Allan Meltzer: Leadership and Progress

Tim O'Neill: Globalization: Fads, Fictions, and Facts

Douglas Lamdin: Corporate Bond Yield Spreads in Recent Decades

Christopher Mills and Eleonora Omarova: Predicting Currency Crises—A Practical Application for Risk Managers

Ray Fair: Testing for the New Economy in the 1990s

Stephen G. Cecchetti: Monetary Policy in a Low Inflation Environment

Robert Eisenbeis, Daniel Waggoner and Tao Zha: Evaluating Wall Street Journal Survey Forecasters

Rajeev Dhawan: Georgia State University’s Economic Forecasting Center

Book Reviews

Leadership and Progress

Democratic Capitalism and the Pax Americana Have Brought Many More Global Benefits Than Is Often Realized.

Allan H. Meltzer

Allan Meltzer is the Allan H. Meltzer University Professor of Political Economy and Public Policy at Carnegie Mellon University. He is also a visiting scholar at the American Enterprise Institute in Washington. He has been a visiting professor at prestigious universities in the United States and abroad and has served as a consultant for several congressional committees, U.S. government departments, the Federal Reserve Board, and foreign central banks. He served as chairman of the International Financial Institution Advisory Commission, known as the Meltzer Commission, and of the Shadow Open Market Committee. He is the author of several books and more than 300 papers on economic theory and policy. His career includes experience as a self-employed businessman, management adviser, and consultant to banks and financial institutions. He is a past president of the Western Economic Association, a distinguished fellow of the American Economic Association, and an NABE fellow.

During the postwar years, more people in more countries increased their living standards by larger amounts than in any period in recorded history. Two institutional changes, working together, explain much of the difference between postwar and previous experience. One is the spread of democratic capitalism, joining the market system to property rights and the rule of law. The other is the Pax Americana, the willingness and ability of the United States to use military strength to deter international aggression. Countries that have adopted democratic capitalism and integration into the global economy have thrived. Those who have not have languished. However, the Pax Americana has been and will be a necessary condition for healthy global economic growth.

This address was presented at the 45th Annual Meeting of the National Association for Business Economics on September 15, 2003 when the author was presented with its Adam Smith Award. An earlier version was presented as the First Irving Kristol lecture of the American Enterprise Institute, February 25, 2003.

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