Nicholas Gregory Mankiw ( MAN-kyoo; born February 3, 1958) is an American macroeconomist who is currently the Robert M. Beren Professor of Economics at Harvard University.
Mankiw has written widely on economics and economic policy. As of February 2020, the RePEc overall ranking based on academic publications, citations, and related metrics put him as the 45th most influential economist in the world, out of nearly 50,000 registered authors. He was the 11th most cited economist and the 9th most productive research economist as measured by the h-index. In addition, Mankiw is the author of several best-selling textbooks, writes a popular blog, and from 2007 to 2021 wrote regularly for the Sunday business section of The New York Times. According to the Open Syllabus Project, Mankiw is the most frequently cited author on college syllabi for economics courses.
Mankiw is a conservative, and has been an economic adviser to several Republican politicians. From 2003 to 2005, Mankiw was Chairman of the Council of Economic Advisers under President George W. Bush. In 2006, he became an economic adviser to Mitt Romney, and worked with Romney during his presidential campaigns in 2008 and 2012. In October 2019, he announced that he was no longer a Republican because of his discontent with President Donald Trump and the Republican Party.
Mankiw was born in Trenton, New Jersey. His grandparents were all Ukrainians. He grew up in Cranford, New Jersey, where he worked in Republican politics, and graduated from the Pingry School in 1976. In 1975, he studied astrophysics at the Summer Science Program. He graduated from Princeton University summa cum laude in 1980 with a Bachelor of Arts in economics. Mankiw completed a 72-page long senior thesis titled "Understanding Employment Fluctuation". At Princeton, Mankiw was classmates with the economist David Romer, who would later become one of his coauthors, and was roommates with the playwright Richard Greenberg.
After college, Mankiw spent a year working on his doctoral degree at the Massachusetts Institute of Technology (MIT) and a subsequent year studying at Harvard Law School. He worked as a staff economist for the Council of Economic Advisers from 1982 to 1983, which he went on to chair two decades later. After leaving the council, he earned his PhD in economics from MIT in 1984 under the supervision of Stanley Fischer. He returned to Harvard Law School for a year, but having completed his PhD and realizing that he was better at economics, he left to briefly teach as an instructor at MIT, and then became an assistant professor of economics at Harvard University in 1985. He was promoted to full professor with tenure in 1987, at the age of 29.
Mankiw did important work on menu costs, which are a source of price stickiness. His paper "Small Menu Costs and Large Business Cycles: A Macroeconomic Model of Monopoly", which was published in the Quarterly Journal of Economics in 1985, compared a firm's private incentive to adjust prices after a shock to nominal aggregate demand with that decision's social welfare implications. The paper concluded that expansion in aggregate demand may either increase welfare or reduce it, but the welfare reduction is never greater than the menu cost. A contraction in aggregate demand, however, reduces welfare, possibly in an amount much larger than the menu cost. In other words, from a social planner's point of view, prices may be stuck too high but never too low. The paper was a building block for work by Olivier Blanchard and Nobuhiro Kiyotaki on aggregate-demand externalities and for work by Laurence M. Ball and David Romer on the interaction between real and nominal rigidities.
In 2002, Mankiw and Ricardo Reis proposed an alternative to the widely used New Keynesian Phillips curve that is based on the slow diffusion of information among the population of price setters. Their sticky-information model displays three related properties that are more consistent with accepted views about the effects of monetary policy. Firstly, disinflations are always contractionary, though announced disinflations are less contractionary than surprise ones. Secondly, monetary policy shocks have their maximum impact on inflation with a substantial delay. Thirdly, the change in inflation is positively correlated with the level of economic activity.
A related 2003 article by Mankiw, Reis, and Justin Wolfers analyzed data on inflation expectations and documented substantial disagreement among both consumers and professional economists about expected future inflation. That disagreement is shown to vary over time and to move with inflation, the absolute value of the change in inflation, and relative price variability. The paper argues that a satisfactory model of economic dynamics must address those business-cycle moments. Noting that most macroeconomic models do not endogenously generate disagreement, they show that a sticky-information model broadly matches many of those facts. The model is also consistent with other observed departures of inflation expectations from full rationality, including autocorrelated forecast errors and insufficient sensitivity to recent macroeconomic news.
Mankiw has also written several papers on the empirical analysis of consumer behavior, often emphasizing the role of heterogeneity. An article with John Campbell in 1989 found that the aggregate consumption data are best described by a model in which about half of consumers obey the permanent income hypothesis, and half simply consume their current income, which is sometimes called hand-to-mouth behavior. An article with Stephen Zeldes in 1991 found the consumption of stockholders to covary more strongly with the stock market than the consumption of nonstockholders did. That provided a possible explanation for the equity premium puzzle.
Mankiw's most widely cited paper is "A Contribution to the Empirics of Economic Growth", which was coauthored with David Romer and David Weil and published in the Quarterly Journal of Economics in 1992. The paper argues that the Solow growth model, once augmented to include a role for human capital, explains reasonably well international differences in standards of living. According to Google Scholar, it has been cited more than 25,000 times, which makes it one of the most cited articles in the field of economics.
Beyond his work in macroeconomics, Mankiw has also written several other notable papers. In 1989, he coauthored a paper with David Weil that examined the demographic determinants of housing demand and predicted that the aging of baby boomers would undermine the housing market in the 1990s and 2000s. In 1986, he coauthored a paper with Michael Whinston in microeconomic theory that showed that under imperfect competition, entry tends to be excessive in homogeneous-goods industries because entrants fail to take into account the business-stealing externality that they impose on their rivals. When goods are heterogeneous, it is ambiguous whether free entry produces too many or too few firms because of offsetting business-stealing and product-variety externalities. (This paper coined the term "business-stealing effect," now widely used in the literature on monopolistic competition.)
Mankiw has written two popular college-level textbooks: the intermediate-level Macroeconomics (now in its 12th edition, published by Worth Publishers) and the more famous introductory text Principles of Economics (now in its 11th edition, published by Cengage). Subsets of chapters from the latter book are sold under the titles Principles of Microeconomics, Principles of Macroeconomics, Brief Principles of Macroeconomics, and Essentials of Economics. The book was signed for a record advance. The New York Times reported in 1995 that Mankiw "was offered a $1.4 million advance by Harcourt Brace in Fort Worth to write a basic economics textbook. That's about three times as big as any other in the college textbook market and rivals those of all but a few celebrity authors."