Michael Spence

“One way to measure the size of a company, industry, or economy is to determine its output. But a better way is to determine its added value - namely, the difference between the value of its outputs, that is, the goods and services it produces, and the costs of its inputs, such as the raw materials and energy it consumes.”

“During my Ph.D. program, I became interested in the informational structure of markets that turned into the work on signaling, which was the part of my early work that was recognized for the Nobel Prize, but it was not really a subject at the time.”

“My mother was strong-willed, demanding, and very supportive all at the same time.”

“Next to my family, it seems clear to me that the educational institutions and the teachers from whom I had the privilege of learning were especially important.”

“Digitally enabled supply chains initially increased efficiency and dramatically shortened lead times. Capital was mobile; labor, less so. Economic activity (production, research, design, etc.) moved to any accessible country or region that had relatively inexpensive labor and human capital.”

“Education is, in the end, about individual interactions and about learning.”

“Whatever advantage Trump thinks he will gain by positioning the U.S. in opposition to its natural allies will be dwarfed by the losses.”

“A global economy that is levering up, while unable to generate enough aggregate demand to achieve potential growth, is on a risky path.”

“The combination of a workable basic formula and the capacity to improve over time is what one hopes for in any aspect of society: business, government, the non-profit sector.”

“I picked economics at the end of my undergraduate time because it seemed to be a really nice combination of theory, including mathematical theory on one hand, and things that are quite practical that you can touch and see and feel. So I picked it, and I consciously thought of it as an experiment to see if I liked it. And it worked.”

“In economies with excess productive capacity, targeted investment can yield a double benefit, generating short-run demand and boosting growth and productivity thereafter.”

“On their own, tariff and trade barriers, if viewed as transitory negotiating tactics, will not significantly change global investment patterns or the structure of global supply chains and employment.”

“We tend to think that employment is employment, and we don't ask the question: is this rewarding employment? Research establishes pretty clearly that typical notions of happiness - that more is better - really don't correspond to the way people think and feel.”

“For physical goods, there are costs associated with logistics and lead times, owing to inventories and poor forecasts of the market. With digital capital-intensive technology, however, production will inevitably move toward the final market, wherever it is. This re-localization constitutes a major shift in the structure of global supply networks.”

“A split between the U.S. and its traditional allies, if it becomes a permanent feature of the new global order, would lead to deeper fragmentation among the world's market-oriented democracies. That will surely shift the long-term balance of power in China's favor, as it moves steadily toward becoming the world's largest economy.”

“Globalization is the process by which markets integrate worldwide.”