Martin Neil Baily

Background

BAILY, Martin Neil was born in 1945 in Exeter, Devon, England.

Education

Bachelor of Arts, Master of Arts University of Cambridge, Cambridge, United Kingdom 1966, 1970. Master of Arts Simon Fraser University, Canada, 1968. Doctor of Philosophy Massachusetts Institute of Technology, Cambridge, Massachusetts, United States of America, 1972.

Career

He is best known for his work on productivity and competitiveness and for his tenure as a cabinet member during the Clinton Administration. He currently co-chairs the Bipartisan Policy Center"s Financial Regulatory Reform Initiative. Baily was a senior fellow at the Brookings Institution (1979-1989) and subsequently professor of economics at the University of Maryland (1989-1996).

He was vice chairman of a National Academy of Sciences – National Research Council panel investigating the effect of computers on productivity.

Baily co-founded the microeconomics issues of the Brookings Papers on Economic Activity. He was a principal at McKinsey & Company"s Global Institute (1996-1999) and has been a senior adviser to McKinsey since 2002.

He joined the board of The Phoenix Companies in 2005 and is an academic adviser to the Congressional Budget Office and associate editor of the Journal of Economic Perspectives. Baily earned his Doctor of Philosophy in economics at the Massachusetts Institute of Technology (Massachusetts Institute of Technology) and his undergraduate degree at King"s College, Cambridge (United Kingdom), and taught at Massachusetts Institute of Technology and Yale University.

He is the author of numerous books and articles and coauthor with Jacob Kirkegaard of Transforming the European Economy (2004).

Congressional testimony:

On April 18, 2013, Baily testified before the United States House Energy Subcommittee on Commerce, Manufacturing and Trade in a hearing about the Global Investment in American Jobs Acting of 2013 (Human Resources 2052. 113th Congress), which he was in favor of. The legislation would instruct the United States Department of Commerce to research and report to Congress about the possibilities for increasing foreign direct investment in the United States.

Achievements

• Martin Neil Baily has been listed as a noteworthy economist, federal official by Marquis Who's Who.

Views

In early research both the depletion of innovation possibilities and federal regulation were found to have slowed new drug development. Dissertation research then developed the theory of implicit labour contracts, showing that a riskneutral firm will stabilise the wage and vary employment in response to product demand fluctuations when workers maintain a long-term relation with the firm. Subsequent work examined the choice between layoffs and hours variations and demonstrated that the unemployment insurance programme could encourage layoffs.

A third paper showed that workers with seniority would choose a stable rather than a flexible wage, and layoffs rather than hours reductions, thereby shifting the costs of recession to junior workers. Joint research with Tobin developed and tested a framework for analysing the impact of public policies on the natural rate of unemployment. The papers showed the conditions under which such policies will be successful or not and how changes in relative wages can defeat the intent of policy measures. My interests then turned to an alternative to the equilibrium business cycle model: an economy prone to endogenous fluctuations can become more stable as it anticipates the benefits of stabilisation policy.

Theoretical and empirical analysis supported this idea. A 1980 study of the slowdown in aggregate productivity growth argued that the flow of capital services may have declined as a result of structural changes such as the rise in energy costs, economic regulation, and the expansion of foreign trade. Evidence for the hypothesis was found in the decline in the market value of capital, and, in a later paper, in the fact that the slowdown has been most severe in the capital-intensive industries. Current research is examining in detail the pattern of industrial innovation in the 1970s to see if it has slowed relative to earlier periods, or changed its direction.

Membership

He was one of three members of the Council of Economic Advisers from 1994 to 1996, and chairman of the Council from 1999 to 2001.

Interests

• 110 Economic Growth; 130 Economic Fluctuations. 820 Labour Markets, Public Policy.

Connections

Married Vickie Baily. Four children.

Spouse:

Vickie Baily