development, and Social Progress (2014)
The Price of Inequality (2012)
The Three Trillion Dollar War (2008)
* 5.7 Stability with Growth (2006)
* 5.8 Making
* 6 Awards and honors * 7 Personal life
* 8 Selected bibliography
* 8.1 Books * 8.2 Book chapters * 8.3 Selected scholarly articles * 8.4 Articles in popular press * 8.5 Video and online sources * 8.6 Papers
* 9 See also * 10 References * 11 External links
LIFE AND CAREER
Stiglitz was born in
Gary, Indiana , to Charlotte (née Fishman), a
schoolteacher, and Nathaniel David Stiglitz, an insurance salesman.
Stiglitz graduated from
From 1966 to 1970 he was a research fellow at the University of
Cambridge . Stiglitz initially arrived at Fitzwilliam College,
Cambridge as a
Fulbright Scholar in 1965, and he later won a Tapp
Junior Research Fellowship at Gonville and Caius College, Cambridge
which was instrumental in shaping his understanding of
macroeconomic theory. In subsequent years, he held academic positions
He also gives classes for a double-degree program between Sciences Po Paris and École Polytechnique in 'Economics and Public Policy'. He has chaired The Brooks World Poverty Institute at the University of Manchester since 2005. Stiglitz is widely considered a New-Keynesian economist, although at least one economics journalist says his work cannot be so clearly categorised.
In addition to making numerous influential contributions to
macroeconomics , Stiglitz has played a number of policy roles. He
served in the Clinton administration as the chair of the President's
Council of Economic Advisers
He is a member of Collegium International , an organization of leaders with political, scientific, and ethical expertise whose goal is to provide new approaches in overcoming the obstacles in the way of a peaceful, socially just and an economically sustainable world. He is also a member of the scientific committee of the Fundacion IDEAS, a Spanish think tank.
Stiglitz has advised American president
In October 2008, he was asked by the President of the United Nations General Assembly to chair a commission drafting a report on the reasons for and solutions to the financial crisis. In response, the commission produced the Stiglitz Report .
On July 25, 2011, Stiglitz participated in the "I Foro Social del
15M" organized in
Stiglitz was the president of the International Economic Association from 2011 to 2014.
CONTRIBUTIONS TO ECONOMICS
Stiglitz at a conference in Mexico in 2009
After getting his PhD from
M.I.T in 1967, Stiglitz co-authored one of
his first papers with
Michael Rothschild for the Journal of Economic
Theory in 1970. Stiglitz and Rothschild extrapolated on previous
works by prominent economists such as
HENRY GEORGE THEOREM
Stiglitz made early contributions to a theory of public finance
stating that an optimal supply of local public goods can be funded
entirely through capture of the land rents generated by those goods
(when population distributions are optimal). Stiglitz dubbed this the
Stiglitz's most famous research was on screening , a technique used by one economic agent to extract otherwise private information from another. It was for this contribution to the theory of information asymmetry that he shared the Nobel Memorial Prize in Economics in 2001 "for laying the foundations for the theory of markets with asymmetric information " with George A. Akerlof and A. Michael Spence .
Before the advent of models of imperfect and asymmetric information, the traditional neoclassical economics literature had assumed that markets are efficient except for some limited and well defined market failures . More recent work by Stiglitz and others reversed that presumption, to assert that it is only under exceptional circumstances that markets are efficient. Stiglitz has shown (together with Bruce Greenwald ) that "whenever markets are incomplete and/or information is imperfect (which are true in virtually all economies), even competitive market allocation is not constrained Pareto efficient ". In other words, they addressed "the problem of determining when tax interventions are Pareto-improving. The approach indicates that such tax interventions almost always exist and that equilibria in situations of imperfect information are rarely constrained Pareto optima." :229, abstract Although these conclusions and the pervasiveness of market failures do not necessarily warrant the state intervening broadly in the economy, it makes clear that the "optimal" range of government recommendable interventions is definitely much larger than the traditional "market failure" school recognizes. For Stiglitz, there is no such thing as an invisible hand , in the sense that free markets lead to efficiency as if guided by unseen forces. According to Stiglitz:
Whenever there are "externalities" – where the actions of an individual have impacts on others for which they do not pay or for which they are not compensated – markets will not work well. But recent research has shown that these externalities are pervasive, whenever there is imperfect information or imperfect risk markets – that is always.
The real debate today is about finding the right balance between the market and government. Both are needed. They can each complement each other. This balance will differ from time to time and place to place.
In an interview in 2007, Stiglitz explained further:
The theories that I (and others) helped develop explained why unfettered markets often not only do not lead to social justice, but do not even produce efficient outcomes. Interestingly, there has been no intellectual challenge to the refutation of Adam Smith's invisible hand: individuals and firms, in the pursuit of their self-interest , are not necessarily, or in general, led as if by an invisible hand, to economic efficiency.
The preceding claim is based on Stiglitz 1986 paper, "Externalities in Economies with Imperfect Information and Incomplete Markets ", which describes a general methodology to deal with externalities and for calculating optimal corrective taxes in a general equilibrium context. In the opening remarks for his prize acceptance "Aula Magna", Stiglitz said:
I hope to show that Information Economics represents a fundamental change in the prevailing paradigm within economics. Problems of information are central to understanding not only market economics but also political economy, and in the last section of this lecture, I explore some of the implications of information imperfections for political processes.
SHAPIRO-STIGLITZ EFFICIENCY WAGE MODEL
Main article: Shapiro–Stiglitz theory See also: Efficiency wages In the Shapiro-Stiglitz model of efficiency wages, workers are paid at a level that dissuades shirking. This prevents wages from dropping to market clearing levels. Full employment cannot be achieved because workers would shirk if they were not threatened with the possibility of unemployment. Because of this, the curve for the no-shirking condition (labeled NSC) goes to infinity at full employment.
Stiglitz also did research on efficiency wages , and helped create
what became known as the "Shapiro-Stiglitz model" to explain why there
is unemployment even in equilibrium, why wages are not bid down
sufficiently by job seekers (in the absence of minimum wages) so that
everyone who wants a job finds one, and to question whether the
neoclassical paradigm could explain involuntary unemployment . The
answer to these puzzles was proposed by Shapiro and Stiglitz in 1984:
* Unlike other forms of capital, humans can choose their level of effort. * It is costly for firms to determine how much effort workers are exerting.
A full description of this model can be found at the links provided. Some key implications of this model are:
* Wages do not fall enough during recessions to prevent unemployment from rising. If the demand for labour falls, this lowers wages. But because wages have fallen, the probability of 'shirking' (workers not exerting effort) has risen. If employment levels are to be maintained, through a sufficient lowering of wages, workers will be less productive than before through the shirking effect. As a consequence, in the model, wages do not fall enough to maintain employment levels at the previous state, because firms want to avoid excessive shirking by their workers. So, unemployment must rise during recessions, because wages are kept 'too high'. * Possible corollary: Wage sluggishness. Moving from one private cost of hiring (w∗) to another private cost of hiring (w∗∗) will require each firm to repeatedly re-optimize wages in response to shifting unemployment rate. Firms cannot cut wages until unemployment rises sufficiently (a coordination problem).
The outcome is never Pareto efficient.
* Each firm employs too few workers because it faces private cost of hiring rather than the social cost – which is equal to and in all cases. This means that firms do not "internalize" the "external" cost of unemployment – they do not factor how large-scale unemployment harms society when assessing their own costs. This leads to a negative externality as marginal social cost exceeds the firm's marginal cost (MSC = Firm's Private Marginal Cost + Marginal External Cost of increased social unemployment) * There are also positive externalities: each firm increases the asset value of unemployment for all other firms when they hire during recessions. By creating hypercompetitive labor markets, all firms (the winners when laborers compete) experience an increase in value. However, this effect of increased valuation is very unapparent, because the first problem (the negative externality of sub-optimal hiring) clearly dominates since the 'natural rate of unemployment' is always too high.
PRACTICAL IMPLICATIONS OF STIGLITZ THEOREMS
While the mathematical validity of Stiglitz et al. theorems are not in question, their practical implications in political economy and their application in real life economic policies have been subject to disagreement and debate. Stiglitz himself has evolved his political-economic discourse over time.
Once incomplete and imperfect information are introduced, Chicago-school defenders of the market system cannot sustain descriptive claims of the Pareto efficiency of the real world. Thus, Stiglitz's use of rational-expectations equilibrium assumptions to achieve a more realistic understanding of capitalism than is usual among rational-expectations theorists leads, paradoxically, to the conclusion that capitalism deviates from the model in a way that justifies state action – socialism – as a remedy.
The effect of Stiglitz's influence is to make economics even more presumptively interventionist than Samuelson preferred. Samuelson treated market failure as the exception to the general rule of efficient markets. But the Greenwald-Stiglitz theorem posits market failure as the norm, establishing "that government could potentially almost always improve upon the market's resource allocation." And the Sappington-Stiglitz theorem "establishes that an ideal government could do better running an enterprise itself than it could through privatization" (Stiglitz 1994, p. 179).
Objections to the wide adoption of positions suggested by Stiglitz's discoveries do not come from economics itself, but mostly from political scientists, especially in the field of sociology . As David L. Prychitko discusses in his "critique" to Whither Socialism? (see below), although Stiglitz's main economic insight seems generally correct, it still leaves open great constitutional questions such as how the coercive institutions of the government should be constrained and what the relation is between the government and civil society.
Stiglitz joined the Clinton Administration in 1993, serving first as
a member during 1993–1995, and was then appointed Chairman of the
Council of Economic Advisers
Stiglitz's most important contribution in this period was helping define a new economic philosophy, a "third way", which postulated the important, but limited, role of government, that unfettered markets often did not work well, but that government was not always able to correct the limitations of markets. The academic research that he had been conducting over the preceding 25 years provided the intellectual foundations for this "third way".
Stiglitz always had a poor relationship with Treasury Secretary
Lawrence Summers . In 2000, Summers successfully petitioned for
Stiglitz's removal, supposedly in exchange for
Stiglitz resigned from the
Joseph E. Stiglitz said today that he would resign as the World Bank's chief economist after using the position for nearly three years to raise pointed questions about the effectiveness of conventional approaches to helping poor countries.
In this role, he continued criticism of the IMF, and, by implication, the US Treasury Department. In April 2000, in an article for The New Republic , he wrote:
They’ll say the IMF is arrogant. They’ll say the IMF doesn’t
really listen to the developing countries it is supposed to help.
They’ll say the IMF is secretive and insulated from democratic
accountability. They’ll say the IMF's economic ‘remedies’ often
make things worse – turning slowdowns into recessions and recessions
into depressions. And they’ll have a point. I was chief economist at
The article was published a week before the annual meetings of the
In a September 19, 2008 radio interview, with Aimee Allison and Philip Maldari on Pacifica Radio 's KPFA 94.1 FM in Berkeley, California , US, Stiglitz implied that President Clinton and his economic advisors would not have backed the North American Free Trade Agreement (NAFTA) had they been aware of stealth provisions, inserted by lobbyists, that they overlooked.
INITIATIVE FOR POLICY DIALOGUE
Main article: Initiative for Policy Dialogue
In July 2000, Stiglitz founded the Initiative for Policy Dialogue (IPD), with support of the Ford, Rockefeller, McArthur, and Mott Foundations and the Canadian and Swedish governments, to enhance democratic processes for decision-making in developing countries and to ensure that a broader range of alternatives are on the table and more stakeholders are at the table.
COMMISSION ON THE MEASUREMENT OF ECONOMIC PERFORMANCE AND SOCIAL PROGRESS
At the beginning of 2008, Stiglitz chaired the Commission on the Measurement of Economic Performance and Social Progress , also known as the Stiglitz-Sen-Fitoussi Commission, initiated by President Sarkozy of France. The Commission held its first plenary meeting on April 22–23, 2008, in Paris. Its final report was made public on September 14, 2009.
COMMISSION OF EXPERTS ON REFORMS OF THE INTERNATIONAL MONETARY AND FINANCIAL SYSTEM
In 2009, Stiglitz chaired the Commission of Experts on Reforms of the
International Monetary and Financial System which was convened by the
President of the United Nations General Assembly "to review the
workings of the global financial system , including major bodies such
GREEK DEBT CRISIS
In 2010, Professor Stiglitz acted as an advisor to the Greek government. He appeared on Bloomberg TV for an interview on the risks of Greece defaulting, in which he stated that he was very confident that Greece would not default. He went on to say that Greece was under "speculative attack" and though it had "short-term liquidity problems... and would benefit from Solidarity Bonds", the country was "on track to meet its obligations".
The next day, during a BBC interview, Stiglitz stated that "there's no problem of Greece or Spain meeting their interest payments". He argued nonetheless, that it would be desirable and needed for all of Europe to make a clear statement of belief in social solidarity and that they "stand behind Greece". Confronted with the statement: "Greece's difficulty is that the magnitude of debt is far greater than the capacity of the economy to service", Stiglitz replied, "That's rather absurd".
In 2012, Stiglitz described the European austerity plans as a "suicide-pact".
Since March 2012, Stiglitz has been a member of the Scottish
Government 's Fiscal Commission Working Group, which oversees the work
to establish a fiscal and macro economic framework for an independent
Scotland on behalf of the Scottish
Council of Economic Advisers
Together with Professors Andrew Hughes Hallett , Sir James Mirrlees and Frances Ruane Stiglitz will "advise on the establishment of a credible Fiscal Commission which entrenches financial responsibility and ensures market confidence".
THE LABOUR PARTY
In July 2015, Stiglitz endorsed
On September 27, 2015, it was announced that he had been appointed to
the British Labour Party\'s
Economic Advisory Committee , convened by
SUPPORT FOR ANTI-AUSTERITY MOVEMENT IN SPAIN
On July 25, 2011, Stiglitz participated in the "I Foro Social del
15M" organized in
CRITICISM OF RATING AGENCIES
Stiglitz has been critical of rating agencies , describing them as the "key culprit" in the financial crisis, noting "they were the party that performed the alchemy that converted the securities from F-rated to A-rated. The banks could not have done what they did without the complicity of the rating agencies."
Stiglitz co-authored a paper with Peter Orszag in 2002 titled "Implications of the New Fannie Mae and Freddie Mac Risk-Based Capital Standard" where they stated "on the basis of historical experience, the risk to the government from a potential default on GSE debt is effectively zero." However, "the risk-based capital standard ... may fail to reflect the probability of another Great Depression-like scenario."
CRITICISM OF TRANS-PACIFIC PARTNERSHIP AND TRANSATLANTIC TRADE AND INVESTMENT PARTNERSHIP
See also: Trans-Pacific Partnership § Response , and Transatlantic Trade and Investment Partnership § activism against TTIP
Stiglitz warned that the Trans-Pacific Partnership (TPP) presented "grave risks" and it "serves the interests of the wealthiest."
Stiglitz also opposed the Transatlantic Trade and Investment
Partnership (TTIP) trade deal between the
Stiglitz argues that relying solely on business self-interest as the means of achieving the well-being of society and economic efficiency is misleading, and that instead "What is needed is stronger norms, clearer understandings of what is acceptable – and what is not – and stronger laws and regulations to ensure that those that do not behave in ways that are consistent with these norms are held accountable".
LAND VALUE TAX (GEORGISM)
Stiglitz argues that land value tax would improve the efficiency and
equity of agricultural economies. Stiglitz believes that societies
should rely on a generalized
VIEWS ON THE EUROZONE
In a September 2016 interview Stiglitz stated that "the cost of keeping the Eurozone together probably exceeds the cost of breaking it up."
VIEWS ON FREE TRADE
Advice For The Eurozone Countries
In the 1990s, he wrote that «rich countries in North America and Europe should eliminate all tariffs and quotas (protectionist measures)» . Now, he advises the eurozone countries to control their trade balance with Germany by means of export/import certificates or «trade chits» (a protectionist measure) .
Citing Keynesian theory, he explains that trade deficits are harmful:
John Maynard Keynes
Stiglitz writes:«Germany's surplus means that the rest of Europe is in deficit. And the fact that these countries import more than they export contributes to the weakness of their economie». He thinks that surplus countries are getting richer at the expense of deficit countries. He notes that the euro is the cause of this deficit and that as the trade deficit declines GDP would rise and unemployment would fall: «The euro system means that Germany's exchange rate cannot increase compared to other euro area members. If the exchange rate were to rise, Germany would have more difficulty exporting and its economic model, based on strong exports, would cease. At the same time, the rest of Europe would export more, GDP would rise and unemployment would fall.»
He also thinks that the rest of the world should impose a carbon-adjustment tax (a protectionist measure) on US exports that do not comply with global standard
Advice For United States
Contrary to Keynesian theory and these analyses on the eurozone, he
However, he admits that that as the trade deficit declines «GDP
would rise and unemployment would fall».«Countries that import more
than they export contributes to the weakness of their economie» . He
notes that trade deficits caused by free trade destroy manufacturing
jobs: the increase in the «value of the dollar will lead to larger
trade deficits and fewer manufacturing jobs» . Moreover, even if
according to him, the
According to him, the
He claims to be against neoliberalism but advises the United States to pursue free trade (deregulation or liberalization of foreign trade) which is a constitutive policy of neoliberalism .
According to him, it's not China (which has a large trade surplus)
that makes «trade war» but the
About China, he writes that the decline in exports is not prejudicial if China replaces «export dependence to a model of growth driven by domestic demand». Thus, it is not the involvement in international trade per se that brings growth, but access to strong demand. Regarding the United States, he writes the opposite: «Walking away from globalization may reduce our imports, but it will also reduce exports in tandem. And, almost surely, jobs will be destroyed faster than they will be created: there may even be fewer net manufacturing jobs». If the U. S. tries to control the movement of goods «they surely will lose» .
Early 2017, he writes that the American middle class is indeed the
loser of globalization and «China, with its large emerging middle
class, is among the big beneficiaries of globalization» . Then he
changed his mind and arges that the fall in wages and the
disappearance of well-paid jobs are not due to globalization but are
only inevitable collateral damage to the march of economic progress
and technological innovation: «The
In 2016, he believes that the economic situation of the United States
is critical : «As the economists Anne Case and
Along with his technical economic publications (he has published over 300 technical articles), Stiglitz is the author of books on issues from patent law to abuses in international trade.
THE EURO: HOW A COMMON CURRENCY THREATENS THE FUTURE OF EUROPE (2016)
THE GREAT DIVIDE: UNEQUAL SOCIETIES AND WHAT WE CAN DO ABOUT THEM (2015)
From the jacket: In The Great Divide, Joseph E. Stiglitz expands on the diagnosis he offered in his best-selling book The Price of Inequality and suggests ways to counter America's growing problem. Stiglitz argues that inequality is a choice – the cumulative result of unjust policies and misguided priorities.
CREATING A LEARNING SOCIETY: A NEW APPROACH TO GROWTH, DEVELOPMENT, AND SOCIAL PROGRESS (2014)
Creating a Learning Society, (co authored with Bruce C. Greenwald), cast light on the significance of this insight for economic theory and policy. Taking as a starting point Kenneth J. Arrow's 1962 paper "Learning by Doing," they explain why the production of knowledge differs from that of other goods and why market economies alone typically do not produce and transmit knowledge efficiently. Closing knowledge gaps and helping laggards learn are central to growth and development. But creating a learning society is equally crucial if we are to sustain improved living standards in advanced countries.
THE PRICE OF INEQUALITY (2012)
From the jacket: As those at the top continue to enjoy the best health care, education, and benefits of wealth, they often fail to realize that, as Joseph E. Stiglitz highlights, "their fate is bound up with how the other 99 percent live ... It does not have to be this way. In The Price of Inequality Stiglitz lays out a comprehensive agenda to create a more dynamic economy and fairer and more equal society"
The book received the Robert F. Kennedy Center for Justice and Human Rights 2013 Book Award, given annually to the book that "most faithfully and forcefully reflects Robert Kennedy's purposes – his concern for the poor and the powerless, his struggle for honest and even-handed justice, his conviction that a decent society must assure all young people a fair chance, and his faith that a free democracy can act to remedy disparities of power and opportunity."
Main article: Freefall: America, Free Markets, and the Sinking of the World Economy
In Freefall: America, Free Markets, and the Sinking of the World Economy, Stiglitz discusses the causes of the 2008 recession/depression and goes on to propose reforms needed to avoid a repetition of a similar crisis, advocating government intervention and regulation in a number of areas. Among the policy-makers he criticises are George W. Bush, Larry Summers, and Barack Obama.
THE THREE TRILLION DOLLAR WAR (2008)
The Three Trillion Dollar War (co-authored with Linda Bilmes ) examines the full cost of the Iraq War, including many hidden costs. The book also discusses the extent to which these costs will be imposed for many years to come, paying special attention to the enormous expenditures that will be required to care for very large numbers of wounded veterans. Stiglitz was openly critical of George W. Bush at the time the book was released.
STABILITY WITH GROWTH (2006)
In Stability with Growth: Macroeconomics, Liberalization and
Development , Stiglitz,
José Antonio Ocampo (United Nations
Under-Secretary-General for Economic and Social Affairs, until 2007),
Shari Spiegel (Managing Director,
Initiative for Policy Dialogue –
Ricardo Ffrench-Davis (Main Adviser, Economic Commission for
Latin America and the Caribbean –
ECLAC ) and
MAKING GLOBALIZATION WORK (2006)
Stiglitz is an exception to the general pro-globalisation view of
professional economists, according to economist
Martin Wolf .
Stiglitz argues that economic opportunities are not widely enough
available, that financial crises are too costly and too frequent, and
that the rich countries have done too little to address these
FAIR TRADE FOR ALL (2005)
In Fair Trade for All, authors Stiglitz and Andrew Charlton argue that it is important to make the trading world more development friendly. The idea is put forth that the present regime of tariffs and agricultural subsidies is dominated by the interests of former colonial powers and needs to change. The removal of the bias toward the developed world will be beneficial to both developing and developed nations. The developing world is in needs of assistance, and this can only be achieved when developed nations abandon mercantilist based priorities and work towards a more liberal world trade regime.
NEW PARADIGM FOR MONETARY ECONOMICS (2003)
THE ROARING NINETIES (2003)
The Roaring Nineties is Stiglitz' analysis of the boom and bust of the 1990s. Presented from an insider's point of view, firstly as chair of President Clinton's Council of Economic Advisors, and later as chief economist of the World Bank, it continues his argument on how misplaced faith in free-market ideology led to the global economic issues of today, with a perceptive focus on US policies.
GLOBALIZATION AND ITS DISCONTENTS (2002)
Stiglitz bases his argument on the themes that his decades of theoretical work have emphasized: namely, what happens when people lack the key information that bears on the decisions they have to make, or when markets for important kinds of transactions are inadequate or don't exist, or when other institutions that standard economic thinking takes for granted are absent or flawed. Stiglitz stresses the point: "Recent advances in economic theory" (in part referring to his own work) "have shown that whenever information is imperfect and markets incomplete, which is to say always, and especially in developing countries, then the invisible hand works most imperfectly." As a result, Stiglitz continues, governments can improve the outcome by well-chosen interventions. Stiglitz argues that when families and firms seek to buy too little compared to what the economy can produce, governments can fight recessions and depressions by using expansionary monetary and fiscal policies to spur the demand for goods and services. At the microeconomic level, governments can regulate banks and other financial institutions to keep them sound. They can also use tax policy to steer investment into more productive industries and trade policies to allow new industries to mature to the point at which they can survive foreign competition. And governments can use a variety of devices, ranging from job creation to manpower training to welfare assistance, to put unemployed labor back to work and cushion human hardship.
Stiglitz complains bitterly that the IMF has done great damage through the economic policies it has prescribed that countries must follow in order to qualify for IMF loans, or for loans from banks and other private-sector lenders that look to the IMF to indicate whether a borrower is creditworthy. The organization and its officials, he argues, have ignored the implications of incomplete information, inadequate markets, and unworkable institutions – all of which are especially characteristic of newly developing countries. As a result, Stiglitz argues, the IMF has often called for policies that conform to textbook economics but do not make sense for the countries to which the IMF is recommending them. Stiglitz seeks to show that these policies have been disastrous for the countries that have followed them.
WHITHER SOCIALISM? (1994)
Whither Socialism? is based on Stiglitz's Wicksell Lectures, presented at the Stockholm School of Economics in 1990 and presents a summary of information economics and the theory of markets with imperfect information and imperfect competition, as well as being a critique of both free market and market socialist approaches (see Roemer critique, op. cit.). Stiglitz explains how the neoclassical , or Walrasian model ("Walrasian economics" refers to the result of the process which has given birth to a formal representation of Adam Smith 's notion of the "invisible hand", along the lines put forward by Léon Walras and encapsulated in the general equilibrium model of Arrow–Debreu ), may have wrongly encouraged the belief that market socialism could work. Stiglitz proposes an alternative model, based on the information economics established by the Greenwald–Stiglitz theorems.
One of the reasons Stiglitz sees for the critical failing in the standard neoclassical model , on which market socialism was built, is its failure to consider the problems that arise from lack of perfect information and from the costs of acquiring information. He also identifies problems arising from its assumptions concerning completeness.
PAPERS AND CONFERENCES
Stiglitz wrote a series of papers and held a series of conferences
explaining how such information uncertainties may have influence on
everything from unemployment to lending shortages. As the chairman of
Council of Economic Advisers
AWARDS AND HONORS
In addition to being awarded the Nobel Memorial prize, Stiglitz has over 40 honorary doctorates and at least eight honorary professorships, as well as an honorary deanship.
In 2011, he was named by
Foreign Policy magazine on its list of top
global thinkers. In February 2012, he was awarded the Legion of Honor
, in the rank of Officer, by the French ambassador in the United
Stiglitz married Jane Hannaway in 1978; the couple later divorced.
He got married, for the third time, on October 28, 2004 to Anya
Schiffrin , who works at the School of International and Public
* Stiglitz, Joseph E.; Uzawa, Hirofumi (1969). Readings in the
modern theory of economic growth. Cambridge, Massachusetts: The M.I.T.
Press. ISBN 9780262190558 .
* Stiglitz, Joseph E.; Atkinson, Anthony B. (1980). Lectures on
public economics. London New York: McGraw-Hill Book Co. ISBN
* Stiglitz, Joseph E.; Newbery, David M.G. (1981). The theory of
commodity price stabilization: a study in the economics of risk.
Oxford Oxford New York: Clarendon Press Oxford University Press. ISBN
* Stiglitz, Joseph E. (1989). The economic role of the state.
Oxford, UK Cambridge, Massachusetts, US:
Wiley-Blackwell . ISBN
* Stiglitz, Joseph E.; Boadway, Robin (1994). Economics and the
Canadian economy. New York: W.W. Norton & Company. ISBN 9780393965117
* Stiglitz, Joseph E. (1994). Whither socialism? . Cambridge,
MIT Press . ISBN 9780262691826 .
* Stiglitz, Joseph E. (2000). Economics of the public sector (3rd
ed.). New York: W.W. Norton & Company. ISBN 9780393966510 .
* Stiglitz, Joseph E.; Meier, Gerald M. (2001). Frontiers of
development economics: the future in perspective. Washington, D.C.
Oxford New York:
Also as: Stiglitz, Joseph (2010). Freefall: free markets and the sinking of the global economy . London: Penguin. ISBN 9780141045122 .
* Stiglitz, Joseph E. (2012). The Price of Inequality: How Today's
Divided Society Endangers Our Future. New York: W.W. Norton & Company
. ISBN 9780393088694 .
* Stiglitz, Joseph; Greenwald, Bruce C. (2014). Creating a learning
society: a new approach to growth, development, and social progress.
* Stiglitz, Joseph E. (1989), "Principal and agent", in Eatwell, John ; Milgate, Murray ; Newman, Peter K. , The New Palgrave: allocation, information, and markets, New York: Norton, ISBN 9780393958546 . * Stiglitz, Joseph E. (1993), " Market socialism and neoclassical economics", in Bardhan, Pranab ; Roemer, John E. , Market socialism: the current debate, New York: Oxford University Press, ISBN 9780195080490 . * Stiglitz, Joseph E. (2009), "Regulation and failure", in Moss, David A. ; Cisternino, John A., New perspectives on regulation, Cambridge, Massachusetts: The Tobin Project, pp. 11–23, ISBN 9780982478806 . Pdf version. * Stiglitz, Joseph E. (2009), "Simple formulae for optional income taxation and the measurement of inequality", in Kanbur, Ravi ; Basu, Kaushik , Arguments for a better world: essays in honor of Amartya Sen Volume I: Ethics, welfare, and measurement, Oxford New York: Oxford University Press, pp. 535–66, ISBN 9780199239115 .
SELECTED SCHOLARLY ARTICLES
* Stiglitz, Joseph E.; Rothschild, Michael (September 1970).
"Increasing risk: I. a definition". Journal of Economic Theory.
Elsevier. 2 (3): 225–43. doi :10.1016/0022-0531(70)90038-4 .
* Stiglitz, Joseph E.; Rothschild, Michael (March 1971). "Increasing
risk: II. Its economic consequences". Journal of Economic Theory.
Elsevier. 3 (1): 66–84. doi :10.1016/0022-0531(71)90034-2 .
* Stiglitz, Joseph E. (May 1974). "Alternative theories of wage
determination and unemployment in LDC\'s: the labor turnover model".
The Quarterly Journal of Economics. Oxford Journals. 88 (2):
194–227. doi :10.2307/1883069 .
* Stiglitz, Joseph E. (April 1974). "Incentives and risk sharing in
sharecropping". Review of Economic Studies. Oxford Journals. 41 (2):
219–55. doi :10.2307/2296714 .
* Stiglitz, Joseph E.; Rothschild, Michael (November 1976).
"Equilibrium in competitive insurance markets: an essay on the
economics of imperfect information". The Quarterly Journal of
Economics. Oxford Journals. 90 (4): 629–49. doi :10.2307/1885326 .
* Stiglitz, Joseph E.; Dixit, Avinash K. (June 1977). "Monopolistic
competition and optimum product diversity". The American Economic
American Economic Association via JSTOR. 67 (3): 297–308.
* Stiglitz, Joseph E.; Weiss, Andrew (June 1981). "Credit rationing
in markets with imperfect information". The American Economic Review.
American Economic Association via JSTOR. 71 (3): 393–410. JSTOR
1802787 . Pdf version.
* Stiglitz, Joseph E.; Weiss, Andrew (1983). "Incentive Effects of
Terminations: Applications to the Credit and Labor Markets". American
Economic Review. 73 (5): 912–927.
* Stiglitz, Joseph E.; Newbery, David M.G. (January 1984). "Pareto
inferior trade". Review of Economic Studies. Oxford Journals. 51 (1):
1–12. doi :10.2307/2297701 .
* Stiglitz, Joseph E. (March 1987). "The causes and consequences of
the dependence of quality on price". The American Economic Review.
American Economic Association via JSTOR. 25 (1): 1–48.
* Stiglitz, Joseph E.; Greenwald, Bruce (Winter 1993). "New and old
Journal of Economic Perspectives . American Economic
Association. 7 (1): 23–44. doi :10.1257/jep.7.1.23 .
* Stiglitz, Joseph E. (Winter 1993). "Post Walrasian and Post
Marxian economics". The
Journal of Economic Perspectives . American
Economic Association. 7 (1): 109–14. doi :10.1257/jep.7.1.109 .
* Stiglitz, Joseph E. (August 1996). "Some lessons from the East
* Stiglitz, Joseph E. (March 1998). "Redefining the role of the state – What should it do? How should it do it? And how should these decisions be made?". Paper presented at the Tenth Anniversary of MITI Research Institute, Tokyo. Pdf version.
Also as: Stiglitz, Joseph E. (2001), "Redefining the role of the
state – What should it do? How should it do it? And how should these
decisions be made?", in Stiglitz, Joseph E. (author); Chang, Ha-Joon
* Stiglitz, Joseph E. (Spring 1998). "Distinguished lecture on economics in government: the private uses of public interests: incentives and institutions". The Journal of Economic Perspectives . American Economic Association. 12 (2): 3–22. doi :10.1257/jep.12.2.3 . * Stiglitz, Joseph E. (May 18, 2007). "Prizes, not patents". Post-Autistic Economics Review. World Economics Association. 42: 48–50.
* Stiglitz, Joseph E. (May 28, 2014). "Reforming taxation to promote growth and equity". White paper. Roosevelt Institute. Pdf version.
ARTICLES IN POPULAR PRESS
* Stiglitz, Joseph E. "Joseph E. Stiglitz". Project Syndicate . Retrieved October 29, 2013.
various articles from 2001 onwards.
See also: Wade, Robert (January–February 2001). "Showdown at the
New Left Review
* Stiglitz, Joseph E.; Orszag, Peter R. ; Orszag, Jonathan M. (March
2, 2002). "Implications of the new
Fannie Mae and Freddie Mac
risk-based capital standard" (PDF).
Fannie Mae Press.
Fannie Mae . I
(2): 1–10. Archived from the original (Pdf) on November 22, 2009.
* Stiglitz, Joseph E. (Fall 2003). "Information and the change in
the paradigm in economics, part 1". The American Economist. Omicron
Delta Epsilon . 47 (2): 6–26. doi :10.1177/056943450304700202 .
Review of the book: Skidelsky, Robert (2009). Keynes: the return of the master. Allen Lane. ISBN 9781846142581 .
* Stiglitz, Joseph E. (May 2011). "Of the 1%, by the 1%, for the
1%". Vanity Fair .
Condé Nast .
* Stiglitz, Joseph E. (July 12, 2011). "The ideological crisis of
Western capitalism". Social Europe .
* Stiglitz, Joseph E. (January 2013). "The post-crisis crises". CFO
Insight Magazine. Euro Treasurer.
* Stiglitz, Joseph E. (April 2013). "The promise of abenomics". CFO
Insight Magazine. Euro Treasurer.
* Stiglitz, Joseph E. (January 2015). "The Chinese Century". Vanity
Fair. Condé Nast.
* Stiglitz, Joseph E. (June 29, 2015). "Joseph Stiglitz: how I would
vote in the Greek referendum".
VIDEO AND ONLINE SOURCES
* Stiglitz, Joseph E. (2007). Committee hearing (via YouTube)
Book details: Stiglitz, Joseph E.; Bilmes, Linda (2008). The three trillion dollar war: the true cost of the Iraq conflict . New York: W.W. Norton & Company. ISBN 9780393067019 .
* Stiglitz, Joseph E. (February 9, 2010). "Bloomberg News" (Video) (YouTube). Interview with Andrea Catherwood . Retrieved October 29, 2014. Stiglitz says EU should defend Greece from speculators * Stiglitz, Joseph E. (guest); Hendry, Hugh (guest) ; Casajuana, Carlos (guest) (February 9, 2010). "Newsnight" (Video) (BBC). Interview with Emily Maitlis . Retrieved October 29, 2014. What should Europe do about Greece? * Stiglitz, Joseph E. (February 9, 2010). "Bloomberg News" (Video) (YouTube). Interview with Andrea Catherwood . Retrieved October 29, 2014. Stiglitz says EU should defend Greece from speculators * Stiglitz, Joseph E. (August 21, 2014). Inequality, wealth, and growth: why capitalism is failing (Speech). 5th Lindau Meeting on Economic Sciences. Lake Constance, Germany: Lindau Nobel Laureate Meetings . Retrieved October 29, 2014.
* Online access to Stiglitz published papers, at his own website.
* ^ A B Smith, Noah (13 January 2017). "Tribal warfare in economics
a thing of the past". The Australian Financial Review. Fairfax Media.
Bloomberg . Look on the pages of economists Joseph Stiglitz
Greg Mankiw or any of a number of prominent economists. On the
sidebar on the right, you’ll see an entry for "school or tradition".
Both Stiglitz and Mankiw are listed as "New Keynesian". That makes
absolutely no sense whatsoever. Stiglitz and Mankiw's research is in
totally different areas. Stiglitz did work on asymmetric information,
efficiency wages, land taxes and a host of other microeconomic
phenomena ... Nor are their policy positions even remotely similar –
Stiglitz is a hero to the left, while Mankiw is a small-government
conservative. In fact, Mankiw did important research on some models
called "New Keynesian". Stiglitz did not.
* ^ Stiglitz, Joseph E. (1966). Studies in the Theory of Economic
Growth and Income Distribution (PDF) (Ph.D.).
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* Official website
* Joseph E. Stiglitz
Columbia Business School