On Peter Howitt's Other Work

The winners of the Nobel Memorial Prize in Economics were announced this past Monday. Brian wrote a post summarizing the authors’ work that earned them the award. Being on the inside of the economics profession, one’s reaction to an award can be different than it is for those who have a more casual interest in economics and economic ideas. From the inside looking out, we economists tend to have our own opinions of the work prior to the award. As a result, sometimes the award feels more deserving than others.

In this case, I must echo Brian’s sentiment that this year’s winners are excellent choices to receive the award. When I teach economic growth to my students, I often emphasize two aspects of the growth literature. There is a mechanism approach, which focuses on the process by which growth occurs. In other words, what economic mechanism can explain how you get sustained growth? But this necessarily leads you to the second aspect. Economic growth is a modern phenomenon. Sustained economic growth is not the norm throughout human history. As a result, one needs to determine what changed to bring about this unprecedented, sustained economic growth. The thing that I like about this award is that Aghion and Howitt provide the framework for thinking about the economic mechanisms and Mokyr provides an understanding of what created the preconditions for these mechanisms to kick in. Undergraduates who have taken my course on economic growth have worked their way through Aghion and Howitt’s textbook (my favorite, challenging as it might be for undergrads) and Mokyr’s arguments.

Nonetheless, I don’t want to write another post about how much I appreciate their work on growth. Brian already wrote a great summary and you should read that if you haven’t already. Instead, I want to devote this post to writing about Peter Howitt and some of his other work, which focused on issues related to monetary theory and business cycles. I think this work is deserving of discussion and his recent award gives me an excuse to write about it.

Some Background

Peter Howitt’s work on monetary theory and business cycles comes out of an older tradition. Howitt received his Ph.D. at Northwestern. His dissertation advisor was Robert Clower. What is particularly unique about this is that Howitt received his Ph.D. in 1973, but Robert Clower left Northwestern for UCLA in 1971. According to David Laidler, ...