Anna Schwartz
Encyclopedia
Anna Jacobson Schwartz (born November 11, 1915) is an economist
at the National Bureau of Economic Research
in New York City, and according to Paul Krugman
"one of the world's greatest monetary scholars". She is best known for her collaboration with Milton Friedman
on A Monetary History of the United States, 1867–1960 which laid a large portion of the blame for the Great Depression
at the door of the Federal Reserve. She is a past president of the Western Economic Association (1988).
in New York City at the age of 18, gained her Master’s in Economics from Columbia University
when she was 19, and had started her career as a professional economist one year later (in 1964, she would earn a Ph.D. from Columbia University as well). In 1936 she married Isaac Schwartz, with whom she raised four children.
Her first published paper appeared four years subsequently, in the 1940 issue of the Review of Economics and Statistics. Written by Arthur Gayer, Isaiah Finkelstein, and, as she then was still known professionally, Anna Jacobson, the paper was on "British Share Prices, 1811–1850". That paper was a precursor of several aspects of her subsequent work. An example is the discussion of the change in the behavior of the share price index after 1824.
This change, they showed, told nothing about the British economy or capital market
s generally, but resulted from the inclusion of mining stocks – then as now sometimes rather speculative investments
. As they wrote, "This example … has been cited to illustrate the need for constant reference to the historical meaning of movements in the indices." The care to put data in its historical context has characterized all her work, and is one of the ways in which it is an example to every economist.
. She has worked in the New York City office of that organization from then right up to the present. When she joined the National Bureau, it was engaged in the study of business cycles. Though she held teaching positions for only a short part of her career she has developed younger scholars by her willingness to work with them and to share her approach, a scrupulous examination of the past, so as both to understand it better and to draw lessons for the present.
, she produced the monumental Growth and Fluctuations in the British Economy, 1790–1850: An Historical, Statistical, and Theoretical Study of Britain’s Economic Development. It appeared in two volumes in 1953, its publication having been delayed by the war for some ten years after it was completed. That book is still highly regarded among economic scholars of the period. It was reprinted in 1975. Arthur Gayer had died before the book’s first appearance, but the other two authors wrote a new introduction which reviewed literature on the subject published since the original publication date. They admitted that there had developed what they called an "amicable divergence of view" on the interpretation of some the facts set out in the book. In particular, Anna Schwartz indicated that she had in the light of recent theoretical and empirical research revised her view of the importance of monetary policy
and her interpretation of interest rate
movements.
, then at Columbia University
and the National Bureau
, subsequently Chairman of the US Federal Reserve System, she and Milton Friedman
teamed up to examine the role of money in the business cycle
. Their first publication was A Monetary History of the United States, 1867–1960. It hypothesized that changes in monetary policy
have large effects on the economy
, and laid a large portion of the blame for the Great Depression
at the door of the Federal Reserve. That book appeared in 1963, along with the equally famous article, "Money and Business Cycles", which as with her first paper was published in the Review of Economics and Statistics. They also wrote the books Monetary Statistics of the United States in 1970 and Monetary Trends in the United States and the United Kingdom: Their Relation to Income, Prices, and Interest Rates, 1867–1975 in 1982.
. Economists, bankers, and policy makers have been and are concerned with the stability of the financial system. Anna Schwartz, in a series of studies in the 1970s, 1980s, and indeed up to the present day – in some remarks at a conference in XXXX in Helsinki
– has emphasized that price level stability is essential for financial system
stability. The uncertainty engendered by the absence of the first makes the latter unattainable. But even if we have price level stability, from time to time individual financial institutions will fail. Drawing on evidence from over two centuries she has demonstrated that such failures do not have major consequences for the economy so long as their effects are prevented from spreading through the financial system. Individual institutions should be allowed to fail, not supported with taxpayer’s money.
and of business cycles, the role of government in monetary policy
, measuring the output of bank
s, and the behavior of interest rates, on deflation, on monetary standards
. She has also done work outside of the United States. Some years ago the Department of Banking and Finance at City University
, London, England, started a research project on the monetary history of the United Kingdom
. For many years, she was an adviser to that project. She commented on papers, suggested lines of approach, came and spoke to students and at academic conferences where the work was discussed.
using Federal Reserve data from 1962. She has not been afraid to speak out with respect to the recent financial crisis, and criticize the government's response to it. She has also addressed a recent critique of Milton Friedman by Paul Krugman.
(1987); Stonehill College
, Massachusetts (1989); Iona College
(1992); Rutgers University
(1998); Emory University
(2000); City University of New York Graduate Center
(2000); Williams College
(2002); Loyola University Chicago
, 2003; City University Business School, London (2006).
Economist
An economist is a professional in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy...
at the National Bureau of Economic Research
National Bureau of Economic Research
The National Bureau of Economic Research is an American private nonprofit research organization "committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community." The NBER is well known for providing start and end...
in New York City, and according to Paul Krugman
Paul Krugman
Paul Robin Krugman is an American economist, professor of Economics and International Affairs at the Woodrow Wilson School of Public and International Affairs at Princeton University, Centenary Professor at the London School of Economics, and an op-ed columnist for The New York Times...
"one of the world's greatest monetary scholars". She is best known for her collaboration with Milton Friedman
Milton Friedman
Milton Friedman was an American economist, statistician, academic, and author who taught at the University of Chicago for more than three decades...
on A Monetary History of the United States, 1867–1960 which laid a large portion of the blame for the Great Depression
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...
at the door of the Federal Reserve. She is a past president of the Western Economic Association (1988).
Early career
She graduated from Barnard CollegeBarnard College
Barnard College is a private women's liberal arts college and a member of the Seven Sisters. Founded in 1889, Barnard has been affiliated with Columbia University since 1900. The campus stretches along Broadway between 116th and 120th Streets in the Morningside Heights neighborhood in the borough...
in New York City at the age of 18, gained her Master’s in Economics from Columbia University
Columbia University
Columbia University in the City of New York is a private, Ivy League university in Manhattan, New York City. Columbia is the oldest institution of higher learning in the state of New York, the fifth oldest in the United States, and one of the country's nine Colonial Colleges founded before the...
when she was 19, and had started her career as a professional economist one year later (in 1964, she would earn a Ph.D. from Columbia University as well). In 1936 she married Isaac Schwartz, with whom she raised four children.
Her first published paper appeared four years subsequently, in the 1940 issue of the Review of Economics and Statistics. Written by Arthur Gayer, Isaiah Finkelstein, and, as she then was still known professionally, Anna Jacobson, the paper was on "British Share Prices, 1811–1850". That paper was a precursor of several aspects of her subsequent work. An example is the discussion of the change in the behavior of the share price index after 1824.
This change, they showed, told nothing about the British economy or capital market
Capital market
A capital market is a market for securities , where business enterprises and governments can raise long-term funds. It is defined as a market in which money is provided for periods longer than a year, as the raising of short-term funds takes place on other markets...
s generally, but resulted from the inclusion of mining stocks – then as now sometimes rather speculative investments
Speculation
In finance, speculation is a financial action that does not promise safety of the initial investment along with the return on the principal sum...
. As they wrote, "This example … has been cited to illustrate the need for constant reference to the historical meaning of movements in the indices." The care to put data in its historical context has characterized all her work, and is one of the ways in which it is an example to every economist.
National Bureau of Economic Research
In 1941 she joined the staff of the National Bureau of Economic ResearchNational Bureau of Economic Research
The National Bureau of Economic Research is an American private nonprofit research organization "committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community." The NBER is well known for providing start and end...
. She has worked in the New York City office of that organization from then right up to the present. When she joined the National Bureau, it was engaged in the study of business cycles. Though she held teaching positions for only a short part of her career she has developed younger scholars by her willingness to work with them and to share her approach, a scrupulous examination of the past, so as both to understand it better and to draw lessons for the present.
Growth and Fluctuations in the British Economy
In collaboration with Arthur Gayer and Walt Whitman RostowWalt Whitman Rostow
Walt Whitman Rostow was a United States economist and political theorist who served as Special Assistant for National Security Affairs to U.S. President Lyndon B...
, she produced the monumental Growth and Fluctuations in the British Economy, 1790–1850: An Historical, Statistical, and Theoretical Study of Britain’s Economic Development. It appeared in two volumes in 1953, its publication having been delayed by the war for some ten years after it was completed. That book is still highly regarded among economic scholars of the period. It was reprinted in 1975. Arthur Gayer had died before the book’s first appearance, but the other two authors wrote a new introduction which reviewed literature on the subject published since the original publication date. They admitted that there had developed what they called an "amicable divergence of view" on the interpretation of some the facts set out in the book. In particular, Anna Schwartz indicated that she had in the light of recent theoretical and empirical research revised her view of the importance of monetary policy
Monetary policy
Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment...
and her interpretation of interest rate
Interest rate
An interest rate is the rate at which interest is paid by a borrower for the use of money that they borrow from a lender. For example, a small company borrows capital from a bank to buy new assets for their business, and in return the lender receives interest at a predetermined interest rate for...
movements.
Research with Milton Friedman
Years before her first book was reprinted, another economist had joined what might be called the Schwartz team of co-authors. Prompted by Arthur F. BurnsArthur F. Burns
Arthur Frank Burns was an American economist. He served as Chairman of the Federal Reserve from 1970 to 1978.- Career :...
, then at Columbia University
Columbia University
Columbia University in the City of New York is a private, Ivy League university in Manhattan, New York City. Columbia is the oldest institution of higher learning in the state of New York, the fifth oldest in the United States, and one of the country's nine Colonial Colleges founded before the...
and the National Bureau
National Bureau of Economic Research
The National Bureau of Economic Research is an American private nonprofit research organization "committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community." The NBER is well known for providing start and end...
, subsequently Chairman of the US Federal Reserve System, she and Milton Friedman
Milton Friedman
Milton Friedman was an American economist, statistician, academic, and author who taught at the University of Chicago for more than three decades...
teamed up to examine the role of money in the business cycle
Business cycle
The term business cycle refers to economy-wide fluctuations in production or economic activity over several months or years...
. Their first publication was A Monetary History of the United States, 1867–1960. It hypothesized that changes in monetary policy
Monetary policy
Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment...
have large effects on the economy
Economic system
An economic system is the combination of the various agencies, entities that provide the economic structure that defines the social community. These agencies are joined by lines of trade and exchange along which goods, money etc. are continuously flowing. An example of such a system for a closed...
, and laid a large portion of the blame for the Great Depression
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...
at the door of the Federal Reserve. That book appeared in 1963, along with the equally famous article, "Money and Business Cycles", which as with her first paper was published in the Review of Economics and Statistics. They also wrote the books Monetary Statistics of the United States in 1970 and Monetary Trends in the United States and the United Kingdom: Their Relation to Income, Prices, and Interest Rates, 1867–1975 in 1982.
Financial regulation
She has also changed minds over financial regulationFinancial regulation
Financial regulation is a form of regulation or supervision, which subjects financial institutions to certain requirements, restrictions and guidelines, aiming to maintain the integrity of the financial system...
. Economists, bankers, and policy makers have been and are concerned with the stability of the financial system. Anna Schwartz, in a series of studies in the 1970s, 1980s, and indeed up to the present day – in some remarks at a conference in XXXX in Helsinki
Helsinki
Helsinki is the capital and largest city in Finland. It is in the region of Uusimaa, located in southern Finland, on the shore of the Gulf of Finland, an arm of the Baltic Sea. The population of the city of Helsinki is , making it by far the most populous municipality in Finland. Helsinki is...
– has emphasized that price level stability is essential for financial system
Financial system
In finance, the financial system is the system that allows the transfer of money between savers and borrowers. A financial system can operate on a global, regional or firm specific level...
stability. The uncertainty engendered by the absence of the first makes the latter unattainable. But even if we have price level stability, from time to time individual financial institutions will fail. Drawing on evidence from over two centuries she has demonstrated that such failures do not have major consequences for the economy so long as their effects are prevented from spreading through the financial system. Individual institutions should be allowed to fail, not supported with taxpayer’s money.
Other areas of work
There have been other areas of her work including the international transmission of inflationInflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
and of business cycles, the role of government in monetary policy
Monetary policy
Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment...
, measuring the output of bank
Bank
A bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...
s, and the behavior of interest rates, on deflation, on monetary standards
Monetary system
A monetary system is anything that is accepted as a standard of value and measure of wealth in a particular region.However, the current trend is to use international trade and investment to alter the policy and legislation of individual governments. The best recent example of this policy is the...
. She has also done work outside of the United States. Some years ago the Department of Banking and Finance at City University
City University, London
City University London , is a public research university located in London, United Kingdom. It was founded in 1894 as the Northampton Institute and became a university in 1966, when it adopted its present name....
, London, England, started a research project on the monetary history of the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
. For many years, she was an adviser to that project. She commented on papers, suggested lines of approach, came and spoke to students and at academic conferences where the work was discussed.
Recent work
In 2002–2003 she served as President of the International Atlantic Economic Society. Since 2007 she concentrated her efforts on researching US official intervention in the foreign exchange marketForeign exchange market
The foreign exchange market is a global, worldwide decentralized financial market for trading currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends...
using Federal Reserve data from 1962. She has not been afraid to speak out with respect to the recent financial crisis, and criticize the government's response to it. She has also addressed a recent critique of Milton Friedman by Paul Krugman.
Honorary Degrees
University of FloridaUniversity of Florida
The University of Florida is an American public land-grant, sea-grant, and space-grant research university located on a campus in Gainesville, Florida. The university traces its historical origins to 1853, and has operated continuously on its present Gainesville campus since September 1906...
(1987); Stonehill College
Stonehill College
Stonehill College is a private Roman Catholic college located in Easton, Massachusetts, United States, founded in 1948. Situated in North Easton, Massachusetts, a suburban community of 23,329 people, Stonehill is located south of Boston on a campus, the original estate of Frederick Lothrop Ames...
, Massachusetts (1989); Iona College
Iona College (New York)
Iona College is located in New Rochelle, New York, 20 miles north of Manhattan in suburban Westchester County. The college occupies 35 acres on North Ave. The college also operates a Graduate Center in Pearl River, Rockland County, New York....
(1992); Rutgers University
Rutgers University
Rutgers, The State University of New Jersey , is the largest institution for higher education in New Jersey, United States. It was originally chartered as Queen's College in 1766. It is the eighth-oldest college in the United States and one of the nine Colonial colleges founded before the American...
(1998); Emory University
Emory University
Emory University is a private research university in metropolitan Atlanta, located in the Druid Hills section of unincorporated DeKalb County, Georgia, United States. The university was founded as Emory College in 1836 in Oxford, Georgia by a small group of Methodists and was named in honor of...
(2000); City University of New York Graduate Center
CUNY Graduate Center
The Graduate Center of the City University of New York brings together graduate education, advanced research, and public programming to midtown Manhattan hosting 4,600 students, 33 doctoral programs, 7 master's programs, and 30 research centers and institutes...
(2000); Williams College
Williams College
Williams College is a private liberal arts college located in Williamstown, Massachusetts, United States. It was established in 1793 with funds from the estate of Ephraim Williams. Originally a men's college, Williams became co-educational in 1970. Fraternities were also phased out during this...
(2002); Loyola University Chicago
Loyola University Chicago
Loyola University Chicago is a private Jesuit research university located in Chicago, Illinois, United States. Founded by the Society of Jesus in 1870 under the title St...
, 2003; City University Business School, London (2006).
Books
- Monetary History of the United States, 1867–1960 (with Milton Friedman), 1963 ISBN 0-691-00354-8
- Monetary Statistics of the United States: Estimates, Sources, Methods (with Milton Friedman), 1970 ISBN 0-87014-210-0
- Growth and Fluctuations in the British Economy, 1790–1850: An Historical, Statistical, and Theoretical Study of Britain’s Economic Development (with Arthur Gayer and Walt Whitman Rostow), 1953 ISBN 0-06492-344-4
- Money in Historical Perspective (with an introduction by Michael D. Bordo and Milton Friedman), 1987 ISBN 0-226-74228-8
External links
- Monetarism Defiant, City Journal, Spring 2009
- Major works of Anna J. Schwartz
- Schwartz's CV at the National Bureau of Economic Research
- Essay on A Monetary History of the United States
- The Great Depression and the Friedman-Schwartz Hypothesis
- Money Supply, by Anna J. Schwartz. Concise encyclopedia of economicsConcise Encyclopedia of EconomicsThe Concise Encyclopedia of Economics is a widely-used encyclopedia of economics. It is used by students and teachers from high school to college to graduate school, and is one of the most popular worldwide resources for researching and understanding topics in economics.Articles are written by...
on Econlib