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Paul Wonnacott is professor emeritus at the University of Maryland and Alan Holmes Professor of Economics (retired) at Middlebury College. From 1991 until Jan. 1993, he was a member of the Council of Economic Advisers under President George H.W. Bush. From time to time, he also served with the State Department, the U.S. Treasury, the Federal Reserve Board and the Canadian Royal Commission on Banking and Finance.^[1]

He was the coauthor of Free Trade Between The United States And Canada: The Potential Economic Effects (with R.J. Wonnacott),^[2] a study that revived the Canadian debate over free trade and helped to set the background for the Canada-United States Free Trade Agreement of 1988. Gordon Ritchie, the Canadian Deputy Chief Negotiator for the free trade agreement, wrote of the Wonnacott study as "a seminal project on the issue" of U.S.- Canadian free trade.^[3] The Wonnacotts argued that economies of scale would provide a major source of gain from free trade, particularly for the relatively small Canadian economy.

Paul Wonnacott has also written a study of the Canadian experience with exchange-rate flexibility in the 1950s.^[4] As a result, he was asked to join the senior staff of the Council of Economic Advisers (1968-70) to study the possibilities for a more general system of floating exchange rates. Such a system came into effect with the breakdown of the Bretton Woods system of pegged-but-adjustable exchange rates in 1971-72.

With his brother Ronald, he has written a number of articles explaining how countries can gain from reductions in foreign trade barriers resulting from bilateral or multilateral trade negotiations.^[5] Thus, they rebut the case made by Harry Gordon Johnson, Paul Krugman and others, that countries can achieve no economic gain through multilateral trade negotiations that could not be achieved through unilateral removal of trade barriers; or, in the words of Krugman, "If Economists ruled the world, there would be no need for a World Trade Organization. The Economist's case for free trade is essentially a unilateral case."^[6] The Wonnacotts argued that this conclusion is not correct.

Paul Wonnacott was also the author of A Suggestion for the Revaluation of Gold,^[7] written in the 1960s, when the old Bretton Woods system of pegged-but-adjustable exchange rates was under increasing strain. He thereby offered a minor, partial way of dealing with the Triffin dilemma: the existing International Monetary Fund system -- based on a gold-exchange standard with the dollar at its core -- was unstable because a rapidly increasing superstructure of international finance was being built on a slowly expanding base of gold.

He was the joint author (with Martin J. Bailey and Mancur Olson) of an article in the American Economic Review^[8] casting doubt on the Friedman-Savage argument that, over a range, marginal utility increases as incomes increase.^[9]

His intermediate macroeconomics text first appeared in 1974,^[10] when widely-accepted Keynesian theory was under vigorous attack from Milton Friedman and other monetarists. Wonnacott pointed out the strengths and problems with each of these viewpoints, and he attempted to explain each in a manner that the proponents would recognize.

References

External links

http://www.econ.umd.edu/faculty/profiles/wonnacott

http://www.lastgoodwar.com