joseph stiglitz is an american new keynesian economist known for his research on information asymmetry risk aversion and monopolistic competition stiglitz received the 2001 nobel prize in economics he is currently a professor at columbia university and chief economist of the roosevelt institute 1
stiglitz is the author of many books and publications including measuring what counts the global movement for well being and rewriting the rules of the european economy an agenda for growth and shared prosperity investopedia lara antalearly life and educationjoseph stiglitz was born in gary indiana on feb 9 1943 he earned a bachelor s degree from amherst college in 1964 and became a research fellow at the university of cambridge as a fulbright scholar stiglitz earned a ph d from the massachusetts institute of technology in 1967 he has taught at stanford princeton and mit under president clinton stiglitz served as chair of the president s council of economic advisers cea he was chief economist and senior vice president of the world bank from 1997 to 2000 1information asymmetryjoseph stiglitz helped create an area of study known as information economics a branch of microeconomics that studies how information and information systems affect an economy and economic decisions his research on information asymmetry helped earn stiglitz the 2001 nobel prize in economics 2information asymmetry is an imbalance of information between players in a market one party in an economic transaction may have more information than another a buyer may possess more knowledge than a seller or a borrower may know his repayment ability more than the lender joseph stiglitz is credited with his screening technique a method used to extract the missing information needed to complete an efficient market transaction stiglitz s screening technique is a frequent tool used by insurance companies and lenders insurance companies screen subscribers and sort them into high risk or low risk categories in order to charge appropriate premiums lenders use screening to sort borrowers by risk of repayment and assign higher interest rates accordingly 3according to stiglitz screening is the process of discrimination of distinguishing among things which in the absence of screening would for economic purposes be treated the same even though it may be known that they differ in perhaps some important ways 4risk aversionjoseph stiglitz s study of risk aversion helped define how individuals make decisions to save and spend money according to stiglitz when uncertainty exists in a situation economic consequences depend on whether one course of action is riskier than another or if one individual is more risk averse than another 5 his theories explain the consequences of risk aversion when applied to portfolio investments individual savings and business production decisions 6monopolistic competitionstiglitz defined the theory of monopolistic competition as a market structure where many companies are present in an industry that produce similar but differentiated products none of the companies enjoy a monopoly and each company operates independently without regard to the actions of other companies in monopolistic competition advertising and branding are key and can contribute to barriers to entry for new firms 7 industries like restaurant chains clothing and sportswear follow this model honors and awardsjoseph stiglitz has received extensive recognition for his work in economics in 1979 joseph e stiglitz received the john bates clark medal an award given to economists under forty who have made substantial contributions to the field of the economic sciences in the united states in 2001 he was awarded the nobel prize in economics for his work on the theory of information asymmetry he is a shared recipient of the 2007 nobel peace prize as a member of the intergovernmental panel on climate change stiglitz was appointed to the pontifical academy of the social sciences and named chair of the u n commission on reforms of the international monetary and financial system by the president of the united nations in 2009 time magazine named stiglitz one of the 100 most influential people in the world in 2011 and in that same year he was named president of the international economic association 1stiglitz serves on numerous boards including the acumen fund and resources for the future 1