Peter A. Diamond

Peter Diamond is John and Jennie S. McDonald Professor of Economics at MIT. He received the 2010 Nobel Prize in Economics.

  • Taxation, Incomplete Markets, and Social Security

    Taxation, Incomplete Markets, and Social Security

    Peter A. Diamond

    In this book, Peter Diamond analyzes social security as a particular example of optimal taxation theory. Assuming a world of incomplete markets and asymmetric information, he uses a variety of simple models to illuminate the economic forces that bear on specific social security policy issues. The focus is on the degree of progressivity desirable in social security and the design of incentives to delay retirement beyond the earliest age of eligibility for benefits. Before analyzing these models, Diamond presents introductions to optimal income tax theory and the theory of incomplete markets. He incorporates recent theoretical developments such as time-inconsistent preferences into his analyses and shows that distorting taxes and a measure of progressivity in benefits are desirable. Diamond also discusses social security reform, with a focus on Germany.

    • Hardcover $7.75 £5.99
    • Paperback $4.75 £3.99
  • Issues in Privatizing Social Security

    Issues in Privatizing Social Security

    Report of an Expert Panel of the National Academy of Social Insurance

    Peter A. Diamond

    This study addresses many important aspects of two politically charged proposals to remedy the Social Security crisis.

    Two types of changes to Social Security have been proposed. One would keep the current defined-benefit structure but build and maintain a larger trust fund, to be partially invested in stocks and corporate bonds. The other would set up individual funded accounts, also to be partially invested in private markets. Both would raise taxes or lower benefits in the near term to increase funds for paying future benefits.This study addresses many important aspects of these politically charged proposals. The questions discussed include: Should Social Security have more advance funding? Should Social Security funds be invested in the stock market? If investments are organized by the government, what independent institutions would shield portfolio decisions and corporate governance from political pressures? If investments are privately organized, what would be the regulatory structure? Finally, should Social Security include individual defined-contribution accounts or stay with traditional defined benefits? The National Academy of Social Insurance is a nonprofit, nonpartisan organization whose mission is to conduct research on and enhance public understanding of social insurance, to develop new leaders, and to provide a forum for the exchange of ideas on issues related to social insurance.

    • Hardcover $35.00 £28.00
    • Paperback $20.00 £15.99
  • Growth/Productivity/Unemployment

    Growth/Productivity/Unemployment

    Essays to Celebrate Bob Solow's Birthday

    Peter A. Diamond

    The essays in this book extend and elaborate on many of the important ideas Solow has either originated or developed in the past three decades.

    Robert Solow received the Nobel Prize in economics in 1987, and his contributions to growth theory, productivity, and short run macroeconomics have influenced an entire generation of scholars. The essays in this book extend and elaborate on many of the important ideas Solow has either originated or developed in the past three decades.

    Frank Hahn and Avinash Dixit offer useful surveys of the growth literature. Hahn reflects on specific problems in standard growth models, while Dixit presents a chronological review of research developments. Robert Hall and Lawrence Summers present challenging empirical findings. Hall shows that the Solow productivity residual is in fact correlated with variables which, according to Solow's assumptions, it should not be correlated with. Summers uses multi-country data to investigate the apparent divergence between private and social rates of return to capital. He argues that this phenomenon stems from the dependence of the rate of technical progress on the rate of capital formation and discusses the policy implications of this idea. Olivier Jean Blanchard and Peter Diamond describe a search-matching model that is a welcome addition to understanding the Beveridge curve. Also included are comments by Eytan Shoshinski, Joseph Stiglitz, Martin Baily, William Nordhaus, George Aherlot, and Robert Gorden. Robert Solow has provided a response to both the essays and these comments. The book concludes with a bibliography of Solow's work.

    • Hardcover $50.00 £40.00
    • Paperback $20.00 £15.99
  • A Search-Equilibrium Approach to the Micro Foundations of Macroeconomics

    Peter A. Diamond

    Peter A. Diamond discusses search equilibrium as a framework for integrating micro and macroeconomics.

    This book presents the second in the renewed Wicksell Lecture Series, sponsored by the Swedish Economic Association. In it, Peter A. Diamond discusses search equilibrium as a framework for integrating micro and macroeconomics. He first presents a formal model which addresses the difficulty and cost of coordinating trade (finding a trade partner) and notes the impact of costly trade coordination on production decisions. He then relates the model to the existing literature, and discusses micro data supporting a search approach.Diamond incorporates the real-world fact that, contrary to the assumption of classical markets, the resource allocation process takes time and is hard to coordinate, and he argues that this fact is important for developing a sound theoretical basis for macroeconomic policy. Rather than being a rival theory, he argues that search equilibrium provides a promising basis for thinking about price and wage stickiness. Moreover, unlike standard rational expectations competitive models, Diamond's search model identifies multiple natural rates of unemployment, offering the potential for good and effective policy.

    • Hardcover $17.00

Contributor

  • Lives of the Laureates, Seventh Edition

    Thirty-Two Nobel Economists

    Roger W. Spencer and David A. Macpherson

    Autobiographical accounts by Nobel laureates reflect the richness and diversity of contemporary economic thought and offer insights into the creative process; with six new laureates.

    Lives of the Laureates offers readers an informal history of modern economic thought as told through autobiographical essays by thirty-two Nobel Prize laureates in economics. The essays not only provide unique insights into major economic ideas of our time but also shed light on the processes of intellectual discovery and creativity. The accounts are accessible and engaging, achieving clarity without sacrificing inherently difficult content.

    This seventh edition adds six Nobelists to its pages: Roger B. Myerson (co-recipient in 2007) describes his evolution as a game theorist and his application of game theory to issues that ranged from electoral systems to perverse incentives; Thomas J. Sargent (co-recipient in 2011), recounts the development of the rational expectations model, which fundamentally changed the policy implications for macroeconomic models; Amartya Sen (recipient in 1998) reflects on his use of a bicycle (later donated to the Nobel Museum) to collect data early in his career; A. Michael Spence (co-recipient in 2001) describes, among other things, his whiplash-inducing first foray into teaching an undergraduate class; Christopher A. Sims (co-recipient in 2011) discusses his “non-Nobel” research; and Alvin E. Roth (co-recipient in 2012) chronicles the “three insurrections” he has witnessed in mainstream economics.

    Lives of the Laureates grows out of a continuing lecture series at Trinity University in San Antonio, which invites Nobelists from American universities to describe their evolution as economists in personal as well as technical terms.

    The Laureates

    W. Arthur Lewis, Lawrence R. Klein, Kenneth J. Arrow, Paul A. Samuelson, Milton Friedman, George J. Stigler, James Tobin, Franco Modigliani, James M. Buchanan, Robert M. Solow, William F. Sharpe, Ronald H. Coase, Douglass C. North, John C. Harsanyi, Myron S. Scholes, Gary S. Becker, Robert E. Lucas, Jr., Vernon L. Smith, Clive W. J. Granger, Edward C. Prescott, Thomas C. Schelling, Edmund S. Phelps, Eric S. Maskin, Joseph E. Stiglitz, Paul Krugman, Peter A. Diamond, Roger B. Myerson, Thomas J. Sargent, Amartya Sen, A. Michael Spence, Christopher A. Sims, Alvin E. Roth

    • Hardcover $55.00 £45.00
  • Lives of the Laureates, Sixth Edition

    Lives of the Laureates, Sixth Edition

    Twenty-three Nobel Economists

    Roger W. Spencer and David A. Macpherson

    Autobiographical accounts by Nobel laureates reflect the richness and diversity of contemporary economic thought and offer insights into the creative process.

    Lives of the Laureates offers readers an informal history of modern economic thought as told through autobiographical essays by twenty-three Nobel Prize laureates in Economics. The essays not only provide unique insights into major economic ideas of our time but also shed light on the processes of intellectual discovery and creativity. The accounts are accessible and engaging, achieving clarity without sacrificing inherently difficult content.

    This sixth edition adds four recent Nobelists to its pages: Eric Maskin, who illustrates his explanation of mechanism design with an example involving a mother, a cake, and two children; Joseph Stiglitz, who recounts his field's ideological wars linked to policy disputes; Paul Krugman, who describes the insights he gained from studying the model of the Capitol Hill Babysitting Coop (and the recession it suffered when more people wanted to accumulate babysitting coupons than redeem them); and Peter Diamond, who maps his development from student to teacher to policy analyst.

    Lives of the Laureates grows out of a continuing lecture series at Trinity University in San Antonio, which invites Nobelists from American universities to describe their evolution as economists in personal as well as technical terms. These lectures demonstrate the richness and diversity of contemporary economic thought. The reader will find that paths cross in unexpected ways—that disparate thinkers were often influenced by the same teachers—and that luck as well as hard work plays a role in the process of scientific discovery.

    The Laureates Lawrence R. Klein • Kenneth J. Arrow • Paul A. Samuelson • Milton Friedman • George J. Stigler • James Tobin • Franco Modigliani • James M. Buchanan • Robert M. Solow • William F. Sharpe • Douglass C. North • Myron S. Scholes • Gary S. Becker • Robert E. Lucas, Jr. • James J. Heckman • Vernon L. Smith • Edward C. Prescott • Thomas C. Schelling • Edmund S. Phelps • Eric S. Maskin • Joseph E. Stiglitz • Paul Krugman • Peter A. Diamond

    • Hardcover $40.00 £32.00