February 2002 Department of Economics Brown University Providence, Rhode Island 02912 Curriculum Vitae HERSCHEL I. GROSSMAN phone: 401 863-2606 fax: 401 863-1970 e-mail: Herschel_Grossman@brown.edu web site: http://econ.pstc.brown.edu/faculty/grossman/ Born Philadelphia, Pennsylvania, March 6, 1939 Education: Johns Hopkins University, Ph.D., 1965 University of Oxford, B. Phil., 1962 University of Virginia, B.A. with Highest Honors, 1960 Positions Held at Brown University: Merton P. Stoltz Professor in the Social Sciences, 1980- present Professor of Economics, 1973-present Chairman, Department of Economics, 1982-1985, 1986-1991 Associate Professor of Economics, 1969-1973 Assistant Professor of Economics, 1964-1969 Some Other Positions Held: Visiting Scholar, Russell Sage Foundation, 2000-2001 Research Associate, National Bureau of Economic Research, 1979-present Editorial Board, European Journal of Political Economy, 2000-present Editorial Board, The Economics of Governance, 1997-present Review Editor, Journal of Monetary Economics, 1984-1991 Board of Editors, American Economic Review, 1980-1983 John Simon Guggenheim Memorial Foundation Fellow, 1979-1980 Editorial Board, Journal of Monetary Economics, 1977-1983 Biography included in Who's Who in Economics and in Who's Who in America. 1
Published Research Papers: Make Us a King : Anarchy, Predation, and the State, European Journal of Political Economy, March 2002. Is a Moral Disposition Rewarded? with M. Kim, Journal of Banking and Finance, forthcoming. Lo Stato è al servizio...di chi? Kéiron, December 2001. The State in Economic History, in Transferring Wealth and Power from the Old to the New World: Monetary and Fiscal Institutions in the 17 th through the 19 th Centuries, M. Bordo and R.Cortés-Conde, eds., Cambridge University Press, 2001. The Creation of Effective Property Rights, American Economic Review, May 2001 "Inc Incentives and Corruption in Chinese Economic Reform", with C. S. Fan, Journal of Policy Reform, 4(3), 2001. Butter and Guns: Complementarity between Economic and Military Competition, with J. Mendoza, Economics of Governance, 2(1), 2001. Cooption and Repression in the Soviet Union, with D. Gershenson, Economics & Politics, March 2001 Civil Conflict: Ended or Never Ending? with D. Gershenson, Journal of Conflict Resolution, December 2000. "Predators, Moral Decay, and Moral Revivals", with M. Kim, European Journal of Political Economy, June 2000. The State: Agent or Proprietor? Economics of Governance, 1(1), 2000. "Sovereign Debt and Consumption Smoothing," with T. Han, Journal of Monetary Economics, August 1999. Kleptocracy and Revolutions," Oxford Economic Papers, April 1999 Wherefore a Prudent Fiscal Policy? in Budget Deficits: A Global Perspective, S. Shojai, ed., Praeger, 1999. 2
Producers and Predators, Pacific Economic Review, October 1998. "Population Increase and the End of Colonialism," with M. Iyigun, Economica, August 1997. "Predation and Accumulation," with M. Kim, Journal of Economic Growth, September 1996. "Predation and Production," with M. Kim, in The Political Economy of Conflict and Appropriation, M. Garfinkel and S. Skaperdas, eds., Cambridge University Press, 1996. "War Debt, Moral Hazard, and the Financing of the Confederacy," with T. Han, Journal of Money, Credit, and Banking, May 1996. "Rival Kleptocrats: The Mafia versus the State" in The Economics of Organized Crime, G. Fiorentini and S. Peltzman, eds., Cambridge University Press, 1995. "Swords or Plowshares? A Theory of the Security of Claims to Property," with M. Kim, Journal of Political Economy, December 1995; reprinted in The Economics of Corruption and Illegal Markets, G. Fiorentini and S. Zamagni, eds., Edward Elgar Publishing, 1999. "The Profitability of Colonial Investment," with M. Iyigun, Economics and Politics, November 1995. "Insurrections," in Handbook of Defense Economics, K. Hartley and T. Sandler, eds., North Holland, 1995. "Robin Hood and the Redistribution of Property Income," European Journal of Political Economy, September 1995. "Production, Appropriation, and Land Reform," American Economic Review, June 1994. "Proprietary Public Finance and Economic Welfare," with S. J. Noh, Journal of Public Economics, February 1994. "Nominal Sovereign Debt, Risk Shifting, and Reputation," with J. Van Huyck, Journal of Economics and Business, August 1993. 3
"A Theory of War Finance," with T. Han, Defence Economics, February 1993. "Foreign Aid and Insurrection," Defence Economics, November 1992. "Monetary Economics: A Review Essay," Journal of Monetary Economics, October 1991. "A General Equilibrium Model of Insurrections," American Economic Review, September 1991; reprinted in Ciencia Economica, Enero-Abril, 1992; and in The Economics of Defense, K. Hartley and T. Sandler, eds., Edward Elgar Publishing, 2001. "A Theory of Kleptocracy with Probabilistic Survival and Reputation," with S.J. Noh, Economics and Politics, July 1990; reprinted in The Economics of Corruption and Illegal Markets, G. Fiorentini and S. Zamagni, eds., Edward Elgar Publishing, 1999. "Inflation and Reputation with Generic Policy Preferences," Journal of Money, Credit and Banking, May 1990. "The Political Economy of War Debt and Inflation," in Monetary Policy for a Changing Financial Environment, W.S. Haraf & P. Cagan, eds., American Enterprise Institute, 1990. "Shunto, Rational Expectations, and Output Growth in Japan," with W. Haraf, Empirical Economics, Issue 3, 1989. "Sovereign Debt as a Contingent Claim: Excusable Default, Repudiation, and Reputation," with J. Van Huyck, American Economic Review, December 1988. "The Theory of Rational Bubbles in Stock Prices," with B. Diba, Economic Journal, September 1988. "Explosive Rational Bubbles in Stock Prices?" with B. Diba, American Economic Review, June 1988. "Rational Inflationary Bubbles," with B. Diba, Journal of Monetary Economics, January 1988. "On the Inception of Rational Bubbles," with B. Diba, Quarterly Journal of Economics, August 1987. 4
"The Illusion of Stabilization Policy?", with S.L. Green, Carnegie-Rochester Conference Series on Public Policy, Volume 25, Autumn 1986. "Seigniorage, Inflation, and Reputation," with J. Van Huyck, Journal of Monetary Economics, July 1986. "Rationalité, Monnaie, et Activite," Observations et Diagnostics Economiques: Revue de L'OFCE, Avril 1986. "Monetary Information and Macroeconomic Fluctuations," with J. Boschen, in Modern Macroeconomic Theory, J-P. Fitoussi, ed., Basil Blackwell, 1983. "The Natural-Rate Hypothesis, the Rational Expectations Hypothesis, and the Remarkable Survival of Non-Market- Clearing Assumptions," Carnegie-Rochester Conference Series on Public Policy, Volume 19, Autumn 1983. "Tests of Equilibrium Macroeconomics Using Contemporaneous Monetary Data," with J. Boschen, Journal of Monetary Economics, November 1982. "The Effects of Demand Disturbances under Alternative Exchange-Rate Regimes," with J. Hanson and R.F. Lucas, Oxford Economic Papers, March 1982. "Risk Shifting, Statistical Discrimination, and the Stability of Earnings," with W.T. Trepeta, in Studies in Labor Markets, S. Rosen, ed., University of Chicago Press, 1981. "The Federal Minimum Wage, Employment Compensation, and Inflation," with J. Boschen, in Report of the Minimum Wage Study Commission, Volume VI, 1981. "Fixed Wages, Layoffs, Unemployment Compensation, and Welfare: Note," with K. Happy, American Economic Review, June 1981. "Incomplete Information, Risk Shifting, and Employment Fluctuations," Review of Economic Studies, April 1981. "Risk Shifting, Unemployment Insurance, and Layoffs," in The Economics of the Labour Markets, Z. Hornstein, J. Grice, and A. Webb, eds., HMSO, 1981. 5
"Rational Expectations, Business Cycles, and Government Behavior," in Rational Expectations and Economic Policy, S. Fischer, ed., University of Chicago Press, 1980; reprinted in IHS-Journal, Issue 3, 1979; and in Eurepargne, Revue Economique Europeenne, 1981. "The Nature of Optimal Labor Contracts," in On the Stability of Contemporary Economic Systems, O. Kyn and W. Schrettl, eds., Vandenhoeck & Ruprecht, 1979. "Employment Fluctuations and the Mitigation of Risk," Economic Inquiry, July 1979. "Adverse Selection, Dissembling, and Competitive Equilibrium," The Bell Journal of Economics, Spring 1979. "Why Does Aggregate Employment Fluctuate?" American Economic Review, May 1979. "Risk Shifting, Layoffs, and Seniority," Journal of Monetary Economics, November 1978. "Risk Shifting and Reliability in Labor Markets," Scandinavian Journal of Economics, No. 2/1977; reprinted in Topics in Disequilibrium Economics, S. Strom and L. Werin, eds., Macmillan Press, 1978. "Consumption, Income, and Liquidity," with R.J. Barro, in Equilibrium and Disequilibrium in Economic Theory, G. Schwodiauer, ed., Reidel Publishing Company, 1977. Money Balances, Commodity Inventories, and Inflationary Expectations," with A. Policano, Journal of Political Economy, December 1975. "Tobin on Macroeconomics," Journal of Political Economy, August 1975. "The Cyclical Pattern of Unemployment and Wage Inflation," Economica, November 1974. "Effective Demand Failures: A Comment," Swedish Journal of Economics, September 1974. 6
"The Macro-Economic Effects of Productive Government Expenditures," with R.F. Lucas, The Manchester School, June 1974. "The Nature of Quantities in Market Disequilibrium," American Economic Review, June 1974. "Suppressed Inflation and the Supply Multiplier," with R.J. Barro, Review of Economic Studies, January 1974; reprinted in Money, Expectations, and Business Cycles, Essays in Macroeconomics, by R.J. Barro, Academic Press, 1981; and in Price Controls, H. Rockoff, ed., Edward Elgar, 1991. "Aggregate Demand, Job Search, and Employment," Journal of Political Economy, November/December 1973. "A Choice-Theoretic Model of an Income-Investment Accelerator," American Economic Review, September 1972. "Was Keynes a `Keynesian'? A Review Article," Journal of Economic Literature, March 1972; reprinted in Revista Espanola de Economia, 1975; and in Die Neue Makrookonomik, Hagemann, Kurz, and Schafer, eds., Campus Verlag, 1981; and in John Maynard Keynes: Critical Assessments, Vol. III, J.C. Wood, ed., Croom Helm, 1983. "Money, Interest, and Prices in Market Disequilibrium," Journal of Political Economy, September/October 1971; reprinted in Revista Espanola de Economia, 1975; and in On the Reappraisal of Keynesian Economics, T. Hanawa, ed., Toyo Keizai Shinposha, 1980. "A General Disequilibrium Model of Income and Employment," with R.J. Barro, American Economic Review, March 1971; reprinted in Revista Espanola de Economia, 1975; in Disequilibrio, Inflacion Y Desempleo, Editorial Vicens- Vives, 1978; in Modern Macroeconomics, P. Korliras and R. Thorn, eds., Harper & Row, 1979; in On the Reappraisal or Keynesian Economics, T. Hanawa, ed., Toyo Keizai Shinposha, 1980; in Die Neue Makrookonomik, Hagemann, Kurz, and Schafer, eds., Campus Verlag, 1981; in Money, Expectations, and Business Cycles, Essays in Macroeconomics, by R.J. Barro, Academic Press, 1981; 7
and in The Foundations of Monetary Economics, D. Laidler, ed., Edward Elgar, 1998. "Open Market Operations and the Medium of Exchange," with R.J. Barro, Journal of Money, Credit, and Banking, May 1971. "Theories of Markets Without Recontracting," Journal of Economic Theory, December 1969. "Expectations, Transaction Costs, and Asset Demands," Journal of Finance, June 1969. "Reserve Base, Reserve Requirements, and the Equilibrium Rate of Interest: Reply," Quarterly Journal of Economics, August 1968. "Risk Aversion, Financial Intermediation, and the Term Structure of Interest Rates," Journal of Finance, December 1967. "Reserve Base, Reserve Requirements, and the Equilibrium Rate of Interest," Quarterly Journal of Economics, May 1967. "A Stochastic Model of Commercial Bank Behavior," American Economist, Summer 1965. 8
Monograph: Money, Employment, and Inflation, with R.J. Barro, Cambridge University Press, 1976; Italian translation, Cedam, 1982. Japanese translation, McGraw-Hill Kogakusha Ltd., 1982. Chinese translation, Bank of Taiwan Classics in Economics, 1981. 9
Current Working Papers: Constitution or Conflict? January 2002. Educational Inequality, with Y. Azuma, July 2001 Annexation or Conquest? The Economics of Empire Building, with J. Mendoza, January 2001. " Inventors and Pirates: Creative Activity and Intellectual Property Rights, May 2001. The Viability of Anarchy, with M. Kim and J. Mendoza, July 2001. Scarcity and Appropriative Competition, with J. Mendoza, October 2001. Educational Policy: Egalitarian or Elitist? with M. Kim, May 2001. Predation, Efficiency, and Inequality, with M. Kim, February 2002. 10
Book Reviews: Money and Inflation, by F. Hahn, Journal of Political Economy, April 1984. Disequilibrium Dynamics: A Theoretical Analysis of Inflation and Unemployment, by K. Iwai, Journal of Political Economy, April 1983. Asset Accumulation and Economic Activity: Reflections on Contemporary Macroeconomic Theory, by J. Tobin, Journal of Monetary Economics, July 1982. Studies in Macroeconomic Theory. Volume I: Employment and Inflation, by E.S. Phelps, Journal of Political Economy, February 1981. A Study in the Theory of Inflation and Unemployment, by C.H. Siven, Journal of Political Economy, May 1980. Essays on Money and Inflation, by D.E.W. Laidler, Journal of Economic Literature, December 1976. A Rehabilitation of Say's Law, by W.H. Hutt, The Manchester School, June 1976. Money and the Real World, by P. Davidson, Journal of Money, Credit, and Banking, August 1975. Varieties of Monetary Experience, D. Meiselman, ed., Journal of Finance, September 1971. Essays on Interest Rates, Volume 1, J.M. Guttentag and P. Cagan, eds., Journal of Finance, June 1970. Macroeconomics: Income and Monetary Theory, by J. Aschheim and C.Y. Hsieh, Journal of Finance, March 1970. Monetary Theory and Policy, R. Thorn, ed., Journal of Political Economy, December 1969. Essays in Monetary Policy in Honor of Elmer Wood, P.C. Walker, ed., National Banking Review, March 1966. 11
Other Publications: Why Could It Happen? Considering the Costs and Benefits of Security, The George Street Journal, September 21st, 2001. Corruption and Anti-corruption in China, with C. S. Fan, The Lingnan Commentary, July 2001. Entrepreneurial Graft in China, with C. S. Fan, The Providence Journal, May 3, 2001; reprinted in The Taipei Times, The Edge (Malaysia), The Straits Times (Singapore), Kaupalehti (Finland), and Het Financiele Dagblad (the Netherlands). Kleptocracy, Revolution, and Kosovo, The George Street Journal, June 10, 1999; reprinted in The Providence Journal, June 14, 1999. Good Government Requires Competition among Rulers: Beware of Ideological Conformity, The Providence Journal, May 17, 1998. Carl Christ: Teaching and Watching, Carnegie-Rochester Conference Series on Public Policy, December 1996. "African-American Students and the Financial Aid Cartel," the Journal of Blacks in Higher Education, Autumn 1996. "Scholarships: Need or Merit?" Cato Journal, Winter 1995. "American Fiscal Policy in the 1990's," Economic Notes, No.2, 1995. "The Economics and Politics of Scholarships," Academic Questions, Summer 1995. "Rebirth of the Ivy Cartel," The Wall Street Journal, January 26, 1994. "Political Stability, Property Rights, and Economic Prospects in the Former Soviet Union," The Brown Journal of Foreign Affairs, Winter 1994. "Commentary: Business Cycle Developments and the Agenda for Business Cycle Research" in The Business Cycle: 12
Theories and Evidence, M. T. Belongia and M. R. Garfinkel, eds., (Kluwer, 1992). "Comment on 'Seigniorage as a Tax: A Quantitative Evaluation'," Journal of Money, Credit, and Banking, August 1991. "Discussion of 'Why Are Prices Sticky? Preliminary Results from an Interview Survey' by Alan Blinder," American Economic Review, May 1991. "Forecasting Monetary Policy: A Comment," Carnegie-Rochester Conference Series on Public Policy, Volume 31, Autumn 1989. "Monetary Disequilibrium and Market Clearing," in The New Palgrave: A Dictionary of Economic Theory and Doctrine (Stockton Press, 1987); reprinted in The New Palgrave: Money (Norton, 1989); and in The New Palgrave Dictionary of Money and Finance (Macmillan, 1992). "Money, Real Activity, and Rationality," Cato Journal, Fall 1986. "Comment on `The Changing Cyclical Variability of Economic Activity'" by J.B. de Long and L.H. Summers, The American Business Cycles: Continuity and Change, R.J. Gordon, ed., (Chicago, 1986). "The Pastoral Letter: Parochial Perceptions and Wasted Moral Authority," in Economics, Theology, and the Social Order, Rochester Center for Research in Government Policy & Business Symposium Series, Volume CS-18, 1986. "A Proposal That Would Waste the Taxpayers' Money," The Providence Journal, October 27, 1983. "Fiscal Policy and the Current Recession," in Monetarism and the Federal Reserve's Conduct of Monetary Policy, (U.S.G.P.O. for Joint Economic Committee, December 1982). "The American Fiscal Deficit: Facts and Effects," The AEI Economist, November 1982. 13
"Comment on `Transition from Inflation to Price Stability' by P. Garber," in Carnegie-Rochester Conference Series on Public Policy, Volume 16, Spring 1982. "Comment on `Inflation, Flexible Exchange Rates, and the Natural Rate of Unemployment' by R.J. Gordon," in Workers, Jobs, and Inflation, M.N. Baily, ed., (Brookings, 1982). "Reagan, Inflation, and the American Economic System," The George St. Journal, October 16, 1981. "Minimum Wages and the American Family," Providence Sunday Journal, July 5, 1981. "The Brechling-Utgoff and Nickell Papers: Comments," in Carnegie-Rochester Conference Series on Public Policy, Volume 11, 1979. "Discussion of `Job Matching Under Imperfect Information' by D. Mortensen," in Evaluating the Labor-Market Effects of Social Programs, O. Ashenfelter & J. Blum, eds., (Princeton, 1976). "Inflation: Union Aggressiveness or Inflationary Expectations?" The Banker's Magazine, June 1971. Statement in Compendium on Monetary Policy Guidelines and Federal Reserve Structure, Committee on Banking and Currency, House of Representatives, December 1968. "Balancing the Economy, Not the Budget," Providence Sunday Journal, January 31, 1965. "Lessons from America's Capital Gains Tax," The Bankers' Magazine, February 1962, with Ursula K. Hicks. 14