Joseph Stiglitz

Joseph Eugene Stiglitz ; born February 9, 1943 is an American New Keynesian economist, a public policy analyst, as well as a full professor at Columbia University. He is a recipient of the Nobel Memorial Prize in Economic Sciences 2001 together with the John Bates Clark Medal 1979. He is a former senior vice president and chief economist of the World Bank and is a former module and chairman of the US president's Council of Economic Advisers. He is requested for his assist of Georgist public finance opinion and for his critical notion of the administration of globalization, of laissez-faire economists whom he calls "free-market fundamentalists", and of international institutions such(a) as the International Monetary Fund and the World Bank.

In 2000, Stiglitz founded the 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 representation on reforming the international monetary and financial system. He served as chair of the international Commission on the Measurement of Economic Performance and Social Progress, appointed by President Sarkozy of France, which issued its relation in 2010, Mismeasuring our Lives: Why GDP doesn't put up, and currently serves as co-chair of its successor, the High Level expert office on the Measurement of Economic Performance and Social Progress. From 2011 to 2014, Stiglitz was president of the International Economic Association IEA. He presided over the organization of the IEA triennial world congress held almost the Dead Sea in Jordan in June 2014.

Stiglitz has received more than 40 honorary degrees, including from Cambridge and Harvard, and he has been decorated by several governments including Bolivia, South Korea, Colombia, Ecuador, and near recently France, where he was appointed a piece of the Legion of Honor, Officer.

In 2011, Stiglitz was named by Time magazine as one of the 100 most influential people in the world. Stiglitz's do 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 People, Power, and Profits 2019, The Euro: How a Common Currency Threatens the Future of Europe 2016, The Great Divide: Unequal Societies and What We Can defecate About Them 2015, Rewriting the Rules of the American Economy: An Agenda for Growth and divided up Prosperity 2015, and Creating a Learning Society: A New Approach to Growth coding and Social Progress 2014. He is also one of the 25 main figures on the Information and Democracy Commission launched by Reporters Without Borders. According to the Open Syllabus Project, Stiglitz is the fifth most frequently cited author on college syllabi for economics courses.

Contributions to economics

After the 2018 mid-term elections in the United States he wrote a solution about the importance of economic justice to the survival of democracy worldwide.

After getting his PhD from ] Stiglitz and Rothschild showed three plausible definitions of a variable X being 'more variable' than a variable Y were any equivalent - Y being survive to X plus noise, every risk averse agent preferring Y to X, and Y having more weight in its tails, and that none of these were always consistent with X having a higher statistical variance than Y - a ordinarily used definition at the time. In apaper, they analyzed the theoretical consequences of risk aversion in various circumstances, such(a) as an individual's savings decisions and a firm's production decisions.[]

Stiglitz present 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 'Henry George theorem' in quotation to the radical classical economist Henry George who famously advocated for land value tax. The explanation behind Stiglitz's finding is that rivalry for public goods takes place geographically, so competition for access to all beneficial public good will put land values by at least as much as its outlay cost. Furthermore, Stiglitz shows that a single tax on rents is necessary to supply the optimal supply of local public investment. Stiglitz also shows how the theorem could be used to find the optimal size of a city or firm.

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 divided 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.

Much of Stiglitz's work on information economics demonstrates situations in which incomplete information prevents markets from achieving social efficiency. His paper with Andrew Weiss showed that if banks use interest rates to infer information about borrowers' set adverse selection effect or to encourage their actions following borrowing incentive effect, then mention will be rationed below the optimal level, even in a competitive market. Stiglitz and Rothschild showed that in an insurance market, firms have an incentive to undermine a 'pooling equilibrium', where all agents are submission the same full-insurance policy, by offering cheaper partial insurance that would only be attractive to the low-risk types, meaning that a competitive market can onlypartial coverage of agents. Stiglitz and Grossman showed that trivially small information acquisition costs prevent financial markets from achieving set up informational efficiency, since agents will have an incentive to free-ride on others' information acquisition, and acquire this information indirectly by observing market prices.

Stiglitz, together with Avinash Dixit, created a tractable model of monopolistic competition that was an option to traditional perfect-competition models of general equilibrium. They showed that in the presence of increasing returns to scale, the everyone of firms is socially too small. The model was extended to show that when consumers have a preference for diversity, entry can be socially too large. The modelling approach was also influential in the fields of trade theory, and industrial organisation, and was used by Paul Krugman in his analysis of non comparative advantage trading patterns.

Stiglitz also did research on efficiency wages, and helped create what became requested as the "Shapiro–Stiglitz model" to explain why there is unemployment even in equilibrium, why wages are non 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. Anto these puzzles was proposed by Shapiro and Stiglitz in 1984: "Unemployment is driven by the information positioning of employment". Two basic observations undergird their analysis:

A full description of this model can be found at the links provided. Some key implications of this model are:

The outcome is never Pareto efficient.

The practical implications of Stiglitz's work in political economy and their economic policy implications have been included to debate. Stiglitz himself has evolved his political-economic discourse over time.

Once incomplete and imperfect information is 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 toa 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 case 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 professionals markets. But the Greenwald-Stiglitz theorem posits market failure as the norm, establishing "that government could potentially almost always refresh 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"

Objections to the adoption of positions suggested by Stiglitz's do not come from economics itself[], but mostly from political scientists, particularly in the field of ]. As David L. Prychitko discusses in his "critique" to Whither Socialism? see below, although Stiglitz's main economic insight seems loosely correct[], it still leaves open great constitutional questions such as how the coercive institutions of the government[ is ] should be constrained and what the relation is between the government and civil society.