Benjamin M. Friedman

Benjamin M. Friedman is William Joseph Maier Professor of Political Economy at Harvard University and the author of The Moral Consequences of Economic Growth.

  • Reforming U.S. Financial Markets

    Reforming U.S. Financial Markets

    Reflections Before and Beyond Dodd-Frank

    Randall S. Kroszner, Robert J. Shiller, and Benjamin M. Friedman

    Two top economists outline distinctive approaches to post-crisis financial reform.

    Over the last few years, the financial sector has experienced its worst crisis since the 1930s. The collapse of major firms, the decline in asset values, the interruption of credit flows, the loss of confidence in firms and credit market instruments, the intervention by governments and central banks: all were extraordinary in scale and scope. In this book, leading economists Randall Kroszner and Robert Shiller discuss what the United States should do to prevent another such financial meltdown. Their discussion goes beyond the nuts and bolts of legislative and regulatory fixes to consider fundamental changes in our financial arrangements.

    Kroszner and Shiller offer two distinctive approaches to financial reform, with Kroszner providing a systematic analysis of regulatory gaps and Shiller addressing the broader concerns of democratizing and humanizing finance. After brief discussions by four commentators (Benjamin M. Friedman, George G. Kaufman, Robert C. Pozen, and Hal S. Scott), Kroszner and Shiller each offer a response to the other's proposals, creating a fruitful dialogue between two major figures in the field.

    • Hardcover $9.75 £7.99
    • Paperback $15.95 £12.99
  • Offshoring of American Jobs

    Offshoring of American Jobs

    What Response from U.S. Economic Policy?

    Jagdish N. Bhagwati, Alan S. Blinder, and Benjamin M. Friedman

    Two leading economists discuss a range of issues relating to the “offshoring” of American jobs, from free trade to unemployment levels.

    It is no surprise that many fearful American workers see the call center operator in Bangalore or the factory worker in Guangzhou as a threat to their jobs. The emergence of China and India (along with other, smaller developing countries) as economic powers has doubled the supply of labor to the integrated world economy. Economic theory suggests that such a dramatic increase in the supply of labor without an accompanying increase in the supply of capital is likely to exert downward pressure on wages for workers already in the integrated world economy, and wages for most workers in the United States have indeed stagnated or declined. In this book, leading economists Jagdish Bhagwati and Alan S. Blinder offer their perspectives on how the outsourcing of labor and the shifting of jobs to lower-wage countries affect the U.S. economy and what, if any, policy responses are required. Bhagwati, in his colorful and pithy style, focuses on globalization and free trade, while Blinder, erudite and witty, addresses the significance of labor market adjustment caused by trade. Bhagwati's and Blinder's contributions are followed by comments from economists Richard Freedman, Douglas A. Irwin, Lori G. Kletzer, and Robert Z. Lawrence. Bhagwati and Blinder then respond separately to the issues raised. Benjamin Friedman, who edited this volume (and organized the symposium that inspired it), provides an introduction.

    • Hardcover $9.75 £7.99
  • Should the United States Privatize Social Security?

    Should the United States Privatize Social Security?

    Henry J. Aaron, John B. Shoven, and Benjamin M. Friedman

    The two papers that make up the core of this book address what is perhaps the most fundamental question in the current debate over Social Security: whether to shift, in part or even entirely, from today's pay-as-you-go system to one that is not just funded but also privatized in the sense that individuals would retain control over the investment of their funds and, therefore, personally bear the associated risk. John Shoven argues yes, Henry Aaron no. Theoretical issues such as the likely effects on saving behavior and capital formation figure importantly in this discussion. But so do a broad array of practical considerations such as the expense of fund management and accounting, questions about how the public would regard the fairness of any new system, and the impact of recent developments in the federal budget and the U.S. stock market.

    The book also includes responses to both papers by four prominent economists—Robert J. Barro and David M. Cutler, of Harvard University; Alicia H. Munnell, of Boston College; and James Tobin, of Yale University—as well as Henry Aaron's and John Shoven's replies. The introductory remarks are by Benjamin M. Friedman.

    • Hardcover $8.75 £6.99
  • Inflation, Unemployment, and Monetary Policy

    Inflation, Unemployment, and Monetary Policy

    Robert M. Solow, James B. Taylor, and Benjamin M. Friedman

    Edited and with an introduction by Benjamin M. Friedman The connection between price inflation and real economic activity has been a focus of macroeconomic research—and debate—for much of the past century. Although this connection is crucial to our understanding of what monetary policy can and cannot accomplish, opinions about its basic properties have swung widely over the years. Today, virtually everyone studying monetary policy acknowledges that, contrary to what many modern macroeconomic models suggest, central bank actions often affect both inflation and measures of real economic activity, such as output, unemployment, and incomes. But the nature and magnitude of these effects are not yet understood. In this volume, Robert M. Solow and John B. Taylor present their views on the dilemmas facing U.S. monetary policymakers. The discussants are Benjamin M. Friedman, James K. Galbraith, N. Gregory Mankiw, and William Poole. The aim of this lively exchange of views is to make both an intellectual contribution to macroeconmics and a practical contribution to the solution of a public policy question of central importance.

    • Hardcover $24.00
    • Paperback $4.75 £3.99

Contributor

  • Revisiting Keynes

    Revisiting Keynes

    Economic Possibilities for Our Grandchildren

    Lorenzo Pecchi and Gustavo Piga

    Leading economists revisit a provocative essay by John Maynard Keynes, debating Keynes's vision of growth, inequality, work, leisure, entrepreneurship, consumerism, and the search for happiness in the twenty-first century.

    In 1931 distinguished economist John Maynard Keynes published a short essay, “Economic Possibilities for Our Grandchildren,” in his collection Essays in Persuasion. In the essay, he expressed optimism for the economic future despite the doldrums of the post-World War I years and the onset of the Great Depression. Keynes imagined that by 2030 the standard of living would be dramatically higher; people, liberated from want (and without the desire to consume for the sake of consumption), would work no more than fifteen hours a week, devoting the rest of their time to leisure and culture. In Revisiting Keynes, leading contemporary economists consider what Keynes got right in his essay—the rise in the standard of living, for example—and what he got wrong—such as a shortened work week and consumer satiation. In so doing, they raise challenging questions about the world economy and contemporary lifestyles in the twenty-first century.

    The contributors—among them, four Nobel laureates in economics—point out that although Keynes correctly predicted economic growth, he neglected the problems of distribution and inequality. Keynes overestimated the desire of people to stop working and underestimated the pleasures and rewards of work—perhaps basing his idea of “economic bliss” on the life of the English gentleman or the ideals of his Bloomsbury group friends. In Revisiting Keynes, Keynes's short essay—usually seen as a minor divertissement compared to his other more influential works—becomes the catalyst for a lively debate among some of today's top economists about economic growth, inequality, wealth, work, leisure, culture, and consumerism.

    Contributors William J. Baumol, Leonardo Becchetti, Gary S. Becker, Michele Boldrin, Jean-Paul Fitoussi, Robert H. Frank, Richard B. Freeman, Benjamin M. Friedman, Axel Leijonhufvud, David K. Levine, Lee E. Ohanian, Edmund S. Phelps, Luis Rayo, Robert Solow, Joseph E. Stiglitz, Fabrizio Zilibotti

    • Hardcover $7.75 £6.95
    • Paperback $20.00 £14.99
  • Inequality in America

    Inequality in America

    What Role for Human Capital Policies?

    James J. Heckman and Alan B. Krueger

    The surge of inequality in income and wealth in the United States over the past twenty-five years has reversed the steady progress toward greater equality that had been underway throughout most of the twentieth century. This economic development has defied historical patterns and surprised many economists, producing vigorous debate. Inequality in America: What Role for Human Capital Policies? examines the ways in which human capital policies can address this important problem. Taking it as a given that potentially low-income workers would benefit from more human capital in the form of market skills and education, James Heckman and Alan Krueger discuss which policies would be most effective in providing it: should we devote more resources to the entire public school system, or to specialized programs like Head Start? Would relaxing credit restraints encourage more students to attend college? Does vocational training actually work? What is the best balance of private and public sector programs?

    The book preserves the character of the symposium at which the papers were originally presented, recreating its atmosphere of lively debate. It begins with separate arguments by Krueger and Heckman (writing with Pedro Carneiro), which are followed by comments from other economists. Krueger and Heckman and Carneiro then offer separate responses to the comments and final rejoinders.

    • Hardcover $45.00 £34.95
    • Paperback $34.00 £27.00
  • Imperfect Competition and International Trade

    Imperfect Competition and International Trade

    Gene M. Grossman

    The last decade has seen an important extension of the theory of international trade to include imperfectly competitive market structures. This book collects 19 of the most influential articles on trade with imperfect competition, providing ready access to current research by top-level economists. Following an introduction. by Grossman that surveys the literature, the readings cover such important topics as the causes and consequences of intraindustry trade, the effects of tariffs and quantitative restrictions in oligopolistic settings, the welfare consequences of strategic trade policies, the raison d'être for multinational corporations, the determinants of innovation, and the interaction between technological progress and trade. The recent work on trade incorporating imperfect competition can help to explain the high volume of intraindustry trade between similarly endowed countries and can account for the increasing importance of multinational corporations in the conduct of international trade. It can predict the emergence of cross-country technology gaps and can help to identify the determinants of dynamic comparative advantage. The explorations of trade with imperfect competition have also deepened substantially our understanding of the costs and benefits of trade policy. We now know why governments may be motivated to assist their national firms in global oligopolistic competitions, and we also know the limitations of the arguments in support of strategic trade policies.

    Contributors Richard E. Baldwin, James A. Brander, Avinash K. Dixit, Jonathan Eaton, Wilfred J. Ethier, Gene M. Grossman, Elhanan Helpman, Kala Krishna, Paul R. Krugman, James R. Markusen, Victor Norman, Luis A. Rivera-Batiz, Paul M. Romer, Barbara J. Spencer, Anthony J. Venables Shmuel Ben Zvi

    • Hardcover $37.50
    • Paperback $8.75 £6.99
  • New Keynesian Economics, Volume 1

    New Keynesian Economics, Volume 1

    Imperfect Competition and Sticky Prices

    N. Gregory Mankiw and David Romer

    These two volumes bring together a set of important essays that represent a "new Keynesian" perspective in economics today. This recent work shows how the Keynesian approach to economic fluctuations can be supported by rigorous microeconomic models of economic behavior. The essays are grouped in seven parts that cover costly price adjustment, staggering of wages and prices, imperfect competition, coordination failures, and the markets for labor, credit, and goods. An overall introduction, brief introductions to each of the parts, and a bibliography of additional papers in the field round out this valuable collection.Volume 1 focuses on how friction in price setting at the microeconomic level leads to nominal rigidity at the macroeconomic level, and on the macroeconomic consequences of imperfect competition, including aggregate demand externalities and multipliers. Volume 2 addresses recent research on non-Walrasian features of the labor, credit, and goods markets.

    Contributors George A Akerlof, Costas Azariadis, Laurence Ball, Ben S. Bernanke, Mark Bits, Olivier J. Blanchard, Alan S. Blinder, John Bryant, Andrew S. Caplin, Dennis W. Carlton, Stephen G. Cecchetti, Russell Cooper, Peter A. Diamond, Gary Fethke, Stanley Fischer, Robert E. Hall, Oliver Hart, Andrew John, Nobuhiro Kiyotaki, Alan B. Krueger, David M. Lilien, Ian M. McDonald, N. David Mankiw, Arthur M. Okun, Andres Policano, David Romer, Julio J. Rotemberg, Garth Saloner, Carl Shapiro, Andrei Shleifer, Robert M. Solow, Daniel F. Spulber, Joseph E. Stiglitz, Lawrence H. Summers, John Taylor, Andrew Weiss, Michael Woodford, Janet L. Yellen

    • Hardcover $42.50 £31.95
    • Paperback $42.00 £33.00
  • New Keynesian Economics, Volume 2

    New Keynesian Economics, Volume 2

    Coordination Failures and Real Rigidities

    N. Gregory Mankiw and David Romer

    These two volumes bring together a set of important essays that represent a "new Keynesian" perspective in economics today. This recent work shows how the Keynesian approach to economic fluctuations can be supported by rigorous microeconomic models of economic behavior. The essays are grouped in seven parts that cover costly price adjustment, staggering of wages and prices, imperfect competition, coordination failures, and the markets for labor, credit, and goods. An overall introduction, brief introductions to each of the parts, and a bibliography of additional papers in the field round out this valuable collection. Volume 1 focuses on how friction in price setting at the microeconomic level leads to nominal rigidity at the macroeconomic level, and on the macroeconomic consequences of imperfect competition, including aggregate demand externalities and multipliers. Volume 2 addresses recent research on non-Walrasian features of the labor, credit, and goods markets.

    Contributors George A Akerlof, Costas Azariadis, Laurence Ball, Ben S. Bernanke, Mark Bits, Olivier J. Blanchard, Alan S. Blinder, John Bryant, Andrew S. Caplin, Dennis W. Carlton, Stephen G. Cecchetti, Russell Cooper, Peter A. Diamond, Gary Fethke, Stanley Fischer, Robert E. Hall, Oliver Hart, Andrew John, Nobuhiro Kiyotaki, Alan B. Krueger, David M. Lilien, Ian M. McDonald, N. David Mankiw, Arthur M. Okun, Andres Policano, David Romer, Julio J. Rotemberg, Garth Saloner, Carl Shapiro, Andrei Shleifer, Robert M. Solow, Daniel F. Spulber, Joseph E. Stiglitz, Lawrence H. Summers, John Taylor, Andrew Weiss, Michael Woodford, Janet L. Yellen

    • Hardcover $42.50
    • Paperback $45.00 £35.00
  • Invention, Growth, and Welfare

    A Theoretical Treatment of Technological Change

    William D. Nordhaus

    As technology continues to expand and to envelop the everyday lives of Westerners, it is important that analysts continue to question the direction in which technology is leading us. One specific set of problems concerns the significance of technology in economic life. It has become clear in recent years that technological change is the major source of growth in per capita income. Less clear, but no less important, is the role of technology in determining the distribution of income and unemployment, the strength of a country's position in the growth of organizational efficiency. Finally, behind the material gains lie the imponderable problems of the destructive forces unleased by technological progress. Many of these questions have been discussed, but much remains to be learned from further analysis.

    The present work explores some of the problems raised in connection with the economics of technology. The author is careful to keep his approach elementary, his feeling being that it is more useful to prepare a good foundation than to put together hastily an elaborate theoretical edifice that stands on uncertain grounds. Where possible the presentation is non-technical, and most of the mathematical intricacies have been put in separate appendixes at the end of the book. To further simplify the reader's task, a uniform notation has been used throughout, with a key to notation given in a separate section at the beginning.

    The book is divided into two general subjects. Part I considers the problem of invention in the firm, with special attention to the microeconomic problems which technological change raises for economic analysis. This part includes a presentation of a simple model of invention with various applications and a discussion of the economics of patents. Part II broadens the study by turning to problems of invention in an economy-wide or general equilibrium framework, with special emphasis on technological change in the process of economic growth. The author examines the Kennedy-Samuelson model of induced invention and applies the model to analyze both the optimal rate and direction of technological change in a planned economy and the applicability of the results to a competitive economy. The effect of invention on prices and wages is also examined, by means of a multisector model. Some surprising results are obtained when this model is applied to economics with unlimited supplies of labor.

    • Hardcover $12.50
  • The Dynamics of the World Cocoa Market

    F. Helmut Weymar

    The static framework of traditional microeconomic theory has never provided an entirely satisfying explanation of short- and intermediate-term commodity price behavior. The conventional supply-demand notion, which accounts in general very well for long-term price levels, is not realistic when shorter term price movements are involved. This monograph proposes a dynamic formulation of commodity price fluctuations that answers this deficiency, using the behavior of the world cocoa market as a source of data and a basis for theoretical conclusions.

    The conventional static-theoretic explanation of short-term price levels makes use of two major variables – the short-term demand function and the market supply rate – that generate at best an incomplete picture of actual commodity behavior. The author argues for the inclusion in the model of two further dynamic variables – inventories and expectations – and develops a commodity price theory to account for them. The current price level at any moment is shown to be a function of long-run equilibrium price expectations and expected future inventory levels. An analysis of the dynamic behavior of the cocoa market is given in illustration of the theories offered.

    Dynamics of the World Cocoa Market offers in addition some valuable data on the cocoa market: a detailed history of cocoa market events during the 1950's and 1960's; comments, in an appendix from market letters during that period; and quantitative data on production expectations, consumption expectations, producer sales rates, and world consumption. The general theoretical content of the book assures it of an audience among economists, particularly specialists in agricultural economics price theory, and applied economics. The cocoa trade – independent dealers, manufactures, and growers – will also welcome the book's publication, as will government officials and commodity speculators working with the cocoa trade.

    • Hardcover $17.50
  • Programming Investment in the Process Industries

    An Approach to Sectoral Planning

    David A. Kendrick

    The purpose of this book is to describe a programming approach to investment planning in the process industries. Investment planners have recognized the value of project analysis in decision making for some time. The extent of this analysis, however, has frequently been limited to an evaluation of the cost and rate of return on a single project independent of the others. Analysts have been unable to take into account the effects of complementary or competing projects because the number of possible combinations of projects made calculation too long and involved. Programming Investment in the Process Industries attempts to meet this need by constructing a mathematical programming model that can be used to evaluate various combinations of investment alternatives and different schedules over time. The model is a means of setting down all the calculations so that they can be performed by computer.

    Professor Kendrick begins by constructing a linear programming model that describes the industry as it exists at the time the investor is making his decisions. This model includes estimates of each product's requirements in all market areas, plant capacities, production costs at each facility, the cost of transporting the products from the plants to the market areas, and other factors. To accommodate the projection of profitable future investment, the model is then converted to a multiperiod model and revised to include investment decision variables. In the final section of the book, Professor Kendrick illustrates the operation of his system by describing in detail the application of his model to an investment planning problem in the Brazilian steel industry. The last chapter of the book includes a brief discussion of the use of time-sharing systems for solving this class of investment problems.

    Programming Investment in the Process Industries describes one of the new and useful tools places at the disposal of the economist and the economic planner by the appearance of the electronic computer. It will be welcome reading for economists and students of economic planning as well as for engineers and businessmen in the process industries. The possibilities suggested by a computer planning system stretch far beyond the process industries alone, making this book a valuable text for members of other industrial concerns and for development planners working with the growth of developing national economies.

    • Hardcover $15.00
  • Unemployment, Money Wage Rates, and Inflation

    George L. Perry

    This is a theoretical and empirical study of the interaction of wage changes, unemployment, and inflation. Its main purpose is to obtain a better understanding of the conditions causing inflation ia an economy where both business and labor exact considerable market power, and to establish the nature of the trade-off between inflation and unemployment in the United States, how it has changed in the past, and what can be done to affect this trade-off in the future.

    The analysis centers on a model of wage determination in which several variables are identified as important determinants of changes in wage rates. Empirical estimates of the wag change model are made for various time periods, including the postwar years and the 1920's. For the postwar years, estimates are also made of relations explaining the principal variables affecting wage rates, and these are combined with the wage equation in a dynamic analysis of a wage-price-profit subsystem of the economy.

    The development and estimation of multivariate model for studying the inflation-unemployment trade-off is in contrast to earlier studies that have examined the effects on wage changes of unemployment alone.

    Volume No. 7 in the M.I.T. Economics Monograph Series.

    • Hardcover $10.00
  • The Theory of Oil Tankship Rates

    An Economic Analysis of Tankship Operations

    Zenon S. Zannetos

    This remarkable contribution to the field of oil tankship economics offers, for the first time, a solid foundation for many decisions in tankship building, chartering, and operation which heretofore have been based primarily on intuition. It provides an intensive economic analysis of all the factors that affect the supply and demand of tanker services in order to develop a sound theory of oil tankship rates. Every important facet of tankship building and operations, encompassing both the economic and motivational aspects of the industry, is analyzed and integrated into a cohesive theory for explaining the behavior of tankship rates.

    Dr. Zannetos has produced an extensive time series of data gathered from numerous sources including oil companies, shipyards, banks, tankship transportation companies, and government agencies, and has formulated an analytical framework for decision making based on modern economic, mathematical, and statistical tools.

    In an effort to identify all the factors that affect the rates in the short as well as the long run and to estimate their impact wherever possible, the author first discusses separately the factors influencing tankship rates that operate through the respective demand and supply schedules. He then fuses the two schedules too show how short-term rates are determined and then focuses attention on long-term or period rates.

    The Theory of Oil Tankship Rates offers a number of important conclusions which should prove invaluable in managerial decision making. Although the methodology provided here is developed specifically for tankship operations, it is applicable in analyzing the interactions in any dynamic market where price expectations and investment decisions combine to cause cyclical price patterns. Consequently, the book should be of interest to a broad range of scholars and practitioners in the fields of economics, business, industry, management science, operations research, and marine transportation.

    Volume No. 4 in the M.I.T. Economics Monograph Series.

    • Hardcover $30.00
  • Urban Migration and Economic Development in Chile

    Bruce H. Herrick

    A study of the effect of internal migration on Chile's economic development.

    The years between 1940 and 1960 in Chile were marked by economic stagnation. Urban migration, reflecting theis economic decay, as well as demographic conditions, are the subject of this study. The work attempts to coordinate the record of Chile's economic development with an account of its concomitant internal migration. In particular, shifts in urban population and changes in the structure of the labor force are explored in an attempt to understand migration's role.

    The study deals explicitly with the economic implications of internal migration. Such an orientation is unique in the English language literature on this subject in Latin America. It is also the first work of its kind to consider internal migration within a lass developed country whose income has risen above the lowest levels. Higher incomes in Chile change many of the preconceptions about the economic impact of migration, both for the migrant and for society. The book deals extensively with these differences.

    Volume No. 6 in the M.I.T. Economics Monograph Series.

    • Hardcover $12.00
  • Labor Migration and Economic Growth

    A Case Study of Puerto Rico

    Stanley L. Friedlander

    The chief goal of this study is to examine the effectiveness of emigration as a tool in aiding the economic growth of the less developed and overpopulated countries. The specific effects of emigration upon economic development—reduced size and possibly improved quality of the labor force, decreased birth rate and population growth, prevention of increased unemployment, rapid growth of output, and so on—are analyzed, and are shown to have had a profound impact on economic growth in Puerto Rico from 1946 to 1960.

    The author chose Puerto Rico for this empirical analysis because it possesses many characteristics of a typical underdeveloped nation. The study, therefore, may have application for many of the less developed countries in the world today.

    The high standards of research and analysis apparent in this work make it a unique and valuable contribution to its field. Economists and labor specialists will, of course, be interested in this book, while international agencies concerned with economic development and those specifically interested in the labor and economic problems of Puerto Rico will find this a basic work.

    • Hardcover $18.00
  • Iron and Steel in Nineteenth-Century America

    An Economic Inquiry

    Peter Temin

    In the nineteeth century, as the United States rapidly increased its area, population, and income, the American iron and steel industry also underwent tremendous expansion, both to meet the increased demand of the booming railroad industry for iron and steel products, and as a result of important innovations in iron and steel production methods. This is the first book to use the tools of modern economic analysis to explain the nature of the growth of the iron and steel industry. Information is provided relating to the changes in the supply and demand curves for iron and steel from 1830 to 1900, a period that saw, besides the expansion of the industry, a major improvement in the quality of iron and steel products, accompanied by a simultaneous lowering of their price.

    This book will be of interest to students of the iron and steel industry, economic historians and those specifically interested in American economic development or the diffusion of innovations, as well as to those concerned with more general questions of industrial growth.

    • Hardcover $12.50