Fast Breaking Comment by Professor Philip R. Lane

Professor Philip R. Lane answers a few questions about this month's fast breaking paper in the field of Economics & Business.

From •>>February 2003

Field: Economics & Business
Article Title: "The new open economy macroeconomics: a survey"
Authors: Lane, PR
Journal: J INT ECON
Volume: 54
Page: 235-266
Year: AUG 2001
* Trinity Coll, Dept Econ, Dublin 2, Ireland.
* Trinity Coll, Dept Econ, Dublin 2, Ireland.
* CEPR, Dublin 2, Ireland.

Why do you think your paper is highly cited?

The paper is the first critical survey of a fast-developing literature known as the "new open-economy macroeconomics". This is technically demanding literature that seeks to develop more rigorous foundations for international macroeconomic theory: my paper provides an accessible overview of this line of research.

Does it describe a new discovery or a new methodology that's useful to others?

It describes the new methodology underlying the "new open-economy macroeconomics". This is based on dynamic general equilibrium modeling of the open economy, with an emphasis on welfare-based evaluation of policy interventions.

What were some of the circumstances that led you to do this research?

This literature was started by Maurice Obstfeld (Berkeley) and Kenneth Rogoff (now Chief Economist at the IMF) with their paper "Exchange Rate Dynamics Redux" that was published in the Journal of Political Economy in 1995 but which was in circulation during 1994. I based much of my doctoral dissertation at Harvard (completed in 1995) on this work and subsequently wrote some other papers in this area. I was struck by the rapid growth in this field and naturally each individual researcher was intent on differentiating his/her contribution from the others: there was a clear need for an overview article that could identify the main common contributions.

Could you summarize the significance of your paper in layman's terms?

The significance of the article is that it provides an accessible introduction to this new field, thereby allowing general researchers in academia and policy institutions to gain familiarity with the important results generated by this new initiative.

Professor Philip R. Lane
Director, Institute for International Integration Studies (IIIS)
The Sutherland Centre
Trinity College Dublin
Dublin, Ireland

ESI Special Topics, February 2003
Citing URL - http://www.esi-topics.com/fbp/2003/february03-PhilipLane.html