George Akerlof | |
|---|---|
.jpg) Akerlof in 2007 | |
| Born | George Arthur Akerlof (1940-06-17)June 17, 1940 (age 85) New Haven, Connecticut, U.S. |
| Spouses | |
| Children | 1 |
| Relatives | Carl W. Akerlof (brother) |
| Academic background | |
| Education | Yale University (BA) Massachusetts Institute of Technology (PhD) |
| Thesis | Wages and capital (1966) |
| Doctoral advisor | Robert Solow[1] |
| Influences | John Maynard Keynes |
| Academic work | |
| School or tradition | New Keynesian economics |
| Institutions | Georgetown University London School of Economics University of California, Berkeley |
| Doctoral students | Charles Engel Adriana Kugler |
| Notable ideas | Information asymmetry Efficiency wages |
| Awards | Nobel Memorial Prize in Economic Sciences (2001) |
| Website | |
George Arthur Akerlof (born June 17, 1940) is an American economist and a university professor at theMcCourt School of Public Policy atGeorgetown University and Koshland Professor of Economics Emeritus at theUniversity of California, Berkeley.[2][3] Akerlof was awarded the 2001Nobel Memorial Prize in Economic Sciences, jointly withMichael Spence andJoseph Stiglitz, "for their analyses of markets with asymmetric information." He is the husband of formerUnited States Secretary of the TreasuryJanet Yellen.
Akerlof was born inNew Haven, Connecticut, on June 17, 1940. His mother was Rosalie Clara Grubber (née Hirschfelder), a housewife ofGerman Jewish descent, and his father was Gösta Carl Åkerlöf, a chemist and inventor, who was aSwedish immigrant.[4][5][6] George has an older brother,Carl, a physics professor at theUniversity of Michigan.[6]
Akerlof attendedPrinceton Day School, before he graduated from theLawrenceville School in 1958.[6] He received abachelor's in economics fromYale University in 1962, and earned hisPhD in economics from theMassachusetts Institute of Technology (MIT) in 1966.[3] His dissertation was titledWages and Capital under the supervision ofRobert Solow, a noted economist who would later receive the Nobel Memorial Prize.
After receiving his doctorate, Akerlof joined the faculty of theUniversity of California, Berkeley, as an assistant professor of economics, although he taught for only one year before moving to India. In 1967, he spent some time as a visiting professor at theIndian Statistical Institute (ISI) in New Delhi and returned to the United States in September 1968.[6] Akerlof then became an associate professor at Berkeley and voted for a tenure-track position at the university. He also served as a senior economist at the White HouseCouncil of Economic Advisers (CEA) from 1973 to 1974. In 1977, Akerlof spent a year as a visiting research economist for theFederal Reserve Board of Governors in Washington, D.C. where he met his future wife and coauthor,Janet Yellen.[3] After that he hoped to be promoted to full professorship, however, Berkeley's department of economics failed to appoint him. Akerlof and Yellen then moved to theLondon School of Economics (LSE) in 1978, where he accepted a prestigious post as the Cassel Professor of Money and Banking, while she accepted a tenure-track lectureship. They remained in the United Kingdom for two years before returning to the United States.[6]
In 1980, Akerlof became Goldman Professor of Economics at Berkeley and taught there for most of his career.[3] In 1997, he took aleave of absence from Berkeley to accompany his wife when she was named chair of the Council of Economic Advisers (CEA). At Washington, Akerlof began working for theBrookings Institution as a senior fellow. They both returned to teaching at UC Berkeley in 1999. Akerlof remained an active faculty member at the university until his retirement. He was awarded Koshland Professor of Economics Emeritus in 2010.
After that, he once again moved to Washington when Yellen confirmed to the Federal Reserve Board.[7] Akerlof received a position as visiting scholar at theInternational Monetary Fund (IMF) from 2010 to 2014 and joined theMcCourt School of Public Policy atGeorgetown University as a university professor in 2014.[2]
Akerlof is perhaps best known for his article, "The Market for Lemons: Quality Uncertainty and the Market Mechanism", published in theQuarterly Journal of Economics in 1970, in which he identified certain severe problems that afflict markets characterized byasymmetric information, the paper for which he was awarded the Nobel Memorial Prize.[10] InEfficiency Wage Models of the Labor Market, Akerlof and coauthor/wife, Janet Yellen propose rationales for theefficiency wage hypothesis in which employers pay above themarket-clearing wage, in contradiction to the conclusions ofneoclassical economics. This work introducedgift-exchange game to economics.
Akerlof and collaboratorRachel Kranton of Duke University have introduced social identity into formal economic analysis, creating the field ofidentity economics. Drawing onsocial psychology and many fields outside of economics, Akerlof and Kranton argue that individuals do not have preferences only over different goods and services. They also adhere tosocial norms for how different people should behave. The norms are linked to a person'ssocial identities. These ideas first appeared in their article "Economics and Identity", published in theQuarterly Journal of Economics in 2000.
In the late 1970s, Akerlof's ideas attracted the attention of some on both sides of the debate over legalabortion. In articles appearing in TheQuarterly Journal of Economics,[11]The Economic Journal,[12] and other forums, Akerlof described a phenomenon that he labeled "reproductive technology shock." He contended that the new technologies that had helped to spawn the late twentieth centurysexual revolution, modern contraceptives and legal abortion, had not only failed to suppress the incidence ofout-of-wedlock childbearing but also had actually worked to increase it. According to Akerlof, for women who did not use them, these technologies had largely transformed the old paradigm of socio-sexual assumptions, expectations, and behaviors in ways that were especially disadvantageous. For example, the availability of legal abortion now allowed men to view their offspring as the deliberate product of female choice rather than as the joint product of sexual intercourse. Thus, it encouraged biological fathers to reject not only the notion of an obligation to marry the mother but also the idea of a paternal obligation.
While Akerlof did not recommend legal restrictions on either abortion or the availability of contraceptives his analysis seemed to lend support to those who did. Thus, a scholar strongly associated with liberal and Democratic-leaning policy positions has been approvingly cited by conservative and Republican-leaning analysts and commentators.[13][14]
In 1993 Akerlof andPaul Romer published "Looting: The Economic Underworld of Bankruptcy for Profit", describing how under certain conditions, owners of corporations will decide it is more profitable for them personally to 'loot' the company and 'extract value' from it instead of trying to make it grow and prosper. For example:
Bankruptcy for profit will occur if poor accounting, lax regulation, or low penalties for abuse give owners an incentive to pay themselves more than their firms are worth and then default on their debt obligations. Bankruptcy for profit occurs most commonly when a government guarantees a firm's debt obligations.[15]
In his 2007 presidential address to theAmerican Economic Association, Akerlof proposednatural norms that decision makers have for how theyshould behave, and showed how such norms can explain discrepancies between theory and observed facts about the macroeconomy. Akerlof proposed a new agenda for macroeconomics, using social norms to explain macroeconomic behavior.[16] He is considered[according to whom?] together withGary Becker as one of the founders ofsocial economics.
He is a trustee ofEconomists for Peace and Security and co-director of the Social Interactions, Identity and Well-Being Program at theCanadian Institute for Advanced Research (CIFAR). He is on the advisory board of theInstitute for New Economic Thinking. He was elected a fellow of theAmerican Academy of Arts and Sciences in 1985.[17]
For his work and contribution to economics and philosophy, he was awarded the third Witten Lectures in Economics and Philosophy at theWitten/Herdecke University in 2009.[18]
In June 2024, 16Nobel Prize in Economics laureates, including Akerlof, signed an open letter arguing thatDonald Trump's fiscal and trade policies coupled with efforts to limit theFederal Reserve's independence would reignite inflation in the United States.[19][20][21]
Akerlof was briefly married to an architect, Kay Leong; they wed in 1974 and divorced three years later, after he did not get promoted to a full professorship at Berkeley. Following their divorce, Kay moved to New York and remarried a fellow architect.[22] In 1978, Akerlof marriedJanet Yellen, an economist who was the formerUnited States Secretary of the Treasury and formerchair of the Federal Reserve, as well as a professor emeritus at Berkeley'sHaas School of Business.[23][24][25]
They have one son named Robert, a fellow economist born in 1981,[6] who earned a bachelor's degree in economics and mathematics from Yale University in 2003 and then was awarded his PhD in economics fromHarvard University in 2009. Robert previously worked for 14 years as an assistant and associate professor of economics at theUniversity of Warwick, having firstly spent two years working as a postdoctoral associate atMIT after his PhD.[26] In 2024, he became a full professor of economics at theUNSW Business School in Sydney.[27]
Akerlof was one of the signees of a 2018amici curiae brief that expressed support for Harvard in theStudents for Fair Admissions v. President and Fellows of Harvard College lawsuit.[28] Other signees of the brief includeAlan B. Krueger,Cecilia E. Rouse,Robert M. Solow, Janet L. Yellen, as well as numerous others.[28]
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: "The Princeton Country Day School ended at grade nine. At that point most of my classmates dispersed among different New England prep schools. Both for financial reasons and also because they preferred that I stay at home, my family sent me down the road to the Lawrenceville School."Trump's policies could prove to be inflationary, other economists also warned, such as his proposal to create a 10% across-the-board tariff on all imports to deporting immigrants. The tariff plan would add $1,700 in annual costs for the typical U.S. household, essentially acting as an inflationary tax, according to experts at the Peterson Institute for International Economics.
including the Nobel Prize Lecture December 8, 2001Behavioral Macroeconomics and Macroeconomic Behavior| Awards | ||
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| Preceded by | Laureate of the Nobel Memorial Prize in Economics 2001 Served alongside:A. Michael Spence,Joseph E. Stiglitz | Succeeded by |
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| Preceded by | President of theAmerican Economic Association 2006–2007 | Succeeded by |
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