Robert Z Aliber

Much of my research has centered on the financial relationships among countries and the determinants of the flows of money, securities, goods, and services among countries. Twenty five years ago I developed the "Andy Warhol Theory of Economic Growth"—every country experiences fifteen or twenty years of rapid growth during the early period of industrialization. Financial capital flows toward countries as their rates of economic growth accelerate because investment spending is high relative to their domestic saving. When their growth rates slow, financial capital flows from these countries because their investment spending has declined relative to their domestic spending. Changes in the anticipated inflation rates also have a major impact on the direction and scope of cross-border flows of money. For most of the period since World War I the U.S. external payments position has evolved to provide consistency of the international accounts for all other countries as a group. During periods when many foreign countries experienced rapid economic growth, these countries developed large trade deficits that meant that the United States then developed the counterpart large trade surpluses. One major policy issue centers on the type of exchange rate arrangements that best accommodates the divergent interests of the United States and its major trading partners—for most of the last 200 years the U.S. dollar and other national currencies have been pegged, initially in the context of the gold standard and subsequently in the context of the Bretton Woods system of adjustable parities. The major currencies have been floating for the last 30 years. In the 1950s and the 1960s the proponents of floating exchange rates advanced a number of claims about the advantages of such an arrangement, including gradualism in terms of the scope and pace of movements in exchange rates and greater independence for national monetary policies. The last 30 years have been the most tumultuous in monetary history; the pace and scope of movements in exchange rates have been larger than ever before, and "overshooting" and "undershooting" (measured as the difference between the market exchange rates and the exchange rates projected from the differences in national inflation rates) also have been larger. There have been four major asset price bubbles—first in Japan and at more or less the same time, in Finland, Norway and Sweden, and then in Bangkok and the neighboring countries in the mid-1990s, and then in the United States in the late 1990s. The national banking systems in 40 or 50 countries have collapsed, after loan losses that in some countries amounted to 20 to 30 percent of their GDPs.
 

Education

B.A. (1952)Williams College; B.A. (1954) Cambridge University; M.A. (1957) Cambridge University; Ph.D. (1962) Yale University
 

Subjects

International Economics,International Finance
 

Experience

• Associate Professor, then Professor, of International Economics and Finance, Graduate School of Business, University of Chicago, 1964-present
• Chair, Committee on Public Policy, University of Chicago, 1978-81
• Senior Economic Advisor, Office of Program Coordination, Agency for International Development, U.S. Department of State, 1964-65
• Staff Economist, Committee for Economic Development, Washington, D.C., 1961-64
• Staff Economist, Commission on Money and Credit, New York, N.Y., 1959-61

Expertise

International finance; macro international economics; asset valuation in the global context; exchange rate arrangements; multinational firms; the international financial system; asset price bubbles