Randall Wright
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Randall D. Wright (born August 4, 1956) is a Canadian academic macroeconomist who advanced the fields of
monetary economics Monetary economics is the branch of economics that studies the different theories of money: it provides a framework for analyzing money and considers its functions (as medium of exchange, store of value, and unit of account), and it considers how m ...
and
labor economics Labour economics seeks to understand the functioning and dynamics of the markets for wage labour. Labour is a commodity that is supplied by labourers, usually in exchange for a wage paid by demanding firms. Because these labourers exist as pa ...
through his role in the development of matching theory.


Biography

Wright obtained a
B.A. A Bachelor of Arts (abbreviated B.A., BA, A.B. or AB; from the Latin ', ', or ') is the holder of a bachelor's degree awarded for an undergraduate program in the liberal arts, or, in some cases, other disciplines. A Bachelor of Arts degree ...
in Economics at the
University of Manitoba The University of Manitoba (U of M, UManitoba, or UM) is a public research university in Winnipeg, Manitoba, Canada. Founded in 1877, it is the first university of Western Canada. Both by total student enrolment and campus area, the University of ...
in 1979 and a Ph.D. in Economics at the
University of Minnesota The University of Minnesota Twin Cities (historically known as University of Minnesota) is a public university, public Land-grant university, land-grant research university in the Minneapolis–Saint Paul, Twin Cities of Minneapolis and Saint ...
in 1986. He was awarded an honorary M.A. by the
University of Pennsylvania The University of Pennsylvania (Penn or UPenn) is a Private university, private Ivy League research university in Philadelphia, Pennsylvania, United States. One of nine colonial colleges, it was chartered in 1755 through the efforts of f ...
in 1990. His first position was as an
assistant professor Assistant professor is an academic rank just below the rank of an associate professor used in universities or colleges, mainly in the United States, Canada, Japan, and South Korea. Overview This position is generally taken after earning a doct ...
at Cornell from 1984 to 1987. He then moved to the University of Pennsylvania, where he became a full professor in 1994, later becoming the James Joo-Jin Kim Professor of Economics. In 2009, Wright accepted a position in the Economics Department at
University of Wisconsin–Madison The University of Wisconsin–Madison (University of Wisconsin, Wisconsin, UW, UW–Madison, or simply Madison) is a public land-grant research university in Madison, Wisconsin, United States. It was founded in 1848 when Wisconsin achieved st ...
. He is at the same time the Ray B. Zemon Chair in Liquid Assets in the
Wisconsin School of Business Wisconsin ( ) is a U.S. state, state in the Great Lakes region, Great Lakes region of the Upper Midwest of the United States. It borders Minnesota to the west, Iowa to the southwest, Illinois to the south, Lake Michigan to the east, Michig ...
' Department of Finance, Investment and Banking. In addition to his academic position, Wright is a research associate at the
Federal Reserve Bank of Cleveland The Federal Reserve Bank of Cleveland is the Cleveland, Ohio, Cleveland-based headquarters of the U.S. Federal Reserve System's Fourth Federal Reserve Districts, District. The district is composed of Ohio, western Pennsylvania, eastern Kentucky ...
, the
Federal Reserve Bank of Philadelphia The Federal Reserve Bank of Philadelphia — also known as the Philadelphia Fed or the Philly Fed — headquartered at 10 Independence Mall in Philadelphia, Pennsylvania, is responsible for the Third District of the Federal Reserve, which cover ...
, the
Bank of Canada The Bank of Canada (BoC; ) is a Crown corporations of Canada, Crown corporation and Canada's central bank. Chartered in 1934 under the ''Bank of Canada Act'', it is responsible for formulating Canada's monetary policy,OECD. OECD Economic Surve ...
, NBER, and Panthéon-Assas University. Wright was elected a Fellow of the
Econometric Society The Econometric Society is an international society of academic economists interested in applying statistical tools in the practice of econometrics. It is an independent organization with no connections to societies of professional mathematicians o ...
in 1997. Wright was the editor of the International Economic Review in 1998–2008 and served on the Board of Editors of the
American Economic Review The ''American Economic Review'' is a monthly peer-reviewed academic journal first published by the American Economic Association in 1911. The current editor-in-chief is Erzo FP Luttmer, a professor of economics at Dartmouth College. The journal is ...
in the period 1998–2000.


Research contribution

Wright, together with co-author
Nobuhiro Kiyotaki (born June 24, 1955) is a Japanese economist and the Harold H. Helms '20 Professor of Economics and Banking at Princeton University. He is especially known for proposing several models that provide deeper microeconomic foundations for macroecon ...
, pioneered the use of
search theory In microeconomics, search theory studies buyers or sellers who cannot instantly find a trading partner, and must therefore search for a partner prior to transacting. It involves determining the best approach to use when looking for a specific ite ...
in monetary economics. The application of search theory to macroeconomics would later be known as matching theory. Search-theoretic models of monetary exchange are based on explicit descriptions of the frictions that make money essential, which contrasts with earlier
reduced form In statistics, and particularly in econometrics, the reduced form of a simultaneous equations model, system of equations is the result of solving the system for the endogenous variables. This gives the latter as functions of the exogenous variables, ...
approaches to money in macroeconomics, such as putting money in the
utility function In economics, utility is a measure of a certain person's satisfaction from a certain state of the world. Over time, the term has been used with at least two meanings. * In a Normative economics, normative context, utility refers to a goal or ob ...
or imposing
cash-in-advance constraint The cash-in-advance constraint, also known as the Clower constraint after American economist Robert W. Clower, is an idea used in economic theory to capture monetary phenomena. In the most basic economic models (such as the Walras model or the Ar ...
s. These earlier ways of modeling money's role did not show explicitly how it helps overcome informational, spatial, or temporal frictions. Search-theoretic models, on the other hand, are based on explicit descriptions of specialization, the pattern of meetings, and the information structure. Kiyotaki and Wright (1989) was the first attempt to use a search-theoretic model to
endogenous Endogeny, in biology, refers to the property of originating or developing from within an organism, tissue, or cell. For example, ''endogenous substances'', and ''endogenous processes'' are those that originate within a living system (e.g. an ...
ly determine which commodities would become media of exchange, i.e.
commodity money Commodity money is money whose value comes from a commodity of which it is made. Commodity money consists of objects having value or use in themselves ( intrinsic value) as well as their value in buying goods. This is in contrast to representa ...
. Later, Kiyotaki and Wright (1991) constructed an alternative search-based model to prove that
fiat money Fiat money is a type of government-issued currency that is not backed by a precious metal, such as gold or silver, nor by any other tangible asset or commodity. Fiat currency is typically designated by the issuing government to be legal tende ...
can be valued as a
medium of exchange In economics, a medium of exchange is any item that is widely acceptable in exchange for goods and services. In modern economies, the most commonly used medium of exchange is currency. Most forms of money are categorised as mediums of exchange, i ...
even if it has a
rate of return In finance, return is a profit on an investment. It comprises any change in value of the investment, and/or cash flows (or securities, or other investments) which the investor receives from that investment over a specified time period, such as i ...
that is inferior to other available assets. The application of these theories emerged in Kiyotaki and Wright (1993), when the authors developed a tractable model of the exchange process that captures the "
double coincidence of wants Double, The Double or Dubble may refer to: Mathematics and computing * Multiplication by 2 * Double precision, a floating-point representation of numbers that is typically 64 bits in length * A double number of the form x+yj, where j^2=+1 * A ...
problem" in a pure
barter In trade, barter (derived from ''bareter'') is a system of exchange (economics), exchange in which participants in a financial transaction, transaction directly exchange good (economics), goods or service (economics), services for other goods ...
setup. In this model, the essential function of money is its role as a medium of exchange. The model can be used to address issues in monetary economics, such as the interaction between specialization and monetary exchange, and the possibility of equilibria with multiple fiat currencies. A shortcoming of search-theoretic models of money is that these models becomes intractable without very strong assumptions, and are therefore impractical for the analysis of
monetary policy Monetary policy is the policy adopted by the monetary authority of a nation to affect monetary and other financial conditions to accomplish broader objectives like high employment and price stability (normally interpreted as a low and stable rat ...
. Wright and
Ricardo Lagos Ricardo Froilán Lagos Escobar (; born 2 March 1938) is a Chilean lawyer, economist and social-democratic politician who served as president of Chile from 2000 to 2006. During the 1980s he was a well-known opponent of the Chilean military di ...
(2005) attempt to overcome this shortcoming by proposing a more general, yet still tractable, framework for the analysis of monetary policy.


Sources

* Nobuhiro Kiyotaki and Randall Wright (1989), "On Money as a Medium of Exchange," ''Journal of Political Economy'', 97, 927–54. * Nobuhiro Kiyotaki and Randall Wright (1991), "A Contribution to the Pure Theory of Money," ''Journal of Economic Theory'', 53, 215–35. * Nobuhiro Kiyotaki and Randall Wright (1993), "A search-theoretic approach to monetary economics," ''American Economic Review'', 83 (1), 63–77. *
Ricardo Lagos Ricardo Froilán Lagos Escobar (; born 2 March 1938) is a Chilean lawyer, economist and social-democratic politician who served as president of Chile from 2000 to 2006. During the 1980s he was a well-known opponent of the Chilean military di ...
and Randall Wright (2005), "A Unified Framework for Monetary Theory and Policy Analysis," ''Journal of Political Economy'', 113, 463–84.


External links


Webpage at University of Wisconsin–Madison

Curriculum Vitae

''Wisconsin School of Business Gazette'' article announcing Randall Wright's move to Wisconsin
{{DEFAULTSORT:Wright, Randall Canadian economists Macroeconomists New classical economists University of Minnesota College of Liberal Arts alumni University of Pennsylvania faculty Federal Reserve economists Fellows of the Econometric Society 1956 births Living people 20th-century American economists 21st-century American economists