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Julio J. Rotemberg

William Ziegler Professor of Business Administration

Contact (617) 495-1015
Overview Biography Publications & Course Materials Current Research Areas of Interest

Published Papers

Rotemberg, Julio J. "Attitude Dependent Altruism, Turnout and Voting." Public Choice (forthcoming).

Rotemberg, Julio J. "Minimally Altruistic Wages and Unemployment in a Matching Model with Monopsony." Supplement. Journal of Monetary Economics 55 (October 2008): 97-110.

Rotemberg, Julio J. "Minimally Acceptable Altruism and the Ultimatum Game." Journal of Economic Behavior and Organization 66, nos. 3-4 (June 2008).

Rotemberg, Julio J. "The Persistence of Inflation Versus that of Real Marginal Cost in the New Keynesian Model." Journal of Money, Credit & Banking 39, no. 1 (February 2007): 237-239. Abstract

This note provides an example where the New Keynesian Phillips Curve leads inflation to be substantially more persistent than the output gap.
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Rotemberg, Julio J. "Cyclical Wages in a Search-and-Bargaining Model with Large Firms." NBER International Seminar on Macroeconomics (2006): 65-114.

Rotemberg, Julio J. "Customer Anger at Price Increases, Changes in the Frequency of Price Adjustment and Monetary Policy." Journal of Monetary Economics 52, no. 4 (May 2005): 829-852.

Rotemberg, Julio J. "Stochastic Technical Progress, Smooth Trends, and Nearly Distinct Business Cycles." American Economic Review 93, no. 5 (December 2003): 1543-1559.

Rotemberg, Julio J. "Commercial Policy with Altruistic Voters." Journal of Political Economy 111, no. 1 (February 2003): 174-201.

Rotemberg, Julio J. "Perceptions of Equity and the Distribution of Income." Journal of Labor Economics 20, no. 2 (April 2002): 249-288.

Rotemberg, Julio J., and G. Saloner. "Visionaries, Managers, and Strategic Direction." The RAND Journal of Economics 31, no. 4 (winter 2000): 693-716.

Rotemberg, Julio J., and G. Saloner. "Competition and Human Capital Accumulation: A Theory of Interregional Specialization and Trade." Regional Science and Urban Economics 30, no. 4 (July 2000): 373-404.

Rotemberg, Julio J. "Process-versus Function-Based Hierarchies." Journal of Economics & Management Strategy 8, no. 4 (winter 1999): 453-487.

Rotemberg, Julio J., and Michael Woodford. "An Optimization-based Econometric Framework for the Evaluation of Monetary Policy." NBER Macroeconomics Annual (December 1997): 297-344.

Rotemberg, Julio J., and Michael Woodford. "Imperfect Competition and the Effects of Energy Price Increases on Economic Activity." Journal of Money, Credit & Banking 28 (November 1996): 549-577.

Rotemberg, J. J. "Prices, Output and Hours: An Empirical Analysis Based on a Sticky Price Model." Journal of Monetary Economics 37 (June 1996): 505-534.

Rotemberg, J. J., and Michael Woodford. "Real Business Cycle Models and the Forecastable Movements in Output, Hours and Consumption." American Economic Review 86, no. 1 (January 1996): 71-89.

Rotemberg, J. J., and Garth Saloner. "Overt Interfunctional Conflict (and Its Reduction through Business Strategy)." The RAND Journal of Economics 26 (winter 1995): 630-653.

Rotemberg, Julio J. "Comment on Inside Money, Outside Money, and Short-Term Interest Rates." Part 2: Liquidity, Monetary Policy, and Financial Intermediation. Journal of Money, Credit & Banking 27, no. 4 (November 1995): 1396-1401.

Rotemberg, J. J., and James M. Poterba. "Environmental Taxes on Intermediate and Final Goods When Both Can Be Imported." International Tax and Public Finance 2 (August 1995): 221-228.

Rotemberg, J. J., John Driscoll, and James Poterba. "Money, Output, and Prices: Evidence from a New Monetary Aggregate." Journal of Business and Economic Statistics 13, no. 1 (January 1995): 67-83.

Rotemberg, J. J., and Garth Saloner. "Benefits of Narrow Business Strategies." American Economic Review 84, no. 5 (December 1994): 1330-1349.

Rotemberg, J. J., and Michael Woodford. "Energy Taxes and Aggregate Economic Activity." Tax Policy and the Economy 8 (1994): 159-195.

Rotemberg, J. J. "Human Relations in the Workplace." Journal of Political Economy 102 (August 1994): 684-718.

Rotemberg, J. J., and Garth Saloner. "Leadership Style and Incentives." Management Science 39, no. 11 (November 1993): 1299-1318.

Rotemberg, J. J. "Power in Profit Maximizing Organizations." Journal of Economics & Management Strategy 2 (summer 1993): 165-198.

Rotemberg, Julio J. "Commentary on 'Monetary Aggregates, Monetary Policy and Economic Activity'." Dimensions of Monetary Policy: Essays in Honor of Anatol B. Balbach. The Federal Reserve Bank of St. Louis Review 75, no. 2 (March - April 1993): 36-41.

Rotemberg, J. J., and Robert Pindyck. "The Comovement of Stock Prices." Quarterly Journal of Economics 108 (November 1993): 1073-1104.

Rotemberg, J. J., and Michael Woodford. "Oligopolistic Pricing and the Effects of Aggregate Demand on Economic Activity." Journal of Political Economy 100 (December 1992): 1153-1207.

Rotemberg, J. J. "A Theory of Inefficient Intrafirm Transactions." American Economic Review 81, no. 1 (January 1991): 191-210.

Rotemberg, Julio J. "Commentary: Monetary Aggregates and Their Uses." Monetary Policy on the 75th Anniversary of the Federal Reserve System (1991). (Proceedings of the Fourteenth Annual Economic Policy Conference of the Federal Reserve Bank of St. Louis.)

Rotemberg, J. J., and Michael Woodford. "Markups and the Business Cycle." Macroeconomics Annual (1991).

Rotemberg, J. J. "Sovereign Debt Buybacks Can Lower Bargaining Costs." Journal of International Money and Finance 10 (September 1991): 330-348.

Rotemberg, J. J., and David S. Scharfstein. "Shareholder Value Maximization and Product Market Competition." Review of Financial Studies 3, no. 3 (fall 1990): 367-392.

Rotemberg, J. J., and Garth Saloner. "Collusive Price Leadership." Journal of Industrial Economics 39 (September 1990): 93-110.

Rotemberg, J. J., and James Poterba. "Inflation and Taxation with Optimizing Governments." Journal of Money, Credit & Banking 22 (February 1990): 1-19.

Rotemberg, J. J., and Lawrence Summers. "Inflexible Prices and Procyclical Productivity." Quarterly Journal of Economics 105 (November 1990): 851-874.

Rotemberg, J. J., and Robert Pindyck. "The Excess Co-Movement of Commodity Prices." Economic Journal 100 (December 1990): 1173-1189.

Rotemberg, J. J., and Alberto Giovannini. "Exchange Rate Dynamics with Sticky Prices: The Deutsche Mark, 1974-1982." Journal of Business and Economic Statistics 7, no. 2 (April 1989): 169-178.

Rotemberg, J. J., and Garth Saloner. "Tariffs vs. Quotas with Implicit Collusion." Canadian Journal of Economics 22 (May 1989): 237-244.

Rotemberg, J. J., and Garth Saloner. "The Cyclical Behavior of Strategic Inventories." Quarterly Journal of Economics 22 (February 1989): 73-98.

Rotemberg, J. J. "The New Keynesian Microfoundations." Macroeconomics Annual 2 (December 1987): 69-104.

Rotemberg, J. J. "Export Promotion as a Development Strategy." Journal of Development Economics 26, no. 2 (August 1987): 343-355.

Rotemberg, J. J., and Robert Pindyck. "Are Imports to Blame?: Attribution of Injury Under the 1974 Trade Act." Journal of Law and Economics 30 (April 1987): 101-122.

Rotemberg, J. J., and Garth Saloner. "The Relative Rigidity of Monopoly Pricing." American Economic Review 77, no. 5 (December 1987): 917-926.

Rotemberg, J. J., and Garth Saloner. "A Supergame Theoretic Model of Price Wars During Booms." American Economic Review 76, no. 3 (June 1986): 390-407.

Rotemberg, J. J., James Poterba, and Lawrence Summers. "A Taxed-Based Test for Nominal Rigidities." American Economic Review 76, no. 4 (September 1986): 659-675.

Rotemberg, J. J. "Money and the Terms of Trade." Journal of International Economics 19 (August 1985): 141-160.

Rotemberg, J. J. "The Efficiency of Equilibrium Traffic Flows." Journal of Public Economics 26 (March 1985): 191-201.

Rotemberg, J. J., N. Gregory Mankiw, and Lawrence Summers. "Intertemporal Substitution in Macroeconomics." Quarterly Journal of Economics 100 (February 1985): 225-251.

Rotemberg, J. J. "A Monetary Equilibrium Model with Transaction Costs." Journal of Political Economy 92, no. 1 (February 1984): 40-58.

Rotemberg, J. J., and Robert Pindyck. "Energy Price Shocks and Macroeconomic Adjustment." Natural Resources Journal 26 (April 1984): 277-296.

Rotemberg, J. J. "Interpreting the Statistical Failures of Some Rational Expectations Macroeconomic Models." American Economic Review 74, no. 2 (May 1984): 188-193.

Rotemberg, J. J., and Robert Pindyck. "Dynamic Factor Demands Under Rational Expectations." Scandinavian Journal of Economics (summer 1983).

Rotemberg, J. J. "Aggregate Consequences of Fixed Costs of Price Adjustment." American Economic Review 73, no. 3 (June 1983): 433-436.

Rotemberg, J. J., and Robert Pindyck. "Dynamic Factor Demands and the Effects of Energy Price Shocks." American Economic Review 73, no. 5 (December 1983): 1066-1079.

Rotemberg, J. J. "Monetary Policy and Costs of Price Adjustment." Journal of Economic Dynamics and Control 5, no. 213 (May 1983): 267-288.

Rotemberg, J. J. "Supply Shocks, Sticky Prices and Monetary Policy." Journal of Money, Credit & Banking 15, no. 4 (November 1983): 433-435.

Rotemberg, J. J. "Monopolistic Price Adjustment and Aggregate Output." Review of Economic Studies 49 (October 1982): 517-531.

Rotemberg, J. J. "Sticky Prices in the United States." Journal of Political Economy 90, no. 6 (December 1982): 1187-1211.

Rotemberg, J. J., and W. Branson. "International Adjustment with Wage Ridgidity." European Economic Review 13, no. 3 (May 1980): 309-337.

Rotemberg, J. J., and J.L. Machinea. "Estimacion de la Funcion de Importaciones de Mercancias." Ensayos Economicos 2, no. 3 (September 1977): 5-50.

Book Chapters

Rotemberg, Julio J. "Cyclical Markups." In The New Palgrave Dictionary of Economics. 2nd ed. Edited by Steven Derlauf and Larry Blume. Hampshire, U.K.: Palgrave Macmillan, 2008.

Rotemberg, Julio J. "Altruism, Cooperation and Reciprocity in the Workplace." Chap. 21 in Handbook of the Economics of Giving, Altruism and Reciprocity. Vol. 2, edited by Serge-Christophe Kolm and Jean Mercier Ythier, 1371-1435. Elsevier Science Publishers B.V./North Holland Press, 2006.

Rotemberg, Julio J., and Michael Woodford. "The Cyclical Behavior of Prices and Costs." In Handbook of Macroeconomics, edited by J. B. Taylor and M. Woodford. North-Holland: Elsevier Science Publishersm B.V., North Holland Press, 1999.

Rotemberg, Julio J., and Michael Woodford. "Interest Rate Rules in an Estimated Sticky Price Model." In Monetary Policy Rules, edited by John B. Taylor. Chicago: Chicago University Press, 1999.

Rotemberg, Julio J., and Michael Woodford. "Dynamic General Equilibrium Models with Imperfectly Competitive Product Markets." In Frontiers of Business Cycle Research, edited by Thomas Cooley. Princeton, N.J.: Princeton University Press, 1995.

Rotemberg, Julio J. and Seok-Hyun Hong. "Energy Policy and Adjustment." Chap. 11 in Structural Adjustment in a Newly Industrialized Country: The Korean Experience, 256-280. Baltimore: The Johns Hopkins University Press, 1992.

Rotemberg, Julio J., and Garth Saloner. "Information Technology and Strategic Advantage." In The Corporation of the 1990s: Information Technology and Organizational Transformation, edited by Michael Scott Morton. New York: Oxford University Press, 1991.

Rotemberg, Julio J. and Paul Krugman. "Speculative Attacks on Target Zones." In Exchange Rate Targets and Currency Bands, edited by Paul Krugman and Marcus Miller. Cambridge: Cambridge University Press, 1991.

Rotemberg, Julio J. and James Poterba. "Money in the Utility Function: An Empirical Implementation." In New Approaches to Monetary Economics, edited by W. Barnett and K. Singleton, 219-240. Cambridge University Press, 1987.

Rotemberg, Julio J., and Robert Pindyck. "Energy Price Shocks and Macroeconomic Adjustment." In Oil Shock: Policy Response and Implementation, edited by A. Alm and R. Weiner. Cambridge: Ballinger, 1984.

Other Papers

Rotemberg, Julio J. "Altruistic Dynamic Pricing with Customer Regret." NBER Working Paper Series, No. 14933, April 2009. Abstract

A model is considered where firms internalize the regret costs that consumers experience when they see an unexpected price change. Regret costs are assumed to be increasing in the size of price changes and this can explain why the size of price increases is less sensitive to inflation than in models with fixed costs of changing prices. The latter predict unrealistically large responses of price changes to inflation for firms that do not frequently reduce their prices. Adjustment costs that depend on the size of price changes also raise the variability on the size of price increases. Lastly, it is argued that the common practice of announcing price increases in advance is much easier to rationalize with regret concerns by consumers than with more standard approaches to price rigidity.
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Rotemberg, Julio J. "Can a Continuously-Liquidating Tontine (or Mutual Inheritance Fund) Succeed where Immediate Annuities Have Floundered?" Harvard Business School Working Paper, No. 09-121, April 2009. Abstract

A new instrument (the Mutual Inheritance Fund or MIF) is proposed whose purpose is to help people carry their savings forward from the moment they retire into their old age.  Like annuities, this instrument requires an up-front payment before people receive any benefits while also protecting people from the risk that they will live a long time.  The funds that individuals contribute to a MIF are invested in a mutual fund.  The proceeds from the fund's underlying assets are reinvested until the contributor dies or he turns an age specified in advance.  If a contributor dies before this pre-specified age, his shares are liquidated and the proceeds are distributed to the other contributors to the MIF.  Contributors who are alive at the pre-specified age are also paid the value of their accumulated shares.  Like tontines, of which MIF is a variant, this instrument has returns that are more tilted towards old age than annuities.  Several advantages of this are discussed, including some that may explain why tontines have proven popular with consumers in the past.


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Rotemberg, Julio J. "Attitude-Dependent Altruism, Turnout and Voting." NBER Working Paper Series, No. 14302, September 2008.

Rotemberg, Julio J. "Liquidity Needs in Economies with Interconnected Financial Obligations." NBER Working Paper Series, No. 14222, August 2008.

Rotemberg, Julio J. "Behavioral Aspects of Price Setting, and Their Policy Implications." National Bureau of Economic Research Working Paper Series, No. 13754.

Rotemberg, Julio J. "Minimally Altruistic Wages and Unemployment in a Matching Model." National Bureau of Economic Research Working Paper Series, No. 13755.

Rotemberg, Julio J. "Attitude-Dependent Altruism, Turnout and Voting." CEPR Working Paper Series, No. DP5146, 2005.

Rotemberg, Julio J. "Fair Pricing." NBER Working Paper Series, No. w10915, 2004.

Rotemberg, Julio J. "Altruism, Reciprocity and Cooperation in the Workplace." Harvard Business School Working Paper, No. 03-021, 2002.

Rotemberg, Julio J. "Endogenous Altruism in Buyer-Seller Relations and Its Implications for Vertical Integration." Harvard Business School Working Paper, No. 03-022, 2002.

Rotemberg, Julio J. "A Heuristic Method for Extracting Smooth Trends from Economic Time Series." NBER Working Paper Series, No. 7439, 1999.

Rotemberg, Julio J. "Government-Enforced Cartels, Outputs and Welfare." Harvard Business School Working Paper, No. 98-116, 1998.

HBS Course Materials

Rotemberg, Julio J. "Basic Statistics from the World Bank's World Development Report 1998/1999." Harvard Business School Supplement 700-088.

Rotemberg, Julio J., and Lisa Lewis. "Birth of Modern Macroeconomic Policy, The: Sweden and the Great Depression." Harvard Business School Case 704-029.

Rotemberg, Julio J. "Birth of Modern Macroeconomic Policy, The: Sweden and the Great Depression (TN)." Harvard Business School Teaching Note 705-001.

Rotemberg, Julio J., and Michelle Kalka. "Competition Policy in the European Union and the Power of Microsoft." Harvard Business School Case 701-043.

Rotemberg, Julio J. "Competition Policy in the European Union and the Power of Microsoft (TN)." Harvard Business School Teaching Note 703-057.

Rotemberg, Julio J., and Cherie Nursalim. "Data Supplement: Post-War US Economic Statistics." Harvard Business School Supplement 700-070.

Rotemberg, Julio J. "The Dubai Ports World Debacle and its Aftermath." Harvard Business School Case 707-014.

Rotemberg, Julio J. "The Dubai Ports World Debacle and its Aftermath (TN)." Harvard Business School Teaching Note 707-053.

Rotemberg, Julio J., and Lisa Lewis. "Fresh Start? Peru's Legacy of Debt and Default (A)." Harvard Business School Case 703-001.

Rotemberg, Julio J. "Fresh Start? Peru's Legacy of Debt and Default (A) (TN)." Harvard Business School Teaching Note 703-042.

Rotemberg, Julio J., and Lisa Lewis. "Fresh Start? Peru's Legacy of Debt and Default (B)." Harvard Business School Case 703-004.

Moss, David A., and Julio J. Rotemberg. "German Hyperinflation of 1923, The." Harvard Business School Case 798-048.

Moss, David A., and Julio J. Rotemberg. "German Hyperinflation of 1923, The TN." Harvard Business School Teaching Note 701-109.

Rotemberg, Julio J., and John T. Gourville. "New York Life and Immediate Annuities." Harvard Business School Case 510-040.

Rotemberg, Julio J. "Subprime Meltdown: American Housing and Global Financial Turmoil." Harvard Business School Teaching Note 708-055.

Rotemberg, Julio. "Subprime Meltdown: American Housing and Global Financial Turmoil." Harvard Business School Case 708-042.

Rotemberg, Julio J. "Supplement for "The Reagan Plan": Fiscal and Monetary Policy at the Beginning of Reagan's Presidency." Harvard Business School Supplement 700-083.

Rotemberg, Julio J., and Sabina M. Ciminero. "The U.S. Banking Panic of 1933 and Federal Deposit Insurance." Harvard Business School Case 799-077.

Rotemberg, Julio J. "The U.S. Banking Panic of 1933 and Federal Deposit Insurance (TN)." Harvard Business School Teaching Note 701-005.