Monday, October 3, 2011

Is anything Stiglitz is famous for original???

This is not a knock on Stiglitz at all (I already got Greg Mankiw commenting on here... gotta tone back what I say about famous economists that I actually like a lot!!!).

What I mean to say is actually fairly high praise for an economist (I think). Reading Adam Smith in my economic thought class these last several weeks has made me realize that every single idea Stiglitz is famous for, Adam Smith already presented.

Some are sort of basic ones, but still points that Smith was the first to make in a rigorous way: Asymmetric information? Featured prominently in Smith. Market power? Featured prominently in Smith. Those are more general and really just mean that Smith constantly referenced the characteristics of the market economy that Stiglitz is famous for constantly referencing.

Others are far more specific, and not just off-hand insights: Efficiency wages and credit rationing are both in there in considerable detail.

Throw in the fact that Smith's trade theory is in many ways just the New Economic Geography, and you realize reading the Wealth of Nations is like getting a preview of the early 21st century Nobel laureates!

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