I grew up in a family in which political issues were often discussed, and debated intensely.
Macroeconomic policy can never be devoid of politics: it involves fundamental trade-offs and affects different groups differently.
If stability and efficiency required that there existed markets that extended infinitely far into the future - and these markets clearly did not exist - what assurance do we have of the stability and efficiency of the capitalist system?
But while I loved all of these courses, there was an irresistible attraction of economics.
Economists often like startling theorems, results which seem to run counter to conventional wisdom.
Certainly, the poverty, the discrimination, the episodic unemployment could not but strike an inquiring youngster: why did these exist, and what could we do about them.
As I noted in my Nobel lecture, an early insight in my work on the economics of information concerned the problem of appropriability - the difficulty that those who pay for information have in getting returns.
The notion that every well educated person would have a mastery of at least the basic elements of the humanities, sciences, and social sciences is a far cry from the specialized education that most students today receive, particularly in the research universities.
There must have been something in the air of Gary that led one into economics: the first Nobel Prize winner, Paul Samuelson, was also from Gary, as were several other distinguished economists.
I think in part the reason is that seeing an economy that is, in many ways, quite different from the one grows up in, helps crystallize issues: in one's own environment, one takes too much for granted, without asking why things are the way they are.
Much of my work in this period was concerned with exploring the logic of economic models, but also with attempting to reconcile the models with every day observation.
My research in this period centered around growth, technical change, and income distribution, both how growth affected the distribution of income and how the distribution of income affected growth.
I recognized that information was, in many respects, like a public good, and it was this insight that made it clear to me that it was unlikely that the private market would provide efficient resource allocations whenever information was endogenous.
Amherst was pivotal in my broad intellectual development; MIT in my development as a professional economist.
The extra curricular activity in which I was most engaged - debating - helped shape my interests in public policy.
For un-subscribe please check the mail footer.