Joseph Stiglitz: Difference between revisions

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===The Labour Party===
===The Labour Party===
In July 2015, Stiglitz endorsed [[Jeremy Corbyn]]'s [[Jeremy Corbyn Labour Party leadership campaign, 2015|campaign]] in [[Labour Party (UK) leadership election, 2015|Labour Party leadership election]]. He said: "I am not surprised at all that there is a demand for a strong anti-austerity movement around increased concern about inequality. The promises of [[New Labour]] in the UK and of the Clintonites in the US have been a disappointment."<ref name="theguardian">{{cite news |last=Macalister|first=Terry|url=https://www.theguardian.com/politics/2015/jul/26/joseph-stiglitz-jeremy-corbyn-labour-leadership-contender-anti-austerity|title=Joseph Stiglitz: unsurprising Jeremy Corbyn is a Labour leadership contender|work= |location= |publisher=''[[The Guardian]]''|date=26 July 2015|accessdate=15 July 2017}}</ref><ref name="independent">{{cite news |last=Segalov|first=Michael|url=http://www.independent.co.uk/news/uk/home-news/nobel-prize-winning-economist-joseph-stiglitz-is-not-surprised-at-success-of-the-corbyn-campaign-10418090.html|title=Jeremy Corbyn is favourite for Labour leadership because party has 'wimped out', says Nobel Prize winner Joseph Stiglitz|work= |location= |publisher=''[[The Independent]]''|date=27 July 2015|accessdate=15 July 2017}}</ref><ref name="cityam">{{cite news |last=Papadopoullos|first=Chris|url=http://www.cityam.com/220973/stiglitz-i-m-not-shocked-labour-lurch|title=Economist Joseph Stiglitz not shocked by Labour lurch: The rise of Jeremy Corbyn gets a big supporter|work= |location= |publisher=''[[City A.M.]]''|date=27 July 2015|accessdate=15 July 2017}}</ref>

On September 27, 2015, it was announced that he had been appointed to the [[Labour Party (UK)|British Labour Party's]] [[Economic Advisory Committee]], convened by [[Shadow Chancellor]] [[John McDonnell (politician)|John McDonnell]] and reporting to [[Leader of the Labour Party (UK)|Labour Party Leader]] [[Jeremy Corbyn]],<ref name="LP01">{{cite web |last= |first= |title=Labour announces new Economic Advisory Committee |publisher=''Labour Press'' |date=27 September 2015 |url=http://press.labour.org.uk/post/129975218774/labour-announces-new-economic-advisory-committee |accessdate=11 March 2016}}</ref> although he reportedly failed to attend the first meeting.<ref name="NS03">{{cite web |last=Chakelian |first=Anoosh |title="Labour must get real about the economy": is Corbyn's economic advisory board unravelling? |publisher=''[[New Statesman]]'' |date=27 January 2016 |url=http://www.newstatesman.com/politics/economy/2016/01/labour-must-get-real-about-economy-corbyn-s-economic-advisory-board |accessdate=11 March 2016}}</ref>
On September 27, 2015, it was announced that he had been appointed to the [[Labour Party (UK)|British Labour Party's]] [[Economic Advisory Committee]], convened by [[Shadow Chancellor]] [[John McDonnell (politician)|John McDonnell]] and reporting to [[Leader of the Labour Party (UK)|Labour Party Leader]] [[Jeremy Corbyn]],<ref name="LP01">{{cite web |last= |first= |title=Labour announces new Economic Advisory Committee |publisher=''Labour Press'' |date=27 September 2015 |url=http://press.labour.org.uk/post/129975218774/labour-announces-new-economic-advisory-committee |accessdate=11 March 2016}}</ref> although he reportedly failed to attend the first meeting.<ref name="NS03">{{cite web |last=Chakelian |first=Anoosh |title="Labour must get real about the economy": is Corbyn's economic advisory board unravelling? |publisher=''[[New Statesman]]'' |date=27 January 2016 |url=http://www.newstatesman.com/politics/economy/2016/01/labour-must-get-real-about-economy-corbyn-s-economic-advisory-board |accessdate=11 March 2016}}</ref>



Revision as of 11:38, 15 July 2017

Joseph Stiglitz
Chief Economist of the World Bank
In office
February 13, 1997 – February 2000
Preceded byMichael Bruno
Succeeded byNicholas Stern
Chair of the Council of Economic Advisers
In office
June 28, 1995 – February 13, 1997
PresidentBill Clinton
Preceded byLaura Tyson
Succeeded byJanet Yellen
Personal details
Born
Joseph Eugene Stiglitz

(1943-02-09) February 9, 1943 (age 81)
Gary, Indiana, U.S.
Political partyDemocratic
Spouse(s)Jane Hannaway (Divorced)
Anya Schiffrin (2004–present)
EducationAmherst College (BA)
Massachusetts Institute of Technology (MA, PhD)
University of Chicago
Academic career
FieldMacroeconomics, public economics, information economics
School or
tradition
New Keynesian economics[1]
Doctoral
advisor
Robert Solow[2]
InfluencesJohn Maynard Keynes, Robert Solow, James Mirrlees, Henry George
Contributions
Information at IDEAS / RePEc
Listen to this article
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Joseph Eugene Stiglitz (born February 9, 1943) is an American economist and a professor at

Georgist public finance theory[5][6][7] and for his critical view of the management of globalization, of laissez-faire economists (whom he calls "free market fundamentalists"), and of international institutions such as the International Monetary Fund and the World Bank
.

In 2000, Stiglitz founded the

university professor) in 2003. He was the founding chair of the university's Committee on Global Thought. He also chairs the University of Manchester's Brooks World Poverty Institute. He is a member of the Pontifical Academy of Social Sciences. 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.[8] 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 report in 2010, Mismeasuring our Lives: Why GDP doesn't add up,[9] and currently serves as co-chair of its successor, the High Level Expert Group on the Measurement of Economic Performance and Social Progress. From 2011 to 2014, Stiglitz was president of the International Economic Association (IEA).[10] He presided over the organization of the IEA triennial world congress held near the Dead Sea in Jordan in June 2014.[11]

Stiglitz has received more than 40 honorary degrees, including from Harvard, Oxford, and Cambridge Universities and 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.

Based on academic citations, Stiglitz is the 4th most influential economist in the world today,

Georgist perspective, asset risk management, corporate governance, and international trade. He is the author of several books, the latest being 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).[14]

Life and career

Stiglitz was born in

École Polytechnique in 'Economics and Public Policy'. He has chaired The Brooks World Poverty Institute at the University of Manchester since 2005.[20][21] Stiglitz is widely considered a New-Keynesian economist,[22][23] although at least one economics journalist says his work cannot be so clearly categorised.[1]

In addition to making numerous influential contributions to

WTO meeting of 1999. He was fired by the World Bank for expressing dissent with its policies.[24] He was a lead author of the 1995 Report of the Intergovernmental Panel on Climate Change, which shared the Nobel Peace Prize in 2007.[25]

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.[26]

Stiglitz has advised American president

Obama Administration's financial-industry rescue plan.[27] Stiglitz said that whoever designed the Obama administration's bank rescue plan is "either in the pocket of the banks or they’re incompetent."[28]

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.[29] In response, the commission produced the Stiglitz Report.

On July 25, 2011, Stiglitz participated in the "I Foro Social del 15M" organized in

2011 Spanish protests.[30]

Stiglitz was the president of the International Economic Association from 2011 to 2014.[31]

On September 27, 2015, the United Kingdom Labour Party announced that Stiglitz was to sit on its Economic Advisory Committee along with five other world leading economists.

Contributions to economics

Stiglitz at a conference in Mexico in 2009

Henry George theorem

Stiglitz made early contributions to a theory of public finance stating that an optimal supply of local

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 any beneficial public good will increase land values by at least as much as its outlay cost. Furthermore, Stiglitz shows that a single tax on rents is necessary to provide 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.[32][33]

Information asymmetry

Stiglitz's most famous research was on

A. Michael Spence
.

Before the advent of models of imperfect and asymmetric information, the traditional

imperfect information are rarely constrained Pareto optima."[34]: 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.[35] 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.[36] According to Stiglitz:[37]

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:[38]

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",[34] 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",[39] Stiglitz said:[40]

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

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.[41] The answer to these puzzles was proposed by Shapiro and Stiglitz in 1984: "Unemployment is driven by the information structure of employment".[41]
Two basic observations undergird their analysis:

  1. Unlike other forms of capital, humans can choose their level of effort.
  2. 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.[42][43] Some key implications of this model are:

  1. 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'.
  2. 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.

  1. 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]
  2. 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.[44] Stiglitz himself has evolved his political-economic discourse over time.[45]

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.[46]

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"[47] (Stiglitz 1994, p. 179).[46]

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.[48]

Government

Clinton administration

Stiglitz joined the Clinton Administration in 1993,[49] serving first as a member during 1993–1995, and was 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

US Treasury had put enormous pressure on the World Bank to silence his criticisms of the policies which they and the IMF had pursued.[50][51]

Stiglitz always had a poor relationship with Treasury Secretary Lawrence Summers.[52] 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".[53]

Stiglitz resigned from the World Bank in January 2000, a month before his term expired.[51] 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.[54]

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.[citation needed] 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.[55]

In a September 19, 2008 radio interview, with

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

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.[56]

Commission of Experts on Reforms of the International Monetary and Financial System

Stiglitz at the World Economic Forum annual meeting in Davos, 2009

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".[57] Its final report was released on September 21, 2009.[58][59]

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".[citation needed]

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".[citation needed]

In 2012, Stiglitz described the European austerity plans as a "suicide-pact".[60]

Scotland

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

Frances Ruane Stiglitz will "advise on the establishment of a credible Fiscal Commission which entrenches financial responsibility and ensures market confidence".[61]

The Labour Party

In July 2015, Stiglitz endorsed

Labour Party leadership election. He said: "I am not surprised at all that there is a demand for a strong anti-austerity movement around increased concern about inequality. The promises of New Labour in the UK and of the Clintonites in the US have been a disappointment."[62][63][64]

On September 27, 2015, it was announced that he had been appointed to the

John McDonnell and reporting to Labour Party Leader Jeremy Corbyn,[65] although he reportedly failed to attend the first meeting.[66]

Economic views

Support for anti-austerity movement in Spain

On July 25, 2011, Stiglitz participated in the "I Foro Social del 15M" organized in Madrid (Spain) expressing his support for the anti-austerity movement in Spain.[30] 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."[67]

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."[68]

Criticism of Trans-Pacific Partnership and Transatlantic Trade and Investment Partnership

Stiglitz warned that the Trans-Pacific Partnership (TPP) presented "grave risks" and it "serves the interests of the wealthiest."[69][70]

Stiglitz also opposed the

the 2016 referendum on the matter if TTIP passes, saying that "the strictures imposed by TTIP would be sufficiently averse to the functioning of government that it would make me think over again about whether membership of the EU was a good idea".[71][72][73]

Regulation

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".[74]

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 Henry George principle to finance public goods, protect natural resources, improve land use, and reduce the burden of rents and taxes on the poor while increasing productive capital formation. Stiglitz advocates taxing "natural resource rents at as close to 100 percent as possible" and that a corollary of this principle is that polluters should be taxed for "activities that generate negative externalities."[75] Stiglitz therefore asserts that land value taxation is even better than its famous advocate Henry George thought.[76]

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."[77]

Books

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

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."[78]

Freefall (2010)

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.[79]

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.[80]

Stability with Growth

In

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 (2006)

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.[81] 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[82] 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.[83] 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.[84]

New Paradigm for Monetary Economics

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)

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? (1994)

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.[85]

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.

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.[86][87][88]

In 2011, he was named by

Foreign Member of the Royal Society (ForMemRS) in 2009.[91]

Personal life

Stiglitz married Jane Hannaway in 1978; the couple later divorced.

He has four children, Siobhan, Michael, Edward (Jed), and Julia, and three grandchildren.

Selected bibliography

Books

Also as: Stiglitz, Joseph (2010). .

Book chapters

Selected scholarly articles

1970–1979

1980–1989

1990–1999

See also: Nicholas Georgescu-Roegen and Robert Solow
  • 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. {{cite journal}}: Invalid |ref=harv (help)CS1 maint: postscript (link) 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);
ISBN 9781898855538. {{citation}}: |editor-first1= has generic name (help); Invalid |ref=harv (help
)

2000–2009

2010 onwards

Articles in popular press

various articles from 2001 onwards.
See also:
Wade, Robert (January–February 2001). "Showdown at the World Bank". New Left Review. II (7). New Left Review: 124–37. {{cite journal}}: Invalid |ref=harv (help)CS1 maint: postscript (link
)
Review of the book: .

Video and online sources

  • Stiglitz, Joseph E. (2007). Committee hearing (via YouTube) (Speech). World Bank & Global Poverty, House Financial Services Committee (C-SPAN). Washington, D.C. Retrieved October 29, 2014.
  • Stiglitz, Joseph E. (presenter); Sarasin, Jacques (director) (May 2007). "1–5". Where is the world going, Mr. Stiglitz?. New York: First Run Features. Five-part series on two DVD discs.
  • Stiglitz, Joseph E. (presenter); Sarasin, Jacques (director) (March 2009). Around the world with Joseph Stiglitz. Arte France / Les Productions Faire Bleu / Swan productions. Original French title Le monde selon Stiglitz.
  • Stiglitz, Joseph E.; Bilmes, Linda (February 28, 2008). The three trillion dollar war. Panel discussion regarding their new book. Columbia University.
Book details: Stiglitz, Joseph E.; .

Papers

See also

References

  1. ^ 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 Wikipedia pages of economists Joseph Stiglitz and 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.
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  5. ^ Gochenour, Zachary, and Bryan Caplan. "An entrepreneurial critique of Georgism." The Review of Austrian Economics 26.4 (2013): 483-491.
  6. ^ Orszag, Peter (March 3, 2015). "To Fight Inequality, Tax Land". Bloomberg View. Retrieved 12 November 2016.
  7. ^ Lucas, Edward. "Land-value tax: Why Henry George had a point". The Economist. Retrieved 12 November 2016.
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  26. ^ Fundación Ideas. "Comité Científico". Retrieved May 8, 2011.
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  32. ^ Richard J. Arnott & Joseph E. Stiglitz, 1979. "Aggregate Land Rents, Expenditure on Public Goods, and Optimal City Size," The Quarterly Journal of Economics, Oxford University Press, vol. 93(4), pages 471-500.
  33. ^ Stiglitz, J.E. (1977) The theory of local public goods. In: Feldstein, M.S. and R.P. Inman (eds.) The Economics of Public Services. MacMillan, London, pp. 274–333.
  34. ^
    JSTOR 1891114. {{cite journal}}: Invalid |ref=harv (help)CS1 maint: postscript (link) PDF; 2.96 MB Archived 2011-05-13 at the Wayback Machine
  35. ^ "Wang, Shaoguang. The State, Market Economy, and Transition. Department of Political Science, Yale University" (PDF). Retrieved October 29, 2013.
  36. ^ Stiglitz, Joseph (December 20, 2002). "There is no invisible hand". The Guardian Comment. London: Guardian Media Group. Retrieved October 29, 2013.
  37. The International Herald Tribune. Archived from the original on 26 June 2009. {{cite news}}: Italic or bold markup not allowed in: |work= (help
    )
  38. ^ "Stiglitz, Joseph E. The pact with the devil. Beppe Grillo's Friends interview". Beppegrillo.it. Retrieved October 29, 2013.
  39. ^ "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. December 8, 2001. Retrieved October 29, 2013.
  40. ^ Stiglitz, Aula Magna
  41. ^
    JSTOR 1804018. {{cite journal}}: Invalid |ref=harv (help)CS1 maint: postscript (link
    )
  42. ^ http://coin.wne.uw.edu.pl/lwincenciak/docs/lecture_4.pdf
  43. ^ "Efficiency wages, the Shapiro-Stiglitz Model" (PDF). Retrieved October 29, 2013.
  44. ^ "Consensus, dissensus, confusion: the `Stiglitz Debate' in perspective". Archived from the original on 2007-04-22. Retrieved 2007-08-03. {{cite web}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  45. ^ Friedman, Benjamin M. (August 15, 2002). "Globalization: Stiglitz's Case". Nybooks.com. The New York Review of Books, Volume 49, Number 13. Retrieved October 29, 2013.
  46. ^ a b Boettke, Peter J. "What Went Wrong with Economics?, Critical Review Vol. 11, No. 1, pp. 35, 58" (PDF). Retrieved October 29, 2013.
  47. ^ "Privatization, Information and Incentives" (PDF). Archived from the original (PDF) on 2006-05-18. Retrieved 2007-05-15. {{cite web}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  48. ^ "Whither Socialism?". Archived from the original on 1997-06-07. Retrieved 2007-09-26. {{cite web}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  49. ^ "Brief Biography of Joseph E. Stiglitz". columbia.edu. Columbia University.
  50. Wade, Robert (January–February 2001). "Showdown at the World Bank". New Left Review. II (7). New Left Review: 124–37. {{cite journal}}: Invalid |ref=harv (help)CS1 maint: postscript (link
    )
  51. ^ a b Hage, Dave (October 11, 2000). "Joseph Stiglitz: A Dangerous Man, A World Bank Insider Who Defected". Star Tribune. Minneapolis: Commondreams.org. Archived from the original on August 14, 2013. Retrieved October 29, 2013. {{cite web}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  52. ^ Hirsh, Michael (18 July 2009). "Why Washington ignores an economic prophet". Newsweek. Newsweek LLC.
  53. ^ Mallaby, The World's Banker, p. 266.
  54. ^ Stevenson, Richard W. (November 25, 1999). "Outspoken chief economist leaving World Bank". The New York Times. The New York Times Company. Retrieved October 29, 2013.
  55. ^ Wade, Robert. US hegemony and the World Bank: Stiglitz's firing and Kanbur's resignation (PDF). UC Berkeley. Archived from the original (pdf) on 29 May 2008.
  56. ^ "Stiglitz documentation". Commission on the Measurement of Economic Performance and Social Progress. September 14, 2009. Archived from the original on 20 July 2015.
  57. ^ "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 May 27, 2009.
  58. ^ The Commission of Experts of the President of the UN General Assembly on Reforms of the International Monetary and Financial System, UN General Assembly
  59. ^ NGLS. "Commission of Experts on Reforms of the International Monetary and Financial System, official site". Un-ngls.org. Retrieved October 29, 2013.
  60. ^ Moore, Malcolm (Jan 17, 2012). "Stiglitz says European austerity plans are a 'suicide pact'". Telegraph. London. Retrieved April 26, 2012.
  61. ^ Staff writer (25 March 2012). "Fiscal Commission Working Group". The Scottish Government. Archived from the original on 1 February 2013.
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  67. ^ Neate, Rupert (August 22, 2011). "Ratings agencies suffer 'conflict of interest', says former Moody's boss". The Guardian. London. Retrieved April 21, 2012.
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  73. ^ "Brexit better for Britain than toxic TTIP, says Joseph Stiglitz". RT UK. 3 March 2016. Retrieved 14 March 2016.
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  75. .
  76. ^ Stiglitz, Joseph; Presentation at a Institute for New Economic Thinking conference on Apr 8, 2015 https://www.youtube.com/watch?v=Fg6UwAQJUVo
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  81. , p. 8. Also Wolf criticizes World Bank heavily (pp. xiii–xv).
  82. YouTube
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  84. ^ Northcott, Michael S. "review of Fair Trade For All by J.E. Stiglitz and Andrew Charlton". Studies in World Christianity. 12 (3): 2006.
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  86. ^ Curriculum Vitae Archived 2011-05-13 at the Wayback Machine, Joseph E. Stiglitz
  87. ^ "Durham University Business School recognises Nobel Laureate winning economist". Durham University. September 23, 2005.
  88. ^ "CERGE-EI | Executive and Supervisory Committee | Governance Bodies | People". Cerge-ei.cz. Retrieved October 29, 2013.
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  91. ^ "Fellowship of the Royal Society 1660-2015". Royal Society. Archived from the original on 2015-07-15. {{cite web}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  92. ^ [ Displaying Abstract ] (June 10, 2012). "Dr. Jane Hannaway Bride of Joseph Stiglitz". NYTimes.com. Retrieved October 29, 2013.
  93. ^ Mary K. Mewborn (October 2004). "Real Estate News". Washingtonlife.com. Retrieved October 29, 2013.
  94. ^ "Anya Schiffrin, Joseph Stiglitz". The New York Times. October 31, 2004.

External links

Political offices
Preceded by Chair of the Council of Economic Advisers
1995–1997
Succeeded by
Diplomatic posts
Preceded by
Chief Economist of the World Bank

1997–2000
Succeeded by
Awards
Preceded by
Laureate of the Nobel Memorial Prize in Economics
2001
Served alongside: George Akerlof, Michael Spence
Succeeded by
Preceded by Succeeded by