| New classical macroeconomics | |
|---|---|
| Born | September 28, 1944 |
| Nationality | United States |
| Institution | Harvard University |
| Field | Macroeconomics |
| Alma mater | Harvard (Ph.D. 1970) Caltech (B.S. 1965) |
| Influences | David Ricardo Robert Lucas, Jr. Zvi Griliches |
| Influenced | Zvi Hercowitz Xavier Sala-i-Martin Alberto Alesina |
| Contributions | Ricardan Equivalence Hypothesis Economic growth Time consistency |
| Information at IDEAS/RePEc | |
Robert Joseph Barro (born September 28, 1944) is an American classical macroeconomist and the Paul M. Warburg Professor of Economics at Harvard University. The Research Papers in Economics project ranked him as the 4th most influential economist in the world as of August 2011 based on his academic contributions.[1] Barro is considered one of the founders of new classical macroeconomics, alongside Robert Lucas, Jr. and Thomas J. Sargent.[2] He is currently a senior fellow at Stanford University's Hoover Institution.
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Barro graduated with a B.S. in physics from the California Institute of Technology in 1965, where he learned under Richard Feynman, but realized he "wouldn't be close to the top in those fields".[3] He turned to economics and earned a Ph.D. from Harvard University in 1970. He first reached wide notice with a 1974 paper entitled "Are Government Bonds Net Wealth?", a paper which argued that, under certain assumptions, present borrowing would be matched by increased bequest to future generations in order to pay future taxes expected to pay the debt on the government bonds. This paper was direct response to the Blinder-Solow results, which had implied that the long term implications of government borrowing would be compensated for by the wealth effect. This paper is among the most cited in macro-economics, and its implications of his Ricardian Equivalence are still being debated in the present.
In 1976, he authored a second influential paper, "Rational expectations and the role of monetary policy", in which he argued that information asymmetries would cause real effects as rational economic actors in response to uncertainty, but not in response to expected monetary policy changes. While he has revisited the topic since then, and critically appraised the paper, it was important in integrating the role of money into neo-classical economics, and in the synthesis of General Equilibrium and macroeconomic models.
In 1983 he applied this information asymmetry argument to the role of central banks, and concluded that central banks, in order to have credibility in inflation fighting, have to be locked into inflation targets that they cannot violate to reduce unemployment. (See also Monetarism, Phillips Effect, Inflation). During the 1970s economist Arthur Okun developed the concept of the Misery Index, which Jimmy Carter publicized during his 1976 presidential campaign, and Ronald Reagan in his 1980 presidential campaign. Numerous sources incorrectly credit Barro with this, due to the similarity of name with his own "Barro Misery Index". Barro's version first appeared in a 1999 BusinessWeek article.[4]
His 1984 Macroeconomics textbook remains a standard for explaining the subject, and his 1995 book, with Columbia University economist Xavier Sala-i-Martin, on Economic Growth is a widely cited and read graduate-level textbook on the theory and evidence concerning long-run economic growth. Barro's research in the 90s was mainly focused on the theoretical and empirical determinants of growth: he gave fundamental contributions to the theory of endogenous growth (with particular attention to the links between innovation and public investment on one side and growth on the other side), and was a pioneer in the econometric analysis of the main factors associated with growth in the modern era.[5] He was elected a Fellow of the American Academy of Arts and Sciences in 1988.[6]
Another often-cited work is a paper co-authored with Gary Becker, "A Reformulation of the Economic Theory of Fertility" published in the Quarterly Journal of Economics, which is influential in thinking about "infinite time horizon" modelling.
In the last decade, Barro has begun investigating the influence of religion and popular culture on political economy, working with his wife Rachel McCleary.
Barro believes that the Keynesian multiplier is close to zero. For every dollar the government borrows and spends, spending elsewhere in the economy falls by almost the same amount.[7]
Barro's work has been central to many of the economic and public policy debates of the last 30 years, including business cycle theory, growth theory, the neo-classical synthesis and public policy. Robert Barro is doctor honoris causa from Universidad Francisco Marroquin.
Finally, Barro has been an outspoken opponent of stimulus spending.[8][9]
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