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AN INTERVIEW WITH ROGER GUESNERIE

Published online by Cambridge University Press:  17 May 2010

Pierre-André Chiappori
Pierre-André Chiappori*
Affiliation:
Columbia University
*
Address correspondence to: Pierre André Chiappori, E. Rowan and Barbara Steinschneider Professor of Economics, Department of Economics, Columbia University, 1009 International Affairs Building, 420 West 118th St., New York, NY 10027, USA; e-mail: [email protected].
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Abstract

Roger Guesnerie is a prominent economic theorist. Among his many honors and distinctions, he is a Foreign Member of the American Academy of Arts and Science and an Honorary Foreign Member of the American Economic Association; he has been a President of the European Economic Association and of the Econometric Society. Currently a Professor at the College de France, he has made fundamental contributions to second-best theory and public economics, information economics, and rational expectation theory.

Guesnerie was one of the founding fathers of second-best theory. His contributions to public economics, addressing issues such as nonconvex economies and especially taxation in a second-best context, remain absolute references on these topics; more recently, he has provided an in-depth analysis of issues related to climate change and global warming from a public economics perspective. Regarding contract theory, his work with Jean Jacques Laffont has considerably extended our understanding of the properties of the basic models, as well as the set of tools that economists can use to address these problems. Finally, Guesnerie's work has been influential in the critical reassessment of rational expectation theory that took place over the last decades. On one hand, he has been a prominent figure in the development of so-called “sunspot” models, which reconcile the Keynesian notion of “animal spirits” with the formal requirements of rational expectations. On the other hand, he has provided path-breaking discussions of the theoretical relevance of rational expectation theory, based on a detailed assessment of the coordination between individual expectations that is implicit in the concept. In some classes of models, Guesnerie argues, rational expectation equilibria constitute a natural outcome, because coordination can be achieved either through “eductive” reasoning (for which common knowledge of individual rationality is sufficient) or as the product of simple evolutionary or learning dynamics (and in general in both ways). In other cases, however, such arguments do not appear to support the rational expectations solution, and its relevance is therefore much less obvious. On a more institutional side, Guesnerie has created the doctoral program “Analyse et Politique Economique” at the Ecole des Hautes Etudes en Sciences Sociales; besides this program, in 1989, several related research centers in Paris merged into Delta, which Guesnerie chaired between 1992 and 2000, and then into the Paris School of Economics (PSE), at which Guesnerie is Chairman of the Board.

This interview with Roger Guesnerie gives an opportunity to discuss further the current situation of economic theory and economics in general, as well as to compare the European and American traditions in economics.

Keywords

Second BestOptimal TaxationContract TheoryPublic EconomicsGlobal WarmingRational Expectations
Type
MD Interview
Information
Macroeconomic Dynamics , Volume 14 , Issue 3 , June 2010 , pp. 388 - 404
Copyright
Copyright © Cambridge University Press 2010

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References

SELECTED SCIENTIFIC PUBLICATIONS OF ROGER GUESNERIE

Valeurs des réserves de liquidité internationale. Cahiers du Séminaire d'Econométrie l4, 1972, 65–93.Google Scholar
Optimality of equilibrium of plans prices and price expectations (with Jaffray, J.Y.). In Drèze, J., ed., with the assistance of Delbaen, F., Gevers, L., Guesnerie, R., and Sondermann, D., Allocation under Uncertainty Equilibrium Optimality, pp. 71–86. London: MacMillan, 1974.Google Scholar
Pareto optimality in non-convex economies. Econometrica 43 (1), 1975, 1–29.CrossRefGoogle Scholar
On the direction of tax reform. Journal of Public Economics 7 (2), 1977, 179–202.CrossRefGoogle Scholar
Taxing price makers (with Laffont, J.J.). Journal of Economic Theory 19 (2), 1978, 423–455.Google Scholar
General statements on second best Pareto optimality. Journal of Mathematical Economics 6 (2), 1979, l69–l94.Google Scholar
Second best taxation as a game (with Oddou, C.). Journal of Economic Theory 25 (1), 1981, 67–91.Google Scholar
Effective policy tools and quantity controls (with Roberts, K.). Econometrica 52 (1), 1984, 59–86.Google Scholar
A complete solution to a class of principal agent problems with an application to the control of a self-managed firm (with Laffont, J.J.). Journal of Public Economics 25 (3), 1984, 329–369.Google Scholar
Planning under incomplete information: The ratchet effect (with Freixas, X. and Tirole, J.). Review of Economic Studies 52 (2), 1985, l73–l9l.CrossRefGoogle Scholar
Sunspots and cycles (with Azariadis, C.). Review of Economic Studies 53 (5), 1986, 725–737.CrossRefGoogle Scholar
Stationary sunspot equilibria in an N-commodity world. Journal of Economic Theory 40 (1), 1986, 103–104.CrossRefGoogle Scholar
An exploration of the eductive justification of the rational expectations hypothesis. American Economic Review 82 (5), 1992, 1254–1278.Google Scholar
Sunspot equilibria: The case of small fluctuations around the steady state (with Chiappori, P.A. and Geoffard, P.Y.). Econometrica 60, 1992, 1097–1127.CrossRefGoogle Scholar
Lucas equation, indeterminacy and non neutrality: An example (with Chiappori, P.A.). In Dasgupta, P., Gale, D., Hart, O., and Maskin, E., eds., Economic Analysis of Markets and Games—Essays in Honor of F. Hahn, 445–465. Cambridge, MA: MIT Press, 1992.CrossRefGoogle Scholar
(De)stabilizing speculation on futures markets: An alternative view point (with Rochet, J.C.). European Economic Review 37 (5), 1993, 1043–1063.Google Scholar
Rational random walks (with Chiappori, P.A.). Review of Economic Studies 60, 1993, 837–864.CrossRefGoogle Scholar
The genealogy of modern theoretical public economics: From first best to second best. European Economic Review 39, 1995, 353–381.CrossRefGoogle Scholar
A Contribution to the Pure Theory of Taxation (Econometric Society Monograph Series). Cambridge University Press, 1995.Google Scholar
Assessing Rational Expectations 1: Sunspot Multiplicity and Economic Fluctuations. Cambridge, MA: MIT Press, 2001.Google Scholar
Short-run expectational coordination: Fixed versus flexible wages. Quarterly Journal of Economics 116, 2001, 1115–1147.CrossRefGoogle Scholar
Kyoto et l'économie de l'Effet de Serre. Report and direction of R. Guesnerie. La Documentation Française, 2003.Google Scholar
Do prices transmit rationally expected information? (with Desgranges, G. and Geoffard, P.Y.). Journal of the European Economic Association 1, 2003, 124–153.CrossRefGoogle Scholar
Calcul économique et développement durable. La Revue Economique 55 (3), 2004, 363–382.Google Scholar
Coordination on saddle-path solutions, the “eductive” viewpoint, 2-linear multivariate models (with Evans, G.). Journal of Economic Theory 124 (2), 2005, 202–229.CrossRefGoogle Scholar
Assessing Rational Expectations 2: Eductive Stability in Economics. Cambridge, MA: MIT Press, 2005.Google Scholar