Robert Barro (1944 - )

Influential libertarian macroeconomist, Paul M. Warburg Professor of Economics at Harvard University.

Dr. Barro first reached wide notice with a 1974 paper entitled "Are Government Bonds Net Wealth?", a paper which argued that, unders certain assumptions, present borrowing would be matched by increased lending in order to pay future taxes expected to pay the debt on the government bonds. This paper was direct response to the Blinder-Solow results, which had implied that the long term implications of government borrowing would be compensated for by the wealth effect . This paper is among the most cited in macro-economics, and its implications of his Ricardan Equivalence Hypothesis are still being debated in the present. In a strange twist, many neo-Keynesians now argue for fiscal restraint, while REH implies that it is possible for government debt to "crowd in" private investment, rather than "crowd out" as Blinder-Solow's results maintain.

In 1976, he authored a second influential paper, "Rational expectations and the role of monetary policy", on the topic of Monetary policy and rational expectations. In it he argued that information asymmetries would cause real effects as rational economic actors in response to uncertainty, but not in response to expected monetary policy changes. While he has revisited the topic since then, and critically appraised the paper, it was important in integrating the role of money into neo-classical economics, and in the synthesis of General Equilibrium and macroeconomic models.

In 1983 he applied this information asymmetry argument to the role of central banks, and concluded that central banks, in order to have credibility in inflation fighting, have to be locked into inflation targets that they cannot violate to reduce unemployment. (See also Monetarism, Phillips Effect, Inflation) This line of thinking has been influential in the creation of the Maastricht treaty for the European Central Bank.

His 1984 Macroeconomics textbook remains a standard for explaining the subject, and his 1995 book, with Sala-i-Martin, on Economic Growth is widely cited and read.

Another work which is cited is a paper where he was a co-author with Gary Becker A Reformulation of the Economic Theory of Fertility," published in the Quarterly Journal of Economics, which is influential in thinking about "infinite time horizon" modelling.

In the last decade, Dr. Barro has begun investigating the influence of religion and popular culture on political economy, working with Rachel McCleary .

Dr. Barro's work has been central to many of the economic and public policy debates of the last 30 years, including business cycle theory, growth theory, the neo-classical synthesis and public policy. It is widely believed in the economics community that he will win the Nobel Memorial Prize in Economics.

References

"Are Government Bonds Net Wealth?", 1974, Journal of Political Economy Barro, Robert Rational expectations and the role of monetary policy. MonetaryEconomy 2:1-32.1976.

External Links

[1] Dr. Barro's web page.