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Edward N. Gamber, associate professor of economics and business at Lafayette, is coauthor of a major new textbook, Macroeconomics.

Scheduled for publication in January by Prentice Hall, the 550-page text is intended for use in undergraduate and master’s-level courses that present modern macroeconomics with a policy emphasis. It will have a companion website. The coauthor is David Colander, Christian A. Johnson Professor of Economics at Middlebury College.

A Lafayette faculty member since 1992, Gamber was principal analyst in the Macroeconomic Analysis Division of the Congressional Budget Office (CBO) from August 1996 to August 1998. CBO provides the Congress with the objective, timely, nonpartisan analyses needed for economic and budget decisions and the information and estimates required for the Congressional budget process. Its broad reach reflects the wide array of activities the federal budget covers and the major role the budget plays in the U.S. economy.

Gamber says his experience at CBO influenced his approach to writing the textbook, whose most distinctive feature is an emphasis on understanding policy rather than analyzing theory. Virtually every chapter contains a section on real-world policy issues, debates, and events. In addition, the text includes separate chapters on monetary and fiscal policy and culminates in a chapter examining key macroeconomic issues using policy tools.

“I’ve always wanted to have a textbook that focused more on policy issues rather than models. Working at the Congressional Budget Office really rekindled my excitement about teaching macroeconomics because everything I worked on there was related to real-world policy,” he says.

The text provides students with a framework for discussing complicated questions and the tools to think about models and the economy in the way that macroeconomists and policy makers do, the publisher says. Theory is developed as needed to understand policy, rather than presenting theory first and then adding policy.

“When we present a policy implication of the theory we tell students the truth: policymakers use theory as a guide but it is an imperfect guide and good policymaking is as much an art as it is a science,” Gamber says. “Our presumption is that students can handle the truth and it is simply more believable than claiming that policymakers can flawlessly manipulate the economy by following the policy recommendations of simple macroeconomic models.

“My teaching changed as a result of writing the book, as well. My courses are now much more real-world oriented,” says Gamber, whose research interests also include time-series forecasting and business-cycle analysis.

This summer he began a long-term study of how college undergraduates spend their money. The project is aimed at measuring precisely statistical biases that distort the federal government’s Consumer Price Index (CPI).

Michael Kotov, a junior economics and business major from Philadelphia, Pa., is working with Gamber as an EXCEL research assistant. In the EXCEL Scholars program, students collaborate closely with faculty while earning a stipend.

According to Gamber, biases in the CPI, the measurement of prices paid by the typical U.S. urban consumer, tend to push up the level of reported inflation by 1 to 1.5 percentage points.

Those biases, he says, include the feds’ undercounting of purchases made at discount stores such as Wal-Mart; consumers’ substitution over time of less expensive products for costly ones; the affect of quality improvements on products; and the tendency of prices of new products to fall rapidly right after they come on the market.

“The advantage of constructing this sample is that the biases can be measured precisely,” Gamber says. “The data will provide insight into how consumption patterns change over time and how they respond to relative price changes.”

Gamber is also research mentor to senior Peter Carlson, a economics and business major from Potomac, Md., who has begun a year-long investigation of the impact of recent tax changes on self-employment, potential labor supply, and long-term growth.

Carlson is undertaking the project in pursuit of departmental honors in his major.

“I am very excited to work with Professor Gamber, not only because he is my favorite professor, but also because of his qualifications,” Carlson says. “He has worked for government agencies and is very experienced in the academic arena. It seems every he knows or has met the author of every article I bring him.”

Gamber holds master’s and doctoral degrees from Virginia Polytechnic Institute and a bachelor’s degree from Towson University.

Categorized in: Academic News