Phillip D. Cagan (born 1927) is an
AmericanThe United States of America is a federal constitutional republic comprising fifty states and a federal district...
scholar and author. He is Professor of Economics Emeritus at
Columbia UniversityColumbia University in the City of New York is a private university in the United States and a member of the Ivy League. Columbia's main campus lies in the Morningside Heights neighborhood in the borough of Manhattan, in New York City...
.
Born in
SeattleSeattle is located in the Pacific Northwest region of the United States. Situated in the western part of Washington State on an isthmus between Puget Sound and Lake Washington, about south of the Canada – United States border, it is named after Chief Sealth, of the Duwamish and Suquamish tribes...
, Washington, Cagan and his family moved to
Southern CaliforniaSouthern California, or SoCal, is defined as the southern portion of the U.S. state of California. Its population centers around three major metropolitan areas, each of which have over 3 million people; the Los Angeles Metropolitan Area with over 12 million inhabitants, the San Bernardino-Riverside...
shortly thereafter. Cagan joined the U.S. Navy at age 17 and fought in
World War IIWorld War II, or the Second World War , was a global military conflict which involved a majority of the world's nations, including all great powers, organized into two opposing military alliances: the Allies and the Axis...
. After the war, Cagan decided to go to college, and earned his
B.A.Bachelor of Arts , from the Latin artium baccalaureus, is a bachelor's degree awarded for an undergraduate course or program in either the liberal arts, the sciences or both....
from UCLA in 1948. Cagan received his
M.A.A Master of Arts is a postgraduate academic master degree awarded by universities in many countries. The degree is typically studied for in English, Fine Arts, History, Nursing, Humanities, Geography, Philosophy, Social Sciences or Theology and can be either fully-taught, research-based, or a...
in 1951, and his
Ph.D.Ph.D. or PHD may stand for:* Doctor of Philosophy, an academic degree* Ph.D. , a 1980s British group* Piled Higher and Deeper, a web comic strip* PhD: Phantasy Degree, a Korean comic series* Parisada Hindu Dharma, an Indonesian organization...
in
EconomicsEconomics is the social science that studies the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
in 1954 from the
University of ChicagoThe University of Chicago is a private, coeducational research university in Chicago, Illinois, USA. It was founded by oil magnate and benefactor John D...
.
After graduate school, Cagan joined the
National Bureau of Economic ResearchThe National Bureau of Economic Research is a US private, nonprofit research organization dedicated to studying the science and empirics of economics, especially the American economy. It is "committed to undertaking and disseminating unbiased economic research among public policymakers, business...
(NBER) in
New YorkNew York is a state in the Mid-Atlantic and Northeastern regions of the United States and is the nation's third most populous. The state is bordered by New Jersey and Pennsylvania to the south, and Connecticut, Massachusetts and Vermont to the east...
where he worked for two years.
Phillip D. Cagan (born 1927) is an
AmericanThe United States of America is a federal constitutional republic comprising fifty states and a federal district...
scholar and author. He is Professor of Economics Emeritus at
Columbia UniversityColumbia University in the City of New York is a private university in the United States and a member of the Ivy League. Columbia's main campus lies in the Morningside Heights neighborhood in the borough of Manhattan, in New York City...
.
Biography
Born in
SeattleSeattle is located in the Pacific Northwest region of the United States. Situated in the western part of Washington State on an isthmus between Puget Sound and Lake Washington, about south of the Canada – United States border, it is named after Chief Sealth, of the Duwamish and Suquamish tribes...
, Washington, Cagan and his family moved to
Southern CaliforniaSouthern California, or SoCal, is defined as the southern portion of the U.S. state of California. Its population centers around three major metropolitan areas, each of which have over 3 million people; the Los Angeles Metropolitan Area with over 12 million inhabitants, the San Bernardino-Riverside...
shortly thereafter. Cagan joined the U.S. Navy at age 17 and fought in
World War IIWorld War II, or the Second World War , was a global military conflict which involved a majority of the world's nations, including all great powers, organized into two opposing military alliances: the Allies and the Axis...
. After the war, Cagan decided to go to college, and earned his
B.A.Bachelor of Arts , from the Latin artium baccalaureus, is a bachelor's degree awarded for an undergraduate course or program in either the liberal arts, the sciences or both....
from UCLA in 1948. Cagan received his
M.A.A Master of Arts is a postgraduate academic master degree awarded by universities in many countries. The degree is typically studied for in English, Fine Arts, History, Nursing, Humanities, Geography, Philosophy, Social Sciences or Theology and can be either fully-taught, research-based, or a...
in 1951, and his
Ph.D.Ph.D. or PHD may stand for:* Doctor of Philosophy, an academic degree* Ph.D. , a 1980s British group* Piled Higher and Deeper, a web comic strip* PhD: Phantasy Degree, a Korean comic series* Parisada Hindu Dharma, an Indonesian organization...
in
EconomicsEconomics is the social science that studies the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
in 1954 from the
University of ChicagoThe University of Chicago is a private, coeducational research university in Chicago, Illinois, USA. It was founded by oil magnate and benefactor John D...
.
After graduate school, Cagan joined the
National Bureau of Economic ResearchThe National Bureau of Economic Research is a US private, nonprofit research organization dedicated to studying the science and empirics of economics, especially the American economy. It is "committed to undertaking and disseminating unbiased economic research among public policymakers, business...
(NBER) in
New YorkNew York is a state in the Mid-Atlantic and Northeastern regions of the United States and is the nation's third most populous. The state is bordered by New Jersey and Pennsylvania to the south, and Connecticut, Massachusetts and Vermont to the east...
where he worked for two years. Then Cagan re-entered academia, teaching at the University of Chicago for three years, and at
Brown UniversityBrown University is a private university located in Providence, Rhode Island, and a member of the Ivy League. Founded in 1764 prior to American independence from the British Empire as the College in the English Colony of Rhode Island and Providence Plantations early in the reign of King George III...
for seven years. In 1966 Cagan was hired by
Columbia UniversityColumbia University in the City of New York is a private university in the United States and a member of the Ivy League. Columbia's main campus lies in the Morningside Heights neighborhood in the borough of Manhattan, in New York City...
, where he taught economics for nearly thirty years — save for fifteen months spent in
Washington, D.C.Washington, D.C. , formally the District of Columbia and commonly referred to as Washington, the District, or simply D.C., is the capital of the United States, founded on July 16, 1790...
, when he was on the staff of the Council of Economic Advisors (CEA).
During his time at Columbia, Cagan was also associated with the
American Enterprise InstituteThe American Enterprise Institute for Public Policy Research is a conservative think tank founded in 1943. Its stated mission is "to defend the principles and improve the institutions of American freedom and democratic capitalism—limited government, private enterprise, individual liberty and...
(AEI) in Washington, D.C., writing on public policy issues.
Cagan lives in
Palo AltoPalo Alto is a California charter city located in the northwest corner of Santa Clara County, in the San Francisco Bay Area of California, USA. It is named after a tree called El Palo Alto...
,
CaliforniaCalifornia is the most populous state in the United States, and the third largest by area. California is the second most populous sub-national entity in the Americas, behind only São Paulo, Brazil...
.
Contributions to economic science
Cagan's work focused on monetary policy and the control of inflation. Cagan has published over 100 books, journal articles, reviews, reports, and pamphlets on these and other topics in
macroeconomicsMacroeconomics is a branch of economics that deals with the performance, structure, and behavior of a national or regional economy as a whole. Along with microeconomics, macroeconomics is one of the two most general fields in economics. It is the study of the behavior and decision-making of entire...
. He is perhaps best-known for
Determinants and Effects of Changes in the Stock of Money, 1875-1960, a work that sought to identify the "causal relationships between changes in money, prices and output." The book, part of the NBER series that contained
Milton FriedmanMilton Friedman was an American economist, statistician and public intellectual, and a recipient of the Nobel Memorial Prize in Economics...
and Anna J. Schwartz's
Monetary History of the United States, 1867-1960, was praised for its "careful empirical work" and called "the most complete study in the area."
Cagan's most important contribution to economics, however, is the article included in Milton Friedman's edited volume
Studies in the Quantity Theory of Money (1956), entitled "The Monetary Dynamics of Hyperinflation," a work that became an "instant classic" in the field.
The article, which contained "extensive manipulation of differential equations and an ingenious use of exponentially weighted averages", analyzed seven hyperinflations and found that "the parameters of money demand functions estimated during hyperinflations generally satisfy the condition of dynamic stability that precludes the inflation from being self-generating, or displaying period-to-period oscillations."
After its publication, Cagan's article generated a significant body of work, as a number of leading macroeconomists either reexamined or extended Cagan's model, most notably "Barro (1970), Sargent and Wallace (1973), Frenkel (1975, 1976a, 1976b, 1977, 1979), Sargent (1977), Abel et al. (1979), Salemi (1979), and Salemi and Sargent (1979)." In addition, monetary economists today often refer to a "Cagan demand function" when modeling the real value of money.
Because of the impact that this groundbreaking work had upon the economics profession, Cagan was elected Fellow of the
Econometric SocietyThe Econometric Society, an International Society for the Advancement of Economic Theory in its Relation with Statistics and Mathematics was founded on December 29, 1930 at the Stalton Hotel in Cleveland, Ohio....
(the most prestigious society in the field), and has been mentioned as a possible candidate for the Nobel Prize in Economics.
Selected bibliography
.
- ______, "Why Do We Use Money in Open Market Operations?" The Journal of Political Economy, Vol. 66, No. 1 (Feb., 1958), pp. 34-46. http://links.jstor.org/sici?sici=0022-3808%28195802%2966%3A1%3C34%3AWDWUMI%3E2.0.CO%3B2-T
- ______, "The Demand for Currency Relative to the Total Money Supply," The Journal of Political Economy, Vol. 66, No. 4 (Aug., 1958), pp. 303-328, http://links.jstor.org/sici?sici=0022-3808%28195808%2966%3A4%3C303%3ATDFCRT%3E2.0.CO%3B2-I
- ______, Determinants and Effects of Changes in the Stock of Money, 1875-1960, New York: Columbia University Press (1965).http://www.amazon.com/dp/B0000CMWRS
- ______, "The Non-Neutrality of Money In the Long Run: A Discussion of the Critical Assumptions and Some Evidence," Journal of Money, Credit and Banking, Vol. 1, No. 2, Conference on Money and Economic Growth (May, 1969), pp. 207-227. http://links.jstor.org/sici?sici=0022-2879%28196905%291%3A2%3C207%3ATNOMIT%3E2.0.CO%3B2-L
- ______, Persistent Inflation: Historical and Policy Essays, New York: Columbia University Press (1979).http://www.amazon.com/dp/0231047290
- ______, "Reflections on Rational Expectations," Journal of Money, Credit and Banking, Vol. 12, No. 4, Part 2: Rational Expectations (Nov., 1980), pp. 826-832. http://links.jstor.org/sici?sici=0022-2879%28198011%2912%3A4%3C826%3ARORE%3E2.0.CO%3B2-%23
- ______, "The Choice Among Monetary Aggregates as Targets and Guides for Monetary Policy," Journal of Money, Credit and Banking, Vol. 14, No. 4, Part 2: The Conduct of U.S. Monetary Policy (Nov., 1982), pp. 661-686. http://links.jstor.org/sici?sici=0022-2879%28198211%2914%3A4%3C661%3ATCAMAA%3E2.0.CO%3B2-A
- ______, "Does Endogeneity of the Money Supply Disprove Monetary Effects on Economic Activity?" Journal of Macroeconomics, Vol. 15, (Summer 1993).
- Phillip Cagan and William G. Dewald, "The Conduct of U.S. Monetary Policy: Introduction," Journal of Money, Credit and Banking, Vol. 14, No. 4, Part 2: The Conduct of U.S. Monetary Policy (Nov., 1982), pp. 565-574. http://links.jstor.org/sici?sici=0022-2879%28198211%2914%3A4%3C565%3ATCOUMP%3E2.0.CO%3B2-N
- Phillip Cagan and Arthur Gandolfi, "The Lag in Monetary Policy as Implied by the Time Pattern of Monetary Effects on Interest Rates," The American Economic Review, Vol. 59, No. 2, Papers and Proceedings of the Eighty-first Annual Meeting of the American Economic Association (May, 1969), pp. 277-284 http://links.jstor.org/sici?sici=0002-8282%28196905%2959%3A2%3C277%3ATLIMPA%3E2.0.CO%3B2-F
- Phillip Cagan and Anna J. Schwartz, "Has the Growth of Money Substitutes Hindered Monetary Policy?" Journal of Money, Credit and Banking, Vol. 7, No. 2 (May, 1975), pp. 137-159. http://links.jstor.org/sici?sici=0022-2879%28197505%297%3A2%3C137%3AHTGOMS%3E2.0.CO%3B2-3
- ______, "The National Bank Note Puzzle Reinterpreted," Journal of Money, Credit and Banking, Vol. 23, No. 3, Part 1 (Aug., 1991), pp. 293-307. http://links.jstor.org/sici?sici=0022-2879%28199108%2923%3A3%3C293%3ATNBNPR%3E2.0.CO%3B2-T
External links