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About the Author(s)

Mervyn King is a former governor of the Bank of England, a member of the British House of Lords, an NBER research associate, and the Alan Greenspan Professor of Economics at New York University. The annual lecture is named in honor of the NBER's president emeritus.


1. To be precise, the first lines of Robert Browning's poem Home-Thoughts, from Abroad, written in 1845, are: "Oh, to be in England Now that April's there"   Go to ⤴︎
2. J. M. Keynes, The General Theory of Employment, Interest and Money, London: Macmillan and Co., 1936, pp. viii. Go to ⤴︎
3. Exceptions include P. Romer, "The Trouble with Macroeconomics," Stern School of Business, New York University, September 2016.   Go to ⤴︎
4. An interesting discussion of the evolution of growth models may be found in S. Spear and W. Young, "Two-Sector Growth, Optimal Growth, and the Turnpike: Amalgamation and Metamorphosis," Macroeconomics Dynamics, 19(2), 2015, pp. 394-424, and in the classic survey paper, F. Hahn and R.C.O. Matthews "The Theory of Economic Growth: A Survey," Economic Journal, 74(96), 1964, pp. 779-902.   Go to ⤴︎
5. F. Ramsey, "A Mathematical Theory of Saving," Economic Journal, 38(152), 1928, pp. 543-59.   Go to ⤴︎
6. Data for 1900 through 2010 from the Maddison Project at, (2013 version), updated from the IMF WEO Database for April 2017. For the methods used to construct these data, see J. Bolt and J.L. van Zenden, "The Maddison Project: Collaborative Research on Historical National Accounts," The Economic History Review, 67(3), 2014, pp. 627-51.   Go to ⤴︎
7. The computed trend growth rates over 1960-2007 are 2.2 percent a year in the U.S. and 2.3 percent a year in the U.K.   Go to ⤴︎
8. The data in M. King and D. Low, "Measuring the 'World' Real Interest Rate," NBER Working Paper 19887, February 2014, with updates to late 2016 by the authors. The extension to July 2017 relies on the change in the U.S. TIPS real yield published on the U.S. Treasury website, because the Bank of England has temporarily (as of June 2017) suspended publication of real yields while the estimation methodology is reviewed.   Go to ⤴︎
9. For a view of the economist as plumber from the perspective of a microeconomist, see E. Duflo, "The Economist as Plumber," American Economic Review, 107(5), 2017, pp. 1-26.   Go to ⤴︎
10. A similar point is made in R. Reis, "Is Something Really Wrong with Macroeconomics?" London School of Economics, June 2017, mimeo.   Go to ⤴︎
11. "In the longer run what is likely to be the potential cost of a one-size-fits-all monetary policy? That is extremely hard to judge and to be confident. The reason why I think one can say you will never really know is that to have enough experience, enough observations, on business cycles to find out whether they have converged — the IMF Study did not cover very long periods — you need 200 or 300 years of data." Select Committee on Education and Employment Minutes of Evidence, Thursday 27 May 1999, Question 46.   Go to ⤴︎
12. See previous citation.   Go to ⤴︎
13. P. Romer, "The Trouble with Macroeconomics," Stern School of Business, New York University, September 2016.   Go to ⤴︎
14. See the discussion in S. Spear and W. Young (endnote 4). As Reis (endnote 10) has argued, there are recent efforts to introduce elements of non-stationarity into small theoretical models. But they have yet to alter the mainstream of thinking about policy and still rest on the assumption of expected utility maximization.   Go to ⤴︎
15. This issue is explored more fully in forthcoming work by John Kay and myself. Go to ⤴︎
16. An excellent discussion of the development of probability theory may be found in L. Daston, Classical Probability in the Enlightenment, Princeton: Princeton University Press, 1988.   Go to ⤴︎
17. L. Savage, The Foundations of Statistics, New York: John Wiley & Sons, 1954, p. 17. The page reference is to the 1972 second revised edition.   Go to ⤴︎
18. See the discussion of the "grand auction" in M. King, The End of Alchemy, New York: W.W. Norton, 2016.   Go to ⤴︎
19. J. M. Keynes, Treatise on Probability, London: Macmillan and Co., 1921, and F. Knight, Risk, Uncertainty and Profit, Boston: Hart, Schaffner & Marx, Houghton Mifflin Co., 1921.   Go to ⤴︎
20. J. M. Keynes, The General Theory of Employment, Interest and Money, London: Macmillan and Co., 1936, p. 267. Page references are to the Royal Economic Society Collected Writings of John Maynard Keynes.   Go to ⤴︎
21. 21. D. Patinkin, "The Collected Writings of John Maynard Keynes: From the Tract to the General Theory," Economic Journal, 85, June 1975, p. 257.   Go to ⤴︎
22. Many of these arguments about the formation of expectations were expounded at length in the writings of G.L.S. (George) Shackle.   Go to ⤴︎
23. I discuss the issue in chapter eight of M. King (endnote 18).   Go to ⤴︎
24. Quoted in M. Lewis, The Undoing Project, New York: W.W. Norton, 2016, p. 250.   Go to ⤴︎
25. C. Manski, "Survey Measurement of Probabilistic Macroeconomic Expectations: Progress and Promise," NBER Working Paper 23418, forthcoming in NBER Macroeconomics Annual 2017, volume 32, M. Eichenbaum and J. Parker, eds., Chicago: University of Chicago Press.   Go to ⤴︎
26. R. Shiller, "Narrative Economics," American Economic Review Papers and Proceedings, 107, 2017, pp. 967-1004.   Go to ⤴︎
27. A useful survey of turnpike models is given in L. McKenzie, "Turnpikes," American Economic Review, 88(2), 1998, pp. 1-14.   Go to ⤴︎
28. See John Hicks' article on neo-Austrian growth theory: J. Hicks, "A Neo-Austrian Growth Theory," Economic Journal, 80(318), 1970, pp. 257-81.   Go to ⤴︎
29. Tradable and non-tradable inflation rates are compiled as a weighted average of price changes of individual consumption goods. Price changes and item weights are drawn from the Eurostat HICP database ( All items are classified as either tradable or non-tradable, following M. Berka, M. Devereux, and C. Engel, "Real Exchange Rates and Sectoral Productivity in the Eurozone," NBER Working Paper 20510, September 2014, Table 1. The non(tradable) consumption weight is the sum of all item weights that are classified as (non)tradables divided by the sum of all item weights.   Go to ⤴︎
30. It is important to remember the distinction between traded and tradable goods and services. Although the definitions used in any particular empirical application are somewhat arbitrary, and hence the data need to be used with some circumspection, for Figure 7 the share of tradable goods and services in total output in 2014 was 58.5 percent in Germany and 58.4 percent in the U.K., well above their respective shares in actual trade. An attempt to calculate the relative price of tradables versus non-tradables in the U.S. has been made by Rui Mano of the IMF, and the U.S. too has experienced a fall in the relative price of tradables with a similar proportion between the two sectors, as in the U.K. and Germany.   Go to ⤴︎
31. R. Gordon, The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War, Princeton: Princeton University Press, 2016.   Go to ⤴︎
32. L. Summers, "The Age of Secular Stagnation: What It Is and What to Do About It," Foreign Affairs, March/April 2016.   Go to ⤴︎
33. J. Fernald, R. Hall, J. Stock, and M. Watson, 2017, "The Disappointing Recovery of Output after 2009," NBER Working Paper 23543, June 2017, forthcoming in Brookings Papers on Economic Activity. Go to ⤴︎

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