Knowledge, Information, and Expectations in Modern Macroeconomics: In Honor of Edmund S. Phelps

Published by Princeton University Press 2003

Knowledge, Information, and Expectations in Modern Macroeconomics

In Honor of Edmund S. Phelps

Edited by: Philippe Aghion , Roman Frydman , Joseph E. Stiglitz and Michael Woodford

https://doi.org/10.1515/9780691223933

Overview
Contents

About this book

Macroeconomics would not be what it is today without Edmund Phelps. This book assembles the field's leading figures to highlight the continuing influence of his ideas from the past four decades. Addressing the most important current debates in macroeconomic theory, it focuses on the rates at which new technologies arise and information about markets is dispersed, information imperfections, and the heterogeneity of beliefs as determinants of an economy's performance. The contributions, which represent a breadth of contemporary theoretical approaches, cover topics including the real effects of monetary disturbances, difficulties in expectations formation, structural factors in unemployment, and sources of technical progress. Based on an October 2001 conference honoring Phelps, this incomparable volume provides the most comprehensive and authoritative account in years of the present state of macroeconomics while also pointing to its future.

The fifteen chapters are by the editors and by Daron Acemoglu, Jess Benhabib, Guillermo A. Calvo, Oya Celasun, Michael D. Goldberg, Bruce Greenwald, James J. Heckman, Bart Hobijn, Peter Howitt, Hehui Jin, Charles I. Jones, Michael Kumhof, Mordecai Kurz, David Laibson, Lars Ljungqvist, N. Gregory Mankiw, Dale T. Mortensen, Maurizio Motolese, Stephen Nickell, Luca Nunziata, Wolfgang Ochel, Christopher A. Pissarides, Glenda Quintini, Ricardo Reis, Andrea Repetto, Thomas J. Sargent, Jeremy Tobacman, and Gianluca Violante. Commenting are Olivier J. Blanchard, Jean-Paul Fitoussi, Mark Gertler, Robert E. Hall, Robert E. Lucas, Jr., David H. Papell, Robert A. Pollak, Robert M. Solow, Nancy L. Stokey, and Lars E. O. Svensson. Also included are reflections by Phelps, a preface by Paul A. Samuelson, and the editors' introduction.

Author / Editor information

Philippe Aghion is Professor of Economics at Harvard University and at University College London. Roman Frydman is Professor of Economics at New York University. Joseph Stiglitz, Professor of Economics at Columbia University, was awarded the Nobel Prize in Economic Science in 2001. Michael Woodford is the Harold H. Helm '20 Professor of Economics and Banking at Princeton University.

Reviews

"This is an outstanding volume full of important contributions by major figures in each of the fields in which Phelps has contributed. It would be worth publishing just for the excellent introduction! Indeed, it would also be worth publishing just for the extremely valuable comments. But the papers themselves are excellent. They will be read and reread by successive generations of economists who understand Phelps's critical role in the development of modern economics."—Laurence J. Kotlikoff, Boston University

"This volume makes it clear that Edmund 'Ned' Phelps did not simply contribute to modern macroeconomics but in many ways he defined it; and that his work is remarkable for its breadth and for its vitality as a source of new ideas. The papers included here, each of which examines and develops a theme originally raised by Phelps, are at the very frontier of current macroeconomic research. Consistent with this breadth and vitality, this book will find a wide audience."—Dominick Salvatore, Fordham University

"Many of the outstanding papers in this volume explore genuinely new ideas. The book addresses a large number of the hottest current macroeconomic policy issues and related theoretical problems."—Duncan K. Foley, Graduate Faculty, New School University

"This is a terrific book, about as good as volumes of collected papers will ever get. It will attract considerable interest, because it brings together so many of our most illustrious people in macroeconomics to reconsider the concepts of one of our most influential theorists, Ned Phelps."—Robert J. Shiller, Yale University, author of Irrational Exuberance

Topics

Frontmatter Publicly Available Download PDF	i
Contents Publicly Available Download PDF	v
Contributors Publicly Available Download PDF	ix
Edmund Phelps, Insider-Economists’ Insider Paul A. Samuelson Requires Authentication Unlicensed Licensed Download PDF	1
Edmund S. Phelps and Modern Macroeconomics Philippe Aghion, Roman Frydman, Joseph Stiglitz and Michael Woodford Requires Authentication Unlicensed Licensed Download PDF	3
Part I. Information, Wage-Price Dynamics, and Business Fluctuations
1. Imperfect Common Knowledge and the Effects of Monetary Policy Michael Woodford Requires Authentication Unlicensed Licensed Download PDF	23
2. Comments onWoodford Lars E. O. Svensson Requires Authentication Unlicensed Licensed Download PDF	59
3. Sticky Information: A Model of Monetary Nonneutrality and Structural Slumps N. Gregory Mankiw and Ricardo Reis Requires Authentication Unlicensed Licensed Download PDF	64
4. A Theory of Rational Inflationary Inertia Guillermo A. Calvo, Oya Celasun and Michael Kumhof Requires Authentication Unlicensed Licensed Download PDF	87
5. Comments on Calvo, Celasun, and Kumhof Mark Gertler Requires Authentication Unlicensed Licensed Download PDF	118
6. Macroeconomic Fluctuations in an Economy of Phelps-Winter Markets Bruce Greenwald and Joseph Stiglitz Requires Authentication Unlicensed Licensed Download PDF	123
7. General Comments on Part I Robert E. Lucas Requires Authentication Unlicensed Licensed Download PDF	137
Part II. Imperfect Knowledge, Expectations, and Rationality
8. Imperfect Knowledge Expectations, Uncertainty-Adjusted Uncovered Interest Rate Parity, and Exchange Rate Dynamics Roman Frydman and Michael D. Goldberg Requires Authentication Unlicensed Licensed Download PDF	143
9. Comments on Frydman and Goldberg David H. Papell Requires Authentication Unlicensed Licensed Download PDF	183
10. Endogenous Fluctuations and the Role of Monetary Policy Mordecai Kurz, Hehui Jin and Maurizio Motolese Requires Authentication Unlicensed Licensed Download PDF	188
11. A Debt Puzzle David Laibson, Andrea Repetto and Jeremy Tobacman Requires Authentication Unlicensed Licensed Download PDF	228
12. Comments on Laibson, Repetto, and Tobacman Robert A. Pollak Requires Authentication Unlicensed Licensed Download PDF	267
13. Reflections on Parts I and II Edmund S. Phelps Requires Authentication Unlicensed Licensed Download PDF	271
Part III. Determinants of Equilibrium Unemployment
14. How Monopsonistic Is the (Danish) Labor Market? Dale T. Mortensen Requires Authentication Unlicensed Licensed Download PDF	283
15. Company Start-Up Costs and Employment Christopher A. Pissarides Requires Authentication Unlicensed Licensed Download PDF	309
16. European Unemployment: From a Worker’s Perspective Lars Ljungqvist and Thomas J. Sargent Requires Authentication Unlicensed Licensed Download PDF	326
17. Comments on Ljungqvist and Sargent Olivier J. Blanchard Requires Authentication Unlicensed Licensed Download PDF	351
18. Flexibility and Job Creation: Lessons for Germany James J. Heckman Requires Authentication Unlicensed Licensed Download PDF	357
19. The Beveridge Curve, Unemployment, andWages in the OECD from the 1960s to the 1990s Stephen Nickell, Luca Nunziata, Wolfgang Ochel and Glenda Quintini Requires Authentication Unlicensed Licensed Download PDF	394
20. Comments on Nickell, Nunziata, Ochel, and Quintini PART IV Education, Technical Change, and Growth Jean-Paul Fitoussi Requires Authentication Unlicensed Licensed Download PDF	432
Part IV. Education, Technical Change, and Growth
21. Wage Inequality and Technological Change: A Nelson-Phelps Approach Philippe Aghion, Peter Howitt and Gianluca Violante Requires Authentication Unlicensed Licensed Download PDF	441
22. Comments on Aghion, Howitt, and Violante Robert E. Hall Requires Authentication Unlicensed Licensed Download PDF	462
23. Factor Prices and Technical Change: From Induced Innovations to Recent Debates Daron Acemoglu Requires Authentication Unlicensed Licensed Download PDF	464
24. Comments on Acemoglu Nancy L. Stokey Requires Authentication Unlicensed Licensed Download PDF	492
25. Population and Ideas: A Theory of Endogenous Growth Charles I. Jones Requires Authentication Unlicensed Licensed Download PDF	498
26. Another View of Investment: 40 Years Later Jess Benhabib and Bart Hobijn Requires Authentication Unlicensed Licensed Download PDF	522
27. General Comments on Part IV Robert M. Solow Requires Authentication Unlicensed Licensed Download PDF	546
28. Reflections on Parts III and IV Edmund S. Phelps Requires Authentication Unlicensed Licensed Download PDF	550
Index Requires Authentication Unlicensed Licensed Download PDF	565