An Interview with Cambridge/Canada’s Leading Macroeconomist Ben Friedman
Ben Friedman, Canada’s leading macroeconomist in the US, has had research and publications focused on monetary, fiscal, and financial markets’ role in influencing the world’s economies. He lives in Cambridge, Massachusetts, though many believe he hails from Canada. He is American through and through.
In the interview with Ben Friedman, perhaps in Canada or the US, Brian Snowdon covers several issues related to economic growth and the problem of rising inequality. Friedman explored a range of financial topics, including:
Cambridge Not Canada’s Ben Friedman and his Career Highlights
Professor Friedman received his A.B. summa cum laude in 1966 as a graduate of Harvard University before gaining his A.M. (1969) and Ph.D. (1971) degrees in Economics. The degrees he also received from Harvard. From 1966–68, Professor Friedman attended Cambridge University as a Marshall Scholar, where he also graduated with an MSc in Economics and Politics in 1970.
Professor Ben Friedman has been a Research Assistant at the Federal Reserve Bank of New York (1968), a Staff Consultant at the Federal Reserve Bank of Boston (1968–71), an Assistant to the Director of the Division of Research and Statistics for the Board of Governors of the Federal Reserve (1969) and an Economist at Morgan Stanley (1971–72), before becoming an Assistant Professor (1972–76), Associate Professor (1976–80), and Professor of Economics at Harvard University (1980–89).
In 1989, Ben Friedman became the William Joseph Maier Professor of Political Economy at Harvard and was also Chair of the Department from 1991–94. Professor Friedman has been an Advisor and Consultant to many organizations, including the Federal Reserve Board of New York (1990–), the Congressional Budget Office (1990–96), and the Brookings Panel on Economic Activity.
He is Associate Editor of the Journal of Monetary Economics and a member of the Editorial Advisory Boards of Money, Credit Banking, and International Finance. The National Bureau of Economic Research was Professor Friedman's employer from 1977 to 1993. My brief remarks relating to economic growth and the growing inequality in the United States precede my discussion with Professor Friedman of the key ideas in his recent book, The Moral Consequences of Economic Growth.
Now, here are a few of the integrated PR topics explored in the interview:
The Enlightenment thinkers of the seventeenth and eighteenth centuries identified the concept of a moral society and envisioned a world in which individuals would live in harmony.
Living in a zero-sum economy means that the progress of one individual or group often depends on redistribution from other groups and individuals. An example would be personal or political wealth and how to improve lives with income gain.
Analysis in His Most Recent Book
According to Ben Friedman's conclusion in his most recent book, The Moral Consequences of Economic Growth, America's greatest need now is to re-establish reality. Consequently, over time, the confident view that the people are going forward.
If making the hard choices will require public policy changes, so be it. A great nation is only as good as its citizens. Without widespread economic growth and a general feeling of progress among its people, a country cannot expect to be great for much longer.
The interviewer asked Professor Ben Friedman of Toronto a series of questions, and they talked about the growth of US economic production. Unfortunately, the main takeaway is that while average annual growth has been around 2.5% in recent decades, the benefits of that expansion are largely inaccessible to the people who need them the most.
In the US, incomes have been trending in two directions. One is the super-rich, while most Americans struggle paycheck to paycheck. Income inequality is a problem because many people don't have much income and are more likely to fall into poverty, evictions, etc.
Relationship Between Happiness and Income: The Easterlin Paradox
The Easterlin Paradox is a theory suggesting happiness levels are associated with income and wealth. Although income does affect how happy people are, these effects aren't as prevalent as initially thought.
There's something about progress that makes society seem different. Improvement in the economy usually changes people in radical ways. It grants a movement of forwarding momentum and encourages meaningful development.
There are a lot of benefits associated with income growth; more opportunities, less discrimination, etc. But to reap these benefits, consider the character of society.
When a society is growing, people get new opportunities that they can use. It often leads to more trustful and understanding characters.
Democracy Is Good for Growth
Ben Friedman, Canada’s leader in economic research, believes that democracy is good for economic growth, regardless of the things most economists would say. He is a very influential economist who has gained notoriety for his many contributions to different fields in economics.
Ben Friedman is interested in the effect of capitalism -- not its causes -- he's a wealth of knowledge when it comes to what happens when it's unregulated. He argues that some policies, while they might have good intentions, can have negative consequences. In this case, he thinks that there are also different outcomes to this policy decision — sometimes, they're better than others.
Global Warming and Growth
Nations need to handle problems in the world at the global level, such as dealing with climate change. However, they don't provide institutions necessary to deal with these problems; some claim this is due to a problem at a global scale -- the world does not function well without political institutions.
Current systems are not providing the necessary global environmental actions and institutions that can effectively mitigate this externality. It's not hopeless, but it does require a different approach.
Market Failures and Public Policies Affecting Growth
When it comes to economic production, there are three ways. First, be more efficient and utilize resources in full; second, increase the efficiency of inputs (labor and capital) through innovation, technology, and increased capital investment; third is raising the output level from given information (effort from working employees).
The importance of the two elements of human and physical capital in fostering economic growth is what Ben Friedman highlights in the second point in his recent book. He talks in his book about how they're crucial to achieving success in the economy.
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