Joseph Stiglitz on Pioneering Economic Theories, Policy Challenges, and His Intellectual Legacy

Conversations with Tyler

Intro  One person’s freedom is another person’s unfreedom Unanimity theorem, also known as the Stiglitz-Greenwald theorem, posits that in the presence of incomplete markets and imperfect information, the competitive equilibrium is generally not Pareto efficientSharecropping can create poor incentives for tenants to work hard or invest in land improvement because they only receive a fraction of the output, leading to lower agricultural productivity compared to other forms of land tenureCities can achieve optimal sizes by balancing the benefits of agglomeration economies (such as increased productivity and innovation due to proximity) against the costs (such as congestion and pollution)Carefully designed tax policies and urban planning can help cities grow in a way that maximizes economic efficiency and equityMarkets cannot be perfectly efficient because if prices fully reflect all available information, there would be no incentive for traders to acquire information, leading to a paradoxMarkets are not very good at pricing risk into the decision-making process Credit availability of monetary policy is what matters – not the money supply or interest rate Hierarchies are particularly problematic when the people the at the top of them are not good decision makers 

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Nobel Prize-winning economist Joseph Stiglitz joined Tyler for a discussion that weaves through Joe’s career and key contributions, including what he learned from giving an 8-lecture in Japan, how being a debater influenced his intellectual development, why he tried to abolish fraternities at Amherst, how studying Kenyan sharecropping led to one of his most influential papers, what he thinks today of Georgism and the YIMBY movement, why he was too right-wing for Cambridge, why he left Gary, Indiana, his current views on high trading volumes and liquidity, the biggest difference between him and Paul Krugman, what working in Washington, DC taught him about hierarchies, what he’ll do next, and more.

Read a full transcript enhanced with helpful links, or watch the full video.

Recorded April 22nd, 2024.

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