Stokey has published significant research in the areas of economic growth and development, as well as papers on economic history and optimal control. She is the co-developer, with Paul Milgrom, of the no-trade theorem, a counter-intuitive development of the premises of financial economics. She co-authored with Robert Lucas, Jr. and Edward Prescott a book on Recursive Methods in Economic Dynamics that is widely used by research economists and graduate students. Stokey worked with Paul Milgrom to publish "Information, Trade, and Common Knowledge", which established that information-based trade is not possible for rational agents with common knowledge. This work contributed to be one of the pillars of modern finance. She is the author of The Economics of Inaction which treats models that involve fixed costs of adjustment. Stokey has written critically about how the United Nations allocates funds for international economic development and humanitarian aid. Stokey coauthored "Optimal Monetary and Fiscal Policy" which was one of the first papers to examine the time consistency of macroeconomic policy and to demonstrate the importance of central banks following rules. Her recent research is on growth theory, economic dynamics, and fiscal and monetary policy. Her recent work include "Specific Technical Change, Trade Dynamics, and the Evolution of Skill Premia" and "Monetary Shocks in an Economy with Circulating Capital." She is currently working on "Technology, Skill, and Long-Run Growth", "Technology, Skill, and the Wage Structure", "The Race Between Technology and The Human Capital", and "Liquidity Crises: Understanding Sources and Limiting Consequences" with Robert E. Lucas Jr.
Professional Experience
Stokey has taught and worked in various institutions. She was an economics professor at Northwestern University since 1978, from assistant professor to department chairman in 1987. She also taught economics as a visiting lecturer at Harvard University in the fall of 1982, at University of Minnesota in spring of 1983, and then at University of Chicago in 1983-1984. Since 1990 until present, she has been teaching economics at University of Chicago. Aside from teaching, she was a visiting scholar of the Research Department at Federal Reserve Bank of Minneapolis for eight falls in the 2000s.
Memberships
Stokey is a member of the National Academy of Sciences and was a vice-president of the American Economic Association between 1996–1997. She has been a member of the American academy of Arts and Sciences since 1993, and a member of the National Academy of Sciences since 2004. She was also a member of the expert panel convened to produce a Copenhagen Consensus on some of the leading scientific/developmental problems of the 21st century. She has held editorial positions with top journals as Econometrica, The Journal of Economic Growth, Games and Economic Behavior and The Journal of Economic Theory. " She has made fundamental contributions in microeconomics, economic theory, finance, and in macroeconomics, with a particular focus on the impact of whether or not economic agents have commitment power." She is married to Nobel Prize in Economics laureate Robert Lucas, Jr.
Publications
"Wait-and-See: Investment Options under Policy Uncertainty," Review of Economic Dynamics, 21, pp. 246–6
Review of Economic Dynamics, 21, pp. 246–65.
Journal of Economic Growth, 20, pp. 1–36.
with Edward C. Prescott and Lee Ohanian, Journal of Economic Theory, 144 , pp. 2235–46.
Journal of Economic Theory, 144 , pp. 2419–39.
with Jerry R. Green, Journal of Economic Theory, July 2007, pp. 90–104.
"Giving Aid Effectively," 2005 Annual Report Issue of The Region, Federal Reserve Bank of Minneapolis.
NBER Macroeconomics Annual 2002, pp. 9–45.
Carnegie-Rochester Conference Series on Public Policy, 55, pp. 55–109.
with Fernando Alvarez, Journal of Economic Theory, 82, pp. 167–189.
Frontiers of Research in Economic Theory: The Nancy L. Schwartz Memorial Lectures 1983-1997, D. Jacobs, E. Kalai, and M. Kamien, eds., Cambridge University Press, 1998.
