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Greg Mankiw

Greg Mankiw

I am the Robert M. Beren Professor of Economics at Harvard University, where I teach introductory economics (ec 10). I use this blog to keep in touch with my current and former students. Teachers and students at other schools, as well as others interested in economic issues, are welcome to use this resource.

Articles by Greg Mankiw

An Inflation Puzzle

18 days ago

A common story about the recent inflation surge in the United States–especially among members of Team Transitory–is that the surge is largely due to global supply shocks, such as rising energy prices, chip shortages, and various bottlenecks in the wake of the worldwide pandemic. Why then do we not see a similar inflation surge in Japan? There, inflation is running at about the same rate as it was pre-pandemic. See below. (Click on image to enlarge.) I am puzzled.

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My Latest

19 days ago

Click here to read my new working paper, Government Debt and Capital Accumulation in an Era of Low Interest Rates.

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Webinar Tomorrow

March 31, 2022

Tomorrow, I will be giving a webinar on the 40-year decline in real interest rates. If you are interested, click here.

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Mr. Pigou, Meet Mr. Putin

March 15, 2022

Harvard’s Ricardo Hausmann says a large tax on energy imports from Russia is a policy worth considering, perhaps better than an embargo.

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A Great Question

March 12, 2022

…from Jon Steinsson:Imagine going 3 years back in time and asking any Fed official what they would do if CPI inflation was 7.9% (and core CPI inflation 6.4%). Does "We will raise rates by 25bp" sound plausible?Could add to the question: And the unemployment rate is 3.8 percent.

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My Heart is Breaking

February 26, 2022

I was born in New Jersey, grew up in New Jersey, and have spent most of adult life in Massachusetts, but I have always felt a kinship with Ukraine. All four of my grandparents were born there. They left as teenagers early in the 20th century, before World War I and the Russian Revolution made a return to their homeland untenable. I grew up attending a Ukrainian Orthodox Church. Every week, we would pray for a free Ukraine, independent of the Soviet Union. As a snarky, know-it-all teenager, I rolled my eyes, thinking the idea preposterous.My family celebrated Ukrainian Christmas on January 7 every year. We ate Ukrainian food.  My parents sent me to Ukrainian School to learn the language (though the effort was unsuccessful, as I have never been a good student of languages). At

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An Upcoming Interview

February 20, 2022

On March 3, I will be interviewed by my old friend Linda Ghent. Click here if you are interested in attending this virtual event.

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Econ Theory Summer Camp

February 10, 2022

Graduate students with an interest in economic theory and/or international trade should look into this opportunity, run by my colleague Eric Maskin.

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January 29, 2022

In today’s WSJ, here is the funniest thing I have read recently:Mr. Kurtz and his then-wife kept a 6-acre parcel for themselves, where they built a roughly 30,000-square-foot mansion with a 65-foot saltwater pool, tennis court and indoor basketball court. As the home was nearing completion, Mr. Kurtz said they realized it was too big for their needs.

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History of Economics Summer Camp

January 16, 2022

Readers of this blog might like to know: The
Center for the History of Political Economy at Duke University will be hosting
another Summer Institute on the History of Economics this summer from June
20-29, 2022. The program is designed for students in graduate programs in
economics, though students in graduate school in other fields as well as newly
minted PhDs will also be considered.

More information on the Summer Institute is
available at this website.

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What I’ve Been Reading

December 19, 2021

The Genetic Lottery by Kathryn Harden is one of the best books I’ve read in the past several years. It offers a clear and smart discussion of the current state of behavioral genetics and what it means–and, equally important, what it doesn’t mean–for public policy. Highly recommended holiday gift for the social science geek in your life.

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BBB’s Ugly Fine Print

December 14, 2021

I have long favored a carbon tax to deal with global climate change. But I understand that if our leaders lack the political courage to propose one, targeted subsidies, such an electric vehicle tax credit, can be a substitute, albeit an imperfect one. In today’s paper, I learned that, unfortunately, the design of this credit in the so-called Build Back Better bill aims not only at addressing climate change but also at reducing competition in the labor market and impeding international trade: The credit is $8,000 if the vehicle is made at a non-union U.S. plant, but rises to $12,500 if it’s made in a union-organized plant. The credit drops $500 if the car’s battery isn’t made in America, and after 2026 only cars assembled in the U.S. would qualify for the basic $7,500 credit.So the

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Macro 11e

November 18, 2021

The 11th edition of my intermediate macroeconomics text is now available. Those interested in obtaining a copy can click here.

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“It’s not inflationary because it’s paid for.”

November 14, 2021

In the discussion of President Biden’s so-called Build Back Better plan, a common refrain among its proponents is that the bill will not increase inflation because it is paid for with tax increases on corporations and wealthy individuals. There are four problems with this logic:1. The bill is likely to include permanent tax increases along with spending provisions that will sunset. The proponents want the spending to be extended later. So, in a true sense, it is not paid for.2. The key issue is not what the plan does to the economy over a 10-year budget window but what it does over the next few years. So look at the path of fiscal policy, not just the 10-year totals. While I wait for CBO’s budget projections, I will guess the bill will expand the budget deficit in the near term.3.

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Happy Kevin Hassett Day!

November 2, 2021

Dow closes above 36,000 for the first time. Here is my old review of the book.Coincidentally, Kevin has released a new book today, which I have not yet read.

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Woke, Inc.

October 30, 2021

I recently had the opportunity to interview Vivek Ramaswamy about his book Woke, Inc. The interview will air this Sunday on Book TV on C-SPAN 2 at 10am ET, 1 pm ET, and 10pm ET. The program will also be available on the Book TV website once the discussion has aired on the network.

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Two Ways to Tell the Story

October 12, 2021

From Paul Krugman today:The most famous example is the research that Card conducted along with the late Alan Krueger on the effects of minimum wage. Most economists used to believe that raising the minimum wage reduces employment. But is this true? In 1992 the state of New Jersey increased its minimum wage while neighboring Pennsylvania didn’t. Card and Krueger realized that they could assess the effect of this policy change by comparing employment growth in the two states after the wage hike, essentially using Pennsylvania as the control for New Jersey’s experiment.What they found was that the increased minimum wage had very little if any negative effect on the number of jobs….So the empirical revolution in economics undermines the right-leaning conventional wisdom that had

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October 8, 2021

There is an interesting article in The New Yorker about one of my competitors in the intro textbook market. A notable tidbit:Jonathan Gruber, who teaches introductory economics at M.I.T., felt that core might introduce too much complexity for a foundational course. He worried that so much emphasis on the ethical and political dimensions of economics might make the subject feel like a different discipline altogether. “The question is, do you want the students to feel like they’re coming out of, you know, to be blunt, a sociology class or an economics class?” Gruber said.

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Proposed Changes in the Child Tax Credit

October 7, 2021

A new paper by Kevin Corinth, Bruce Meyer, Matthew Stadnicki, and Derek Wu finds the following (emphasis added). The proposed change under the American Families Plan (AFP) to the Tax Cuts and Jobs Act (TCJA) Child Tax Credit (CTC) would increase maximum benefit amounts to $3,000 or $3,600 per child (up from $2,000 per child) and make the full credit available to all low and middle-income families regardless of earnings or income. We estimate the anti-poverty, targeting, and labor supply effects of the expansion by linking survey data with administrative tax and government program data which form part of the Comprehensive Income Dataset (CID). Initially ignoring any behavioral responses, we estimate that the expansion of the CTC would reduce child poverty by 34% and deep child

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Economics Teaching Conference

September 29, 2021

Later this week, registration will open for the 17th Annual
Economics Teaching Conference sponsored by the National Economics Teaching
Association (NETA) and Cengage. This conference will be held virtually on
Thursday, October 28 and Friday, October 29. I am one of the speakers.

of this blog have an opportunity to register now using this link.

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A Magic Trick from Biden’s Economists

September 23, 2021

A magician tricks his audiences by distracting them. While people focus on something that is attractive but irrelevant (a shiny object, the magician’s beautiful assistant in a skimpy outfit), the magician can more easily hide his deception.In a new CEA blog post, the Biden economics team does something similar. It asks what the average tax rate of the 400 wealthiest families would be if unrealized capital gains were included in the measure of their income.This is a mildly interesting question. But why is the Biden team taking the time from their busy schedules to ask it? Because they want to convince you that the rich aren’t paying their fair share in taxes.The problem is that this question has little connection to the policies now being discussed. As I understand it, the essence

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Let CBO estimate before you legislate

September 23, 2021

In my recent Times column on the expanded social safety net, the following passage was cut in the editorial process, but it is an important point, which I am afraid is being lost in the Congressional rush to get something done:Team Biden says they
won’t pass the bill onto future generations in the form of higher public debt. Whether that’s true is
hard to say. The Congressional Budget Office and Joint Tax Committee have not yet
scored the bill because it hasn’t been written. Let’s hope that Congressional
leadership is patient enough to let the scorekeepers do their jobs before
bringing the legislation up for a vote.

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Follow-up references

September 22, 2021

In my most recent Times column, I did not have the space to fully explain the body of work that follows up on the Prescott hypothesis that higher tax rates explain lower work effort and national incomes in Western Europe. For interested readers (that is, the more nerdy ones), here are a some relevant references together with brief excerpts (emphasis added):1. Steven Davis and Magnus Henrekson"Lastly, let us return to the recent studies by Prescott (2002, 2003), which consider the
output, employment and welfare consequences of personal taxes in an equilibrium model with
one production sector and a simple labor-leisure choice for the representative household. Our
evidence supports the view that tax rate differences among rich countries are a major reason
for large international

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