(1943 - )
Joseph Stiglitz was born on February 9, 1943,
in Gary, Indiana. From 1960 to 1963, he studied at Amherst College.
He went to MIT for his fourth year as an undergraduate, where he later
pursued graduate work. From 1965 to 1966, he studied at the University
of Chicago after receiving a Fulbright Fellowship. In subsequent years,
he taught at MIT and Yale. Stiglitz is currently a Professor at Columbia,
with appointments at the Business School and the School of International
and Public Affairs (SIPA), and is a co-editor of The Economists'
In addition to making numerous influential contributions
to microeconomics, Stiglitz has played number of policy roles. He served
in the Clinton Administration as the chair of the President's Council
of Economic Advisors (1995–1997). At the World Bank, he served
as Senior Vice President and Chief Economist (1997–2000), in the
time when unprecedented protest against international economic organizations
started, most prominently with the Seattle WTO meeting of 1999. He is
best known for his critical views of globalization and international
institutions like the International Monetary Fund (IMF). In April 2001,
he had this to say about the IMF: “When a nation is down and out,
the IMF takes advantage and squeezes the last pound of blood out of
them. They turn up the heat until, finally, the whole cauldron blows
up. It has condemned people to death. They don't care if people live
or die. The policies undermine democracy...it's a little like the Middle
Ages or the Opium Wars."
Stiglitz was forced out of the World Bank by then
Treasury Secretary Lawrence Summers. In July 2000, Stiglitz founded
the Initiative for Policy Dialogue (IPD) to help developing countries
explore policy alternatives, and enable wider civic participation in
Stiglitz' most famous research was on screening, a
technique used by one economic agent to extract otherwise private information
from another. Stiglitz was awarded the Nobel
Prize for Economics in 2001 for this contribution to the theory
of information asymmetries that he shared with George Akerlof and A.
Along with his technical economic publications, Stiglitz
is the author of Whither Socialism, a non-mathematical book providing
an introduction to the theories behind economic socialism's failure
in Eastern Europe, the role of imperfect information in markets, and
misconceptions about how truly "free market" the free market
capitalist system is. In 2002, he wrote Globalization and Its Discontents,
where he asserts that the International Monetary Fund puts the interest
of "its largest shareholder," the United States, above those
of the poorer nations it was designed to serve. In 2003, Stiglitz published The Roaring Nineties, his analysis of the boom and bust of the
Stiglitz’s Publications Include:
• Walsh, Carl & Stiglitz, Joseph. Economics. New
York : W.W. Norton & Company, (2002).
• Walsh, Carl & Stiglitz, Joseph. Principles in Macroeconomics.
New York : W.W. Norton & Company, (2002).
• Stiglitz, Joseph. Globalization and Its Discontents W. W. Norton & Company, (2002).
• Greenwald, Bruce & Stiglitz, Joseph. Towards a New
Paradigm in Monetary Politics. Cambrididge: Cambridge University
• Stiglitz, Joseph. The Roaring Nineties. Why We're Paying
the Price for the Greediest Decade in History Penguin, (2004).
The following press release
from the Royal Swedish Academy of Sciences
describes Stiglitz's work:
Many markets are characterized by asymmetric information: actors
on one side of the market have much better information than those on
the other. Borrowers know more than lenders about their repayment prospects,
managers and boards know more than shareholders about the firm's profitability,
and prospective clients know more than insurance companies about their
accident risk. During the 1970s, this year's Laureates laid the foundation
for a general theory of markets with asymmetric information. Applications
have been abundant, ranging from traditional agricultural markets to
modern financial markets. The Laureates' contributions form the core
of modern information economics.
Joseph Stiglitz clarified the opposite type of market
adjustment, where poorly informed agents extract information from the
better informed, such as the screening performed by insurance companies
dividing customers into risk classes by offering a menu of contracts
where higher deductibles can be exchanged for significantly lower premiums.
In a number of contributions about different markets, Stiglitz has shown
that asymmetric information can provide the key to understanding many
observed market phenomena, including unemployment and credit rationing.