Volatility and Macroeconomic Paradigms for Rich and Poor

William Easterly, Roumeen Islam and Joseph Stiglitz
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William Easterly: The World Bank, Washington DC
Roumeen Islam: The World Bank, Washington DC

Chapter 17 in Advances in Macroeconomic Theory, 2001, pp 352-372 from Palgrave Macmillan

Abstract: Abstract Michael Bruno has left us with legacies that include an empiricism free of ideology, a curiosity about what the real facts are, a scepticism about the conventional wisdom, and a willingness to listen to a wide range of opinions. His interest in macroeconomics resulted in one of the most influential books of the 1980s, The Economics of Worldwide Stagflation, which examined why the conventional Phillips curve had been turned on its head by institutional mechanisms. His interest in macroeconomic policy was applied to real life when he led the successful Israeli heterodox inflation stabilization effort of 1985, first as adviser and then as central bank governor. As Chief Economist of the World Bank, he emphasized research and economic and sector work relative to lending activities and external relations. In research, while Chief Economist, he showed how high inflation was robustly and negatively related to economic growth, while there was little evidence of a robust relationship between inflation and growth at low rates of inflation (say below 40 per cent a year). Michael Bruno’s legacy lives on in the many people whom he inspired by being a good and curious listener and a thoughtful and non-ideological researcher. While inflation was the central macroeconomic issue of the 1980s,

Keywords: Exchange Rate; Interest Rate; Real Wage; Real Interest Rate; Small Open Economy (search for similar items in EconPapers)
Date: 2001
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DOI: 10.1057/9780333992753_17

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