Julio J. Rotemberg

William Ziegler Professor of Business Administration
Unit Head, Business, Government and the International Economy

Professor Julio J. Rotemberg received his B.A. degree in Economics from the University of California, Berkeley in 1975 and his Ph.D. in Economics from Princeton University in 1981. He first came to the Harvard Business School as a one-year visiting professor in 1995 and he became a member of the faculty in 1997. At HBS, he has taught Business,Government and the International Economy (BGIE) in both the MBA and the AMP programs as well Business History in the Foundations module. He currently teaches First Year Marketing in the MBA program. From 1980 to 1996 he was on the faculty at the Sloan School of Management, Massachusetts Institute of Technology, where he taught macro and international economics.

Professor Rotemberg has written over 50 articles. Most of his research has concerned itself with the sources of economic fluctuations with particular attention to the effects of monetary policy, fiscal policy and oil price changes. He has also worked on other topics in macroeconomics as well as doing work on the behavior of retail prices, international economics, the economics of market structure and the economics of organizations. He has been an Editor of the NBER Macroeconomics Annual and the Review of Economics and Statistics, and is currently an Associate Editor of Journal of Money, Credit and Banking.

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Publications

Journal Articles

Article | Marketing Science | Forthcoming

Expected Firm Altruism, Quality Provision, and Brand Extensions

Julio J. Rotemberg

A setting is considered where consumers keep track of the extent to which brands care about them, which is modeled as altruism of brands towards their target consumers. Consumers who purchase an experience good of high quality reasonably deduce that the supplier of this good is relatively altruistic towards them and are therefore more keen to purchase a brand extension that is also directed at them. As a result, the success of brand extensions depends on the overlap between the customers of its original product and the target customers of the extension product. The quality and demand for a brand extension can be higher if the brand is perceived as caring only for its most quality-conscious consumers rather than for all possible buyers of the good.

Citation:
Rotemberg, Julio J. "Expected Firm Altruism, Quality Provision, and Brand Extensions." Marketing Science (forthcoming).

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Article | Journal of Public Economics | Forthcoming

Charitable Giving When Altruism and Similarity Are Linked

Julio J. Rotemberg

This paper presents a model in which anonymous charitable donations are rationalized by two human tendencies drawn from the psychology literature. The first is people's disproportionate disposition to help those they agree with, while the second is the dependence of peoples' self-esteem on the extent to which they perceive that others agree with them. Government spending crowds out the charity that ensues from these forces only modestly. Moreover, people's donations tend to rise when others donate. In some equilibria of the model, poor people give little because they expect donations to come mainly from richer individuals. In others, donations by poor individuals constitute a large fraction of donations, and this raises the incentive for poor people to donate. The model predicts that under some circumstances, charities with identical objectives can differ by obtaining funds from distinct donor groups. The model then provides an interpretation for situations in which the number of charities rises while total donations are stagnant.

Citation:
Rotemberg, Julio J. "Charitable Giving When Altruism and Similarity Are Linked." Journal of Public Economics (forthcoming).

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Article | Journal of the European Economic Association |

Fair Pricing

Julio J. Rotemberg

This paper explores the consequences of supposing that consumers see a firm as fair if they cannot reject the hypothesis that the firm is somewhat benevolent towards them. When consumers can reject this hypothesis, some become angry, which is costly to the firm. The desire to appear benevolent can lead firms to adopt third-degree price discrimination based on the income of different consumer classes while foreswearing third-degree price discrimination based on differences in the elasticity of demand. It can also explain why prices seem to be more responsive to changes in factor costs than to changes in demand that have the same effect on marginal cost. Lastly, if consumers experience regret or disappointment when faced by increased prices, the model can explain why prices can be more rigid in response to disasters that increase demand dramatically than they are when there is a less substantial increase in demand.

Keywords: Fair Value Accounting; Outcome or Result; Price; Consumer Behavior; Income Characteristics;

Citation:
Rotemberg, Julio J. "Fair Pricing." Journal of the European Economic Association 9, no. 5 (October 2011).

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Journal Article | Journal of Money, Credit & Banking |

Minimal Settlement Assets in Economies with Interconnected Financial Obligations

Julio J. Rotemberg

A model is developed where firms belonging to a group are obliged to make payments to one another by using a liquid asset. The paper studies the exogenous endowments of this asset that are necessary to assure that all obligations are met. Conditions are presented under which the degree to which firms are interconnected (so that each creditor has more debtors and each debtor has more creditors) increases the number of firms that must be endowed with the liquid asset. Interconnectedness then makes payment defaults more likely. By acquiring too many payment obligations, firms may also become too interconnected.

Keywords: Borrowing and Debt; Financial Liquidity; Financing and Loans; Networks;

Citation:
Rotemberg, Julio J. "Minimal Settlement Assets in Economies with Interconnected Financial Obligations." Journal of Money, Credit & Banking 43, no. 1 (February 2011): 81–108.

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Article | Scandinavian Journal of Economics |

Altruistic Dynamic Pricing with Customer Regret

Julio J. Rotemberg

A model is considered where firms internalize the regret costs that consumers experience when they see an unexpected price change. Regret costs are assumed to be increasing in the size of price changes and this can explain why the size of price increases is less sensitive to inflation than in models with fixed costs of changing prices. The latter predict unrealistically large responses of price changes to inflation for firms that do not frequently reduce their prices. Adjustment costs that depend on the size of price changes also raise the variability on the size of price increases. Lastly, it is argued that the common practice of announcing price increases in advance is much easier to rationalize with regret concerns by consumers than with more standard approaches to price rigidity.

Keywords: Cost; Price; Change; Inflation and Deflation; Cost Management; Customers; Practice; Announcements; Forecasting and Prediction;

Citation:
Rotemberg, Julio J. "Altruistic Dynamic Pricing with Customer Regret." Scandinavian Journal of Economics 112, no. 4 (December 2010).

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Article | Public Choice |

Attitude Dependent Altruism, Turnout and Voting

Julio J. Rotemberg

Keywords: Voting; Attitudes;

Citation:
Rotemberg, Julio J. "Attitude Dependent Altruism, Turnout and Voting." Public Choice 140, nos. 1-2 (July 2009): 223–244.

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Article | Journal of Monetary Economics |

Minimally Altruistic Wages and Unemployment in a Matching Model with Monopsony

Julio J. Rotemberg

Keywords: Compensation and Benefits; Job Cuts and Outsourcing; Economics;

Citation:
Rotemberg, Julio J. "Minimally Altruistic Wages and Unemployment in a Matching Model with Monopsony." Supplement. Journal of Monetary Economics 55 (October 2008): 97–110.

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Journal Article | Journal of Economic Behavior & Organization |

Minimally Acceptable Altruism and the Ultimatum Game

Julio J. Rotemberg

I suppose that people react with anger when others show themselves not to be minimally altruistic. With heterogeneous agents, this can account for the experimental results of ultimatum and dictator games. Moreover, it can account for the surprisingly large fraction of individuals who offer an even split, with parameter values that are more plausible than those required to explain outcomes in these experiments with the models of Levine (1998), Fehr and Schmidt (1999), Dickinson (2000), and Bolton and Ockenfels (2000).

Keywords: Giving and Philanthropy; Game Theory; Mathematical Methods;

Citation:
Rotemberg, Julio J. "Minimally Acceptable Altruism and the Ultimatum Game." Journal of Economic Behavior & Organization 66, nos. 3-4 (June 2008).

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Article | Journal of Money, Credit & Banking |

The Persistence of Inflation Versus that of Real Marginal Cost in the New Keynesian Model

Julio J. Rotemberg

This note provides an example where the New Keynesian Phillips Curve leads inflation to be substantially more persistent than the output gap.

Keywords: Macroeconomics; Inflation and Deflation; Cost;

Citation:
Rotemberg, Julio J. "The Persistence of Inflation Versus that of Real Marginal Cost in the New Keynesian Model." Journal of Money, Credit & Banking 39, no. 1 (February 2007): 237–239.

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Article | NBER International Seminar on Macroeconomics |

Cyclical Wages in a Search-and-Bargaining Model with Large Firms

Julio J. Rotemberg

Keywords: Compensation and Benefits; Business Ventures;

Citation:
Rotemberg, Julio J. "Cyclical Wages in a Search-and-Bargaining Model with Large Firms." NBER International Seminar on Macroeconomics (2006): 65–114.

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Article | Journal of Monetary Economics |

Customer Anger at Price Increases, Changes in the Frequency of Price Adjustment and Monetary Policy

Julio J. Rotemberg

Keywords: Customers; Price; Change; Money; Policy;

Citation:
Rotemberg, Julio J. "Customer Anger at Price Increases, Changes in the Frequency of Price Adjustment and Monetary Policy." Journal of Monetary Economics 52, no. 4 (May 2005): 829–852.

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Article | American Economic Review |

Stochastic Technical Progress, Smooth Trends, and Nearly Distinct Business Cycles

Julio J. Rotemberg

Keywords: Technology; Trends; Business Cycles;

Citation:
Rotemberg, Julio J. "Stochastic Technical Progress, Smooth Trends, and Nearly Distinct Business Cycles." American Economic Review 93, no. 5 (December 2003): 1543–1559.

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Article | Journal of Political Economy |

Commercial Policy with Altruistic Voters

Julio J. Rotemberg

Keywords: Policy; Voting;

Citation:
Rotemberg, Julio J. "Commercial Policy with Altruistic Voters." Journal of Political Economy 111, no. 1 (February 2003): 174–201.

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Article | Journal of Labor Economics |

Perceptions of Equity and the Distribution of Income

Julio J. Rotemberg

Keywords: Perception; Equity; Compensation and Benefits;

Citation:
Rotemberg, Julio J. "Perceptions of Equity and the Distribution of Income." Journal of Labor Economics 20, no. 2 (April 2002): 249–288.

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Article | Regional Science and Urban Economics |

Competition and Human Capital Accumulation: A Theory of Interregional Specialization and Trade

Julio J. Rotemberg and G. Saloner

Keywords: Competition; Human Capital; Theory; Geography; Trade;

Citation:
Rotemberg, Julio J., and G. Saloner. "Competition and Human Capital Accumulation: A Theory of Interregional Specialization and Trade." Regional Science and Urban Economics 30, no. 4 (July 2000): 373–404.

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Article | RAND Journal of Economics |

Visionaries, Managers, and Strategic Direction

Julio J. Rotemberg and G. Saloner

Keywords: Management; Strategy;

Citation:
Rotemberg, Julio J., and G. Saloner. "Visionaries, Managers, and Strategic Direction." RAND Journal of Economics 31, no. 4 (winter 2000): 693–716.

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Journal Article | Journal of Economics & Management Strategy |

Process-versus Function-Based Hierarchies

Julio J. Rotemberg

Citation:
Rotemberg, Julio J. "Process-versus Function-Based Hierarchies." Journal of Economics & Management Strategy 8, no. 4 (winter 1999): 453–487.

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Article | NBER Macroeconomics Annual |

An Optimization-based Econometric Framework for the Evaluation of Monetary Policy

Julio J. Rotemberg and Michael Woodford

Keywords: Framework; Mathematical Methods; Money; Policy;

Citation:
Rotemberg, Julio J., and Michael Woodford. "An Optimization-based Econometric Framework for the Evaluation of Monetary Policy." NBER Macroeconomics Annual (December 1997): 297–344.

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Article | Journal of Money, Credit & Banking |

Imperfect Competition and the Effects of Energy Price Increases on Economic Activity

Julio J. Rotemberg and Michael Woodford

Keywords: Competition; Price; Energy;

Citation:
Rotemberg, Julio J., and Michael Woodford. "Imperfect Competition and the Effects of Energy Price Increases on Economic Activity." Journal of Money, Credit & Banking 28 (November 1996): 549–577.

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Article | Journal of Monetary Economics |

Prices, Output and Hours: An Empirical Analysis Based on a Sticky Price Model

J. J. Rotemberg

Keywords: Price; Performance Productivity;

Citation:
Rotemberg, J. J. "Prices, Output and Hours: An Empirical Analysis Based on a Sticky Price Model." Journal of Monetary Economics 37 (June 1996): 505–534.

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Article | American Economic Review |

Real Business Cycle Models and the Forecastable Movements in Output, Hours and Consumption

J. J. Rotemberg and Michael Woodford

Keywords: Forecasting and Prediction;

Citation:
Rotemberg, J. J., and Michael Woodford. "Real Business Cycle Models and the Forecastable Movements in Output, Hours and Consumption." American Economic Review 86, no. 1 (January 1996): 71–89.

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Comment | Journal of Money, Credit & Banking |

Comment on Inside Money, Outside Money, and Short-Term Interest Rates

Julio J. Rotemberg

Keywords: Money; Interest Rates;

Citation:
Rotemberg, Julio J. "Comment on Inside Money, Outside Money, and Short-Term Interest Rates." Part 2: Liquidity, Monetary Policy, and Financial Intermediation Journal of Money, Credit & Banking 27, no. 4 (November 1995): 1396–1401.

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Article | International Tax and Public Finance |

Environmental Taxes on Intermediate and Final Goods When Both Can Be Imported

J. J. Rotemberg and James M. Poterba

Keywords: Taxation; Natural Environment; Goods and Commodities;

Citation:
Rotemberg, J. J., and James M. Poterba. "Environmental Taxes on Intermediate and Final Goods When Both Can Be Imported." International Tax and Public Finance 2 (August 1995): 221–228.

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Article | RAND Journal of Economics |

Overt Interfunctional Conflict (and Its Reduction through Business Strategy)

J. J. Rotemberg and Garth Saloner

Keywords: Conflict and Resolution; Business Strategy;

Citation:
Rotemberg, J. J., and Garth Saloner. "Overt Interfunctional Conflict (and Its Reduction through Business Strategy)." RAND Journal of Economics 26 (winter 1995): 630–653.

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Article | Journal of Business & Economic Statistics |

Money, Output, and Prices: Evidence from a New Monetary Aggregate

J. J. Rotemberg, John Driscoll and James Poterba

Keywords: Money; Price; Information;

Citation:
Rotemberg, J. J., John Driscoll, and James Poterba. "Money, Output, and Prices: Evidence from a New Monetary Aggregate." Journal of Business & Economic Statistics 13, no. 1 (January 1995): 67–83.

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Article | American Economic Review |

Benefits of Narrow Business Strategies

J. J. Rotemberg and Garth Saloner

Keywords: Business Strategy;

Citation:
Rotemberg, J. J., and Garth Saloner. "Benefits of Narrow Business Strategies." American Economic Review 84, no. 5 (December 1994): 1330–1349.

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Article | Journal of Political Economy |

Human Relations in the Workplace

J. J. Rotemberg

Keywords: Relationships;

Citation:
Rotemberg, J. J. "Human Relations in the Workplace." Journal of Political Economy 102 (August 1994): 684–718.

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Article | Tax Policy and the Economy |

Energy Taxes and Aggregate Economic Activity

J. J. Rotemberg and Michael Woodford

Keywords: Taxation; Economics;

Citation:
Rotemberg, J. J., and Michael Woodford. "Energy Taxes and Aggregate Economic Activity." Tax Policy and the Economy 8 (1994): 159–195.

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Article | Management Science |

Leadership Style and Incentives

J. J. Rotemberg and Garth Saloner

Keywords: Leadership; Motivation and Incentives;

Citation:
Rotemberg, J. J., and Garth Saloner. "Leadership Style and Incentives." Management Science 39, no. 11 (November 1993): 1299–1318.

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Article | Quarterly Journal of Economics |

The Comovement of Stock Prices

J. J. Rotemberg and Robert Pindyck

Keywords: Stocks; Price;

Citation:
Rotemberg, J. J., and Robert Pindyck. "The Comovement of Stock Prices." Quarterly Journal of Economics 108 (November 1993): 1073–1104.

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Article | Journal of Economics & Management Strategy |

Power in Profit Maximizing Organizations

J. J. Rotemberg

Keywords: Profit; Organizations;

Citation:
Rotemberg, J. J. "Power in Profit Maximizing Organizations." Journal of Economics & Management Strategy 2 (summer 1993): 165–198.

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Comment | Federal Reserve Bank of St. Louis Review |

Commentary on 'Monetary Aggregates, Monetary Policy and Economic Activity'

Julio J. Rotemberg

Keywords: Money; Policy; Economics;

Citation:
Rotemberg, Julio J. "Commentary on 'Monetary Aggregates, Monetary Policy and Economic Activity'." Dimensions of Monetary Policy: Essays in Honor of Anatol B. Balbach Federal Reserve Bank of St. Louis Review 75, no. 2 (March–April 1993): 36–41.

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Article | Journal of Political Economy |

Oligopolistic Pricing and the Effects of Aggregate Demand on Economic Activity

J. J. Rotemberg and Michael Woodford

Keywords: Duopoly and Oligopoly; Price; Economics;

Citation:
Rotemberg, J. J., and Michael Woodford. "Oligopolistic Pricing and the Effects of Aggregate Demand on Economic Activity." Journal of Political Economy 100 (December 1992): 1153–1207.

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Article | Journal of International Money and Finance |

Sovereign Debt Buybacks Can Lower Bargaining Costs

J. J. Rotemberg

Keywords: Sovereign Finance; Negotiation; Cost; Borrowing and Debt;

Citation:
Rotemberg, J. J. "Sovereign Debt Buybacks Can Lower Bargaining Costs." Journal of International Money and Finance 10 (September 1991): 330–348.

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Article | NBER Macroeconomics Annual |

Markups and the Business Cycle

J. J. Rotemberg and Michael Woodford

Keywords: Business Cycles;

Citation:
Rotemberg, J. J., and Michael Woodford. "Markups and the Business Cycle." NBER Macroeconomics Annual (1991).

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Article | American Economic Review |

A Theory of Inefficient Intrafirm Transactions

J. J. Rotemberg

Keywords: Theory;

Citation:
Rotemberg, J. J. "A Theory of Inefficient Intrafirm Transactions." American Economic Review 81, no. 1 (January 1991): 191–210.

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Comment | Monetary Policy on the 75th Anniversary of the Federal Reserve System |

Commentary: Monetary Aggregates and Their Uses

Julio J. Rotemberg

Keywords: Money;

Citation:
Rotemberg, Julio J. "Commentary: Monetary Aggregates and Their Uses." Monetary Policy on the 75th Anniversary of the Federal Reserve System (1991). (Proceedings of the Fourteenth Annual Economic Policy Conference of the Federal Reserve Bank of St. Louis.)

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Article | Economic Journal (Royal Economic Society) |

The Excess Co-Movement of Commodity Prices

J. J. Rotemberg and Robert Pindyck

Keywords: Price;

Citation:
Rotemberg, J. J., and Robert Pindyck. "The Excess Co-Movement of Commodity Prices." Economic Journal (Royal Economic Society) 100 (December 1990): 1173–1189.

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Article | Quarterly Journal of Economics |

Inflexible Prices and Procyclical Productivity

J. J. Rotemberg and Lawrence Summers

Keywords: Price;

Citation:
Rotemberg, J. J., and Lawrence Summers. "Inflexible Prices and Procyclical Productivity." Quarterly Journal of Economics 105 (November 1990): 851–874.

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Article | Review of Financial Studies |

Shareholder Value Maximization and Product Market Competition

J. J. Rotemberg and David S. Scharfstein

Keywords: Product; Markets; Competition; Money; Value;

Citation:
Rotemberg, J. J., and David S. Scharfstein. "Shareholder Value Maximization and Product Market Competition." Review of Financial Studies 3, no. 3 (fall 1990): 367–392.

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Article | Journal of Industrial Economics |

Collusive Price Leadership

J. J. Rotemberg and Garth Saloner

Keywords: Price; Leadership;

Citation:
Rotemberg, J. J., and Garth Saloner. "Collusive Price Leadership." Journal of Industrial Economics 39 (September 1990): 93–110.

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Article | Journal of Money, Credit & Banking |

Inflation and Taxation with Optimizing Governments

J. J. Rotemberg and James Poterba

Keywords: Inflation and Deflation; Taxation; Government and Politics;

Citation:
Rotemberg, J. J., and James Poterba. "Inflation and Taxation with Optimizing Governments." Journal of Money, Credit & Banking 22 (February 1990): 1–19.

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Article | Canadian Journal of Economics |

Tariffs vs. Quotas with Implicit Collusion

J. J. Rotemberg and Garth Saloner

Keywords: Taxation;

Citation:
Rotemberg, J. J., and Garth Saloner. "Tariffs vs. Quotas with Implicit Collusion." Canadian Journal of Economics 22 (May 1989): 237–244.

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Article | Journal of Business & Economic Statistics |

Exchange Rate Dynamics with Sticky Prices: The Deutsche Mark, 1974-1982

J. J. Rotemberg and Alberto Giovannini

Keywords: Currency Exchange Rate; Price; Currency; Germany;

Citation:
Rotemberg, J. J., and Alberto Giovannini. "Exchange Rate Dynamics with Sticky Prices: The Deutsche Mark, 1974-1982." Journal of Business & Economic Statistics 7, no. 2 (April 1989): 169–178.

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Article | Quarterly Journal of Economics |

The Cyclical Behavior of Strategic Inventories

J. J. Rotemberg and Garth Saloner

Keywords: Strategy; Behavior;

Citation:
Rotemberg, J. J., and Garth Saloner. "The Cyclical Behavior of Strategic Inventories." Quarterly Journal of Economics 22 (February 1989): 73–98.

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Journal Article | NBER Macroeconomics Annual |

The New Keynesian Microfoundations

J. J. Rotemberg

Citation:
Rotemberg, J. J. "The New Keynesian Microfoundations." NBER Macroeconomics Annual 2 (December 1987): 69–104.

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Article | American Economic Review |

The Relative Rigidity of Monopoly Pricing

J. J. Rotemberg and Garth Saloner

Keywords: Price;

Citation:
Rotemberg, J. J., and Garth Saloner. "The Relative Rigidity of Monopoly Pricing." American Economic Review 77, no. 5 (December 1987): 917–926.

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Article | Journal of Development Economics |

Export Promotion as a Development Strategy

J. J. Rotemberg

Keywords: Growth and Development; Strategy; Trade;

Citation:
Rotemberg, J. J. "Export Promotion as a Development Strategy." Journal of Development Economics 26, no. 2 (August 1987): 343–355.

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Article | Journal of Law & Economics |

Are Imports to Blame?: Attribution of Injury Under the 1974 Trade Act

J. J. Rotemberg and Robert Pindyck

Keywords: Trade; Law;

Citation:
Rotemberg, J. J., and Robert Pindyck. "Are Imports to Blame?: Attribution of Injury Under the 1974 Trade Act." Journal of Law & Economics 30 (April 1987): 101–122.

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Article | American Economic Review |

A Taxed-Based Test for Nominal Rigidities

J. J. Rotemberg, James Poterba and Lawrence Summers

Keywords: Taxation;

Citation:
Rotemberg, J. J., James Poterba, and Lawrence Summers. "A Taxed-Based Test for Nominal Rigidities." American Economic Review 76, no. 4 (September 1986): 659–675.

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Article | American Economic Review |

A Supergame Theoretic Model of Price Wars During Booms

J. J. Rotemberg and Garth Saloner

Keywords: Game Theory; Price;

Citation:
Rotemberg, J. J., and Garth Saloner. "A Supergame Theoretic Model of Price Wars During Booms." American Economic Review 76, no. 3 (June 1986): 390–407.

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Article | Journal of International Economics |

Money and the Terms of Trade

J. J. Rotemberg

Keywords: Money; Trade;

Citation:
Rotemberg, J. J. "Money and the Terms of Trade." Journal of International Economics 19 (August 1985): 141–160.

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Journal Article | Journal of Public Economics |

The Efficiency of Equilibrium Traffic Flows

J. J. Rotemberg

Citation:
Rotemberg, J. J. "The Efficiency of Equilibrium Traffic Flows." Journal of Public Economics 26 (March 1985): 191–201.

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Article | Quarterly Journal of Economics |

Intertemporal Substitution in Macroeconomics

J. J. Rotemberg, N. Gregory Mankiw and Lawrence Summers

Keywords: Macroeconomics;

Citation:
Rotemberg, J. J., N. Gregory Mankiw, and Lawrence Summers. "Intertemporal Substitution in Macroeconomics." Quarterly Journal of Economics 100 (February 1985): 225–251.

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Article | American Economic Review |

Interpreting the Statistical Failures of Some Rational Expectations Macroeconomic Models

J. J. Rotemberg

Keywords: Macroeconomics;

Citation:
Rotemberg, J. J. "Interpreting the Statistical Failures of Some Rational Expectations Macroeconomic Models." American Economic Review 74, no. 2 (May 1984): 188–193.

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Article | Natural Resources Journal |

Energy Price Shocks and Macroeconomic Adjustment

J. J. Rotemberg and Robert Pindyck

Keywords: Price; Macroeconomics;

Citation:
Rotemberg, J. J., and Robert Pindyck. "Energy Price Shocks and Macroeconomic Adjustment." Natural Resources Journal 26 (April 1984): 277–296.

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Article | Journal of Political Economy |

A Monetary Equilibrium Model with Transaction Costs

J. J. Rotemberg

Keywords: Cost;

Citation:
Rotemberg, J. J. "A Monetary Equilibrium Model with Transaction Costs." Journal of Political Economy 92, no. 1 (February 1984): 40–58.

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Article | American Economic Review |

Dynamic Factor Demands and the Effects of Energy Price Shocks

J. J. Rotemberg and Robert Pindyck

Keywords: Price; Energy;

Citation:
Rotemberg, J. J., and Robert Pindyck. "Dynamic Factor Demands and the Effects of Energy Price Shocks." American Economic Review 73, no. 5 (December 1983): 1066–1079.

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Article | Journal of Money, Credit & Banking |

Supply Shocks, Sticky Prices and Monetary Policy

J. J. Rotemberg

Keywords: Price; Money; Policy;

Citation:
Rotemberg, J. J. "Supply Shocks, Sticky Prices and Monetary Policy." Journal of Money, Credit & Banking 15, no. 4 (November 1983): 433–435.

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Journal Article | Scandinavian Journal of Economics |

Dynamic Factor Demands Under Rational Expectations

J. J. Rotemberg and Robert Pindyck

Citation:
Rotemberg, J. J., and Robert Pindyck. "Dynamic Factor Demands Under Rational Expectations." Scandinavian Journal of Economics (summer 1983).

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Article | American Economic Review |

Aggregate Consequences of Fixed Costs of Price Adjustment

J. J. Rotemberg

Keywords: Cost; Price;

Citation:
Rotemberg, J. J. "Aggregate Consequences of Fixed Costs of Price Adjustment." American Economic Review 73, no. 3 (June 1983): 433–436.

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Article | Journal of Economic Dynamics & Control |

Monetary Policy and Costs of Price Adjustment

J. J. Rotemberg

Keywords: Policy; Price; Cost;

Citation:
Rotemberg, J. J. "Monetary Policy and Costs of Price Adjustment." Journal of Economic Dynamics & Control 5, no. 213 (May 1983): 267–288.

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Article | Journal of Political Economy |

Sticky Prices in the United States

J. J. Rotemberg

Keywords: Price; United States;

Citation:
Rotemberg, J. J. "Sticky Prices in the United States." Journal of Political Economy 90, no. 6 (December 1982): 1187–1211.

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Article | Review of Economic Studies |

Monopolistic Price Adjustment and Aggregate Output

J. J. Rotemberg

Keywords: Price;

Citation:
Rotemberg, J. J. "Monopolistic Price Adjustment and Aggregate Output." Review of Economic Studies 49 (October 1982): 517–531.

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Article | European Economic Review |

International Adjustment with Wage Ridgidity

J. J. Rotemberg and W. Branson

Keywords: Wages;

Citation:
Rotemberg, J. J., and W. Branson. "International Adjustment with Wage Ridgidity." European Economic Review 13, no. 3 (May 1980): 309–337.

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Journal Article | Ensayos económicos |

Estimacion de la Funcion de Importaciones de Mercancias

J. J. Rotemberg and J.L. Machinea

Citation:
Rotemberg, J. J., and J.L. Machinea. "Estimacion de la Funcion de Importaciones de Mercancias." Ensayos económicos 2, no. 3 (September 1977): 5–50.

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Book Chapters

Chapter | Policymaking Insights from Behavioral Economics | 2009

Behavioral Aspects of Price Setting, and Their Policy Implications

Julio J. Rotemberg

This paper starts by discussing consumers' cognitive and emotional reaction to posted prices. Cognitively, some consumers do not appear to make effective use of price information to maximize their consumption-based utility. Emotionally, prices can induce regret and anger among consumers. The optimal responses of firm's prices to these reactions can explain why firms charge prices below marginal cost for many goods and why they keep their prices rigid. This explanation of price rigidity has the advantage of being consistent with the observation that the typical size of price increases is nearly invariant to inflation. Lastly, the paper turns to some government policies regarding prices that appear to have some consumer support. It argues that both laws against price gouging and laws regulating the terms of mortgages may have support because consumers recognize that many people do not optimize their consumption effectively and because they are angry at firms that take advantage of this. These attitudes can also explain consumer support for monetary policies that maintain a low level of average inflation.

Keywords: Inflation and Deflation; Price; Policy; Laws and Statutes; Demand and Consumers; Business and Government Relations;

Citation:
Rotemberg, Julio J. "Behavioral Aspects of Price Setting, and Their Policy Implications." In Policymaking Insights from Behavioral Economics, edited by Christopher L. Foote, Lorenz Goette, and Stephan Meier. Boston, MA: Federal Reserve Bank of Boston, 2009.

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Chapter | The New Palgrave Dictionary of Economics | 2008

Cyclical Markups

Julio J. Rotemberg

Keywords: Business Cycles; Price;

Citation:
Rotemberg, Julio J. "Cyclical Markups." In The New Palgrave Dictionary of Economics. 2nd ed. Edited by Steven Derlauf, and Larry Blume. Hampshire, U.K.: Palgrave Macmillan, 2008.

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Chapter | Handbook of the Economics of Giving, Altruism and Reciprocity | 2006

Altruism, Cooperation and Reciprocity in the Workplace

Julio J. Rotemberg

Keywords: Working Conditions; Cooperation; Attitudes;

Citation:
Rotemberg, Julio J. "Altruism, Cooperation and Reciprocity in the Workplace." Chap. 21 in Handbook of the Economics of Giving, Altruism and Reciprocity. Vol. 2, edited by Serge-Christophe Kolm, and Jean Mercier Ythier, 1371–1435. Elsevier Science, 2006.

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Chapter | Handbook of Macroeconomics | 1999

The Cyclical Behavior of Prices and Costs

Julio J. Rotemberg and Michael Woodford

Keywords: Price; Cost; Business Cycles;

Citation:
Rotemberg, Julio J., and Michael Woodford. "The Cyclical Behavior of Prices and Costs." In Handbook of Macroeconomics, edited by J. B. Taylor, and M. Woodford. North Holland: Elsevier Science, 1999.

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Chapter | Monetary Policy Rules | 1999

Interest Rate Rules in an Estimated Sticky Price Model

Julio J. Rotemberg and Michael Woodford

Keywords: Interest Rates; Mathematical Methods;

Citation:
Rotemberg, Julio J., and Michael Woodford. "Interest Rate Rules in an Estimated Sticky Price Model." In Monetary Policy Rules, edited by John B. Taylor. Chicago: Chicago University Press, 1999.

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Chapter | Frontiers of Business Cycle Research | 1995

Dynamic General Equilibrium Models with Imperfectly Competitive Product Markets

Julio J. Rotemberg and Michael Woodford

Keywords: Mathematical Methods; Competition; Markets;

Citation:
Rotemberg, Julio J., and Michael Woodford. "Dynamic General Equilibrium Models with Imperfectly Competitive Product Markets." In Frontiers of Business Cycle Research, edited by Thomas Cooley. Princeton, NJ: Princeton University Press, 1995.

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Chapter | Structural Adjustment in a Newly Industrialized Country: The Korean Experience | 1992

Energy Policy and Adjustment

Julio J. Rotemberg and Seok-Hyun Hong

Keywords: Energy; Policy; Energy Industry;

Citation:
Rotemberg, Julio J., and Seok-Hyun Hong. "Energy Policy and Adjustment." Chap. 11 in Structural Adjustment in a Newly Industrialized Country: The Korean Experience, edited by Vittorio Corbo, and Sang-mok Sŏ, 256–280. Baltimore: Johns Hopkins University Press, 1992.

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Chapter | The Corporation of the 1990s: Information Technology and Organizational Transformation | 1991

Information Technology and Strategic Advantage

Julio J. Rotemberg and Garth Saloner

Keywords: Information Technology; Competitive Advantage; Strategy; Information Technology Industry;

Citation:
Rotemberg, Julio J., and Garth Saloner. "Information Technology and Strategic Advantage." In The Corporation of the 1990s: Information Technology and Organizational Transformation, edited by Michael Scott Morton. New York: Oxford University Press, 1991.

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Chapter | Exchange Rate Targets and Currency Bands | 1991

Speculative Attacks on Target Zones

Julio J. Rotemberg and Paul Krugman

Keywords: Currency Exchange Rate;

Citation:
Rotemberg, Julio J., and Paul Krugman. "Speculative Attacks on Target Zones." In Exchange Rate Targets and Currency Bands, edited by Paul Krugman, and Marcus Miller. Cambridge: Cambridge University Press, 1991.

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Chapter | New Approaches to Monetary Economics | 1987

Money in the Utility Function: An Empirical Implementation

Julio J. Rotemberg and James Poterba

Keywords: Money; Mathematical Methods;

Citation:
Rotemberg, Julio J., and James Poterba. "Money in the Utility Function: An Empirical Implementation." In New Approaches to Monetary Economics, edited by W. Barnett, and K. Singleton, 219–240. Cambridge University Press, 1987.

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Chapter | Oil Shock: Policy Response and Implementation | 1984

Energy Price Shocks and Macroeconomic Adjustment

Julio J. Rotemberg and Robert Pindyck

Keywords: Energy; Price; System Shocks; Macroeconomics;

Citation:
Rotemberg, Julio J., and Robert Pindyck. "Energy Price Shocks and Macroeconomic Adjustment." In Oil Shock: Policy Response and Implementation, edited by A. Alm, and R. Weiner. Cambridge: Ballinger Publishing Company, 1984.

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Working Papers

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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Working Paper | 2011

Charitable Giving When Altruism and Similarity Are Linked

Julio J. Rotemberg

This paper presents a model in which anonymous charitable donations are rationalized by two human tendencies drawn from the psychology literature. The first is people's disproportionate disposition to help those they agree with while the second is the dependence of people's self-esteem on the extent to which they perceive that others agree with them. Government spending crowds out the charity that ensues from these forces only modestly. Moreover, people's donations tend to rise when others donate. In some equilibria of the model, poor people give little because they expect donations to come mainly from richer individuals. In others, donations by poor individuals constitute a large fraction of donations, and this raises the incentive for poor people to donate. The model predicts that under some circumstances, charities with identical objectives can differ by obtaining funds from distinct donor groups. The model then provides an interpretation for situations in which the number of charities rises while total donations are stagnant.

Keywords: Giving and Philanthropy; Mathematical Methods; Attitudes; Interests; Perception; Wealth and Poverty;

Citation:
Rotemberg, Julio J. "Charitable Giving When Altruism and Similarity Are Linked." NBER Working Paper Series, No. 17585, November 2011.

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Working Paper | 2010

A Behavioral Model of Demandable Deposits and Its Implications for Financial Regulation

Julio J. Rotemberg

A model is developed that rationalizes contracts that give depositors the right to obtain funds on demand even when depositors intend to use these funds for consumption in the future. This is explained by depositor overoptimism regarding their own ability to collect funds in a run. Capitalized institutions serving depositors with such beliefs emerge in equilibrium even if depositors and bank owners have the same preferences and the same investment opportunities. Various government regulations of these institutions, including minimum capital levels, requirements concerning the assets they may hold, deposit insurance, and compulsory clawbacks in bankruptcy, can raise the average ex post welfare of depositors.

Keywords: Banks and Banking; Insurance; Governing Rules, Regulations, and Reforms; Policy; Consumer Behavior; Financial Services Industry;

Citation:
Rotemberg, Julio J. "A Behavioral Model of Demandable Deposits and Its Implications for Financial Regulation." NBER Working Paper Series, No. 16620, December 2010.

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Working Paper | 2010

Persuasion and Empathy in Salesperson-Customer Interactions

Julio J. Rotemberg

Citation:
Rotemberg, Julio J. "Persuasion and Empathy in Salesperson-Customer Interactions." NBER Working Paper Series, No. 15975, May 2010.

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Working Paper | 2010

Quality Provision, Expected Firm Altruism and Brand Extensions

Julio J. Rotemberg

This paper studies quality choice in a model where consumers expect firms to act altruistically. It is shown that, under plausible assumptions regarding this altruism and the reaction of consumers to firms that demonstrate insufficient altruism, existing firms (or brands) can face a larger demand for new products than new entrants. Moreover, the failure of new products can reduce the demand for a brand's existing products even if the quality of these existing products is well understood by consumers. The model provides an interpretation for the dependence of the success of brand extensions on the "fit" between the original product and the extension. Lastly, the model can explain why a "high-end" firm that is expected to care only for its most quality sensitive customers can have an advantage in introducing a product relative to a firm that is expected to be more widely altruistic.

Keywords: Brands and Branding; Consumer Behavior; Product Development; Corporate Social Responsibility and Impact; Quality; Mathematical Methods;

Citation:
Rotemberg, Julio J. "Quality Provision, Expected Firm Altruism and Brand Extensions." NBER Working Paper Series, No. 15635, January 2010.

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Working Paper | HBS Working Paper Series | 2009

Can a Continuously-Liquidating Tontine (or Mutual Inheritance Fund) Succeed where Immediate Annuities Have Floundered?

Julio J. Rotemberg

A new instrument (the Mutual Inheritance Fund or MIF) is proposed whose purpose is to help people carry their savings forward from the moment they retire into their old age. Like annuities, this instrument requires an up-front payment before people receive any benefits while also protecting people from the risk that they will live a long time. The funds that individuals contribute to a MIF are invested in a mutual fund. The proceeds from the fund's underlying assets are reinvested until the contributor dies or he turns an age specified in advance. If a contributor dies before this pre-specified age, his shares are liquidated and the proceeds are distributed to the other contributors to the MIF. Contributors who are alive at the pre-specified age are also paid the value of their accumulated shares. Like tontines, of which MIF is a variant, this instrument has returns that are more tilted towards old age than annuities. Several advantages of this are discussed, including some that may explain why tontines have proven popular with consumers in the past.

Keywords: Age Characteristics; Annuities; Investment Return; Investment Funds; Saving; Retirement;

Citation:
Rotemberg, Julio J. "Can a Continuously-Liquidating Tontine (or Mutual Inheritance Fund) Succeed where Immediate Annuities Have Floundered?" Harvard Business School Working Paper, No. 09–121, April 2009.

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Working Paper | 2009

Altruistic Dynamic Pricing with Customer Regret

Julio J. Rotemberg

A model is considered where firms internalize the regret costs that consumers experience when they see an unexpected price change. Regret costs are assumed to be increasing in the size of price changes and this can explain why the size of price increases is less sensitive to inflation than in models with fixed costs of changing prices. The latter predict unrealistically large responses of price changes to inflation for firms that do not frequently reduce their prices. Adjustment costs that depend on the size of price changes also raise the variability on the size of price increases. Lastly, it is argued that the common practice of announcing price increases in advance is much easier to rationalize with regret concerns by consumers than with more standard approaches to price rigidity.

Keywords: Inflation and Deflation; Price; Marketing; Consumer Behavior; Mathematical Methods;

Citation:
Rotemberg, Julio J. "Altruistic Dynamic Pricing with Customer Regret." NBER Working Paper Series, No. 14933, April 2009.

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Working Paper | 2008

Attitude-Dependent Altruism, Turnout and Voting

Julio J. Rotemberg

This paper presents a goal-oriented model of political participation based on two psychological assumptions. The first is that people are more altruistic towards individuals that agree with them and the second is that people's well-being rises when other people share their personal opinions. The act of voting is then a source of vicarious utility because it raises the well-being of individuals that agree with the voter. Substantial equilibrium turnout emerges with nontrivial voting costs and modest altruism. The model can explain higher turnout in close elections as well as votes for third-party candidates with no prospect of victory. For certain parameters, these third-party candidates lose votes to more popular candidates, a phenomenon often called strategic voting. For other parameters, the model predicts "vote-stealing" where the addition of a third candidate robs a viable major candidate of electoral support.

Keywords: Voting; Political Elections; Market Participation; Attitudes;

Citation:
Rotemberg, Julio J. "Attitude-Dependent Altruism, Turnout and Voting." NBER Working Paper Series, No. 14302, September 2008.

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Working Paper | 2008

Liquidity Needs in Economies with Interconnected Financial Obligations

Julio J. Rotemberg

A model is developed where firms in a financial system have to settle their debts to each other by using a liquid asset. The question that is studied is how many firms must obtain how much of this asset from outside the financial system to make sure that all debts within the system are settled. The main result is that these liquidity needs are larger when these firms are more interconnected through their debts, i.e., when they borrow from and lend to more firms. Two pecuniary externalities are discussed. One involves the choice of paying one creditor first rather than another. The second involves the extent to which firms borrow and acquire claims on other firms with the proceeds. When a group of firms raises their involvement in this activity, firms outside the group may face more difficulties in settling their debts.

Keywords: Economy; Borrowing and Debt; Financial Liquidity; Networks;

Citation:
Rotemberg, Julio J. "Liquidity Needs in Economies with Interconnected Financial Obligations." NBER Working Paper Series, No. 14222, August 2008.

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Working Paper | 2008

Minimally Altruistic Wages and Unemployment in a Matching Model

Julio J. Rotemberg

This paper presents a model in which firms recruit both unemployed and employed workers by posting vacancies. Firms act monopsonistically and set wages to retain their existing workers as well as to attract new ones. The model differs from Burdett and Mortensen (1998) in that its assumptions ensure that there is an equilibrium where all firms pay the same wage. The paper analyzes the response of this wage to exogenous changes in the marginal revenue product of labor. The paper finds parameters for which the response of wages is modest relative to the response of employment, as appears to be the case in U.S. data and shows that the insistence by workers that firms act with a minimal level of altruism can be a source of dampened wage responses. The paper also considers a setting where this minimal level of altruism is subject to fluctuations and shows that, for certain parameters, the model can explain both the standard deviations of employment and wages and the correlation between these two series over time.

Keywords: Retention; Selection and Staffing; Employment; Wages; Mathematical Methods;

Citation:
Rotemberg, Julio J. "Minimally Altruistic Wages and Unemployment in a Matching Model." NBER Working Paper Series, No. 13755, February 2008.

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Working Paper | 2008

Behavioral Aspects of Price Setting, and Their Policy Implications

Julio J. Rotemberg

This paper starts by discussing consumers' cognitive and emotional reaction to posted prices. Cognitively, some consumers do not appear to make effective use of price information to maximize their consumption-based utility. Emotionally, prices can induce regret and anger among consumers. The optimal responses of firm's prices to these reactions can explain why firms charge prices below marginal cost for many goods and why they keep their prices rigid. This explanation of price rigidity has the advantage of being consistent with the observation that the typical size of price increases is nearly invariant to inflation. Lastly, the paper turns to some government policies regarding prices that appear to have some consumer support. It argues that both laws against price gouging and laws regulating the terms of mortgages may have support because consumers recognize that many people do not optimize their consumption effectively and because they are angry at firms that take advantage of this. These attitudes can also explain consumer support for monetary policies that maintain a low level of average inflation.

Keywords: Inflation and Deflation; Price; Policy; Laws and Statutes; Consumer Behavior; Emotions;

Citation:
Rotemberg, Julio J. "Behavioral Aspects of Price Setting, and Their Policy Implications." NBER Working Paper Series, No. 13754, February 2008.

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Working Paper | 2005

Attitude-Dependent Altruism, Turnout and Voting

Julio J. Rotemberg

Citation:
Rotemberg, Julio J. "Attitude-Dependent Altruism, Turnout and Voting." Centre for Economic Policy Research (Great Britain) Discussion Paper, No. DP5146, July 2005.

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Working Paper | 2004

Fair Pricing

Julio J. Rotemberg

Citation:
Rotemberg, Julio J. "Fair Pricing." NBER Working Paper Series, No. w10915, November 2004.

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Working Paper | HBS Working Paper Series | 2002

Altruism, Reciprocity and Cooperation in the Workplace

Julio J. Rotemberg

Citation:
Rotemberg, Julio J. "Altruism, Reciprocity and Cooperation in the Workplace." Harvard Business School Working Paper, No. 03–021, August 2002.

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Working Paper | HBS Working Paper Series | 2002

Endogenous Altruism in Buyer-Seller Relations and Its Implications for Vertical Integration

Julio J. Rotemberg

Citation:
Rotemberg, Julio J. "Endogenous Altruism in Buyer-Seller Relations and Its Implications for Vertical Integration." Harvard Business School Working Paper, No. 03–022, August 2002.

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Working Paper | 1999

A Heuristic Method for Extracting Smooth Trends from Economic Time Series

Julio J. Rotemberg

Citation:
Rotemberg, Julio J. "A Heuristic Method for Extracting Smooth Trends from Economic Time Series." NBER Working Paper Series, No. 7439, December 1999.

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Working Paper | HBS Working Paper Series | 1998

Government-Enforced Cartels, Outputs and Welfare

Julio J. Rotemberg

Citation:
Rotemberg, Julio J. "Government-Enforced Cartels, Outputs and Welfare." Harvard Business School Working Paper, No. 98–116, June 1998.

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Cases and Teaching Materials

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

Switzerland: Foreign Pressure and Direct Democracy

Julio J. Rotemberg and Jonathan Naharro Martin

Keywords: Switzerland;

Citation:
Rotemberg, Julio J., and Jonathan Naharro Martin. "Switzerland: Foreign Pressure and Direct Democracy." Harvard Business School Case 712-053, March 2013. (Revised from original April 2012 version.)

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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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Teaching Note | HBS Case Collection | 2011

BP's Macondo: Spill and Response (TN)

Julio J. Rotemberg

Teaching Note for 711-021.

Keywords: Energy Industry; Mining Industry; United Kingdom; United States;

Citation:
Rotemberg, Julio J. "BP's Macondo: Spill and Response (TN)." Harvard Business School Teaching Note 712-003, July 2011.

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Case | HBS Case Collection | 2011 (Revised from original 2009 version)

New York Life and Immediate Annuities

Julio J. Rotemberg and John T. Gourville

By positioning Immediate Annuities as "guaranteed lifetime income," New York Life has built itself a $1.4 billion per year business by 2009. However, to make Immediate Annuities a mainstream financial product for retirees, New York Life must understand why many retirees are reluctant to buy them and many agents are reluctant to sell them.

Keywords: Insurance; Personal Finance; Product Marketing; Consumer Behavior; Retirement; Salesforce Management; Insurance Industry;

Citation:
Rotemberg, Julio J., and John T. Gourville. "New York Life and Immediate Annuities." Harvard Business School Case 510-040, March 2011. (Revised from original November 2009 version.)

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Teaching Note | HBS Case Collection | 2010

New York Life and Immediate Annuities (TN)

Julio J. Rotemberg and John T. Gourville

Teaching Note for [510040].

Keywords: Retirement; Salesforce Management; Annuities; Insurance Industry;

Citation:
Rotemberg, Julio J., and John T. Gourville. "New York Life and Immediate Annuities (TN)." Harvard Business School Teaching Note 510-094, March 2010.

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Teaching Note | HBS Case Collection | 2008

Subprime Meltdown: American Housing and Global Financial Turmoil

Julio J. Rotemberg

Teaching Note for [708042].

Keywords: Mortgages; Debt Securities; Risk and Uncertainty; Financial Markets; Financial Crisis; Insolvency and Bankruptcy; Governing Rules, Regulations, and Reforms; Central Banking; Policy; United States; Europe;

Citation:
Rotemberg, Julio J. "Subprime Meltdown: American Housing and Global Financial Turmoil." Harvard Business School Teaching Note 708-055, May 2008.

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Case | HBS Case Collection | 2008 (Revised from original 2008 version)

Subprime Meltdown: American Housing and Global Financial Turmoil

Julio Rotemberg

This case focuses on the financial difficulties faced in the U.S. from August to December 2006 as well as their roots in subprime lending. After briefly discussing how mortgages were structured and traded in the pre-1990 period, it describes subprime mortgage lending, as well as other innovative mortgages issued in the 1990s. It also discusses how these mortgages were packaged into securities, and who ultimately came to own these claims and their attendant risk. The case then describes the pain inflicted by raising foreclosures, as well as the financial market ramifications of the rise in mortgage delinquencies. It also chronicles the response of the U.S. and European central banks to the unfolding financial difficulties. Lastly, the case lays policies that have been proposed to deal with either the consequences or the causes of the crisis. These include policies for reforming the supervision of the financial system, changing bankruptcy rules and regulating mortgage finance. Some attention is paid to the role of credit rating agencies in the crisis, and in the financial system as a whole.

Keywords: Financial Crisis; Insolvency and Bankruptcy; Central Banking; Financial Markets; Mortgages; Governing Rules, Regulations, and Reforms; Policy; United States;

Citation:
Rotemberg, Julio. "Subprime Meltdown: American Housing and Global Financial Turmoil." Harvard Business School Case 708-042, May 2008. (Revised from original January 2008 version.)

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Case | HBS Case Collection | 2008 (Revised from original 1999 version)

The U.S. Banking Panic of 1933 and Federal Deposit Insurance

Julio J. Rotemberg and Sabina M. Ciminero

After highlighting some key developments in the banking history of the United States, the case illustrates the Banking Panic of 1933 and the way in which Franklin D. Roosevelt dealt with it at the beginning of his presidency. Describes the main components of banking reform bills that members of Congress proposed in April 1933. Deposit insurance figured prominently in these bills, and the case summarizes the contemporary debate surrounding this proposed insurance.

Keywords: History; Government Legislation; Insurance; Crisis Management; Financial Crisis; Banks and Banking; Banking Industry; United States;

Citation:
Rotemberg, Julio J., and Sabina M. Ciminero. "The U.S. Banking Panic of 1933 and Federal Deposit Insurance." Harvard Business School Case 799-077, January 2008. (Revised from original January 1999 version.)

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Case | HBS Case Collection | 2007 (Revised from original 2006 version)

The Dubai Ports World Debacle and its Aftermath

Julio J. Rotemberg

Describes the political ramifications in the United States of Dubai-based DP World's acquisition of London-based Peninsular and Oriental Steam Navigation Company (P&O). Because P&O operated some port terminals in the United States, DP World obtained clearance from the Committee on Foreign Investments in the United States before P&O shareholders approved the deal in February 2006. Nonetheless, a ruckus over port security erupted both in Congress and in the press and this ruckus led DP World to promise that it would relinquish the U.S. terminals of P&O. Also contains a brief description of Dubai and its relationship to the U.S., a discussion of issues related to port security, and a brief history of U.S. security concerns with foreign direct investment. Ends with a depiction of the Bills passed unanimously by the U.S. House and Senate to further regulate foreign investment in the wake of the DP World debacle.

Keywords: Foreign Direct Investment; Multinational Firms and Management; Governing Rules, Regulations, and Reforms; Government Legislation; National Security; Business and Government Relations; Ship Transportation; Dubai; United States;

Citation:
Rotemberg, Julio J. "The Dubai Ports World Debacle and its Aftermath." Harvard Business School Case 707-014, August 2007. (Revised from original September 2006 version.)

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Teaching Note | HBS Case Collection | 2007

The Dubai Ports World Debacle and its Aftermath (TN)

Julio J. Rotemberg

Citation:
Rotemberg, Julio J. "The Dubai Ports World Debacle and its Aftermath (TN)." Harvard Business School Teaching Note 707-053, May 2007.

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Case | HBS Case Collection | 2005 (Revised from original 2003 version)

Birth of Modern Macroeconomic Policy, The: Sweden and the Great Depression

Julio J. Rotemberg and Lisa Lewis

By early 1937, a debate over the proper conduct of monetary policy raged in Sweden. Sweden's response to the Great Depression was unique. It had, in particular, embraced a revolutionary goal for monetary policy when it abandoned the gold standard in 1931.

Keywords: History; Money; Policy; Financial Crisis; Macroeconomics; Sweden;

Citation:
Rotemberg, Julio J., and Lisa Lewis. "Birth of Modern Macroeconomic Policy, The: Sweden and the Great Depression." Harvard Business School Case 704-029, April 2005. (Revised from original December 2003 version.)

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Teaching Note | HBS Case Collection | 2004

Birth of Modern Macroeconomic Policy, The: Sweden and the Great Depression (TN)

Julio J. Rotemberg

Teaching Note to (9-704-029).

Keywords: Sweden;

Citation:
Rotemberg, Julio J. "Birth of Modern Macroeconomic Policy, The: Sweden and the Great Depression (TN)." Harvard Business School Teaching Note 705-001, July 2004.

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Teaching Note | HBS Case Collection | 2003

Competition Policy in the European Union and the Power of Microsoft (TN)

Julio J. Rotemberg

Teaching Note for (9-701-043).

Keywords: Computer Industry; Electronics Industry; European Union; United States;

Citation:
Rotemberg, Julio J. "Competition Policy in the European Union and the Power of Microsoft (TN)." Harvard Business School Teaching Note 703-057, June 2003.

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Teaching Note | HBS Case Collection | 2003

Fresh Start? Peru's Legacy of Debt and Default (A) (TN)

Julio J. Rotemberg

Teaching Note for (9-703-001).

Keywords: Peru;

Citation:
Rotemberg, Julio J. "Fresh Start? Peru's Legacy of Debt and Default (A) (TN)." Harvard Business School Teaching Note 703-042, April 2003.

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Case | HBS Case Collection | 2003 (Revised from original 2002 version)

Fresh Start? Peru's Legacy of Debt and Default (A)

Julio J. Rotemberg and Lisa Lewis

Considers the situation facing Alberto Fujimori as he takes office in 1990. Pays particular attention to Peru's long history of international borrowing, default, and renegotiation. This history suggests that the costs imposed by foreigners on Peru when it failed to meet its contracts with foreign lenders have been relatively mild. Discusses the administration of Alan Garcia, who limited payments on Peru's international debt while also leading his country into an inflationary spiral. Also discusses some of the challenges posed by a bloody insurgency group named Sendero Luminoso.

Keywords: History; International Finance; Sovereign Finance; Economy; Borrowing and Debt; Peru;

Citation:
Rotemberg, Julio J., and Lisa Lewis. "Fresh Start? Peru's Legacy of Debt and Default (A)." Harvard Business School Case 703-001, February 2003. (Revised from original July 2002 version.)

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Case | HBS Case Collection | 2002

Fresh Start? Peru's Legacy of Debt and Default (B)

Julio J. Rotemberg and Lisa Lewis

Supplements the (A) case.

Keywords: Peru;

Citation:
Rotemberg, Julio J., and Lisa Lewis. "Fresh Start? Peru's Legacy of Debt and Default (B)." Harvard Business School Case 703-004, July 2002.

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Case | HBS Case Collection | 2001 (Revised from original 2001 version)

Competition Policy in the European Union and the Power of Microsoft

Julio J. Rotemberg and Michelle Kalka

Focuses on a decision by the European Competition Commissioner Mario Monti about U.S.-based Microsoft Corp. Sun has complained to the commission that Microsoft has installed components in its desktop operating system that only "talk" to Microsoft operating systems for servers. Sun has further complained that Microsoft released information about its operating systems to some partners but not to Sun. The commission has issued a formal complaint, but Monti's decision is still pending at the time of the case. As background for this decision, the case contains information about the U.S. antitrust case against Microsoft, U.S. and European competition laws, and how European lawmakers have dealt with interconnections among IT components in the past.

Keywords: Competition; Law; Emerging Markets; Information Technology; Policy; Computer Industry; Electronics Industry; European Union; United States;

Citation:
Rotemberg, Julio J., and Michelle Kalka. "Competition Policy in the European Union and the Power of Microsoft." Harvard Business School Case 701-043, June 2001. (Revised from original April 2001 version.)

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Teaching Note | HBS Case Collection | 2001

German Hyperinflation of 1923, The TN

David A. Moss and Julio J. Rotemberg

Teaching Note for (1-798-048).

Keywords: Germany;

Citation:
Moss, David A., and Julio J. Rotemberg. "German Hyperinflation of 1923, The TN." Harvard Business School Teaching Note 701-109, March 2001.

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Supplement | HBS Case Collection | 2001 (Revised from original 2000 version)

Supplement for "The Reagan Plan": Fiscal and Monetary Policy at the Beginning of Reagan's Presidency

Julio J. Rotemberg

Supplements The Reagan Plan.

Keywords: Macroeconomics; Government Administration;

Citation:
Rotemberg, Julio J. Supplement for "The Reagan Plan": Fiscal and Monetary Policy at the Beginning of Reagan's Presidency. Harvard Business School Supplement 700-083, February 2001. (Revised from original March 2000 version.)

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Teaching Note | HBS Case Collection | 2000 (Revised from original 2000 version)

The U.S. Banking Panic of 1933 and Federal Deposit Insurance (TN)

Julio J. Rotemberg

Teaching Note for (9-799-077).

Keywords: Business History; Governing Rules, Regulations, and Reforms; Banks and Banking; Government and Politics; Insurance; Banking Industry; United States;

Citation:
Rotemberg, Julio J. "The U.S. Banking Panic of 1933 and Federal Deposit Insurance (TN)." Harvard Business School Teaching Note 701-005, August 2000. (Revised from original July 2000 version.)

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Supplement | HBS Case Collection | 2000 (Revised from original 1999 version)

Data Supplement: Post-War US Economic Statistics

Julio J. Rotemberg and Cherie Nursalim

Supplements Tax Cut of 1964 (9-382-078), Nixon's Economic Strategy--1969 (8-378-258), and The Reagan Plan (9-381-173).

Keywords: History; Sovereign Finance; Development Economics; Mathematical Methods; Taxation; Policy; Government Administration; Macroeconomics; United States;

Citation:
Rotemberg, Julio J., and Cherie Nursalim. "Data Supplement: Post-War US Economic Statistics." Harvard Business School Supplement 700-070, May 2000. (Revised from original November 1999 version.)

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Supplement | HBS Case Collection | 2000

Basic Statistics from the World Bank's World Development Report 1998/1999

Julio J. Rotemberg

Supplements National Income Accounting and The Origins of National Income Accounting.

Keywords: Business Organization; History; Earnings Management; Financial Institutions; International Finance; International Accounting; Business Earnings; Mathematical Methods; Reports; Economic Growth; Commercial Banking; Financial Services Industry;

Citation:
Rotemberg, Julio J. "Basic Statistics from the World Bank's World Development Report 1998/1999." Harvard Business School Supplement 700-088, January 2000.

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Case | HBS Case Collection | 1999 (Revised from original 1998 version)

German Hyperinflation of 1923, The

David A. Moss and Julio J. Rotemberg

Presents a compilation of primary and secondary sources as well as a set of data exhibits on the German hyperinflation of 1923. The hyperinflation represented a defining moment in German history and certainly one of the two or three most important economic events of the 20th century. Memories of it continue to shape economic policy in Germany to this day. Equally important, the story of the world's most spectacular hyperinflation is rich in lessons about the many interconnections between money, prices, production, and politics in a modern capitalist economy.

Keywords: History; Price; Production; Money; Inflation and Deflation; Government and Politics; Germany;

Citation:
Moss, David A., and Julio J. Rotemberg. "German Hyperinflation of 1923, The." Harvard Business School Case 798-048, June 1999. (Revised from original January 1998 version.)

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