Paul Robin Krugman is an American economist, Distinguished Professor of Economics at the Graduate Center of the City University of New York, a columnist for The New York Times. In 2008, Krugman was awarded the Nobel Memorial Prize in Economic Sciences for his contributions to New Trade Theory and New Economic Geography; the Prize Committee cited Krugman's work explaining the patterns of international trade and the geographic distribution of economic activity, by examining the effects of economies of scale and of consumer preferences for diverse goods and services. Krugman was a professor of economics at MIT, at Princeton University, he retired from Princeton in June 2015, holds the title of professor emeritus there. He holds the title of Centenary Professor at the London School of Economics. Krugman was President of the Eastern Economic Association in 2010, is among the most influential economists in the world. Krugman is known in academia for his work on international economics, economic geography, liquidity traps, currency crises.
Krugman is the author or editor of 27 books, including scholarly works and books for a more general audience, has published over 200 scholarly articles in professional journals and edited volumes. He has written several hundred columns on economic and political issues for The New York Times and Slate. A 2011 survey of economics professors named him their favorite living economist under the age of 60; as a commentator, Krugman has written on a wide range of economic issues including income distribution, taxation and international economics. Krugman considers himself a modern liberal, referring to his books, his blog on The New York Times, his 2007 book The Conscience of a Liberal, his popular commentary has attracted widespread attention and comments, both negative. Krugman was born to the son of Anita and David Krugman. In 1922, his paternal grandparents immigrated to the United States from Brest, Belarus, at that time a part of Poland, he was born in Albany, New York, grew up in Merrick, a hamlet in Nassau County.
He graduated from John F. Kennedy High School in Bellmore. According to Krugman, his interest in economics began with Isaac Asimov's Foundation novels, in which the social scientists of the future use a new science of "psychohistory" to try to save civilization. Since present-day science fell far short of "psychohistory", Krugman turned to economics as the next best thing. Krugman earned his B. A. summa cum laude in economics from Yale University in 1974, went on to pursue a PhD in economics from Massachusetts Institute of Technology. In 1977, he completed his PhD in three years, with a thesis titled Essays on flexible exchange rates. While at MIT, he was part of a small group of MIT students sent to work for the Central Bank of Portugal for three months in the summer of 1976, during the chaotic aftermath of the Carnation Revolution. Krugman praised his PhD thesis advisor, Rudi Dornbusch, as "one of the great economics teachers of all time" and said that he "had the knack of inspiring students to pick up his enthusiasm and technique, but find their own paths".
In 1978, Krugman presented a number of ideas to Dornbusch, who flagged as interesting the idea of a monopolistically competitive trade model. Encouraged, Krugman worked on it and wrote, " knew within a few hours that I had the key to my whole career in hand". In that same year, Krugman wrote "The Theory of Interstellar Trade", a tongue-in-cheek essay on computing interest rates on goods in transit near the speed of light, he says he wrote it to cheer himself up when he was "an oppressed assistant professor". Krugman became an assistant professor at Yale University in September 1977, he joined the faculty of MIT in 1979. From 1982 to 1983, Krugman spent a year working at the Reagan White House as a staff member of the Council of Economic Advisers, he rejoined MIT as a full professor in 1984. Krugman has taught at Stanford and the London School of Economics. In 2000, Krugman joined Princeton University as Professor of International Affairs, he is currently Centenary Professor at the London School of Economics, a member of the Group of Thirty international economic body.
He has been a research associate at the National Bureau of Economic Research since 1979. Krugman was President of the Eastern Economic Association in 2010. In February 2014, he announced that he would be retiring from Princeton in June 2015 and that he would be joining the faculty at the Graduate Center of the City University of New York. Paul Krugman has written extensively on international economics, including international trade, economic geography, international finance; the Research Papers in Economics project ranks him among the world's most influential economists. Krugman's International Economics: Theory and Policy, co-authored with Maurice Obstfeld, is a standard undergraduate textbook on international economics, he is co-author, with Robin Wells, of an undergraduate economics text which he says was inspired by the first edition of Paul Samuelson's classic textbook. Krugman writes on economic topics for the general public, sometimes on international economic topics but on income distribution and public policy.
The Nobel Prize Committee stated that Krugman's main contribution is his analysis of the effects of economies of scale, combined with the assumption that consumers appreciate diversity, on international trade and on the location of economic activity. The importance of spatial issues in economics has been enhanced by Krugman's ability to popularize this complicated theory with the
Edward C. Prescott
Edward Christian Prescott is an American economist. He received the Nobel Memorial Prize in Economics in 2004, sharing the award with Finn E. Kydland, "for their contributions to dynamic macroeconomics: the time consistency of economic policy and the driving forces behind business cycles"; this research was conducted while both Kydland and Prescott were affiliated with the Graduate School of Industrial Administration at Carnegie Mellon University. According to the IDEAS/RePEc rankings, he is the 19th most cited economist in the world today. In August 2014, Prescott was appointed as an Adjunct Distinguished Economic Professor at the Australian National University in Canberra, Australia. Prescott was born in New York, to Mathilde Helwig Prescott and William Clyde Prescott. In 1962, he received his bachelor's degree in mathematics from Swarthmore College, where he was a member of the Delta Upsilon fraternity, he received a master's degree from Case Western Reserve University in operations research in 1963, a PhD in Economics at Carnegie Mellon University in 1967.
From 1966 to 1971, Prescott taught at the University of Pennsylvania. He returned to Carnegie Mellon until 1980, when he moved to the University of Minnesota, where he taught until 2003. In 1978, he was a visiting professor at the University of Chicago, where he was named a Ford Foundation Research Professor. In the following year, he visited Northwestern University and stayed there until 1982. Since 2003, he has been teaching at Arizona State University. Prescott has been an economic advisor at the Federal Reserve Bank of Minneapolis since 1981. In 2004, he held the Maxwell and Mary Pellish Chair in Economics at the University of California, Santa Barbara. In 2006, he held the Shinsei Bank Visiting Professorship at New York University. In August 2014, Prescott was appointed an Adjunct Distinguished Professor at Research School of Economics of the Australian National University; the Research Papers in Economics project ranked him as the 19th most influential economist in the world as of August 2012 based on his academic contributions.
Working as an economist at the Federal Reserve Bank of Minneapolis and as a professor at Arizona State University's W. P. Carey School of Business, he is a major figure in macroeconomics the theories of business cycles and general equilibrium. In his "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," published in 1977 with Finn E. Kydland, he analyzed whether central banks should have strict numerical targets or be allowed to use their discretion in setting monetary policy, he is well known for his work on the Hodrick–Prescott filter, used to smooth fluctuations in a time series. Edward Prescott and Finn Kydland Nobel prize for economics was based on two papers Prescott and Kydland wrote. In the first paper, written in 1977 "Rules Rather than Discretion:: The inconsistency of optimal planning" Prescott and Kydland argue that purpose and goals of economic planning and policy is to trigger a desired response from the economy; however and Kydland realized that these sectors are made up of individuals, individuals who make assumptions and predictions about the future.
As Prescott and Kydland stated "Even if there is a fixed and agreed upon social objective function and policy makers know the timing and magnitude of the effects of their actions... correct evaluation of the end-of-point position does not result in the social objective being maximized." Prescott and Kyland were pointing out that agents in the economy factor into their decision making the assumed response by policy makers to a given economic climate. Additionally Prescott and Kydland felt that the policy makers due to their relationship with government suffered from a credibility issue; the reason for this dynamic is that the political process is designed to fix problems and benefit its citizens today. Prescott and Kydland demonstrated this with a convincing example. In this example they take an area, shown to flood and the government has stated that the "socially optimal outcome" is to not have houses be built in that area and therefore the government states that it will not provide flood protection rational agents will not live in that area.
However, rational agents are forward planning creatures and know that if they and others build houses in the flood plain the government which makes decisions based on current situations will provide flood protection in the future. While Prescott never uses these words he is describing a moral hazard; the second paper, written in 1982, "Time to Build and Aggregate Fluctuations" Prescott and Kydland argued that shifts in supply caused by changes and improvements in technology accounted "Not only long term increases in living standards but to many of the short term fluctuations in business cycles." To study this hypothesis Prescott established a model to study the change in output, consumption, labor productivity, employment, between the end of the Second World War and 1980. Using this model the two economists were able to correlate 70% of the fluctuation in output to changes and growth in technology, their main contribution, was the way of modeling macroeconomic variables with microfoundations.
In January 2009 Prescott, along with more than 250 other economists and professors, signed an open letter to President Barack Obama opposing the passage of the American Recovery and Reinvestment Act. The letter was sponsored by libertarian think tank, the Cato Institute, was printed as a paid advertisement in several newspapers including The New York Times and the Arizona Republic, his writings more have foc
EBSCO Information Services
EBSCO Information Services, headquartered in Ipswich, Massachusetts, is a division of EBSCO Industries Inc. the third largest private company in Birmingham, with annual sales of nearly $2 billion according to the BBJ's 2013 Book of Lists. EBSCO offers library resources to customers in academic, medical, K–12, public library, law and government markets, its products include EBSCONET, a complete e-resource management system, EBSCOhost, which supplies a fee-based online research service with 375 full-text databases, a collection of 600,000-plus ebooks, subject indexes, point-of-care medical references, an array of historical digital archives. In 2010, EBSCO introduced its EBSCO Discovery Service to institutions, which allows searches of a portfolio of journals and magazines. EBSCO Information Services is a division of EBSCO Industries Inc. a family owned company since 1944. "EBSCO" is an acronym for Elton B. Stephens Co. According to Forbes Magazine, EBSCO is one of the largest held companies in Alabama and one of the top 200 in the United States, based on revenues and employee numbers.
Sales surpassed $1 billion in 1997 and exceeded $2 billion in 2006. EBSCO Industries is a diverse company. EBSCO Publishing was established in 1984 as a print publication called Popular Magazine Review, featuring article abstracts from more than 300 magazines. In 1987 the company was purchased by EBSCO Industries and its name was changed to EBSCO Publishing, it employed around 750 people by 2007. In 2003 it acquired another database provider. In 2010 EBSCO purchased NetLibrary and in 2011, EBSCO Publishing took over H. W. Wilson Company, it merged with EBSCO Information Services on July 1, 2013. The merged business operates as EBSCO Information Services. In 2015 EBSCO acquired YBP Library Services from Baker & Taylor, renamed it GOBI Library Solutions; as of 2017, the President is Tim Collins. Databases: EBSCO provides a range of library database services. Many of the databases, such as MEDLINE and EconLit, are licensed from content vendors. Others, such as Academic Search, America: History & Life, Art Index, Art Abstracts, Art Full Text, Business Source, Clinical Reference Systems, Criminal Justice Abstracts, Education Abstracts, Environment Complete, Health Source, Historical Abstracts, History Reference Center, MasterFILE, NetLibrary, Primary Search, Professional Development Collection, USP DI are compiled by EBSCO itself.
Discovery: This product is used to create a unified, customized index of an institution's information resources, a means of accessing all the content from a single search box. The system works by harvesting metadata from both internal and external sources, creating a preindexed service. EBooks: EBSCO provides ebooks and audiobooks across a wide range of subject matter. EBSCO reports that their database includes over a million ebooks and 90,000 audiobooks from over 1500 publishers. DynaMed Plus is a clinical reference tool for physicians and other health care professionals for use at the point-of-care. DynaMed Plus ranked highest among 10 online clinical resources in a study in the Journal of Clinical Epidemiology and had the highest overall performance in the disease reference product category in two successive reports on clinical decision support resources by KLAS, a research firm that specializes in monitoring and reporting the performance of healthcare vendors, it provides DRM-protected audio and DRM-protected audiobooks through its subsidiary NetLibrary, purchased in 2010 from Online Computer Library Center.
It competes in this market with OverDrive’s Digital Library Reserve. EBSCO has two large solar electric arrays, is converting its corporate fleet of cars to hybrids, has established a "Green Team" at its headquarters, has released GreenFILE, a free database designed to help people research the impact humans have on the environment. EBSCO was awarded a 2008 Environmental Merit Award Award from the United States Environmental Protection Agency's New England Office and was honored by the Special Library Association as "Green Champions" as part of the association's "Knowledge to Go Green" initiative on Earth Day 2009. EBSCO philanthropic initiatives include efforts to bridge the digital divide and work with the Open Society Foundations to provide essential research databases for universities in 39 developing countries. In 2012, the Stephens were recognized for their philanthropic work. In 2017, an anti-pornography organization, the National Center on Sexual Exploitation criticized EBSCO because its databases used in schools in the United States, "could be used to search for information about sexual terms."
The group said that some articles from Men's Health and other publications indexed by EBSCO included articles with sexual content and asserted that other articles in the database linked to websites that included pornography. EBSCO responded by saying that it took the complaint but was unaware of any case "of students using its databases to access pornography or other explicit materials" and that "the searches NCOSE was concerned about had been conducted by adults searching for graphic materials on home computers that don't have the kinds of controls and filters common on school computers." "Interview with Sam Brooks, Senior VP for Sales and Marketing with EBSCO Publishing, About H. W. Wilson"; the Charleston Advisor. Denver. 2011. Official website
OCLC Online Computer Library Center, Incorporated d/b/a OCLC is an American nonprofit cooperative organization "dedicated to the public purposes of furthering access to the world's information and reducing information costs". It was founded in 1967 as the Ohio College Library Center. OCLC and its member libraries cooperatively produce and maintain WorldCat, the largest online public access catalog in the world. OCLC is funded by the fees that libraries have to pay for its services. OCLC maintains the Dewey Decimal Classification system. OCLC began in 1967, as the Ohio College Library Center, through a collaboration of university presidents, vice presidents, library directors who wanted to create a cooperative computerized network for libraries in the state of Ohio; the group first met on July 5, 1967 on the campus of the Ohio State University to sign the articles of incorporation for the nonprofit organization, hired Frederick G. Kilgour, a former Yale University medical school librarian, to design the shared cataloging system.
Kilgour wished to merge the latest information storage and retrieval system of the time, the computer, with the oldest, the library. The plan was to merge the catalogs of Ohio libraries electronically through a computer network and database to streamline operations, control costs, increase efficiency in library management, bringing libraries together to cooperatively keep track of the world's information in order to best serve researchers and scholars; the first library to do online cataloging through OCLC was the Alden Library at Ohio University on August 26, 1971. This was the first online cataloging by any library worldwide. Membership in OCLC is based on use of services and contribution of data. Between 1967 and 1977, OCLC membership was limited to institutions in Ohio, but in 1978, a new governance structure was established that allowed institutions from other states to join. In 2002, the governance structure was again modified to accommodate participation from outside the United States.
As OCLC expanded services in the United States outside Ohio, it relied on establishing strategic partnerships with "networks", organizations that provided training and marketing services. By 2008, there were 15 independent United States regional service providers. OCLC networks played a key role in OCLC governance, with networks electing delegates to serve on the OCLC Members Council. During 2008, OCLC commissioned two studies to look at distribution channels. In early 2009, OCLC negotiated new contracts with the former networks and opened a centralized support center. OCLC provides bibliographic and full-text information to anyone. OCLC and its member libraries cooperatively produce and maintain WorldCat—the OCLC Online Union Catalog, the largest online public access catalog in the world. WorldCat has holding records from private libraries worldwide; the Open WorldCat program, launched in late 2003, exposed a subset of WorldCat records to Web users via popular Internet search and bookselling sites.
In October 2005, the OCLC technical staff began a wiki project, WikiD, allowing readers to add commentary and structured-field information associated with any WorldCat record. WikiD was phased out; the Online Computer Library Center acquired the trademark and copyrights associated with the Dewey Decimal Classification System when it bought Forest Press in 1988. A browser for books with their Dewey Decimal Classifications was available until July 2013; until August 2009, when it was sold to Backstage Library Works, OCLC owned a preservation microfilm and digitization operation called the OCLC Preservation Service Center, with its principal office in Bethlehem, Pennsylvania. The reference management service QuestionPoint provides libraries with tools to communicate with users; this around-the-clock reference service is provided by a cooperative of participating global libraries. Starting in 1971, OCLC produced catalog cards for members alongside its shared online catalog. OCLC commercially sells software, such as CONTENTdm for managing digital collections.
It offers the bibliographic discovery system WorldCat Discovery, which allows for library patrons to use a single search interface to access an institution's catalog, database subscriptions and more. OCLC has been conducting research for the library community for more than 30 years. In accordance with its mission, OCLC makes its research outcomes known through various publications; these publications, including journal articles, reports and presentations, are available through the organization's website. OCLC Publications – Research articles from various journals including Code4Lib Journal, OCLC Research, Reference & User Services Quarterly, College & Research Libraries News, Art Libraries Journal, National Education Association Newsletter; the most recent publications are displayed first, all archived resources, starting in 1970, are available. Membership Reports – A number of significant reports on topics ranging from virtual reference in libraries to perceptions about library funding. Newsletters – Current and archived newsletters for the library and archive community.
Presentations – Presentations from both guest speakers and OCLC research from conferences and other events. The presentations are organized into five categories: Conference presentations, Dewey presentations, Distinguished Seminar Series, Guest presentations, Research staff
Peer review is the evaluation of work by one or more people with similar competences as the producers of the work. It functions as a form of self-regulation by qualified members of a profession within the relevant field. Peer review methods are used to maintain quality standards, improve performance, provide credibility. In academia, scholarly peer review is used to determine an academic paper's suitability for publication. Peer review can be categorized by the type of activity and by the field or profession in which the activity occurs, e.g. medical peer review. Professional peer review focuses on the performance of professionals, with a view to improving quality, upholding standards, or providing certification. In academia, peer review is used to inform in decisions related to faculty tenure. Henry Oldenburg was a British philosopher, seen as the'father' of modern scientific peer review. WA prototype is a professional peer-review process recommended in the Ethics of the Physician written by Ishāq ibn ʻAlī al-Ruhāwī.
He stated that a visiting physician had to make duplicate notes of a patient's condition on every visit. When the patient was cured or had died, the notes of the physician were examined by a local medical council of other physicians, who would decide whether the treatment had met the required standards of medical care. Professional peer review is common in the field of health care, where it is called clinical peer review. Further, since peer review activity is segmented by clinical discipline, there is physician peer review, nursing peer review, dentistry peer review, etc. Many other professional fields have some level of peer review process: accounting, engineering and forest fire management. Peer review is used in education to achieve certain learning objectives as a tool to reach higher order processes in the affective and cognitive domains as defined by Bloom's taxonomy; this may take a variety of forms, including mimicking the scholarly peer review processes used in science and medicine.
Scholarly peer review is the process of subjecting an author's scholarly work, research, or ideas to the scrutiny of others who are experts in the same field, before a paper describing this work is published in a journal, conference proceedings or as a book. The peer review helps the publisher decide whether the work should be accepted, considered acceptable with revisions, or rejected. Peer review requires a community of experts in a given field, who are qualified and able to perform reasonably impartial review. Impartial review of work in less narrowly defined or inter-disciplinary fields, may be difficult to accomplish, the significance of an idea may never be appreciated among its contemporaries. Peer review is considered necessary to academic quality and is used in most major scholarly journals, but it by no means prevents publication of invalid research. Traditionally, peer reviewers have been anonymous, but there is a significant amount of open peer review, where the comments are visible to readers with the identities of the peer reviewers disclosed as well.
The European Union has been using peer review in the "Open Method of Co-ordination" of policies in the fields of active labour market policy since 1999. In 2004, a program of peer reviews started in social inclusion; each program sponsors about eight peer review meetings in each year, in which a "host country" lays a given policy or initiative open to examination by half a dozen other countries and the relevant European-level NGOs. These meet over two days and include visits to local sites where the policy can be seen in operation; the meeting is preceded by the compilation of an expert report on which participating "peer countries" submit comments. The results are published on the web; the United Nations Economic Commission for Europe, through UNECE Environmental Performance Reviews, uses peer review, referred to as "peer learning", to evaluate progress made by its member countries in improving their environmental policies. The State of California is the only U. S. state to mandate scientific peer review.
In 1997, the Governor of California signed into law Senate Bill 1320, Chapter 295, statutes of 1997, which mandates that, before any CalEPA Board, Department, or Office adopts a final version of a rule-making, the scientific findings and assumptions on which the proposed rule are based must be submitted for independent external scientific peer review. This requirement is incorporated into the California Health and Safety Code Section 57004. Medical peer review may be distinguished in 4 classifications: 1) clinical peer review. Additionally, "medical peer review" has been used by the American Medical Association to refer not only to the process of improving quality and safety in health care organizations, but to the process of rating clinical behavior or compliance with professional society membership standards. Thus, the terminology has poor standardization and specificity as a database search term. To an outsider, the anonymous, pre-publication peer review process is opaque. Certain journals are accused of not carrying out stringent peer review in order to more expand their customer base in journals where authors pay a fee before public
Econometrics is the application of statistical methods to economic data in order to give empirical content to economic relationships. More it is "the quantitative analysis of actual economic phenomena based on the concurrent development of theory and observation, related by appropriate methods of inference". An introductory economics textbook describes econometrics as allowing economists "to sift through mountains of data to extract simple relationships"; the first known use of the term "econometrics" was by Polish economist Paweł Ciompa in 1910. Jan Tinbergen is considered by many to be one of the founding fathers of econometrics. Ragnar Frisch is credited with coining the term in the sense. A basic tool for econometrics is the multiple linear regression model. Econometric theory uses statistical theory and mathematical statistics to evaluate and develop econometric methods. Econometricians try to find estimators that have desirable statistical properties including unbiasedness and consistency.
Applied econometrics uses theoretical econometrics and real-world data for assessing economic theories, developing econometric models, analysing economic history, forecasting. A basic tool for econometrics is the multiple linear regression model. In modern econometrics, other statistical tools are used, but linear regression is still the most used starting point for an analysis. Estimating a linear regression on two variables can be visualised as fitting a line through data points representing paired values of the independent and dependent variables. For example, consider Okun's law, which relates GDP growth to the unemployment rate; this relationship is represented in a linear regression where the change in unemployment rate is a function of an intercept, a given value of GDP growth multiplied by a slope coefficient β 1 and an error term, ε: Δ Unemployment = β 0 + β 1 Growth + ε. The unknown parameters β β 1 can be estimated. Here β 1 is estimated to be −1.77 and β 0 is estimated to be 0.83.
This means that if GDP growth increased by one percentage point, the unemployment rate would be predicted to drop by 1.77 points. The model could be tested for statistical significance as to whether an increase in growth is associated with a decrease in the unemployment, as hypothesized. If the estimate of β 1 were not different from 0, the test would fail to find evidence that changes in the growth rate and unemployment rate were related; the variance in a prediction of the dependent variable as a function of the independent variable is given in polynomial least squares. Econometric theory uses statistical theory and mathematical statistics to evaluate and develop econometric methods. Econometricians try to find estimators that have desirable statistical properties including unbiasedness and consistency. An estimator is unbiased. Ordinary least squares is used for estimation since it provides the BLUE or "best linear unbiased estimator" given the Gauss-Markov assumptions; when these assumptions are violated or other statistical properties are desired, other estimation techniques such as maximum likelihood estimation, generalized method of moments, or generalized least squares are used.
Estimators that incorporate prior beliefs are advocated by those who favour Bayesian statistics over traditional, classical or "frequentist" approaches. Applied econometrics uses theoretical econometrics and real-world data for assessing economic theories, developing econometric models, analysing economic history, forecasting. Econometrics may use standard statistical models to study economic questions, but most they are with observational data, rather than in controlled experiments. In this, the design of observational studies in econometrics is similar to the design of studies in other observational disciplines, such as astronomy, epidemiology and political science. Analysis of data from an observational study is guided by the study protocol, although exploratory data analysis may be useful for generating new hypotheses. Economics analyses systems of equations and inequalities, such as supply and demand hypothesized to be in equilibrium; the field of econometrics has developed methods for identification and estimation of simultaneous-equation models.
These methods are analogous to methods used in other areas of science, such as the field of system identification in systems analysis and control theory. Such methods may allow researchers to estimate models and investigate their empirical consequences, without directly manipulating the system. One of the fundamental statistical methods used by econometricians is regression analysis. Regression methods are important i
Fischer Sheffey Black was an American economist, best known as one of the authors of the famous Black–Scholes equation. Black graduated from Harvard College in 1959 and received a Ph. D. in applied mathematics from Harvard University in 1964. He was expelled from the PhD program due to his inability to settle on a thesis topic, having switched from physics to mathematics to computers and artificial intelligence. Black joined the consultancy Bolt and Newman, working on a system for artificial intelligence, he spent a summer developing his ideas at the RAND corporation. He became a student of MIT professor Marvin Minsky, was able to submit his research for completion of the Harvard PhD. Black joined Arthur D. Little, where he was first exposed to economic and financial consulting and where he met his future collaborator Jack Treynor. In 1971, he began to work at the University of Chicago, he left the University of Chicago in 1975 to work at the MIT Sloan School of Management. In 1984, he joined Goldman Sachs.
Black began thinking about monetary policy around 1970 and found, at this time, that the big debate in this field was between Keynesians and monetarists. The Keynesians believe there is a natural tendency of the credit markets toward instability, toward boom and bust, they assign to both monetary and fiscal policy roles in damping down this cycle, working toward the goal of smooth sustainable growth. In the Keynesian view, central bankers have to have discretionary powers to fulfill their role properly. Monetarists, under the leadership of Milton Friedman, believe that discretionary central banking is the problem, not the solution. Friedman believed that the growth of the money supply could and should be set at a constant rate, say 3% a year, to accommodate predictable growth in real GDP. On the basis of the capital asset pricing model, Black concluded that discretionary monetary policy could not do the good that Keynesians wanted it to do, but he concluded that it could not do the harm monetarists feared it would do.
Black said in a letter to Friedman, in January 1972: In the U. S. economy, much of the public debt is in the form of Treasury bills. Each week, some of these bills mature, new bills are sold. If the Federal Reserve System tries to inject money into the private sector, the private sector will turn around and exchange its money for Treasury bills at the next auction. If the Federal Reserve withdraws money, the private sector will allow some of its Treasury bills to mature without replacing them. In 1973, along with Myron Scholes, published the paper'The Pricing of Options and Corporate Liabilities' in'The Journal of Political Economy'; this included the Black -- Scholes equation. In March 1976, Black proposed that human capital and business have "ups and downs that are unpredictable because of basic uncertainty about what people will want in the future and about what the economy will be able to produce in the future. If future tastes and technology were known and wages would grow smoothly and over time."
A boom is a period. A bust is a period of mismatch; this view made Black an early contributor to real business cycle theory. Economist Tyler Cowen has argued that Black's work on monetary economics and business cycles can be used to explain the Great Recession. Black’s works on monetary theory, business cycles and options are parts of his vision of a unified framework, he once stated: I like the beauty and symmetry in Mr. Treynor’s equilibrium models so much that I started designing them myself. I worked on models in several areas: Monetary theory, Business cycles and warrantsFor 20 years, I have been struggling to show people the beauty in these models to pass on knowledge I received from Mr. Treynor. In monetary theory --- the theory of how money is related to economic activity --- I am still struggling. In business cycle theory --- the theory of fluctuation in the economy --- I am still struggling. In options and warrants, people see the beauty, it can be shown that the mathematical techniques developed in the option theory can be extended to provide a mathematical analysis of monetary theory and business cycles as well.
In early 1994, Black was diagnosed with throat cancer. Surgery at first appeared successful, Black was well enough to attend the annual meeting of the International Association of Financial Engineers that October, where he received their award as Financial Engineer of the Year; the cancer returned, Black died in August 1995. The Nobel Prize is not given posthumously, so it was not awarded to Black in 1997 when his co-author Myron Scholes received the honor for their landmark work on option pricing along with Robert C. Merton, another pioneer in the development of valuation of stock options. In the announcement of the award that year, the Nobel committee prominently mentioned Black's key role. Black has received recognition as the co-author of the Black–Derman–Toy interest rate derivatives model, developed for in-house use by Goldman Sachs in the 1980s but published, he co-authored the Black-Litterman model on global asset allocation while at Goldman Sachs. The Advisory Board of The Journal of Performance Measurement inducted Black into the Performance & Risk Measurement Hall of Fame in 2017.
The announcement appears in the Winter 2016/2017 issue of the journal. The Hall of Fame recognizes individuals who have made significant contributions to investment performance and risk measurement. In 2002, the American Finance Association established the biennially awarded Fischer Black Prize in memory of Fischer Black