Joseph Stiglitz is an influential economist
that was born in Gary, Indiana. He attended the Amherst University for his
undergraduate studies and then later received his PhD at the Massachusetts
Institute of Technology. He currently is
a Professor at the University of Columbia and has had numerous contributions in
the field of economics. These include winning the Nobel Peace prize in 2007 for
his work in studying asymmetrical information in insurance market, developing
the Shapiro-Stiglitz model which explains efficiency wages, as well as working
with the United States government under Clinton and the Obama information by
serving on the council of economics. Some of the areas of research that he is
known for are in efficiency wages in unemployment, income distribution,
anti-trust laws, and globalization.
Stiglitz began working with the
Clinton administration in 1992 and has served on the council of economics to
provide consultation to the United States government. Furthermore, he has
worked under the Obama administration to deal with the financial crisis during
the financial housing market crisis. He has been noted for criticizing the
policies of the Obama administration in regards to the financial recovery
plans. In addition to his work in the government, Stiglitz has provided
contributions in economics through his research in the efficiency of wages in
unemployment even under equilibrium. More specifically, he has developed a
model with Shapiro called the Shapiro-Stiglitz model in 1984. This model seeks
to explain the structure of unemployment through certain assumptions about
human behavior.
His research into insurance led him
to win the Nobel Peace prize in 2007. Stiglitz did research into the insurance
market and discovered that there were differing levels that buyers and sellers
had in the insurance market. In particular people buying insurance typically
have more information than the companies that they are buying from. The
implications of this particular study resulted in a better understanding of the
concept of asymmetrical information. This concept is where one party has more
information over another.
While researching about Stiglitz I
was particularly interested in his role in the United States government. One of
my research interests is being able to develop and understand models on a
Macroeconomic level and more specifically on an international level. I did not
know any about Stiglitz before this project, and I was pleasantly surprised at
how influential his work has been in the fields that I am currently studying.
Stiglitz works seems relevant to this course, especially the Shapiro-Stiglitz
model when it comes to the structure of businesses and society in order to
explain unemployment as well as the productivity and efficiency of a particular
market. In the Shapiro-Stiglitz model, he explains that there is market failure
because of the structure of our government. Our government implements minimum
wage laws that makes the labor market inefficient because this price does not
correspond with the equilibrium price of that wage.
Citations
One comment about the appearance of the post before commenting on the substance. I would appreciate it if you put in line spaces between paragraphs. That is more important then the indent. It makes it easier to read on the screen. Lots of white space in the background is good.
ReplyDeleteWhen Stiglitz was a purely academic economist, he was probably the most prolific publisher in the profession. He generated a huge amount of research and wrote with many different people.
Much of his economic theory (both on credit rationing and the labor market vis-a-vis involuntary unemployment) emphasizes that markets don't clear in the way envisioned in intermediate micro, but rather there is some rationing instead because that's part of the equilibrium way to address the information issues.