Weitzman, Martin L. 1942
Overview
Works:  139 works in 294 publications in 5 languages and 2,514 library holdings 

Roles:  Author, Contributor, Editor, Speaker, Honoree 
Classifications:  HD5710, 339.5 
Publication Timeline
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Most widely held works about
Martin L Weitzman
 Wirtschaftsordnungstheoretische Implikationen der WeitzmanRegel : ein Beitrag zur Diskussion über tariflich vereinbarte LohnBeschäftigtenzahlKombinationen by Axel Nitschke Axel Nitschke( Book )
 Weitzman's share economy the answer to stagflation? by Doreen Bekker Doreen Bekker( Book )
 Beschäftigungsstabilisierung durch das Beteiligungssystem? : eine Auseinandersetzung mit dem WeitzmanPlan by Markus Eder Markus Eder( Book )
Most widely held works by
Martin L Weitzman
The share economy : conquering stagflation
by
Martin L Weitzman(
Book
)
15 editions published between 1984 and 1987 in 3 languages and held by 1,052 WorldCat member libraries worldwide
15 editions published between 1984 and 1987 in 3 languages and held by 1,052 WorldCat member libraries worldwide
Income, wealth, and the maximum principle
by
Martin L Weitzman(
)
11 editions published between 2003 and 2007 in English and held by 572 WorldCat member libraries worldwide
Annotation This compact and original exposition of optimal control theory and applications is designed for graduate and advanced undergraduate students in economics. It presents a new elementary yet rigorous proof of the maximum principle and a new way of applying the principle that will enable students to solve any onedimensional problem routinely. Its unified framework illuminates many famous economic examples and models.This work also emphasizes the connection between optimal control theory and the classical themes of capital theory. It offers a fresh approach to fundamental questions such as: What is income? How should it be measured? What is its relation to wealth?The book will be valuable to students who want to formulate and solve dynamic allocation problems. It will also be of interest to any economist who wants to understand results of the latest research on the relationship between comprehensive income accounting and wealth or welfare
11 editions published between 2003 and 2007 in English and held by 572 WorldCat member libraries worldwide
Annotation This compact and original exposition of optimal control theory and applications is designed for graduate and advanced undergraduate students in economics. It presents a new elementary yet rigorous proof of the maximum principle and a new way of applying the principle that will enable students to solve any onedimensional problem routinely. Its unified framework illuminates many famous economic examples and models.This work also emphasizes the connection between optimal control theory and the classical themes of capital theory. It offers a fresh approach to fundamental questions such as: What is income? How should it be measured? What is its relation to wealth?The book will be valuable to students who want to formulate and solve dynamic allocation problems. It will also be of interest to any economist who wants to understand results of the latest research on the relationship between comprehensive income accounting and wealth or welfare
A contribution to the theory of welfare comparisons
by
Martin L Weitzman(
Book
)
14 editions published in 1999 in English and held by 100 WorldCat member libraries worldwide
Abstract: Using only information based on current directlyobservable market behavior, the paper shows how to make rigorous dynamic welfare comparisons among economies or economic situations having arbitrarilydifferent endowments and technologies, but sharing a common dynamic preference ordering. The correct answers to seemingly complicated questions, which intrinsically involve comparing wealthlike measures of dynamic wellbeing, can be translated isomorphically into a simpleminded story told in the familiar language of oldfashioned static consumerwelfare theory
14 editions published in 1999 in English and held by 100 WorldCat member libraries worldwide
Abstract: Using only information based on current directlyobservable market behavior, the paper shows how to make rigorous dynamic welfare comparisons among economies or economic situations having arbitrarilydifferent endowments and technologies, but sharing a common dynamic preference ordering. The correct answers to seemingly complicated questions, which intrinsically involve comparing wealthlike measures of dynamic wellbeing, can be translated isomorphically into a simpleminded story told in the familiar language of oldfashioned static consumerwelfare theory
L'économie de partage : vaincre la stagflation
by
Martin L Weitzman(
Book
)
3 editions published in 1986 in French and held by 54 WorldCat member libraries worldwide
3 editions published in 1986 in French and held by 54 WorldCat member libraries worldwide
Das Beteiligungsmodell : Vollbeschäftigung durch flexible Löhne
by
Martin L Weitzman(
Book
)
2 editions published in 1987 in German and held by 47 WorldCat member libraries worldwide
2 editions published in 1987 in German and held by 47 WorldCat member libraries worldwide
Structural uncertainty and the value of statistical life in the economics of catastrophic climate change
by
Martin L Weitzman(
)
4 editions published in 2007 in English and held by 44 WorldCat member libraries worldwide
Using climate change as a prototype motivating example, this paper analyzes the implications of structural uncertainty for the economics of lowprobability highimpact catastrophes. The paper shows that having an uncertain multiplicative parameter, which scales or amplifies exogenous shocks and is updated by Bayesian learning, induces a critical "tail fattening" of posteriorpredictive distributions. These fattened tails can have strong implications for situations (like climate change) where a catastrophe is theoretically possible because prior knowledge cannot place sufficiently narrow bounds on overall damages. The essence of the problem is the difficulty of learning extremeimpact tail behavior from finite data alone. At least potentially, the influence on costbenefit analysis of fattailed uncertainty about the scale of damages  coupled with a high value of statistical life  can outweigh the influence of discounting or anything else
4 editions published in 2007 in English and held by 44 WorldCat member libraries worldwide
Using climate change as a prototype motivating example, this paper analyzes the implications of structural uncertainty for the economics of lowprobability highimpact catastrophes. The paper shows that having an uncertain multiplicative parameter, which scales or amplifies exogenous shocks and is updated by Bayesian learning, induces a critical "tail fattening" of posteriorpredictive distributions. These fattened tails can have strong implications for situations (like climate change) where a catastrophe is theoretically possible because prior knowledge cannot place sufficiently narrow bounds on overall damages. The essence of the problem is the difficulty of learning extremeimpact tail behavior from finite data alone. At least potentially, the influence on costbenefit analysis of fattailed uncertainty about the scale of damages  coupled with a high value of statistical life  can outweigh the influence of discounting or anything else
Bonuses and employment in Japan
by
Richard B Freeman(
Book
)
7 editions published between 1986 and 1989 in English and held by 40 WorldCat member libraries worldwide
Japan has a relatively unique system of labor compensation. Most Japanese workers are paid large bonuses twice a year. This paper examines the cyclical movement of bonuses compared with wages and the relation of bonuses to employment in the context of the Weitzman "share economy." The paper makes three basic points:(1) The Japanese bonus is much more procyclical than Japanese base wages, but not as cyclically variable as profits. Bonuses can be interpreted as containing a quantitatively significant revenue or profitsharing component.(2) Bonuses have quite different employment consequences than do base wages. Even after controlling for other economic factors, bonuses are positively related to employment, whereas base wages are negatively related to employment.(3) The bonus system of paying workers, while far from explaining the whole macroeconomic story in Japan, seems to play a role in helping to stabilize Japanese unemployment at comparatively low levels
7 editions published between 1986 and 1989 in English and held by 40 WorldCat member libraries worldwide
Japan has a relatively unique system of labor compensation. Most Japanese workers are paid large bonuses twice a year. This paper examines the cyclical movement of bonuses compared with wages and the relation of bonuses to employment in the context of the Weitzman "share economy." The paper makes three basic points:(1) The Japanese bonus is much more procyclical than Japanese base wages, but not as cyclically variable as profits. Bonuses can be interpreted as containing a quantitatively significant revenue or profitsharing component.(2) Bonuses have quite different employment consequences than do base wages. Even after controlling for other economic factors, bonuses are positively related to employment, whereas base wages are negatively related to employment.(3) The bonus system of paying workers, while far from explaining the whole macroeconomic story in Japan, seems to play a role in helping to stabilize Japanese unemployment at comparatively low levels
Patterns of behavior in biodiversity preservation
by
Andrew Metrick(
Book
)
6 editions published in 1994 in English and held by 37 WorldCat member libraries worldwide
6 editions published in 1994 in English and held by 37 WorldCat member libraries worldwide
GHG targets as insurance against catastrophic climate damages
by
Martin L Weitzman(
)
6 editions published in 2010 in English and held by 36 WorldCat member libraries worldwide
A critical issue in climatechange economics is the specification of the socalled "damages function" and its interaction with the unknown uncertainty of catastrophic outcomes. This paper asks how much we might be misled by our economic assessment of climate change when we employ a conventional quadratic damages function and/or a thintailed probability distribution for extreme temperatures. The paper gives some numerical examples of the indirect value of various GHG concentration targets as insurance against catastrophic climatechange temperatures and damages. These numerical examples suggest that we might be underestimating considerably the welfare losses from uncertainty by using a quadratic damages function and/or a thintailed temperature distribution. In these examples, the primary reason for keeping GHG levels down is to insure against hightemperature catastrophic climate risks
6 editions published in 2010 in English and held by 36 WorldCat member libraries worldwide
A critical issue in climatechange economics is the specification of the socalled "damages function" and its interaction with the unknown uncertainty of catastrophic outcomes. This paper asks how much we might be misled by our economic assessment of climate change when we employ a conventional quadratic damages function and/or a thintailed probability distribution for extreme temperatures. The paper gives some numerical examples of the indirect value of various GHG concentration targets as insurance against catastrophic climatechange temperatures and damages. These numerical examples suggest that we might be underestimating considerably the welfare losses from uncertainty by using a quadratic damages function and/or a thintailed temperature distribution. In these examples, the primary reason for keeping GHG levels down is to insure against hightemperature catastrophic climate risks
Chinese township village enterprises as vaguely defined cooperatives
by
Martin L Weitzman(
Book
)
9 editions published in 1993 in English and held by 32 WorldCat member libraries worldwide
Property rights, reform, economic, transition
9 editions published in 1993 in English and held by 32 WorldCat member libraries worldwide
Property rights, reform, economic, transition
Rare disasters, tailhedged investments, and riskadjusted discount rates
by
Martin L Weitzman(
)
4 editions published in 2012 in English and held by 32 WorldCat member libraries worldwide
What is the best way to incorporate a risk premium into the discount rate schedule for a real investment project with uncertain payoffs? The standard CAPM formula suggests a betaweighted average of the return on a safe investment and the mean return on an economywide representative risky investment. Suppose, though, that the project constitutes a tailhedged investment, meaning that it is expected to yield positive payoffs in catastrophic states of nature. Then the model of this paper suggests that what should be combined in a weighted average are not the two discount rates, but rather the corresponding two discount factors. This implies an effective discount rate schedule that declines over time from the standard CAPM formula down to the riskfree rate alone. Some simple numerical examples are given. Implications are noted for discounting longterm public investments and calculating the social cost of carbon in climate change
4 editions published in 2012 in English and held by 32 WorldCat member libraries worldwide
What is the best way to incorporate a risk premium into the discount rate schedule for a real investment project with uncertain payoffs? The standard CAPM formula suggests a betaweighted average of the return on a safe investment and the mean return on an economywide representative risky investment. Suppose, though, that the project constitutes a tailhedged investment, meaning that it is expected to yield positive payoffs in catastrophic states of nature. Then the model of this paper suggests that what should be combined in a weighted average are not the two discount rates, but rather the corresponding two discount factors. This implies an effective discount rate schedule that declines over time from the standard CAPM formula down to the riskfree rate alone. Some simple numerical examples are given. Implications are noted for discounting longterm public investments and calculating the social cost of carbon in climate change
The Ramsey Discounting Formula for a hiddenstate stochastic growth process
by
Martin L Weitzman(
)
5 editions published in 2012 in English and held by 32 WorldCat member libraries worldwide
The long term discount rate is critically dependent upon projections of future growth rates that are fuzzier in proportion to the remoteness of the time horizon. This paper models such increasing fuzziness as an evolving hiddenstate stochastic process. The underlying trend growth rate is an unobservable random walk hidden by noisy transitory shocks and recoverable only as a probability distribution via Bayesian updating. A simple expression is derived for the timedeclining Ramsey discount rate. The components of this hiddenstate Ramsey discounting formula are then analyzed, followed by a few remarks about possible implications and applications
5 editions published in 2012 in English and held by 32 WorldCat member libraries worldwide
The long term discount rate is critically dependent upon projections of future growth rates that are fuzzier in proportion to the remoteness of the time horizon. This paper models such increasing fuzziness as an evolving hiddenstate stochastic process. The underlying trend growth rate is an unobservable random walk hidden by noisy transitory shocks and recoverable only as a probability distribution via Bayesian updating. A simple expression is derived for the timedeclining Ramsey discount rate. The components of this hiddenstate Ramsey discounting formula are then analyzed, followed by a few remarks about possible implications and applications
Riskadjusted gamma discounting
by
Martin L Weitzman(
)
7 editions published in 2009 in English and held by 32 WorldCat member libraries worldwide
"It is widely recognized that the economics of distantfuture events, like climate change, is critically dependent upon the choice of a discount rate. Unfortunately, it is unclear how to discount distantfuture events when the future discount rate itself is unknown. In previous work, an analyticallytractable approach called "gamma discounting" was proposed, which gave a declining discount rate schedule as a simple closedform function of time. This paper extends the previous gamma approach by using a Ramsey optimal growth model, combined with uncertainty about future productivity, in order to "risk adjust" all probabilities by marginal utility weights. Some basic numerical examples are given, which suggest that the overall effect of riskadjusted gamma discounting on lowering distantfuture discount rates may be significant. The driving force is a "fear factor" from risk aversion to permanent productivity shocks representing catastrophic future states of the world"National Bureau of Economic Research web site
7 editions published in 2009 in English and held by 32 WorldCat member libraries worldwide
"It is widely recognized that the economics of distantfuture events, like climate change, is critically dependent upon the choice of a discount rate. Unfortunately, it is unclear how to discount distantfuture events when the future discount rate itself is unknown. In previous work, an analyticallytractable approach called "gamma discounting" was proposed, which gave a declining discount rate schedule as a simple closedform function of time. This paper extends the previous gamma approach by using a Ramsey optimal growth model, combined with uncertainty about future productivity, in order to "risk adjust" all probabilities by marginal utility weights. Some basic numerical examples are given, which suggest that the overall effect of riskadjusted gamma discounting on lowering distantfuture discount rates may be significant. The driving force is a "fear factor" from risk aversion to permanent productivity shocks representing catastrophic future states of the world"National Bureau of Economic Research web site
A precautionary tale of uncertain tail fattening
by
Martin L Weitzman(
)
5 editions published in 2012 in English and held by 32 WorldCat member libraries worldwide
Suppose that there is a probability density function for how bad things might get, but that the overall rate at which this probability density function slims down to approach zero in the tail is uncertain. The paper shows how a basic precautionary principle of tail fattening could then apply. The worse is the contemplated damage, the more should a decision maker consider the bad tail to be among the relatively fattertailed possibilities. A rough numerical example is applied to the uncertain tail distribution of climate sensitivity
5 editions published in 2012 in English and held by 32 WorldCat member libraries worldwide
Suppose that there is a probability density function for how bad things might get, but that the overall rate at which this probability density function slims down to approach zero in the tail is uncertain. The paper shows how a basic precautionary principle of tail fattening could then apply. The worse is the contemplated damage, the more should a decision maker consider the bad tail to be among the relatively fattertailed possibilities. A rough numerical example is applied to the uncertain tail distribution of climate sensitivity
A voting architecture for the governance of freedriver externalities, with application to geoengineering
by
Martin L Weitzman(
)
3 editions published in 2012 in English and held by 30 WorldCat member libraries worldwide
Climate change is a global "free rider" problem because significant abatement of greenhouse gases is an expensive public good requiring international cooperation to apportion compliance among states. But it is also a global "free driver" problem because geoengineering the stratosphere with reflective particles to block incoming solar radiation is so cheap that it could essentially be undertaken unilaterally by one state perceiving itself to be in peril. This paper develops the main features of a "free driver" externality in a simple model based on the asymmetric consequences of typeI and typeII errors. I propose a socialchoice decision architecture based on the solution concept of a supermajority voting rule and derive its basic properties. In the model this supermajority voting rule attains the socially optimal cooperative solution, which is a new theoretical result around which the paper is built  National Bureau of Economic Research web site
3 editions published in 2012 in English and held by 30 WorldCat member libraries worldwide
Climate change is a global "free rider" problem because significant abatement of greenhouse gases is an expensive public good requiring international cooperation to apportion compliance among states. But it is also a global "free driver" problem because geoengineering the stratosphere with reflective particles to block incoming solar radiation is so cheap that it could essentially be undertaken unilaterally by one state perceiving itself to be in peril. This paper develops the main features of a "free driver" externality in a simple model based on the asymmetric consequences of typeI and typeII errors. I propose a socialchoice decision architecture based on the solution concept of a supermajority voting rule and derive its basic properties. In the model this supermajority voting rule attains the socially optimal cooperative solution, which is a new theoretical result around which the paper is built  National Bureau of Economic Research web site
Can negotiating a uniform carbon price help to internalize the global warming externality?
by
Martin L Weitzman(
)
2 editions published in 2013 in English and held by 27 WorldCat member libraries worldwide
Thus far, most approaches to resolving the global warming externality have been quantity based. With n different national entities, a meaningful comprehensive treaty involves negotiating n different binding emissions quotas (whether tradeable or not). In postKyoto practice this ndimensional coordination problem has proven intractable and has essentially devolved into sporadic regional volunteerism. By contrast, on the price side there is a natural onedimensional focus on negotiating a single binding carbon price, the proceeds from which are domestically retained. Significantly (and unlike negotiated quantities) the negotiated uniform price on carbon emissions embodies an automatic "countervailing force" against freeriding self interest by incentivizing agents to internalize the externality. The model of this paper indicates an exact sense in which each agent's extra cost from a higher emissions price is counterbalanced by that agent's extra benefit from inducing (via the higher emissions price) all other agents to simultaneously lower their emissions. With some further restrictions, the theoretical model shows that populationweighted majority rule for a uniform price on carbon emissions can come as close to global efficiency as the median marginal benefit (per capita) is close to the mean marginal benefit (per capita)
2 editions published in 2013 in English and held by 27 WorldCat member libraries worldwide
Thus far, most approaches to resolving the global warming externality have been quantity based. With n different national entities, a meaningful comprehensive treaty involves negotiating n different binding emissions quotas (whether tradeable or not). In postKyoto practice this ndimensional coordination problem has proven intractable and has essentially devolved into sporadic regional volunteerism. By contrast, on the price side there is a natural onedimensional focus on negotiating a single binding carbon price, the proceeds from which are domestically retained. Significantly (and unlike negotiated quantities) the negotiated uniform price on carbon emissions embodies an automatic "countervailing force" against freeriding self interest by incentivizing agents to internalize the externality. The model of this paper indicates an exact sense in which each agent's extra cost from a higher emissions price is counterbalanced by that agent's extra benefit from inducing (via the higher emissions price) all other agents to simultaneously lower their emissions. With some further restrictions, the theoretical model shows that populationweighted majority rule for a uniform price on carbon emissions can come as close to global efficiency as the median marginal benefit (per capita) is close to the mean marginal benefit (per capita)
The case for profitsharing
by
Martin L Weitzman(
Book
)
3 editions published in 1986 in English and held by 24 WorldCat member libraries worldwide
3 editions published in 1986 in English and held by 24 WorldCat member libraries worldwide
L'economia della partecipazione : sconfiggere la stagflazione
by
Martin L Weitzman(
Book
)
5 editions published between 1985 and 1986 in Italian and held by 22 WorldCat member libraries worldwide
5 editions published between 1985 and 1986 in Italian and held by 22 WorldCat member libraries worldwide
Icelandic fisheries management : fees versus quotas
by
Thorvaldur Gylfason(
Book
)
5 editions published in 2003 in English and held by 20 WorldCat member libraries worldwide
5 editions published in 2003 in English and held by 20 WorldCat member libraries worldwide
Recombinant growth
by
Martin L Weitzman(
Book
)
7 editions published between 1995 and 1996 in English and held by 11 WorldCat member libraries worldwide
7 editions published between 1995 and 1996 in English and held by 11 WorldCat member libraries worldwide
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Related Identities
 National Bureau of Economic Research
 Harvard Institute of Economic Research
 Metrick, Andrew Author
 World Bank Policy Research Department Environment, Infrastructure, and Agriculture Division
 Freeman, Richard B. (Richard Barry) 1943 Author
 Ramsey, Frank Plumpton 19031930
 Xu, Chenggang Honoree
 Employment Institute
 Gylfason, Thorvaldur 1951 Author
 London School of Economics and Political Science Centre for Economic Performance
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Associated Subjects
Biodiversity conservation Bonus systemMathematical models Business cycles China Consumption (Economics)Econometric models DiscountEconometric models Economic developmentMathematical models Economics EconomicsMathematical models Employment stabilization Environmental protectionEconometric models Expenditures, Public Externalities (Economics)Econometric models Fishery management Iceland Japan Management Mathematical optimization Maximum principles (Mathematics) National incomeAccounting National incomeAccountingEconometric models National incomeAccountingStatistical methods National incomeEconometric models Natural disastersEconomic aspects Producer cooperatives Profitsharing Ramsey, Frank Plumpton, Risk assessment Risk assessmentEconometric models Technological innovationsEconomic aspectsMathematical models Uncertainty Unemployment UnemploymentEffect of inflation on UnemploymentMathematical models United States WealthMathematical models Weitzman, Martin L.,