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Martin J. BAILEY

Martin J. BAILEY, economist in the field of Fiscal Theory and Policy; Economic Fluc tuations, Forecasting and Inflation; Theory of Social Choice. Phi Beta Kappa, 1951; Beta Gamma Sigma, 1971; Ford Foundation Faculty Research Fellow, 1960-1961.


  • Bachelor of Arts University of California, Los Angeles, Calif., United States of America, 1951. Master of Arts, Doctor of Philosophy Johns Hopkins University, 1953, 1956.


  • Visiting Research Professor of Economics, University Catolica de Chile, Santiago, 1956-1957. Staff Economics, United States Cabinet Committee Price Stability for Economics Growth, 1959. Assistant Professor, Association Professor, Professor of Economics, University Chicago, 1955-1959, 1959-1964, 1964-1965.

    Economics, Acting Association Director, Economics Political Studies Division, United States Institute, Institution Defense Analyses, 1963-1964, 1964-1967. Visiting Fellow, Graduate School Industrial Administration, CarnegieMellon University, 1973^1. Professor of Economics, University Maryland, since 1974.

    Economics Adviser, Undersecretary Economics Affairs, United States State Department, since 1983. Advisory Board, Journal of Money, Credit and Banking.

Major achievements

  • Phi Beta Kappa, 1951. Beta Gamma Sigma, 1971. Ford Foundation Faculty Research Fellow, 1960-1961.


Overall my work has ranged over several fields, including economic theory (micro and macro), public finance and social choice. My early work was divided about equally between macro-theory and public finance. In macro-theory, my papers on inflationary finance and on the saving function were followed by a graduate textbook and treatise, National Income and the Price Level.

Its innovations, still of some topical relevance, included the development of a Fisherian approach to inflation within the IS-LM framework, and the development of what would now be called a rational expectations approach to multipliers and the fiscal impact. In public finance, I published papers on benefit-cost analysis, tax analysis, and the theory of social choice. These interests, and their specialised applications, continue to the present. From time to time, I have published papers on various aspects of income taxation, covering both incidence and incentive effects.

My work on benefitcost analysis started with the rate-ofreturn issue in capital budgeting, and has since ranged into particular fields of application such as defence, health and safety. Starting in the early 1960s, I became interested in government service, first in the Defense Department, later at the Treasury Department (in tax policy), and currently at the State Department. This service alternated with my regular academic career.

My defence work led me away from the fundamentals of project evaluation to questions of incentive structure in government, a field closely related to my recent work on externalities and optimal local government.

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