Kenneth Kletzer

Professor of Economics


University of California

Santa Cruz, CA 95064

Office: 461 Engineering 2

Phone: 831-459-3407 begin_of_the_skype_highlightingend_of_the_skype_highlighting

Fax: 831-459-5077



Curriculum Vitae (pdf)

Course Information


Fall 2015


Economics 141: International Finance



Economics 205A: Advanced Macroeconomics


Past Courses and Syllabi

Spring 2015


Economics 105: Topics in Macroeconomics


Spring 2014


Economics 241C: Advanced International Macroeconomics



Academic Year 2012-13


Economics 100N: Macroeconomics, Spring 2013

Economics 241C: Advanced International Macroeconomics, Spring 2013


Economics 205A: Advanced Macroeconomics, Fall 2012


Even More Courses Here




Current topics:


Moral Hazard and Fiscal Insurance in a Monetary Union


Optimal Taxation with Private Information in Interdependent Economies


Government Debt Dynamics with Imperfect Information without Commitment


Public Debt Indexation with Partial Commitment: Inflation Taxes and Default Risk


Fiscal Policy, Fiscal Dominance and Public Debt in India


Co-editor: Monetary Policy in India: A Modern Macroeconomic Perspective, edited by Chetan Ghate and Kenneth Kletzer, Springer Verlag, expected 2016.





Articles and Chapters


“Decentralization and Epsilon‑Rational Competitive Equilibria,” with Steven M. Goldman, Econometrica, Vol. 50, No. 1, January 1982.


“Asymmetries of Information and LDC Borrowing with Sovereign Risk,” Economic Journal, Vol. 94, June 1984.


“Dynamic Effects of Protection on Productivity,” with Pranab Bardhan, Journal of International Economics, Vol. 16, No. 1/2, February 1984.


“Quality Variations and the Choice Between Foreign and Indigenous Goods or Technology,” with Pranab Bardhan, Journal of Development Economics, Vol. 14, No. 3, April 1984.


“Credit Markets and Patterns of International Trade,” with Pranab Bardhan, Journal of Development Economics, Vol. 27, 1987; (reprinted in P. Bardhan, J. Behrman, and A. Fishlow, eds., International Trade, Investment, Macro Policies and History: Essays in Memory of Carlos F. Diaz‑Alejandro, Amsterdam: North‑Holland, 1988.)


“External Borrowing by LDCs:  A Survey of Theoretical Issues,” in G. Ranis and T. P. Schultz, eds., The State of Development Economics, London:  Basil Blackwell, 1988.


“Saving and Investment in an Open Economy with Non‑Traded Goods,” with Charles M. Engel, International Economic Review, Vol. 30, No. 4, November 1989.


“Sovereign Debt Renegotiation Under Asymmetric Information,” in J.Frenkel, M. Dooley, and P. Wickham, eds., The Analytical Issues in Debt, Washington:  International Monetary Fund, 1989.


            “Tariffs and Saving in a Model with New Generations,” with Charles M.Engel, Journal of International Economics, Vol. 28, No. 1, February 1990.


            “Decentralized Consistent Equilibria”, with Steven M. Goldman, in S. B. Dahiya, ed., Theoretical Foundations of Development Planning,, Concept Publishing Company, New Delhi, 1991.


            “Trade Policy with Endogenous Credibility,” with Charles M. Engel, Journal of Development Economics, Vol. 36, December 1991.


“The Welfare Economics of Cooperative and Noncooperative Fiscal Policy,” with Willem H. Buiter, Journal of Economic Dynamics and Control, Vol. 15, No. 1, January 1991.


“Reflections on the Fiscal Implications of a Common Currency,” with Willem H. Buiter, in Alberto Giovannini and Colin Mayer, eds., European Financial Integration, New York:  Cambridge University  Press, 1991.


“Persistent Differences in National Productivity Growth Rates with a  Common Technology and Free Capital Mobility,” with Willem H. Buiter, Journal of the Japanese and International Economies, Vol. 5, No. 4, December 1991.


“Voluntary Choices in Concerted Deals: Mechanics and Attributes of the Menu Approach to LDC Debt,” with Ishac Diwan, World Bank Economic Review, Vol. 6, No. 1, January 1992.


“Fiscal Policy Coordination as Fiscal Federalism:  Economic Integration, Public Goods and Efficiency in Growing Economies,” with Willem H. Buiter, European Economic Review, Vol. 36, April 1992.


“Who's Afraid of the Public Debt,” with Willem Buiter, American Economic Review Papers and Proceedings, Vol. 82, May 1992.


“Smoothing Primary Exporters' Price Risks:  Bonds, Futures, Options and Insurance,” with David M. Newbery and Brian D. Wright, Oxford Economic Papers, October 1992.


“Persistent National Productivity Growth Differentials in an Integrated World Economy:  the Roles of Households, Non‑tradedness, Self‑financing and Fiscal Policy,” with Willem H. Buiter, Scandinavian Journal of Economics, Vol 95, No. 4, December 1993.  Reprinted in Torben Andersen and Karl O. Moene, eds., Endogenous Growth, Oxford: Basil Blackwell, 1993, pp. 77‑104.


“Sovereign Immunity and International Lending,” in Frederick van der Ploeg, ed., Handbook of International Macroeconomics, Oxford:  Basil Blackwell, 1994, pp. 439‑479.


“Foreign Debt and Capital Flight as International Financial Intermediation,” with Michael P. Dooley, Federal Reserve Bank of San Francisco Economic Review, No. 3, 1994, pp. 29‑37.


“Fiscal Convergence Criteria, Factor Mobility and Credibility in Transition to Monetary Union in Europe,” with Michael M. Hutchison, in Barry Eichengreen, Jeffrey Frieden and Jurgen von Hagen, eds., Monetary and Fiscal Policy in an Integrated Europe, Berlin: Springer‑Verlag, 1995, pp. 138‑165.


“Capital Mobility, Fiscal Policy and Growth under Self‑financing of Human Capital Formation,” with Willem H. Buiter, Canadian Journal of Economics, Vol. 28, November, 1995, pp. S163‑S194.


“Recent Private Capital Inflows to Developing Countries:  Is the Debt Crisis History?,” with Michael P. Dooley and Eduardo Fernandez‑Arias, World Bank Economic Review, Vol. 10, No.1, January 1996, pp. 27‑49.


“The Political Economy of Indian Fiscal Federalism,” with Nirvikar Singh, in Sudipto Mundle, ed., Fiscal Policy in India, Oxford: Oxford University Press, 1997, pp. 259-298.


“Monetary Union and the Role of Automatic Stabilizers,” with Willem H. Buiter, in Jean‑Olivier Hairault, Pierre‑Yves Henin and Franck Portier, eds., Should We Rebuild Built‑in Stabilizers, Dordrecht: Kluwer, 1997, pp. 109-147.


“Macroeconomic Stabilization with a Common Currency: Does European Monetary Unification Create a Need for Fiscal Insurance or Federalism?,” in Barry Eichengreen and Jeffry Frieden, eds., Forging an Integrated Europe, Ann Arbor:  University of Michigan Press, 1998, pp. 91-126.


            “Rent Sharing, Aggregate Saving and Growth,” with Charles M. Engel, Review of Development Economics, June, 1998, pp. 107-122.


“Speculative Capital Inflows and Exchange Rate Targeting in the Pacific Basin:  Theory and Evidence,” with Mark Spiegel, in Reuven Glick, ed., Managing Capital Flows and Exchange Rates:  Lessons from the Pacific Basin, New York: Cambridge University Press,1998, pp. 409-435.


“Debt and Taxes: Ponzi Finance, Dynamic Efficiency and Government Solvency,” with Willem H. Buiter, in S. Brakman, H. Van Ees and S. Kuipers, eds., Market Behaviour and Macroeconomic Modelling, London: Macmillan Press, 1998, pp. 275-307. 


“The Importance of Price Normalization in Models of International Trade under Imperfect Competition,” with T. N. Srinivasan, in James Melvin, James Moore and Ray Riezman, eds., Trade, Theory and Econometrics:  Essays in Honor of John S. Chipman, New York: Routledge, 1999, pp. 65-75.


“Monetary Union, Asymmetric Productivity Shocks and Fiscal Insurance: an Analytical Discussion of Welfare Issues,” in A. Hughes-Hallett, M. Hutchison, S. Jensen, eds., Fiscal Aspects of European Monetary Integration, London: Cambridge University Press, 1999, pp. 96-123.


“Indian Fiscal Federalism: Political Economy and Issues for Reform,” with Nirvikar Singh, in Satu Kahkonen and Anthony Lanyi, eds., Institutions, Incentives and Economic Reforms in India, New Delhi: Sage Publications, pp.37-76.


“Sovereign Debt as Intertemporal Barter,” with Brian Wright, American Economic Review, Vol. 90, June, 2000, pp. 621-639.


“Will Self-Protection Policies Safeguard Emerging Markets from Crises?” with Ashoka Mody, in Robert Litan, ed.,  Emerging Markets in the New Financial System, Washington D.C.: Brookings Institution Press, 2000, pp. 413-445.


“International Capital Inflows, Domestic Financial Intermediation and Financial Crises under Imperfect Information,” with Menzie D. Chinn, in Reuven Glick, ed., Financial Crises in Emerging Markets, New York: Cambridge University Press, 2001, pp. 196-237.


“Monetary Union and Fiscal Federalism,” with Juergen von Hagen, in Charles Wyplosz, ed., European Monetary Union and its Impact on Europe and the Developing Countries,  Oxford: Oxford University Press, 2001, pp. 17-39.


“Domestic Bank Regulation and Financial Crises:  Theory and Empirical Evidence from East Asia,” with Robert Dekle, in Sebastian Edwards and Jeffrey Frankel, eds., Preventing Currency Crises in Emerging Markets, Chicago: University of Chicago Press, 2002, pp. 507-552.


“The Japanese Banking Crisis and Economic Growth: Theoretical and Empirical Implications of Deposit Guarantees and Weak Financial Regulation,” with Robert Dekle, Journal of the Japanese and International Economies, Vol. 17,September 2003, pages 305-335.


“Sterilization Costs and Exchange Rate Targeting,” with Mark Spiegel, Journal of International Money and Finance, Vol. 23, October 2004, pages 897-915.


            “Crisis Resolution: Next Steps,” with Barry Eichengreen and Ashoka Mody, Brookings Trade Forum 2003, Washington, DC: Brookings Institution, 2004, pp. 279-338.


“Sovereign Bond Restructuring: Collective Action Clauses and Official Crisis Intervention,” in Andrew Haldane, ed., Fixing Financial Crises in the 21st Century, London: Routledge, 2004, pages 230-253.


“Liberalizing Capital Flows in India: Financial Repression, Macroeconomic Policy and Gradual Reforms,” NCAER/Brookings India Policy Forum, 2004, Washington, D.C.: Brookings

Institution, 2004, pages 227-263.


“Deposit Insurance, Regulatory Forbearance and Economic Growth: Implications for the Japanese Banking Crisis,” with Robert Dekle, in M. Hutchison and F. Westermann, eds., Economic Stagnation in Japan, Cambridge, MA: MIT Press, 2005, pages 61-101.


“Sovereign Debt, Volatility and Insurance,” External Vulnerability and Preventive Policies, vol. 10, Series on Central Banking, Analysis and Economics Policies, edited by Ricardo J. Caballero, Cesar Calderon and Luis F. Cespedes, Santiago: Central Bank of Chile, 2006, pages 327-351.


“International Financial Integration, Sovereignty and Constraints on Macroeconomic Policies,” Bank of Japan, Monetary and Economic Studies, 23 (S-1), October 2005, pages 165-186.


“Sargent and Wallace meets Krugman-Flood-Garber, or: Why Sovereign Debt Swaps Don’t Avert Macroeconomic Crises,” with Joshua Aizenman and Brian Pinto, Economic Journal, Vol. 115, 2005, pages 343-367.


“The IMF in a World of Private Capital Markets,” with Barry Eichengreen and Ashoka Mody, Journal of Banking and Finance, vol. 30, no. 5, 2006, pp. 1335-1357.


Taxes and stabilization in contemporary macroeconomic models,” International Tax and Public Finance, vol. 13, No. 4, August 2006, pp. 351-371.


            “Sovereign Debt,” in Lawrence E. Blume and Steven N. Durlauf, eds., The New Palgrave  Dictionary of Economics, 2nd Edition, London: Palgrave Macmillan, 2008.


“The Life Cycle of Scholars and Papers in Economics - the "Citation Death Tax,” with Joshua Aizenman, Applied Economics, Vol. 43.27, 2010, pp. 4135-48.


“Growth, Dynamics and Economic Policy: Papers in Honor or Stephen J. Turnovsky,” with Walter Fisher, Journal of Economic Dynamics and Control, Vol. 35, Issue 8, September, 2011, pp. 1387-92.


            “Financial Friction and Monetary Policy Transmission in India,” in Chetan Ghate, ed., The Oxford Handbook of the Indian Economy, Oxford/New Delhi: Oxford University Press, 2012.


Discussions and comments:


            “Comment on “Are Capital Flows to Developing Countries a Vote for or against Economic Policy Reforms,” by Michael Dooley in P. R. Agenor, M. Miller, D. Vines and A. Weber, eds., The Asian Financial Crises: Causes, Contagion and Consequences, Cambridge: Cambridge University Press, 2000, pp. 123-126.


            “Comment on ‘On the Fiscal Implications of Twin Crises’ by Burnside, Eichenbaum and Rebello,” in Michael Dooley and Jeffrey Frankel, eds, Managing Currency Crises in Emerging Markets, Chicago: University of Chicago Press, 2003, pages 218-222.


            “Comment on ‘India’s Fiscal Situation: Is a Crisis Ahead?’ by T.N. Srinivasan,” in Anne Krueger, ed., Economic Policy Reforms and the Indian Economy, Chicago: University of Chicago Press, 2002, pages 76-79.


            “Comment on ‘Should a U.S.-India FTA be Part of India’s Trade Strategy?” by R. Lawrence and R. Chadha, in NCAER/Brookings India Policy Forum, 2004, Washington: Brookings Institution, 2004, pages 125-129.


“Comment on ‘How Applicable is the Inflation-Targeting Framework for India?’ by Sheetal K. Chand and Kanhaiya Singh,” India Policy Forum, vol. 2, Washington, D.C.: Brookings Institution, 2005/06, pages 170-175.


“Comment on ‘Trade Liberalization, Labor-Market Institutions, and Poverty Reduction: Evidence from Indian States,’ by Rana Hasan, Devashish Mitra and Beyza P. Ural,” Brookings Institution and National Council for Economic Research, India Policy Forum, vol. 3, New Delhi: Sage Publications, 2007, pp. 111-14.


“Comment on ‘Trade Liberalization, Labor Market Institutions and Poverty Reduction: Evidence from Indian States,’ by Jean-Marie Baland, Rohini Somanathan and Lore Vandewalle” India Policy Forum, vol. 4, Washington: Brookings Institution, 2007/08, pages 111-114.


“Comment on ‘The Cost of Holding Excess Reserves: Evidence from India,’ by Abhijit Sen Gupta” India Policy Forum, 2008/09, vol. 5, Brookings Institution and National Council for Economic Research (India), New Delhi: Sage Publications, 2009, pp. 284-288.


“Comment on “Determinants of Cost Overruns in Public Procurement of Infrastructure: Roads and Railways,” by Ram Singh, India Policy Forum, 2010-11, vol. 7, Brookings Institution and National Council for Economic Research (India), New Delhi: Sage Publications, 2011, pp. 148-53.


“Comment on “Is State Ownership in the Indian Banking Sector Desirable?” by Viral Acharya, India Policy Forum, 2011-12, vol. 8, Brookings Institution and National Council for Economic Research (India), New Delhi: Sage Publications, 2012.


“Comment on “Post-Global Crisis Inflation Dynamics in India: What has Changed?” by Michael Debabrata Patra, Jeevan Kumar Khundrakpam and Asish Thomas George, India Policy Forum, 2013-14, vol. 10, Brookings Institution and National Council for Economic Research (India), New Delhi: Sage Publications, 2014.


Policy commentaries:


            “Some Thoughts on the Brady Plan: Putting a Fourth Leg on the Donkey?” with W. Buiter and T.N. Srinivasan, World Development, Vol. 17, No. 10, October 1989.


“Implications of Exchange Rate Unification for Fiscal and Monetary Policy Coordination,” Policy Forum on Europe 1992 and the Implications for Canada,  John Deutsch Institute for the Study  Economic Policy, Queen's University, March 1991.


“The Effects of Public Expenditures on the Macroeconomy of Kenya,” with Catherine B. Hill and A. A. Shah, in Henry Bruton and Catherine Hill, eds., Public Expenditure in Sub‑Saharan Africa, Washington,  D.C.:  The World Bank, 1994.


Book reviews:


            Review of Debt and Crisis in Latin America:  The  Supply Side of the Story, by Robert Devlin, Journal of Economic Literature, Vol. 29, No. 3, September 1991.


Review of A Vision for the World Economy:  Openness, Diversity and Cohesion, by Robert Z. Lawrence, Albert Bressard and Takatoshi Ito, Journal of Economic Literature, 1997.


Review of World Capital Markets: Challenge to the G-10, by Wendy Dobson and Gary Clyde Hufbauer, Journal of Economic Literature, Vol. 41, pages 1293-1294.