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Draft:Pete Klenow

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  • Comment: Better sourcing needed; fails WP:NPROF. All citations that are about Prof. Klenow are connected to him; we need independent sources. All other citations are to his publications; we need independent secondary coverage about the individual, not his work. WeirdNAnnoyed (talk) 12:25, 4 March 2025 (UTC)


Pete Klenow
NationalityAmerican
Academic career
FieldIndustrial Organization,
Macroeconomics
InstitutionStanford University
Alma materUC Berkeley (BS)
Stanford University (Ph.D.)

Peter Joseph Klenow (born 1964) is an American economist and the Ralph Landau Professor in Economic Policy at Stanford University. He is known for his work on firm productivity in the developing world and on measures of economic growth.

He is a member of the American Academy of Arts and Sciences and the Econometric Society. He has published in the Quarterly Journal of Economics, the American Economic Review, Econometrica, and The Journal of Political Economy.

Biography

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Klenow received his PhD from Stanford in 1991 with a dissertation on "Externalities and Business Cycles."[1][2] He was advised by Robert Hall and Kenneth L. Judd.[1]

Klenow was a junior professor in the Chicago Booth School of Business from 1991 until 2000. He then joined the Federal Reserve Bank of Minneapolis as a senior economist.[3][4] In 2003, he returned to Stanford to join the faculty.

Beginning in 2025, Klenow will be a co-editor of Econometrica.[5] From 2017 to 2023, he was a founding co-editor of AER:Insights.[6]

Work

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Economic measurement

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Much of Klenow's work has focused on improving our measurements of macroeconomic variables. With Mark Bils, a frequent coauthor, Klenow wrote several papers on measuring the quality of goods and human capital, and its implication for growth models.[7] They proposed using the increase in the willingness-to-pay of consumers as a fraction of their income to test how good quality changes as one’s income increases. Automobiles have a steep curve, suggesting that quality rises sharply, while the flat curve of vacuum cleaners suggests that the same technology is available to everyone.[8]

Since the 1970s, economists have observed that social welfare is broader than GDP, and have proposed methods to capture items like leisure and household production.[9] With Chad Jones, Klenow has proposed methods to capture health, consumption, leisure, and inequality in welfare measures.[9][10] [11] Including these in welfare statistics causes living standards in France and Germany to look more similar to those of the United States.[12][13]

Klenow has examined how macroeconomic models change when the number of people living is viewed as relevant to total welfare. In such a world, welfare has risen considerably more than we estimate now, though countries with low population growth like Japan have stagnated.[14]

Klenow has worked to improve measures of total factor productivity. His paper with Philippe Aghion, Antonin Bergeaud, Timo Boppart, and Huiyu Li corrects a bias in how statistical bureaus adjust for new product varieties.[15] If a new product appears which surpasses a previously existing product so completely the old product is no longer sold, its quality adjusted price is necessarily below the old one. Statistical bureaus have no basis for saying how much lower it is, and presume that its price growth is the same as similar products which did not disappear entirely. They found that growth between 1983 and 2005 was substantially higher per year than otherwise believed.

With co-author Austin Goolsbee, Klenow developed the Adobe Digital Price Index, a comprehensive measure of online inflation.[16]

Misallocation and firm productivity

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Klenow's 2009 paper with Chang-Tai Hsieh, “Misallocation and Manufacturing TFP in China and India,” has been cited more than 7,000 times as of March 2025.[17] More productive firms should have a larger share of the market, but they are often prevented by corruption or unfair regulations. To estimate this effect, the paper describes a tractable way to measure how far off the distribution of firms is from optimal.[18] Revenue productivity – the amount of revenue brought in per unit of input – should be equal across all firms. These distortions are large in China and India than the US; if brought to the same level the US, they find that total factor productivity would rise 30-50% in China and 40-60% in India.[18][19]

In a later paper, Hsieh and Klenow (2014) propose reasons that country-level productivity diminishes when older firms cannot expand their most productive plants.[20] In the United States, plants which are more than 40 years old are 7 times larger than those less than 5 years old. But in India, 40-year-old plants are only 40 percent larger than new plants. Hsieh and Klenow estimate that this inability for productive plants to grow reduces total factor productivity by as much as 25 percent.[20] In Mexico, moving production factors to the most-productive plants would double manufacturing productivity.[21]

Efforts to measure factor misallocation are sensitive to the measurement practices of national statistical bureaus. For example, India does not clean its firm data.[22] A firm omitting a zero in their revenue would likely be caught in the US, but not in India. Klenow's 2021 paper with Mark Bils and Cian Rian proposes a correction which revises down the degree of misallocation in the developing world.[23] Shocks to productivity should change its revenue and inputs in the same proportion is if it correctly measured, and will be disproportionate if a firm is systematically misreporting its true values.

Klenow's factor misallocation papers were cited as exemplary research in his induction to The Econometric Society.[24] Alex Tabarrok has described Hsieh and Klenow's first factor misallocation paper as “pioneering”.[25]

Labor market discrimination

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In addition, Klenow’s work has shed light on the harmful effects of discrimination on the allocation of talent. Hsieh, Hurst, Jones, and Klenow (2019) quantified the gains from allowing people to work the jobs which they are most suited for.[26] In an era of anti-black discrimination, or of workplace sexism, fully capable people were kept from achieving their full potential. The effects were large: they estimate that the reduction of labor force discrimination is responsible for between 20 and 40 percent of per person income growth in the United States between 1960 and 2010.[27]

When first released, the working paper received coverage on the blog Marginal Revolution.[28][29] U.S. Treasury officials have cited the paper to show that labor market discrimination limits economic growth.[30] Marianne Bertrand has profiled the work as an example of economists valuing the adverse effects of inequality, not only inefficiency, as a problem for economic growth.[31] Others have argued the paper's approach does not readily explain the persistence of racism, since it implies self-imposed economic harm. Sandy Darity argues racism can be better explained as a dominant racial group increasing its share of national income by excluding a nondominant racial group.[32]

Semiconductor industry

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Klenow’s career began with a series of papers about "learning by doing" in the semiconductor industry with Doug Irwin, which he extended in a general look at learning curves in manufacturing in 1998.[33][34][35] They found that, while there were significant economies of scale in creating particular designs of computer chips, these did not extend from design to design. Economies of scale were contained largely within the firm, with some spillovers internationally, but did not stay within the country. Their results imply that the conditions for tariffs to improve outcomes are not met.

Awards and honors

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Klenow is a member of the:

References

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  1. ^ a b "Peter Joseph Klenow". Mathematics Genealogy Project. Retrieved 10 March 2025.
  2. ^ "Doctoral Dissertations in Economics Eighty-ninth Annual List". Journal of Economic Literature. 30 (4): 2514–2543. 1992. JSTOR 2728058. Retrieved 6 March 2025.
  3. ^ Pethokoukis, James. "How Will America's Economy Grow in the 2020s? My Long-read Q&A with Peter Klenow". AEIdeas. Retrieved 6 March 2025.
  4. ^ "Peter J. Klenow". Federal Reserve Bank of Minneapolis. Retrieved 6 March 2025.
  5. ^ "Announcing the new 2025 co-editors". The Econometric Society. 9 September 2024. Retrieved 6 March 2025.
  6. ^ "Minutes of the Annual Business Meeting". AEA Papers and Proceedings 2020. 110. American Economic Association: 627. 2020. Retrieved 5 March 2025.
  7. ^ Bils, Mark; Klenow, Peter J (2000). "Does Schooling Cause Growth?" (PDF). American Economic Review. 90 (5): 1160–1183. doi:10.1257/aer.90.5.1160.
  8. ^ Bils, Mark; Klenow, Peter J (2001). "Quantifying Quality Growth" (PDF). American Economic Review. 91 (4): 1006–1030. doi:10.1257/aer.91.4.1006.
  9. ^ a b Jorgensen, Dale W. (2019). "Production and Welfare: Progress in Economic Measurement". Journal of Economic Literature. 56 (3): 867–919. doi:10.1257/jel.20171358.
  10. ^ Jones, Charles I; Klenow, Peter J (2016). "Beyond GDP? Welfare across Countries and Time" (PDF). American Economic Review. 106 (9): 2426–2457. doi:10.1257/aer.20110236.
  11. ^ "Measuring economic strength with quality of life". Stanford Institute for Economic Policy Research (SIEPR). 7 January 2016. Retrieved 5 March 2025.
  12. ^ Whitehouse, Mark (10 January 2011). "Nations Seek Success Beyond GDP". Wall Street Journal. Retrieved 5 March 2025.
  13. ^ "Beyond GDP". The Economist. 20 September 2010. Retrieved 5 March 2025.
  14. ^ Adhami, Mohamad; Bils, Mark; Jones, Charles I; Klenow, Peter (2023). "Population and Welfare: Measuring Growth when Life is Worth Living". National Bureau of Economic Research Working Papers. doi:10.3386/w31999.
  15. ^ Aghion, Philippe; Bergeaud, Antonin; Boppart, Timo; Klenow, Peter J; Li, Huiyu (2019). "Missing Growth from Creative Destruction" (PDF). American Economic Review. 109 (8): 2795–2822. doi:10.1257/aer.20171745. Retrieved 6 March 2025.
  16. ^ Adobe Inc. "Adobe Digital Price Index". Adobe Digital Price Index. Retrieved 3 March 2024.
  17. ^ "Google Scholar citation information for 'Misallocation and manufacturing TFP in China and India'". Google Scholar. Retrieved 10 March 2025.
  18. ^ a b Hsieh, Chang-Tai; Klenow, Peter J (November 2009). "Misallocation and Manufacturing TFP in China and India" (PDF). The Quarterly Journal of Economics. 124 (4): 1403–1448. doi:10.1162/qjec.2009.124.4.1403.
  19. ^ Syverson, Chad (2011-06-01). "What Determines Productivity?". Journal of Economic Literature. 49 (2): 326–365. doi:10.1257/jel.49.2.326. ISSN 0022-0515.
  20. ^ a b Hsieh, Chang-Tai; Klenow, Pete (August 2014). "The Life Cycle of Plants in India and Mexico". The Quarterly Journal of Economics. 129 (3): 1035–1084. doi:10.1093/qje/qju014.
  21. ^ Hanson, Gordon (2010). "Why Isn't Mexico Rich?". Journal of Economic Literature. 48 (4): 987–1004. doi:10.1257/jel.48.4.987.
  22. ^ Kim, Hang; Rotemberg, Martin; White, T. Kirk (2021). "Plant-to-Table(s and Figures): Processed Manufacturing Data and Measured Misallocation" (PDF). Retrieved 13 March 2025.
  23. ^ Bils, Mark; Klenow, Peter J; Ruane, Cian (2021). "Misallocation or Mismeasurement?" (PDF). Journal of Monetary Economics. 124: S39 – S56. doi:10.1016/j.jmoneco.2021.09.004.
  24. ^ a b "2014 Election of Fellows to the Econometric Society". Econometrica. 83 (3): 1255–1260. May 2015. doi:10.3982/ECTA833EF.
  25. ^ Tabarrok, Alex (26 March 2015). "The Misallocation of Water". Marginal Revolution. Retrieved 5 March 2025.
  26. ^ Hsieh, Chang-Tai; Hurst, Erik; Jones, Charles I.; Klenow, Peter J. (September 2019). "The Allocation of Talent and U.S. Economic Growth" (PDF). Econometrica. 87 (5): 1439–1474. doi:10.3982/ECTA11427.
  27. ^ Andrade, Eduardo; Canuto, Otaviano (4 April 2024). "Demographic Dynamics and Immigration Policies in High-Income Countries". Policy Center for the New South. Retrieved 5 March 2025.
  28. ^ Tabarrok, Alex (9 May 2012). "The Growth of Justice". Retrieved 5 March 2025.
  29. ^ Cowen, Tyler (27 November 2013). "The economic gains from a better allocation of talent". Marginal Revolution. Retrieved 5 March 2025.
  30. ^ Bowdler, Janis; Harris, Benjamin (9 June 2023). "Racial Differences in Educational Experiences and Attainment". U.S. Department of the Treasury. Retrieved 5 March 2025.
  31. ^ Bertrand, Marianne (26 June 2018). "In Praise of 'Messy Economics'". Chicago Booth Review. Retrieved 5 March 2025.
  32. ^ Darity, William A., Jr. (2002). "Position and Possessions: Stratification Economics and Intergroup Inequality". Journal of Economic Literature. 60 (3): 400–426. doi:10.1257/jel.20211690.{{cite journal}}: CS1 maint: multiple names: authors list (link)
  33. ^ Irwin, Douglas A.; Klenow, Peter J. (1996). "High-tech R&D Subsidies: Estimating the Effects of Sematech" (PDF). Journal of International Economics. 40 (3–4): 323–344. doi:10.1016/0022-1996(95)01408-X.
  34. ^ Irwin, Douglas A.; Klenow, Peter J. (1994). "Learning-by-Doing Spillovers in the Semiconductor Industry" (PDF). Journal of Political Economy. 102 (6): 1200–1227. doi:10.1086/261968.
  35. ^ Klenow, Pete (1998). "Learning Curves and the Cyclical Behavior of Manufacturing Industries" (PDF). Review of Economic Dynamics. 1 (2): 531–550. doi:10.1006/redy.1998.0014.
  36. ^ "Fellows of the Econometric Society". The Econometric Society. Retrieved 5 March 2025.
  37. ^ "Peter J. Klenow". American Academy of Arts & Sciences. February 2025. Retrieved 5 March 2025.
  38. ^ Parker, Clifton B. (22 April 2015). "American Academy of Arts and Sciences elects 10 Stanford professors to 2015 class". Stanford Report. Retrieved 6 March 2025.

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