Robert Pindyck

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Robert Pindyck
BornJanuary 5, 1945
CitizenshipAmerican
Education Massachusetts Institute of Technology (BS, MS, PhD)
OccupationEconomist
Employer Massachusetts Institute of Technology

Robert Stephen Pindyck ( /ˈpɪndaɪk/ PIN-dyke; born January 5, 1945) is an American economist, Bank of Tokyo-Mitsubishi Professor of Economics and Finance at Sloan School of Management at Massachusetts Institute of Technology. He is also a research associate with the National Bureau of Economic Research and a Fellow of the Econometric Society. He has also been a visiting professor at Tel-Aviv University, Harvard University, and Columbia University.

Contents

Pindyck's teaching and research focuses on market structure, financial economics, environmental, resource, and energy economics, the role of uncertainty on investment decisions and policy formulation, and economic policy generally.

Education

Pindyck grew up in Mamaroneck, New York, and in 1962 graduated from Mamaroneck High School. He then went to M.I.T. where he did his undergraduate work, majoring in physics and electrical engineering, and received his bachelor's degree in 1966.

He went on to do his graduate work at M.I.T., where he completed a Master's degree in electrical engineering in 1967 and a PhD in economics in 1971. [1] His PhD dissertation dealt with the application of optimal control theory to the design of monetary and fiscal policy for macroeconomic stabilization. [2] [3] [4]

After finishing his PhD, Pindyck joined the faculty at the M.I.T. Sloan School of Management, where he has taught since 1971.

Research

During the 1970s, Pindyck's research interests turned to microeconomics. His early work focused on empirical studies of oil and natural gas markets and the effects of price regulation, [5] [6] and he wrote a book and several articles on world energy demand. [7] [8] [9] He also studied the behavior and impact of cartels, especially in natural resource markets. [10] [11] [12] He published several theoretical studies of resource exploration and depletion, [13] including the role of uncertainty. [14] [15] Later, Pindyck studied futures markets and the behavior of commodity futures and spot prices. [16] [17] [18] [19] [20] This included a recent study that showed how inventories link futures and spot prices, so that futures price speculation can have very limited (if any) impact on spot prices. [21]

Much of Pindyck's work addressed the role and implications of uncertainty for market behavior, pricing, and production, and how various kinds of uncertainty affect irreversible investment decisions. With uncertainty, firms have options to make capital investments, and much of a firm's value can be attributed to the value of these options. [22] [23] Pindyck has shown how this option value depends on the nature of the uncertainty, and how it can affect investment decisions and market structure. [24] [25] [26] [27] [28] [29] He has also shown how this concept of option value can also be applied to environmental policy, where there is uncertainty over potential (irreversibly) environmental damage from pollution. [30] [31] [32]

Much of Pindyck's work in environmental economics has focused on the economics of climate change. He has shown how uncertainty over future damages from climate change can affect policy decisions, such as the design of a carbon tax. [33] [34] [35] Related to this, he has argued that large "Integrated Assessment Models" are of limited usefulness when applied to climate forecasting and the design of climate policy. [36] [37] In 2021, he completed a book on climate change, titled Climate Future: Averting and Adapting to Climate Change (Oxford University Press). [38] The book explains what we know and don't know about climate change, argues that despite our best intentions and efforts temperatures are likely to rise substantially over the coming decades, and shows how forms of adaptation can be used to reduce the impact of warming.

Pindyck's most recent research has been related to how government policy can address potential global catastrophic events, such as major pandemics, nuclear or bio-terrorism, or a climate catastrophe. His work has shown how traditional cost-benefit analysis fails when applied to policies to avert potential catastrophes, [39] and how the value of lost lives can be taken into account in analyses of catastrophic events. [40]

Publications

Pindyck is also the co-author of three textbooks. With Avinash Dixit, he wrote Investment Under Uncertainty (Princeton University Press, 1994; ISBN   0691034109), the first textbook exclusively about the real options approach to investments, and described as “a born-classic” [41] in view of its importance to the theory. With Daniel L. Rubinfeld he is the author of two widely used textbooks, Microeconomics (9th Edition, Pearson, 2018; ISBN   9780134184241), and Econometric Models and Economic Forecasts (4th Edition, McGraw-Hill, 1998; ISBN   0079132928).

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References

  1. ↑ http://web.mit.edu/rpindyck/www/resume.pdf [ bare URL PDF ]
  2. ↑ Pindyck, Robert S. (May 1973). "Optimal Policies for Economic Stabilization". Econometrica. 41 (3): 529–560. doi:10.2307/1913374. ISSN   0012-9682. JSTOR   1913374.
  3. ↑ Pindyck, Robert (1973). Optimal Planning for Economic Stabilization. North-Holland Publishing Company.
  4. ↑ Pindyck, Robert S.; Roberts, Steven M. (October 1976). "Instruments, Intermediate Targets, and Monetary Controllability". International Economic Review. 17 (3): 627. doi:10.2307/2525793. ISSN   0020-6598. JSTOR   2525793.
  5. ↑ Pindyck, Robert, and Paul MacAvoy (1975). The Economics of the Natural Gas Shortage: 1960-1980. North-Holland Publishing Company.{{cite book}}: CS1 maint: multiple names: authors list (link)
  6. ↑ Pindyck, Robert S. (1974). "The Regulatory Implications of Three Alternative Econometric Supply Models of Natural Gas". The Bell Journal of Economics and Management Science. 5 (2): 633–645. doi:10.2307/3003125. ISSN   0005-8556. JSTOR   3003125.
  7. ↑ Pindyck, Robert (1979). The Structure of World Energy Demand. M.I.T. Press.
  8. ↑ Pindyck, Robert S. (May 1979). "Interfuel Substitution and the Industrial Demand for Energy: An International Comparison". The Review of Economics and Statistics. 61 (2): 169–179. doi:10.2307/1924584. hdl: 1721.1/31258 . ISSN   0034-6535. JSTOR   1924584.
  9. ↑ Pindyck, Robert S. (January 1980). "International comparisons of the residential demand for energy". European Economic Review. 13 (1): 1–24. doi:10.1016/0014-2921(80)90044-6. hdl: 1721.1/31264 . ISSN   0014-2921.
  10. ↑ Pindyck, Robert S. (April 1978). "Gains to Producers from the Cartelization of Exhaustible Resources". The Review of Economics and Statistics. 60 (2): 238–251. doi:10.2307/1924977. hdl: 1721.1/27836 . ISSN   0034-6535. JSTOR   1924977.
  11. ↑ Pindyck, Robert S. (1977). "Cartel Pricing and the Structure of the World Bauxite Market". The Bell Journal of Economics. 8 (2): 343–360. doi:10.2307/3003291. hdl: 1721.1/31244 . ISSN   0361-915X. JSTOR   3003291.
  12. ↑ Hnyilicza, Esteban; Pindyck, Robert S. (August 1976). "Pricing policies for a two-part exhaustible resource cartel". European Economic Review. 8 (2): 139–154. doi:10.1016/0014-2921(76)90009-x. ISSN   0014-2921.
  13. ↑ Pindyck, Robert S. (October 1978). "The Optimal Exploration and Production of Nonrenewable Resources". Journal of Political Economy. 86 (5): 841–861. doi:10.1086/260714. ISSN   0022-3808. S2CID   153378297.
  14. ↑ Pindyck, Robert S. (December 1980). "Uncertainty and Exhaustible Resource Markets". Journal of Political Economy. 88 (6): 1203–1225. doi:10.1086/260935. ISSN   0022-3808. S2CID   9401352.
  15. ↑ Pindyck, Robert S. (April 1984). "Uncertainty in the Theory of Renewable Resource Markets". The Review of Economic Studies. 51 (2): 289–303. doi:10.2307/2297693. ISSN   0034-6527. JSTOR   2297693.
  16. ↑ Pindyck, Robert S. (May 1993). "The Present Value Model of Rational Commodity Pricing". The Economic Journal. 103 (418): 511–530. doi:10.2307/2234529. hdl: 1721.1/2378 . ISSN   0013-0133. JSTOR   2234529. S2CID   5245800.
  17. ↑ Pindyck, Robert S. (1994). "Inventories and the Short-Run Dynamics of Commodity Prices". The RAND Journal of Economics. 25 (1): 141–159. hdl: 1721.1/2297 . ISSN   0741-6261. JSTOR   2555858. S2CID   12913470.
  18. ↑ Pindyck, Robert S.; Rotemberg, Julio J. (December 1990). "The Excess Co-Movement of Commodity Prices". The Economic Journal. 100 (403): 1173. doi:10.2307/2233966. hdl: 1721.1/2193 . ISSN   0013-0133. JSTOR   2233966. S2CID   1108056.
  19. ↑ Pindyck, Robert S. (2004). "Volatility and commodity price dynamics". Journal of Futures Markets. 24 (11): 1029–1047. doi:10.1002/fut.20120. hdl: 1721.1/44979 . ISSN   0270-7314.
  20. ↑ Pindyck, Robert S. (2001-07-01). "The Dynamics of Commodity Spot and Futures Markets: A Primer". The Energy Journal. 22 (3): 1–29. doi:10.5547/issn0195-6574-ej-vol22-no3-1. ISSN   0195-6574. S2CID   3201269.
  21. ↑ Knittel, Christopher R.; Pindyck, Robert S. (2016-04-01). "The Simple Economics of Commodity Price Speculation". American Economic Journal: Macroeconomics. 8 (2): 85–110. doi:10.1257/mac.20140033. hdl: 1721.1/108833 . ISSN   1945-7707. S2CID   8557775.
  22. ↑ Pindyck, Robert (December 1988). "Irreversible Investment, Capacity Choice, and the Value of the Firm". American Economic Review.
  23. ↑ Pindyck, Robert (September 1991). "Irreversibility, Uncertainty, and Investment". Journal of Economic Literature.
  24. ↑ Majd, Saman; Pindyck, Robert S. (March 1987). "Time to build, option value, and investment decisions". Journal of Financial Economics. 18 (1): 7–27. doi:10.1016/0304-405x(87)90059-6. ISSN   0304-405X.
  25. ↑ Pindyck, Robert (March 1993). "A Note on Competitive Investment under Uncertainty". American Economic Review.
  26. ↑ Pindyck, Robert S. (August 1993). "Investments of uncertain cost". Journal of Financial Economics. 34 (1): 53–76. doi:10.1016/0304-405x(93)90040-i. hdl: 1721.1/50176 . ISSN   0304-405X. S2CID   6518142.
  27. ↑ Pindyck, Robert S.; Solimano, Andrés (January 1993). "Economic Instability and Aggregate Investment". NBER Macroeconomics Annual. 8: 259–303. doi:10.1086/654223. hdl: 1721.1/2462 . ISSN   0889-3365. S2CID   6110809.
  28. ↑ Caballero, Ricardo J.; Pindyck, Robert S. (August 1996). "Uncertainty, Investment, and Industry Evolution". International Economic Review. 37 (3): 641. doi:10.2307/2527445. hdl: 1721.1/2433 . ISSN   0020-6598. JSTOR   2527445. S2CID   13859679.
  29. ↑ Pindyck, Robert S. (2007-01-01). "Mandatory Unbundling and Irreversible Investment in Telecom Networks". Review of Network Economics. 6 (3). doi: 10.2202/1446-9022.1121 . ISSN   1446-9022. S2CID   201100689.
  30. ↑ Pindyck, Robert S (July 2000). "Irreversibilities and the timing of environmental policy". Resource and Energy Economics. 22 (3): 233–259. Bibcode:2000REEco..22..233P. doi:10.1016/s0928-7655(00)00033-6. hdl: 1721.1/2737 . ISSN   0928-7655.
  31. ↑ Pindyck, Robert S. (August 2002). "Optimal timing problems in environmental economics". Journal of Economic Dynamics and Control. 26 (9–10): 1677–1697. doi:10.1016/s0165-1889(01)00090-2. hdl: 1721.1/44973 . ISSN   0165-1889.
  32. ↑ Pindyck, Robert S. (2007-01-01). "Uncertainty in Environmental Economics". Review of Environmental Economics and Policy. 1 (1): 45–65. doi:10.1093/reep/rem002. hdl: 1721.1/45063 . ISSN   1750-6816.
  33. ↑ Pindyck, Robert S. (May 2012). "Uncertain outcomes and climate change policy". Journal of Environmental Economics and Management. 63 (3): 289–303. Bibcode:2012JEEM...63..289P. doi:10.1016/j.jeem.2011.12.001. hdl: 1721.1/66946 . ISSN   0095-0696.
  34. ↑ Pindyck, Robert S. (2017-05-30). "Coase Lecture-Taxes, Targets and the Social Cost of Carbon". Economica. 84 (335): 345–364. doi: 10.1111/ecca.12243 . ISSN   0013-0427.
  35. ↑ Pindyck, Robert (March 2021). "What We Know and Don't Know about Climate Change, and Implications for Policy". Environmental and Energy Policy and the Economy, University of Chicago Press. 2.
  36. ↑ Pindyck, Robert (September 2013). "Climate Change Policy: What Do the Models Tell Us?" (PDF). Journal of Economic Literature. 51 (3): 860–872. doi:10.1257/jel.51.3.860. S2CID   10182480.
  37. ↑ Pindyck, Robert S. (2017-01-01). "The Use and Misuse of Models for Climate Policy". Review of Environmental Economics and Policy. 11 (1): 100–114. doi:10.1093/reep/rew012. hdl: 1721.1/120585 . ISSN   1750-6816.
  38. ↑ Pindyck, Robert (2022). Climate Future: Averting and Adapting to Climate Change. New York: Oxford University Press.
  39. ↑ Martin, Ian W.R. and Robert Pindyck (October 2015). "Averting Catastrophes: The Strange Economics of Scylla and Charybdis". American Economic Review. 105 (10): 2947–2985. doi:10.1257/aer.20140806. hdl: 1721.1/109147 . S2CID   14778466.
  40. ↑ Martin, Ian W.R. and Robert Pindyck (February 2021). "Welfare Costs of Catastrophes: Lost Consumption and Lost Lives". The Economic Journal. 131 (634): 946–969. doi:10.1093/ej/ueaa099. hdl: 1721.1/133700 .
  41. ↑ "Real Options Selected Bibliography: The Dixit & Pindyck Book".
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