Laurence Ball Professor of Economics Office: Mergenthaler Hall 431 Phone: (410) 516-7605 Fax: (410) 516-7600 E-mail: Curriculum Vitae (PDF)

My research addresses both theoretical and applied topics in macroeconomics. My theoretical work focuses on the microeconomic foundations of "Keynesian" macro models. Economists of the "New Classical" school have attacked the key Keynesian assumption of sluggish price adjustment, arguing that it is inconsistent with profit-maximizing behavior by firms. My work seems to explain why firms adjust prices slowly (for example, because they fear upsetting customers). Establishing foundations for Keynesian models is important for supporting the view that government policies have powerful effects on the economy (for good or for ill depending on the policies).

My applied research focuses on inflation and monetary policy, both in the United States and in high-inflation countries such as Brazil. Some of my work investigates how shocks such as changes in oil prices raise overall inflation. I have also studied the question of how best to reduce inflation. One conclusion is that trying to reduce inflation gradually can backfire: it often produces a deeper recession than a "cold-turkey" policy of reducing inflation quickly. Finally, my research investigates the economic costs of inflation. Here, the central idea is that high inflation today creates damaging uncertainty about inflation in the future.

Research:

Does Inflation Targetting Matter?, March 2003.

Monetary Policy for Inattentive Economies, January 2003.

Short-run Money Demand, August 2002.

The NAIRU in Theory and Practice (with N. Gregory Mankiw), April 2002. Forthcoming, Journal of Economic Perspectives.

The Fed and the New Economy (with Robert Tchaidze), December 2001.

Productivity Growth and the Phillips Curve (with Robert Moffitt), June 2001.

Intergenerational Risk Sharing in the Spirit of Arrow, Debreu, and Rawls, with Applications to Social Security Design (with N. Gregory Mankiw), May 2001.

Near-Rationality and Inflation in Two Monetary Regimes, November 2000.

Policy Rules and External Shocks, September 2000. Forthcoming in volume published by Central Bank of Chile.

Aggregate Demand and Long-Run Unemployment. Brookings Papers on Economic Activity, 1999:2, pp. 189-251.

Efficient Rules for Monetary Policy. International Finance, April 1999, pp. 63-83.

Policy Rules for Open Economies. In John Taylor (ed.) Monetary Policy Rules, University of Chicago Press, 1999, pp. 127-144.

Another Look at Long-Run Money Demand, June 1998. Forthcoming, Journal of Monetary Economics.

Classes Taught:

Economics 302 -- Macroeconomic Theory:
This undergraduate course provides a treatment of macroeconomic theory including a static analysis of the determination of output, employment, the price level, the rate of interest, and a dynamic analysis of growth, inflation, and business cycles. In addition, the use and effectiveness of monetary and fiscal policy to bring about full employment, price stability, and steady economic growth will be discussed.

Economics 305 -- Topics in Macroeconomics:
This course builds on Macroeconomic Theory, addressing selected topics in greater depth. The course emphasizes recent research. Specific topics vary from year-to-year, but are likely to include monetary-policy rules, European unemployment, the costs of disinflation, and Social Security reform. ASCII dataset

Economics 605 -- Advanced Macroeconomics:
This is a graduate course covering selected topics in macroeconomics. These include nominal rigidities, dynamic-consistency theories of inflation, inflation inertia and the costs of disinflation, monetary policy, costs and benefits of price stability, benefits of output stabilization, alternative policy rules, measuring inflation, unemployment, efficiency-wage theories, the behavior of the NAIRU, macro in middle-income countries, high inflation and stabilization, currency crises.