Robert J. Barro, the Paul M. Warburg Professor of Economics at Harvard University, has been named as a 2014 Distinguished Fellow by the American Economic Association (AEA).
The AEA extols Barro as a leading American macroeconomist who, as one of the founders of the “New Classical” school of macroeconomic thought in the 1970s, has contributed consistently to both methodological advances and public policy applications of the subject ever since.
In acknowledging that Barro is best known for his contributions to the analysis of fiscal policy, they highlight his work that fits within the modern theory of public finance, as well as with general equilibrium theory:
His paper “Are Government Bonds Net Wealth?” originated the modern literature on “Ricardian equivalence,” showing that at least under certain ideal circumstances, changes in the level of public debt have no macroeconomic consequences at all, as the wealth effects of people’s holdings of such debt are offset by the anticipated future taxes required to pay off the debt. The result, considered highly counterintuitive at the time, remains central to modern analysis, even if much is now understood about conditions under which strict debt neutrality does not obtain. Another seminal paper, “On the Determination of Public Debt,” argued for the optimality of a state-contingent path for public debt that allows for intertemporal smoothing of tax distortions, one of the most celebrated results in the normative theory of fiscal policy. Barro is also known for his empirical studies of the effects of fiscal policy, especially the effects of government purchases on aggregate economic activity, beginning with his 1981 paper, “Output Effects of Government Purchases.”
Not more than four Distinguished Fellows are named in any one calendar year from economists of high distinction in the United States and Canada. The Award of Distinguished Fellow was instituted in 1965.