Michael Woodford (economist)
Encyclopedia
Michael Dean Woodford is an American macroeconomist
and monetary theorist who currently teaches at Columbia University
.
and a law degree from Yale, and completed his economics doctorate at MIT in 1983. He began his teaching career at Columbia, and then taught at Chicago and Princeton before returning to Columbia to accept the John Bates Clark chair in 2004. He is one of relatively few economists to have been awarded the John D. and Catherine T. MacArthur Foundation Prize Fellowship
, which financed his research from 1981 to 1986. In 2007, he was awarded the Deutsche Bank Prize
.
. Thereafter he began to work on macroeconomic models with sticky prices
; together with Julio Rotemberg
he developed one of the first microfounded
New Keynesian
macroeconomic models. Since then he has used this framework to
study many topics related to monetary policy
, including the fiscal theory of the price level
, the effectiveness of monetary policy as consumers use more credit and less cash, and inflation targeting rules.
Macroeconomics
Macroeconomics is a branch of economics dealing with the performance, structure, behavior, and decision-making of the whole economy. This includes a national, regional, or global economy...
and monetary theorist who currently teaches at Columbia University
Columbia University
Columbia University in the City of New York is a private, Ivy League university in Manhattan, New York City. Columbia is the oldest institution of higher learning in the state of New York, the fifth oldest in the United States, and one of the country's nine Colonial Colleges founded before the...
.
Academic career
Woodford holds an undergraduate degree from the University of ChicagoUniversity of Chicago
The University of Chicago is a private research university in Chicago, Illinois, USA. It was founded by the American Baptist Education Society with a donation from oil magnate and philanthropist John D. Rockefeller and incorporated in 1890...
and a law degree from Yale, and completed his economics doctorate at MIT in 1983. He began his teaching career at Columbia, and then taught at Chicago and Princeton before returning to Columbia to accept the John Bates Clark chair in 2004. He is one of relatively few economists to have been awarded the John D. and Catherine T. MacArthur Foundation Prize Fellowship
MacArthur Fellows Program
The MacArthur Fellows Program or MacArthur Fellowship is an award given by the John D. and Catherine T...
, which financed his research from 1981 to 1986. In 2007, he was awarded the Deutsche Bank Prize
Deutsche bank prize
The Deutsche Bank Prize in Financial Economics honors renowned researchers who have made influential contributions to the fields of finance and money and macroeconomics, and whose work has led to practical and policy-relevant results. It is awarded biannually, since 2005, by the Center for...
.
Theoretical contributions
Woodford's early research topics included sunspot equilibria and imperfect competitionImperfect competition
In economic theory, imperfect competition is the competitive situation in any market where the conditions necessary for perfect competition are not satisfied...
. Thereafter he began to work on macroeconomic models with sticky prices
Sticky (economics)
Sticky, in the social sciences and particularly economics, describes a situation in which a variable is resistant to change. Sticky prices are an important part of macroeconomic theory since they may be used to explain why markets might not reach equilibrium right away. Nominal wages are often said...
; together with Julio Rotemberg
Julio Rotemberg
Julio J. Rotemberg is an American economist at Harvard Business School. He is known for his collaboration with Michael Woodford on the first New Keynesian DSGE model, especially on monopolistic competition. He is also known for an alternative model of sticky prices.Rotemberg holds a B.A. in...
he developed one of the first microfounded
Microfoundations
In economics, the term microfoundations refers to the microeconomic analysis of the behavior of individual agents such as households or firms that underpins a macroeconomic theory....
New Keynesian
New Keynesian economics
New Keynesian economics is a school of contemporary macroeconomics that strives to provide microeconomic foundations for Keynesian economics. It developed partly as a response to criticisms of Keynesian macroeconomics by adherents of New Classical macroeconomics.Two main assumptions define the New...
macroeconomic models. Since then he has used this framework to
study many topics related to monetary policy
Monetary policy
Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment...
, including the fiscal theory of the price level
Fiscal theory of the price level
The fiscal theory of the price level is the idea that government fiscal policy affects the price level: for the price level to be stable , government finances must be sustainable: they must run a balanced budget over the course of the business cycle, meaning they must not run a structural...
, the effectiveness of monetary policy as consumers use more credit and less cash, and inflation targeting rules.
Interest and Prices
Woodford is probably best known as the author of an advanced textbook on monetary macroeconomics entitled Interest and Prices: Foundations of a Theory of Monetary Policy. The book has, in the words of the Deutsche Bank Prize Committee, 'quickly become the standard reference for monetary theory and analysis among academic economists and their colleagues at central banks'.External links
- Michael Woodford's homepage at Columbia University
- Michael Woodford 2007 winner of the Deutsche Bank Prize in Financial Economics