He moves to Washington in March 1992 to join the Clinton Administration, first as a member, and then as Chairman of the Council of Economic Advisers, in which capacity he also serves as a member of the cabinet.
An interlude at the Institute of Development Studies in Nairobi (Kenya) in the summer of 1969 helps to shape his life-long interest in development, and also greatly influences his work on the economics of information.
At MIT, he has several Nobel Prize winners as professors, and his first paper on economics is jointly co-authored by George Akerlof, whom he later shares the Nobel Prize with.
Joseph Stiglitz, George Akerlof and Michael Spence share the 2001 economics prize “for their analyses of markets with asymmetric information”. Asymmetric information means that people on one side have better information than those on the other: Borrowers know more than lenders about their repayment prospects, and managers know more than shareholders about a firm’s profitability.
Stiglitz goes on to teach at Princeton, Oxford, and Stanford.
Stiglitz has been politically active for a number of causes. In the 1980s, he helps secure a better deal for the Seneca Indians in New York state who had been cheated out of the equivalent of more than $1 billion through an unfair lease. He opposes the war in Iraq, which he estimates at costing the economy more than $3 trillion, compared to $100 billion global spend on aid. He has been a strong advocate for a “fairer globalization” with rules which would treat developing countries more fairly.
After that, he goes on to teach at Yale. There he continues his work on economic dynamics and begins his research on the economics of uncertainty, which leads to his work on the economics of information.
He attends local schools where along with the usual academic lessons he learns two trades – printing and being an electrician.
He spends the academic year 1965–66 at Cambridge University, UK, where he first explores the economics of information.
He later becomes senior vice president and chief economist of the World Bank. He criticizes the International Monetary Fund (IMF) using its economic power to force developing countries to adopt certain financial policies, which generated instability and undermined democratic processes. The US Treasury puts great pressure on the World Bank to silence his criticism. Under these circumstances, he cannot maintain his independence and express his views openly. So he leaves the World Bank in 2000.
Joseph Eugene Stiglitz is born on February 9, 1943, in Gary, Indiana.
He is University Professor and chair of the Committee on Global Thought at Columbia University.
From 1960–63 he studies at Amherst College in Massachusetts. Initially, he majors in physics but later swaps to economics because of his desire to apply mathematics to socially important problems. Being concerned with segregation and civil rights, he becomes politically active and gets elected president of the student councils. One of his campaigns is to abolish fraternities because they are socially divisive. He goes on to MIT without a degree, but he is awarded his Bachelor in 1964.
He returns to MIT to gain his PhD in 1967 and takes up a one-year appointment as an assistant professor.