Economy

Martin Feldstein, economist, 1939-2019

Martin Feldstein was among the many most revered and influential US economists of his technology. He was a conservative, believing firmly in low taxes and small authorities. He was additionally a principled man, adhering to the very best requirements of rigour and devotion to the proof.

Feldstein (at all times referred to as Marty), who has died on the age of 79, gained the respect of students and policymakers throughout the political spectrum for his mental achievements and institutional creativity. He constructed bridges between individuals and positions. He was an excellent trainer: half of the undergraduate class at Harvard took his introductory course in economics and a lot of influential economists are his former college students.

In particular person, he was unfailingly type, well mannered and constructive. As an economist, he was no desiccated technician: he was satisfied of the ability of economics to grasp the world.

Educated first at Harvard Faculty after which Oxford college, the place he obtained his doctorate in 1967, whereas at Nuffield Faculty, Feldstein was a agency anglophile. He might be a lot missed by his many buddies, of whom I used to be one.

I met Marty first once I was a scholar at Nuffield, between 1969 and 1971. I had the pleasure of assembly him subsequently in many various contexts. Amongst them was a exceptional convention on “Financial and Monetary Crises in Rising Market Economies” that he organised in Woodstock, Vermont, in October 2000, not lengthy after the Asian monetary disaster. I additionally met him commonly on the annual China Growth Discussion board. A patriotic American, he at all times held a world view. He was additionally unfailingly gratifying and thought-provoking.

Feldstein had a big profession in public coverage, the very best level being his service as chairman of then US president Ronald Reagan’s council of financial advisers from 1982 to 1984. He was publicly against the facile “provide aspect economics” of that period (and at this time’s), which held that tax cuts would pay for themselves. He argued, as a substitute, for tax will increase. Though the view that deficits and debt matter put him exterior the Republican celebration’s mainstream, to his credit score, he by no means bent these views to the political style.

Feldstein’s macroeconomic evaluation was mainstream, even Keynesian, and at all times empirically grounded. In 2005, he was considered as a number one candidate to succeed Alan Greenspan as chairman of the Federal Reserve — a place that went to Ben Bernanke.

He additionally labored throughout political divides, serving as a member of the Financial Restoration Advisory Board arrange by Barack Obama throughout his presidency. However his coverage positions, notably his dedication to the partial privatisation of social safety, which influenced Mr Obama’s predecessor, George W Bush, put him firmly on the conservative aspect. But in 2017, he joined a lot of different main US conservatives arguing for carbon taxes to be remitted on to the American individuals.

Martin Feldstein, left, with David Stockman and Donald Regan in 1984 © AP

Daring in public debate, Feldstein in 1997 printed what swiftly turned a infamous commentary on the thought of the European single foreign money for International Affairs. In it, he argued that the creation of a single foreign money might result in intra-European disputes: “conflicts over financial insurance policies and interference with nationwide sovereignty might reinforce longstanding animosities based mostly on historical past, nationality, and faith”.

A distinct contribution was much less controversial, however massively influential: the paper on financial savings and funding he printed with Charles Horioka in 1980, which confirmed a excessive correlation between home financial savings and funding. This exhibits that savers have a robust dwelling bias. As Feldstein identified in newer writings, to the extent that it isn’t true, present account deficits and surpluses should emerge — some extent not grasped, alas, by the Trump administration.

Feldstein’s tutorial profession was made at Harvard, the place he was on the college from 1967, turning into the George F Baker professor. He printed greater than 300 analysis articles, in addition to many contributions to newspapers, together with the Monetary Occasions. His tutorial work lined well being economics (the subject of his doctorate), worldwide economics and the economics of nationwide safety. However the focus of his work was on public finance, social insurance coverage and macroeconomics. He was additionally a pioneer in using massive information units to check behaviour.

In 1977, Feldstein received the John Bates Clark Medal of the American Financial Affiliation — an award given to the economist underneath the age of 40 judged to have made the best contribution to the science. He was president of the AEA in 2004.

But arguably, his biggest skilled achievement was his presidency of the Nationwide Bureau of Financial Analysis from 1977 to 2008 (except for 1982-84). He turned this organisation into crucial promoter and writer of empirical analysis on economics on the earth. Most main utilized economists in North America at the moment are related to NBER.

Born in New York to a Jewish household, Feldstein met his spouse Kathleen (Kate) Foley, one other economist, at Oxford. They married in 1965 and had two daughters and 4 grandchildren.

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