Joseph Stiglitz

Who is Joseph Stiglitz?

Joseph Eugene Stiglitz is a renowned American economist. In 2001, Stiglitz was awarded the Nobel Prize for Economics for his foundational theory of markets with asymmetric information. He received the award together with fellow American economists Michael Spence and George Akerlof.

Joseph Stiglitz’s Life and Career

Joseph Stiglitz was born in America on February 9, 1943 in Gary, Indiana. He studied at Amherst College (Massachusetts) and completed his studies in 1964. In 1967, Stiglitz obtained his Ph.D. from the Massachusetts Institute of Technology (MIT) and became a professor at Yale University in 1970. In 1979, Stiglitz was awarded the John Bates Clark Award. He also taught at various tertiary institutions, including Harvard, Stanford, MIT, and Princeton.

Between 1993 and 1997, Joseph Stiglitz served as an active member of the Council of Economic Advisers for the United States, becoming its vice president in 1995. Stiglitz was also a member of President Bill Clinton’s economic policy team.

Between 1997 and 2000, Stiglitz served as the chief economist and vice president of the World Bank but resigned before the end of his term. In 2000, Stiglitz founded the Initiative for Policy Dialogue (IPD), a think tank on international development based at Columbia University.

Stiglitz also advised American president Barack Obama, but was a critic of the Obama administration’s financial-industry rescue plan. As a matter of fact, Stiglitz was critical of U.S. rating agencies, who he describes as the “key culprit” in the Global Financial Crisis (GFC) and conspired with the banks.

Stiglitz was recruited by the French president Nicolas Sarkozy to head/chair the Commission on the “Measurement of Economic Performance and Social Progress” in 2008. In 2009, he was then recruited by the President of the United Nations General Assembly to serve as the chair of the Commission of “Experts on Reform of the International Financial and Monetary System”, where he authored the “Stiglitz Report” outlining reforms to the financial system after the GFC. He also served as an advisor to the Greek government during the European Sovereign Crisis in 2010.

Between 2011 and 2014, he served as the president of the International Economic Association and joined the United Kingdom Labour Party ‘s Economic Advisory Committee in 2015.

In 2011, Stiglitz was named by Time magazine as one of the 100 most influential people in the world.

Since 2000, Stiglitz has been a full professor at Columbia University’s Business School and teaches at the Graduate School of Arts and Sciences (Department of Economics) and the School of International and Public Affairs. He holds more than 40 honorary degrees and he has been decorated by several governments.

Information Asymmetries

Joseph Stiglitz has been an outspoken and significant contributor to work centered around the field of economics. He helped popularize a new field of economics called “The Economics of Information.” The study focused on studying the effects of information asymmetries and how uninformed citizens could potentially improve their positions in markets with asymmetric information.

By studying the insurance market, Stiglitz was able to formulate notable ideologies and concepts like “moral hazard” and “adverse selection.” He further found that insurance companies lacking complete information could mitigate the risk of “asymmetric information” through the screening of individuals and/or customers.

Notable Publications

Joseph Stiglitz also published several materials over the last decade, making a significant impact on the economic field of study and global debates. “Globalization and Its Discontents,” published in 2002, sold over a million copies globally and was translated into more than thirty (30) languages. The book was followed by two sequels: “Fair Trade for All” and “Making Globalization Work,” which were published in 2005 and 2006, respectively.

His other publications, “The Roaring Nineties” and “Towards a New Paradigm in Monetary Economics,” published in 2003, highlighted the effects of financial deregulation (among other acts) in the 1990s and identified the potential risks associated with financial interdependence and the misconceptions in current monetary and fiscal policies, respectively.

A prolific author, he has also written “People, Power, and Profits” (2019), “The Euro: How a Common Currency Threatens the Future of Europe” (2016), “The Great Divide: Unequal Societies and What We Can Do About Them” (2015), “Rewriting the Rules of the American Economy: An Agenda for Growth and Shared Prosperity” (2015), and “Creating a Learning Society: A New Approach to Growth Development and Social Progress” (2014).

More recently, Professor Stiglitz has published “Rewriting the Rules of the European Economy: An Agenda for Growth and Shared Prosperity” (2020), “Measuring What Counts: The Global Movement for Well-Being” (2019) and “For Good Measure: An Agenda for Moving Beyond GDP” (2019).

Additional Resources

Adverse Selection

Milton Friedman

Monetary Policy

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