|New Keynesian economics|
February 9, 1943 |
|Field||Macroeconomics, public economics, information economics|
|Alma mater||Amherst College, MIT, University of Chicago|
|Influences||John Maynard Keynes, Robert Solow, James Mirrlees|
|Influenced||Paul Krugman, Jason Furman, Stephany Griffith-Jones, Huw Dixon|
|Contributions||Screening, taxation, unemployment|
|World Bank Chief Economist|
|Preceded by||Michael Bruno|
|Succeeded by||Nicholas Stern|
|17th Chair of the Council of Economic Advisors|
June 28, 1995 – February 13, 1997
|Preceded by||Laura Tyson|
|Succeeded by||Janet Yellen|
|Born||Joseph Eugene Stiglitz
February 9, 1943
|Spouse(s)||Jane Hannaway (1978–?; divorced)
Anya Schiffrin (m. 2004)
|Alma mater||Amherst College
Massachusetts Institute of Technology
Joseph Eugene Stiglitz, ForMemRS, FBA (born February 9, 1943) is an American economist and a professor at Columbia University. He is a recipient of the Nobel Memorial Prize in Economic Sciences (2001) and the John Bates Clark Medal (1979). He is a former senior vice president and chief economist of the World Bank, and is a former member, and Chairman of the Council of Economic Advisers. He is known for his critical view of the management of globalization, free-market economists (whom he calls "free market fundamentalists"), and some international institutions like the International Monetary Fund and the World Bank.
In 2000, Stiglitz founded the Initiative for Policy Dialogue (IPD), a think tank on international development based at Columbia University. Since 2001, he has been a member of the Columbia faculty, has been a University Professor since 2003, and is the Co-Chair of the University's Committee on Global Thought. He also chairs the University of Manchester's Brooks World Poverty Institute as well as the Socialist International Commission on Global Financial Issues and is a member of the Pontifical Academy of Social Sciences. Stiglitz has over 40 honorary doctorates and at least eight honorary professorships, as well as an honorary deanship. In 2009 the President of the United Nations General Assembly Miguel d'Escoto Brockmann, appointed Stiglitz as the Chairman of the U.N. Commission on Reforms of the International Monetary and Financial System, where he oversaw suggested proposals, and Commissioned a report on reforming the international monetary and financial system. Since 2012 Stiglitz has been the President of the International Economic Association and is currently presiding over the organization of the IEA triennial world congress that will be held on the Dead Sea Jordan in June 2014.
Stiglitz is the 4th most influential economist in the world today based on academic citations, and in 2011 he was named by Time magazine as one of the 100 most influential people in the world. Stiglitz's work focuses on income distribution, asset risk management, corporate governance, and international trade, and is the author of ten books, with his latest, The Price of Inequality (2012), hitting The New York Times best seller list.
- 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 Support for 2011 Spanish protests
- 3.7 Criticism of rating agencies
- 4 Books
- 4.1 The Price of Inequality
- 4.2 Freefall
- 4.3 The Three Trillion Dollar War
- 4.4 Stability with Growth
- 4.5 Making Globalization Work
- 4.6 Fair Trade for All
- 4.7 New Paradigm for Monetary Economics
- 4.8 The Roaring Nineties
- 4.9 Globalization and Its Discontents
- 4.10 Whither Socialism?
- 4.11 Papers and conferences
- 5 Personal life
- 6 Publications
- 7 See also
- 8 References
- 9 External links
Life and career
Stiglitz was born in Gary, Indiana, to Jewish parents, Charlotte (née Fishman) and Nathaniel D. Stiglitz. From 1960 to 1963, he studied at Amherst College, where he was a highly active member of the debate team and president of the student government. He went to the Massachusetts Institute of Technology (MIT) for his fourth year as an undergraduate, where he later pursued graduate work. His undergraduate degree was awarded from Amherst College. From 1965 to 1966, he moved to the University of Chicago to do research under Hirofumi Uzawa who had received an NSF grant. He studied for his PhD from MIT from 1966 to 1967, during which time he also held an MIT assistant professorship. Stiglitz stated that the particular style of MIT economics suited him well – simple and concrete models, directed at answering important and relevant questions. From 1966 to 1970 he was a research fellow at Cambridge University: he arrived at Fitzwilliam College as a Fulbright Scholar in 1965 and then won a Tapp Junior Research Fellowship at Gonville and Caius College. In subsequent years, he held academic positions at Yale, Stanford, Duke, Oxford, and Princeton. Stiglitz is now a professor at Columbia University, with appointments at the Business School, the Department of Economics and the School of International and Public Affairs (SIPA), and is editor of The Economists' Voice journal with J. Bradford DeLong and Aaron Edlin. 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 a New-Keynesian economist.
In addition to making numerous influential contributions to microeconomics, Stiglitz has played a number of policy roles. He served in the Clinton administration as the chair of the President's Council of Economic Advisors (1995 – 1997). At the World Bank, he served as senior vice-president and chief economist (1997 – 2000), in the time when unprecedented protest against international economic organizations started, most prominently with the Seattle WTO meeting of 1999. He was fired by the World Bank for expressing dissent with its policies. He was a lead author for the Intergovernmental Panel on Climate Change, which received the Nobel Peace Prize in 2007.
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 Barack Obama, but has also been sharply critical of the Obama Administration's financial-industry rescue plan. Stiglitz said that whoever designed the Obama administration's bank rescue plan is "either in the pocket of the banks or they’re incompetent."
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.
Stiglitz is the president of the International Economic Association from 2011–2014.
Contributions to economics
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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. 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.
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.
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.
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: "Unemployment is driven by the information structure of employment". Two basic observations undergird their analysis:
- 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.
- 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.[clarification needed] 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)[clarification needed]
- 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 considerable disagreement and debate. Stiglitz himself seems to be continuously adapting his own political-economic discourse, as we can see from the evolution in his positions as initially stated in Whither Socialism? (1994) to his own new positions held on his most recent publications.
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, 179).
The objections to the wide adoption of these positions suggested by Stiglitz's discoveries do not come from economics itself but mostly from political scientists and are in the fields 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 then appointed Chairman of the Council of Economic Advisers on June 28, 1995, in which capacity he also served as a member of the cabinet. He became deeply involved in environmental issues, which included serving on the Intergovernmental Panel on Climate Change, and helping draft a new law for toxic wastes (which was never passed).
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".
When President Bill Clinton was re-elected, he asked Stiglitz to continue to serve as Chairman of the Council of Economic Advisers for another term. But he had already been approached by the World Bank to be its senior vice president for development policy and its chief economist, and he assumed that position after his CEA successor was confirmed on February 13, 1997.
As the World Bank began its ten-year review of the transition of the former Communist countries to the market economy it unveiled failures of the countries that had followed the International Monetary Fund (IMF) shock therapy policies – both in terms of the declines in GDP and increases in poverty – that were even worse than the worst that most of its critics had envisioned at the onset of the transition. Clear links existed between the dismal performances and the policies that the IMF had advocated, such as the voucher privatization schemes and excessive monetary stringency. Meanwhile, the success of a few countries that had followed quite different strategies suggested that there were alternatives that could have been followed. The U.S. Treasury had put enormous pressure on the World Bank to silence his criticisms of the policies which they and the IMF had pursued.
Stiglitz always had a poor relationship with Treasury Secretary Lawrence Summers. In 2000, Summers successfully petitioned for Stiglitz's removal, supposedly in exchange for World Bank President James Wolfensohn's re-appointment – an exchange that Wolfensohn denies took place. Whether Summers ever made such a blunt demand is questionable – Wolfensohn claims he would "have told him to fuck himself".
Stiglitz resigned from the World Bank in January 2000, a month before his term expired. The Bank's president, James Wolfensohn, announced Stiglitz's resignation in November 1999 and also announced that Stiglitz would stay on as Special Advisor to the President, and would chair the search committee for a successor.
Joseph E. Stiglitz said today [Nov. 24, 1999] 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 World Bank from 1996 until last November, during the gravest global economic crisis in a half-century. I saw how the IMF, in tandem with the U.S. Treasury Department, responded. And I was appalled.
The article was published a week before the annual meetings of the World Bank and IMF and provoked a strong response. It proved too strong for Summers and, yet more lethally, Stiglitz's protector-of-sorts at the World Bank, Wolfensohn. Wolfensohn had privately empathised with Stiglitz's views, but this time was worried for his second term, which Summers had threatened to veto. Stanley Fischer, deputy managing director of the IMF, called a special staff meeting and informed at that gathering that Wolfensohn had agreed to fire Stiglitz. Meanwhile, the Bank's External Affairs department told the press that Stiglitz had not been fired, his post had merely been abolished.
In a September 19, 2008 radio interview with Aimee Allison and Philip Maldari on Pacifica Radio's KPFA 94.1 FM in Berkeley, California, 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
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 22–23 April 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 as the World Bank and the IMF, and to suggest steps to be taken by Member States to secure a more sustainable and just global economic order". Its final report was released on September 21, 2009.
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."
Support for 2011 Spanish protests
On July 25, 2011, Stiglitz participated to the "I Foro Social del 15M" organized in Madrid (Spain) expressing his support to the 2011 Spanish protests. During an informal speech, he made a brief review of some of the problems in Europe and in the United States, the serious unemployment rate and the situation in Greece. "This is an opportunity for economic contribution social measures", argued Stiglitz, who made a critical speech about the way authorities are handling the political exit to the crisis. He encouraged those present to respond to the "bad ideas", not with indifference, but with "good ideas". "This does not work, you have to change it", he said.
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."
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 Price of Inequality
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."
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
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
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 – IPD), Ricardo Ffrench-Davis (Main Adviser, Economic Commission for Latin America and the Caribbean – ECLAC) and Deepak Nayyar (Vice Chancellor, University of Delhi) discuss the current debates on macroeconomics, capital market liberalization and development, and develop a new framework within which one can assess alternative policies. They explain their belief that the Washington Consensus has advocated narrow goals for development (with a focus on price stability) and prescribed too few policy instruments (emphasizing monetary and fiscal policies), and places unwarranted faith in the role of markets. The new framework focuses on real stability and long-term sustainable and equitable growth, offers a variety of non-standard ways to stabilize the economy and promote growth, and accepts that market imperfections necessitate government interventions. Policy-makers have pursued stabilization goals with little concern for growth consequences, while trying to increase growth through structural reforms focused on improving economic efficiency. Moreover, structural policies, such as capital market liberalization, have had major consequences for economic stability. This book challenges these policies by arguing that stabilization policy has important consequences for long-term growth and has often been implemented with adverse consequences. The first part of the book introduces the key questions and looks at the objectives of economic policy from different perspectives. The third part presents a similar analysis for capital market liberalization.
Making Globalization Work
Making Globalization Work surveys the inequities of the global economy, and the mechanisms by which developed countries exert an excessive influence over developing nations. Dr. Stiglitz argues that through tariffs, subsidies, an over-complex patent system and pollution, the world is being both economically and politically destabilised. Stiglitz argues that strong, transparent institutions are needed to address these problems. He shows how an examination of incomplete markets can make corrective government policies desirable.
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 problems. Making Globalization Work has sold more than two million copies.
Fair Trade for All
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
The Roaring Nineties
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
In Globalization and Its Discontents, Stiglitz argues that what are often called "developing economies" are, in fact, not developing at all, and puts much of the blame on the IMF.
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? 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 the Council of Economic Advisers during the first term of the Clinton Administration and former chief economist at the World Bank, Stiglitz was able to put some of his views into action. For example, he was an outspoken critic of quickly opening up financial markets in developing countries. These markets rely on access to good financial data and sound bankruptcy laws, but he argued that many of these countries didn't have the regulatory institutions needed to ensure that the markets would operate soundly.
Stiglitz married Jane Hannaway in 1978; the couple later divorced. He married, for the third time, on October 28, 2004, to Anya Schiffrin, who works at the School of International and Public Affairs at Columbia University. He has four children, Siobhan, Michael, Edward (Jed), and Julia, and three grandchildren.
- 2012, The Price of Inequality: How Today's Divided Society Endangers Our Future, Stiglitz, J.E., W.W. Norton & Company, ISBN 978-0393088694
- 2010, Freefall: America, Free Markets, and the Sinking of the World Economy, Stiglitz, J.E., W.W. Norton & Company, ISBN 0393075966
- 2010, Mismeasuring Our Lives: Why GDP Doesn't Add Up, Fitoussi, J-P., Sen, A. & Stiglitz, J.E., The New Press.
- 2010, The Stiglitz Report: Reforming the International Monetary and Financial Systems in the Wake of the Global Crisis, Stiglitz, J.E., The New Press, ISBN 1595585206
- 2010, Time for a Visible Hand: Lessons from the 2008 World Financial Crisis, Jones, S.G., Ocampo, J.A. & Stiglitz, J.E. (Ed.), Oxford University Press.
- 2008, The Three Trillion Dollar War, Bilmes, L. Stiglitz, J.E., W.W. Norton & Company, ISBN 978-0393067019
- 2006, Making Globalization Work, Stiglitz, J.E., W.W. Norton & Company, ISBN 978-0393061222
- 2006, Stability with Growth: Macroeconomics, Liberalization, and Development, Ffrench-Davis, R., Nayyar, D., Ocampo, J.A., Spiegel, S. & Stiglitz, J.E., Oxford University Press.
- 2005, Fair Trade for All: How Trade Can Promote Development, Charlton, A.H.G. & Stiglitz, J.E., Oxford University Press, ISBN 0199290903
- 2004, The Development Round of Trade Negotiations in the Aftermath of Cancún, Charlton, A.H.G. & Stiglitz, J.E., Commonwealth Secretariat, ISBN 978-0850928013
- 2003, The Roaring Nineties, Stiglitz, J.E, W.W. Norton & Company, ISBN 978-0393058529
- 2003, Towards a New Paradigm in Monetary Economics, Greenwald, B. & Stiglitz, J.E., Cambridge University Press, ISBN 978-0521810340
- 2002, Economics, Stiglitz, J.E. & Walsh, C.E., W.W. Norton & Company.
- 2002, Globalization and Its Discontents, Stiglitz, J.E., W.W. Norton & Company, ISBN 978-0393051247
- 2002, Peasants Versus City-Dwellers: Taxation and the Burden of Economic Development, Sah, R.K. & Stiglitz, J.E., Oxford University Press.
- 2002, Principles of Macroeconomics, Stiglitz, J.E. & Walsh, C.E., W.W. Norton & Company.
- 2002, The Rebel Within: Joseph Stiglitz and the World Bank, The Rebel Within: Joseph Stiglitz and the World Bank, Stiglitz, J.E., Anthem Press.
- 2001, Rethinking the East Asian Miracle, Stiglitz, J.E. & Yusuf, S. (Ed.), Oxford University Press.
- 2000, Frontiers of Development Economics: The Future in Perspective, Meier, G.M. & Stiglitz, J.E. (Ed.), World Bank.
- 1996, Whither Socialism?, Stiglitz, J.E., MIT Press, ISBN 978-0262691826
- 1994' Economics and the Canadian Economy, Stiglitz, J.E. & Boadway, Robin W., W W Norton & Co Inc, ISBN 978-0393965117
- 1989, The Economic Role of the State, Stiglitz, J.E., Wiley-Blackwell, ISBN 978-0631171355
- 1986, Economics of the Public Sector, Stiglitz, J.E., W.W. Norton & Company, ISBN 978-0393966510
- 1981, Theory of Commodity Price Stabalization, Newberry, D.M.G. & Stiglitz, J.E., Oxford University Press.
- 1980, Lectures on Public Economics, Anthony Barnes Atkinson & Joseph E. Stiglitz, Mcgraw-Hill College, ISBN 978-0070841055
- 1969, Readings in the Modern Theory of Economic Growth, Stiglitz, J.E. & Uzawa, H., MIT Press, ISBN 978-0262190558
- Book chapters
- 2009. "Regulation and Failure", in David Moss and John Cisternino (eds.), New Perspectives on Regulation, ch. 1, pp. 11–23. Cambridge: The Tobin Project.
- 2001, New Ideas About Old Age Security: Toward Sustainable Pension Systems in the 21st Century, edited with Robert Holzmann, World Bank, January 2001.
- Selected scholarly articles
- 2007, "Prizes, Not Patents" post-autistic economics review, issue no. 42
- 1998, Distinguished lecture on economics in government: The private uses of public interests: Incentives and institutions. Journal of Economic Perspectives, Vol. 12, No. 2, pp. 3–22.
- 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, March 1998.
- 1996, The World Bank Research Observer: No 2: August 1996 by Joseph Stiglitz
- 1993, "Post Walrasian and post Marxian economics," Journal of Economic Perspectives, vol. 7, pp. 109–14
- 1993, "Market socialism and neoclassical economics," in Bardhan, P. K. and Roemer, J. E. (eds.), Market Socialism. The Current Debate, New York: Oxford University Press
- 1989, "Principal and agent," in J. Eatwell, M. Milgate and P. Newman (eds.), The New Palgrave. Allocation, Information and Markets. New York: W. W. Norton
- 1987, "The causes and consequences of the dependence of quality on prices", Journal of Economic Literature, vol. 25, pp. 1–48
- 1981 (with A. Weiss), "Credit Rationing in Markets with Imperfect Information", American Economic Review, vol. 71, pp. 393–410
- 1977 (with A.K. Dixit), "Monopolistic Competition and Optimum Product Diversity", American Economic Review, vol. 67, pp. 297–308
- 1976 (with M. Rothschild), "Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information", Quarterly Journal of Economics, vol. 90, pp. 629–650.
- 1974, "Incentives and Risk Sharing in Sharecropping", Review of Economic Studies, Vol. 41, No. 2, 219–255.
- 1974, "Alternative Theories of Wage Determination and Unemployment in LDCs: The Labour Turnover Model", Quarterly Journal of Economics, vol. 81, pp. 194–227
- 1971 (with M. Rothschild), "Increasing Risk: II. Its Economic Consequences", Journal of Economic Theory, Vol. 3, pp. 66–84
- 1970 (with M. Rothschild), "Increasing Risk: I. A Definition", Journal of Economic Theory, Vol. 2, pp. 225–243
- Articles in popular press
- 2013, "The Promise of Abenomics", CFO Insight Magazine, April 2013
- 2013, "The Post-Crisis Crises", CFO Insight Magazine, January 2013
- 2011, "Of the 1%, by the 1%, for the 1%", Vanity Fair, May 2011
- 2010, "The Non-Existent Hand". London Review of Books 32 (8): 17–18. April 22, 2010. Retrieved February 14, 2011. Review of Skidelsky, Robert (2009). Keynes: the Return of the Master. Allen Lane. ISBN 978-1-84614-258-1.
- 2009, "Wall Street’s Toxic Message", Vanity Fair, July 2009
- 2009, "America's socialism for the rich", The Guardian, June 2009
- 2009, "Capitalist Fools", Vanity Fair, January 2009
- 2009, "Report: The $10 Trillion Hangover: Paying the Price for Eight Years of Bush", with Linda Bilmes, Harper's Magazine, 318/1904, January 2009
- 2007, "The Economic Consequences of Mr. Bush", Vanity Fair, December 2007 Issue
- 2007, Where is the World Going To, Mr. Stiglitz? directed by Jacques Sarasin, First Run Features.
- 2002, "Implications of the New Fannie Mae and Freddie Mac Risk-based Capital Standard", for FannieMae Volume I, Issue March 2, 2002
- 2001, began writing for Project Syndicate, continues to present
- Video and online sources
- 2010, What should Europe do about Greece?, BBC Newsnight February 10, 2010.
- 2010, The Last word, Bloomberg Television, February 9, 2010.
- 2008, The Three Trillion Dollar War a panel discussion with Joseph Stiglitz and Linda Bilmes regarding their new book, The Three Trillion Dollar War: The True Cost of the Iraq Conflict. Feb 28, 2008 at Columbia University.
- 2007, Where is the World Going To, Mr. Stiglitz? directed by Jacques Sarasin, First Run Features.
- World Bank Video presentation
- Online access to Stiglitz published papers, at his own website
- "Former Chief Economists". http://econ.worldbank.org.
- "Former Members of the Council". whitehouse.gov.
- CURRICULUM VITAE, JOSEPH E. STIGLITZ
- "Durham University Business School recognises Nobel Laureate winning economist". Durham University. September 23, 2005.
- "CERGE-EI | Executive and Supervisory Committee | Governance Bodies | People". Cerge-ei.cz. Retrieved 2013-10-29.
- "The Commission of Experts of the President of the UN General Assembly on Reforms of the International Monetary and Financial System". un.org.
- "The International Economics Association". International Economics Association. October 14, 2013.
- "IEA World Congress 2014". International Economics Association. October 14, 2013.
- "Economist Rankings at IDEAS – Top 10% Authors, as of May 2013". Research Papers in Economics. May 2013. Retrieved June 19, 2013.
- "The 2011 TIME 100". time.com. April 21, 2011.
- Taylor, Ihsan. "Best Sellers - The New York Times". Nytimes.com. Retrieved 2013-10-29.
- International Who's who of Authors and Writers. 2008.
- "Joseph E. Stiglitz: The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2001". Nobelprize.org. 1943-02-09. Retrieved 2013-10-29.
- "A shilling in the meter and a penny for your thoughts ... An Interview with Professor Joseph E Stiglitz". Optima. 2005. Retrieved 2011-04-27.
- Archived January 12, 2007 at the Wayback Machine
- Archived May 17, 2008 at the Wayback Machine
- Bruce C. Greenwald & Joseph E. Stiglitz: Keynesian, New Keynesian and New Classical Economics. Oxford Economics Papers, 39, March 1987, pp. 119–133. (PDF; 1,62 MB)
- Bruce C. Greenwald & Joseph E. Stiglitz: Examining Alternative Macroeconomic Theories. Brookings Papers on Economic Activity, No. 1, 1988, pp. 201–270. (PDF; 5,50 MB)
- Greg Palast (2001-10-10). "multi-day interview with Greg Palast". Gregpalast.com. Retrieved 2013-10-29.
- Fundación Ideas. "Comité Científico". Retrieved 2011-05-08.
- Stiglitz, Joseph E. (2009-03-31). "Obama's Ersatz Capitalism". The New York Times. Retrieved 2009-04-02.
- "Stiglitz Says Ties to Wall Street Doom Bank Rescue". Bloomberg News. 2009-04-17. Retrieved 2009-04-18.
- "Commission of Experts of the President of the UN General Assembly on Reforms of the International Monetary and Financial System".
- "Joseph Stiglitz apoya el movimiento 15-M". Retrieved 2011-07-26.
- "The FP Top 100 Global Thinkers". Foreign Policy. Retrieved 2013-10-29.
- "International Economic Association (IEA)". Iea-world.com. Retrieved 2013-10-29.
- "Stephen Emerson and Joseph Stiglitz awarded the Légion d'Honneur - France in the United States/ Embassy of France in Washington". Ambafrance-us.org. Retrieved 2013-10-29.
- Bruce C. Greenwald & Joseph E. Stiglitz: "Externalities in Economies with Imperfect Information and Incomplete Markets", Quarterly Journal of Economics 90, May 1986, 229–264. (PDF; 2,96 MB)
- "WANG, Shaoguang. The State, Market Economy, and Transition. Department of Political Science, Yale University." (PDF). Retrieved 2013-10-29.
- Joseph Stiglitz (2002-12-20). "STIGLITZ, Joseph E. ''There is no invisible hand.'' London: The Guardian Comment, December 20, 2002". Guardian. Retrieved 2013-10-29.
- ALTMAN, Daniel. Managing Globalization. In: Q & Answers with Joseph E. Stiglitz, Columbia University and The International Herald Tribune, Oct 11, 2006 05:03AM.
- "STIGLITZ, Joseph E. ''Prize Lecture: Information and the Change in the Paradigm in Economics.'' Joseph E. Stiglitz held his Prize Lecture December 8, 2001, at ''Aula Magna,'' Stockholm University. He was presented by Lars E.O. Svensson, Chairman of the Prize Committee". Nobelprize.org. 2001-12-08. Retrieved 2013-10-29.
- Stiglitz, Aula Magna
- "STIGLITZ, Joseph E. ''The pact with the devil.'' Beppe Grillo's Friends interview". Beppegrillo.it. Retrieved 2013-10-29.
- "SHAPIRO, Carl and STIGLITZ, Joseph E. ''Equilibrium Unemployment as a Worker Discipline Device.'' The American Economic Review, Vol. 74, No. 3 (June 1984), pp. 433–444". Links.jstor.org. Retrieved 2013-10-29.
- "''Efficiency wages, the Shapiro-Stiglitz Model''" (PDF). Retrieved 2013-10-29.
- SANAHUJA, José Antonio. Consensus, dissensus, confusion: the "Stiglitz Debate" in perspective. Development in Practice, Vol 14, 2004[dead link]
- "FRIEDMAN, Benjamin M. ''Globalization: Stiglitz's Case.'' The New York Review of Books, Volume 49, Number 13 · August 15, 2002". Nybooks.com. 2002-08-15. Retrieved 2013-10-29.
- "BOETTKE, Peter J. ''What Went Wrong with Economics?'', Critical Review Vol. 11, No. 1, P. 35. p. 58" (PDF). Retrieved 2013-10-29.
- SAPPINGTON, David E. M. e STIGLITZ, Joseph E. Privatization, Information and Incentives. Columbia University; National Bureau of Economic Research (NBER) June 1988; NBER Working Paper No. W2196[dead link]
- PRYCHITKO, David L. Book Reviews, Whither Socialism?, The Cato Journal, Cato Institute, vol. 16, no. 2. David L. Prychitko is the Head of the Department of Economics (Northern Michigan University), a Faculty Affiliate in the Program on Markets and Institutions at the James M. Buchanan Center for Political Economy (George Mason University) and the author of over a dozen socio-economic books mainly on Marxism and socialism[dead link]
- Robert Wade. "Wade, Robert. ''Showdown at the World Bank'', New Left Review 7, January–February 2001". Newleftreview.org. Retrieved 2013-10-29.
- "Hage, Dave.. ''Joseph Stiglitz : A Dangerous Man, A World Bank Insider Who Defected'', Published on Wednesday, October 11, 2000 in the Minneapolis Star-Tribune". Commondreams.org. 2000-10-11. Retrieved 2013-10-29.
- Michael Hirsh, Why Joseph Stiglitz is Ignored, Newsweek, Jul 18, 2009[dead link]
- Mallaby, The World's Banker, p. 266
- By RICHARD W. STEVENSONPublished: November 25, 1999 (1999-11-25). "Richard W. Stevenson, ''Outspoken chief economist leaving World Bank,'' ''New York Times'' (November 25, 1999)". New York Times. Retrieved 2013-10-29.
- WADE, Robert. U.S. Hegemony and the World Bank: Stiglitz's Firing And Kanbur's Resignation., New Left Review, Oct 9, 2000, pp. 9–10.[dead link]
- , Commission on the Measurement of Economic Performance and Social Progress
- "Terms of Reference Commission of Experts of the President of the United Nations General Assembly on Reforms of the International Monetary and Financial System". Retrieved 2009-05-27.
- The Commission of Experts of the President of the UN General Assembly on Reforms of the International Monetary and Financial System, UN General Assembly
- NGLS. "Commission of Experts on Reforms of the International Monetary and Financial System, official site". Un-ngls.org. Retrieved 2013-10-29.
- Moore, Malcolm (Jan 17, 2012). "Stiglitz says European austerity plans are a 'suicide pact'". Telegraph. Retrieved April 26, 2012.
- Neate, Rupert (August 22, 2011). "Ratings agencies suffer 'conflict of interest', says former Moody's boss". The Guardian. Retrieved April 21, 2012.
- "Implications of the New Fannie Mae and Freddie Mac Risk-Based Capital Standard". Fannie Mae. Retrieved 2010-02-10.
- "Book Award". RFKcenter.org.
- Krupa, Joel (2010-06-07). "Guiding the Invisible Hand". Retrieved 2010-12-28.
- Perry, Kevin (2008-03-04). "Joseph Stiglitz interview about The Three Trillion Dollar War". London: The Beaver. Retrieved 2010-09-29.
- "Why Globalization Works" (Yale University Press 2004) ISBN 978-0-300-10252-9, p. 8. Also Wolf criticizes World Bank heavily (ppp. xiii–xv).
- see Stiglitz discuss his book on Youtube
- David Blandford, review of Fair Trade for All, by J.E. Stiglitz and Andrew Charlton, American Journal of Agricultural Economics, 90 (2), 2008
- Michael S. Northcott, review of Fair Trade For All by J.E. Stiglitz and Andrew Charlton, Studies in World Christianity, 12 (3), 2006
- "ZAPIA, Carlo. ''The economics of information, market socialism and Hayek's legacy.'', Dipartimento di Economia Politica, Università di Siena" (PDF). Retrieved 2013-10-29.
- [ Displaying Abstract ] (2012-06-10). "Dr. Jane Hannaway Bride of Joseph Stiglitz - Article - NYTimes.com". Select.nytimes.com. Retrieved 2013-10-29.
- "Washington Life Magazine: October 2004: Real Estate". Washingtonlife.com. Retrieved 2013-10-29.
- "Search: joseph stiglitz". Project Syndicate. Retrieved 2013-10-29.
|Wikiquote has a collection of quotations related to: Joseph Stiglitz|
- Joseph E. Stiglitz at Columbia University
- Joseph Stiglitz committee chair profile at Committee on Global Thought at Columbia University
- Information and the Change in the Paradigm in Economics 2001 lecture at NobelPrize.org
- Profile and Papers at Research Papers in Economics/RePEc
- Publications at the National Bureau of Economic Research
- "Joseph E. Stiglitz (1943– )". The Concise Encyclopedia of Economics. Library of Economics and Liberty (2nd ed.) (Liberty Fund). 2008.
- Column archives at Project Syndicate
- Appearances on C-SPAN
- Joseph Stiglitz at the Internet Movie Database
- Works by or about Joseph Stiglitz in libraries (WorldCat catalog)
- Joseph Stiglitz collected news and commentary at The New York Times
- Of the 1%, by the 1%, for the 1%, Joseph E. Stiglitz, Vanity Fair, May 2011
- Roberts, Russ (July 9, 2012). "Stiglitz on Inequality". EconTalk. Library of Economics and Liberty.
Laura D'Andrea Tyson
|Chairman of the Council of Economic Advisers
June 28, 1995–February 13, 1997
|World Bank Chief Economist