I was saddened to hear that Earl Thompson just passed away, at the age of 71. Although I never met Professor Thompson, I found him to be one of the most brilliant and original thinkers in the field of macroeconomics. Unfortunately for him, he was far ahead of his time, and his insights still have not been incorporated into macro theory. Last year I pointed out that he was one of the few economists who understood that tight money in 2008 was behind the current economic crisis. Here is an obituary from UCLA, where he taught.
I was disappointed that the obit didn’t even mention his innovative work on monetary policy. He was one of the first to call for nominal wage targeting to minimize employment fluctuations, and developed an approach to overcome policy lags that was close to my futures targeting idea. I believe he may have been the first economist to ever propose this idea, but the paper was never published. A year later Robert Hall published a different method of using market expectations to implement a price level target.
He also did excellent work on the role of gold in the Great Depression. I don’t know much about his work in other fields, but the UCLA obituary has a good summary.
My sympathy to his wife Velma Montoya, and their son.
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