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• Case | HBS Case Collection | 2013 (Revised from original 2012 version)

  Perspectives on the Great Depression

  Julio J. Rotemberg

  The case assembles texts giving perspectives on the Great Depression by Franklin Delano Roosevelt, John Maynard Keynes, Milton Friedman, Anna Schwartz and Ben Bernanke. This should allow for a discussion of the role of fiscal and monetary policies in reaching and escaping outcomes in which the interest rate is close to zero for a long time.

  Keywords: Great Depression; Keynesian multiplier; monetary policy; zero lower bound of interest rates; role of expectations in Macroeconomics; Performance Expectations; History; Policy; Interest Rates; Macroeconomics;

  Citation:

  Rotemberg, Julio J. "Perspectives on the Great Depression." Harvard Business School Case 713-056, April 2013. (Revised from original November 2012 version.)

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• Working Paper | 2012

  Prominent Job Advertisements, Group Learning and Wage Dispersion

  Julio J. Rotemberg

  A model is presented in which people base their labor search strategy on the average wage and the average unemployment duration of people who belong to their peer group. It is shown that, if the distribution of wage offers is not stationary so lower wage offers tend to arrive before higher wage ones, such learning can induce a great deal of wage inequality. An equilibrium model is developed in which firms can choose either to advertise their job openings prominently or not. Prominent ads are assumed to have more influence on more inexperienced job searchers who are less able to identify a multiplicity of viable jobs. Equilibria can then feature groups that learn naively from the experience of their members and accept low wage offers from prominent ads while other groups do not find these offers acceptable. A new test statistic is proposed that measures whether, as predicted by the model, the gains from increasing one's reservation wage are larger than either those that people expect or those predicted by models in which job offers are stationary.

  Citation:

  Rotemberg, Julio J. "Prominent Job Advertisements, Group Learning and Wage Dispersion." NBER Working Paper Series, No. 18638, December 2012.

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• Case | HBS Case Collection | 2012 (Revised from original 2010 version)

  BP's Macondo: Spill and Response

  Julio J. Rotemberg

  This case starts by reporting various factors that may have contributed to the massive Macondo oil spill, noting that BP, its partners and the government all made decisions that helped cause the accident. It then discusses the response to this spill by BP and the government. This helps provide some context for the decision by the Obama administration to request $20 billion for a fund from BP and for BP's willingness to go along with this request. The case also depicts BP's safety record before this spill, which may also have contributed to the creation of this fund. After this, the case describes the various ways in which the U.S. government is involved in offshore oil, starting from the leasing of tracts, the regulation of drilling and the assessment of fines and damages. To provide a contrast with BP's payments, the case depicts the payments made by Exxon after the Exxon Valdez spill. The U.S. regulatory regime is then briefly compared with regimes in other countries. After a brief description of the way the fund set up by BP sought to distribute funds and of the temporary moratorium that followed the spill, the case ends with discussion of possible regulatory responses.

  Keywords: Safety; Metals and Minerals; Crisis Management; Infrastructure; Trade; Pollution and Pollutants; Risk and Uncertainty; Business and Government Relations; Finance; Multinational Firms and Management; Governing Rules, Regulations, and Reforms; Technology Adoption; Energy Industry; Mining Industry; United Kingdom; United States;

  Citation:

  Rotemberg, Julio J. "BP's Macondo: Spill and Response." Harvard Business School Case 711-021, January 2012. (Revised from original September 2010 version.)

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