Archive for 24 November 2008
Christina Romer to Head CEA
| Peter Klein |
Obama has named Christy Romer, one of my old professors, to head the Council of Economic Advisers. She’s smart, organized, a great communicator; I expect her to be highly effective. She is a moderate Keynesian, of the New Keynesian variety, best known for her revisionist work challenging the postwar Keynesian consensus view that activist monetary and fiscal policy has lessened the severity of the business cycle compared to the bad old laissez-faire days. See, for example, “Is the Stabilization of the Postwar Economy a Figment of the Data?” AER, June 1986, and “Remeasuring Business Cycles,” JEH, September 1994. A recent Journal of Economic Perspectives piece and her entry on business cycles in the Concise Encyclopedia of Economics summarizes this work. Here is more. (Of course, doubts about the effectiveness of Keynesian stabilization policy have not dampened most macroeconomists’ enthusiasm for, well, Keynesian stabilization policy.)
I met Christy in my first year of graduate school when she co-taught, with Barry Eichengreen, my course in US economic history. I subsequently served for two semesters as her head TA in the large economics principles course (600 students, 16 TAs, one head TA, one professor — quite an operation). Berkeley had in those days a system in which the dissertation adviser (in my case, Oliver Williamson) does not serve on the dissertation proposal committee, and Christy kindly chaired the proposal committee for me, even though the topic (conglomerate diversification) was not in her general area. She is a great teacher and a great manager, careful, patient, and fair. Naturally my top choice for CEA chair would have been somone with views just like, um, mine, but of the realistic candidates Christy is an excellent choice.
What Do Boards Do and How Do They Do It?
| Peter Klein |
A new survey paper on Boards of Directors by Ben Hermalin and Mike Weisbach, updating their 2003 paper.
This paper is a survey of the literature on boards of directors, with an emphasis on research done subsequent to the Hermalin and Weisbach (2003) survey. The two questions most asked about boards are what determines their makeup and what determines their actions? These questions are fundamentally intertwined, which complicates the study of boards due to the joint endogeneity of makeup and actions. A focus of this survey is on how the literature, theoretical as well as empirically, deals – or on occasions fails to deal – with this complication. We suggest that many studies of boards can best be interpreted as joint statements about both the director-selection process and the effect of board composition on board actions and firm performance.
Don’t let James Walsh see this!
Organizations and Markets 
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