Kenneth Judd

Kenneth Judd
Born (1953-03-24) March 24, 1953 (age 73)
AwardsFellow of the Econometric Society; Member, American Academy of Arts and Sciences (2003)
Academic background
EducationUniversity of Wisconsin (BA, MA, PhD)
Academic work
DisciplineComputational economics
InstitutionsHoover Institution, Stanford University
Websitekenjudd.org

Kenneth Lewis Judd (born March 24, 1953) is an economist who works in computational economics. He is the Paul H. Bauer Senior Fellow at the Hoover Institution at Stanford University. His research covers public finance, industrial organization, numerical methods for dynamic models, and the economics of climate policy. He wrote the textbook Numerical Methods in Economics (1998) and is one of the two economists associated with the Chamley–Judd result on capital income taxation. He was elected a fellow of the Econometric Society in 1989 and a member of the American Academy of Arts and Sciences in 2003.

Education

Judd attended the University of Wisconsin, graduating Phi Beta Kappa in 1975 with undergraduate degrees in mathematics and computer sciences. He received a master's degree in mathematics in 1977, a master's degree in economics, and a PhD in economics in 1981.

Career

Judd was a postdoctoral teaching fellow in the Department of Economics at the University of Chicago in 1980–81. From 1981 to 1983 he was an assistant professor of managerial economics at the Kellogg Graduate School of Management at Northwestern University, and from 1984 to 1986 an associate professor there. He was a national fellow at the Hoover Institution in 1986–87, was a visiting professor of business economics at the University of Chicago, and has been a senior fellow at Hoover since 1988.

His Hoover biography also lists him as a co-principal investigator at the Center for Robust Decision Making on Climate and Energy Policy, director of the Initiative for Computational Economics at the University of Chicago, and a member of the National Academies Board on Mathematical Sciences and Applications. He is a research associate of the National Bureau of Economic Research, in its public economics program.

Research

Capital income taxation

In a 1985 article in the Journal of Public Economics, Judd analysed redistributive taxation in a perfect-foresight model and showed that the optimal long-run tax on capital income is zero. Christophe Chamley published a similar result in 1986, and the finding became known as the Chamley–Judd result. It has been described as one of the most important benchmarks in the literature on optimal taxation. Straub and Werning later argued that, within the models of Judd (1985) and Chamley (1986), the long-run tax on capital is not necessarily zero. In a 1997 NBER working paper titled "The Optimal Tax Rate for Capital Income is Negative", Judd revisited the question. With Glenn Hubbard he also studied how liquidity constraints affect the welfare effects of social security and the payroll tax. The American Academy of Arts and Sciences cited his application of dynamic models to public finance.

Computational economics

Judd's book Numerical Methods in Economics was published by MIT Press in 1998. The American Academy of Arts and Sciences said it defined a new field that made dynamic economic theory operational. He also wrote on projection methods for solving aggregate growth models, and, with Felix Kübler and Karl Schmedders, on asset trading volume in models with heterogeneous agents. With Yongyang Cai and Jevgenijs Steinbuks he developed a nonlinear certainty-equivalent approximation method for dynamic stochastic problems, which the authors applied to models with up to 400 state variables. He and Leigh Tesfatsion edited Handbook of Computational Economics, Volume 2: Agent-Based Computational Economics (Elsevier, 2006).

Industrial organization

Judd's papers in industrial organization include work on equilibrium price dispersion with Kenneth Burdett (1983), the performance of patents, and credible spatial preemption. In the patents paper he built a dynamic general equilibrium model of continuous product innovation and showed that patents of infinite duration may produce too much, too little or the socially optimal amount of innovation. The American Academy of Arts and Sciences cited his papers on patents, price dispersion and credible entry deterrence.

Climate economics

With Yongyang Cai and Thomas Lontzek, Judd worked on DSICE, a stochastic extension of William Nordhaus's DICE model that adds economic and climate risks. An early version of the work appeared as a 2013 NBER working paper. The published version, on the social cost of carbon, appeared in the Journal of Political Economy in 2019 under the names of Cai and Lontzek. Judd was a co-author, with Lontzek, Cai and Timothy Lenton, of a 2015 Nature Climate Change paper that used a stochastic version of DICE to examine how uncertain climate tipping points affect optimal climate policy, and found that they raise the optimal carbon tax today by at least 50 per cent. The study was covered by Carbon Brief. A second 2015 paper, with Cai, Lenton, Lontzek and Daiju Narita in the Proceedings of the National Academy of Sciences, found that including tipping-point impacts substantially changes the cost–benefit assessment of climate policy.

Editorial and professional service

Judd was co-editor of the RAND Journal of Economics from 1988 to 1995 and of the Journal of Economic Dynamics and Control from 2002 to 2006, associate editor of the Journal of Public Economics from 1988 to 1997, and a member of the National Science Foundation's economics panel from 1986 to 1988. He has also been an associate editor of Computational Economics.

Honors

Selected works

References

  1. 1 2 3 4 5 6 "Kenneth L. Judd". Hoover Institution. Stanford University. Retrieved 21 October 2026.
  2. 1 2 "Fellows of the Econometric Society". The Econometric Society. Retrieved 21 October 2026.
  3. 1 2 3 4 5 "Kenneth L. Judd". American Academy of Arts and Sciences. Retrieved 21 October 2026.
  4. ↑ "Kenneth L. Judd". National Bureau of Economic Research. Retrieved 21 October 2026.
  5. ↑ Judd, Kenneth L. (1985). "Redistributive taxation in a simple perfect foresight model". Journal of Public Economics. 28 (1): 59–83. doi:10.1016/0047-2727(85)90020-9.
  6. ↑ Chamley, Christophe (1986). "Optimal Taxation of Capital Income in General Equilibrium with Infinite Lives". Econometrica. 54 (3): 607–622. doi:10.2307/1911310.
  7. 1 2 Straub, Ludwig; Werning, Iván (2014). Positive Long-Run Capital Taxation: Chamley–Judd Revisited (PDF) (Report). NBER Working Paper. National Bureau of Economic Research.
  8. ↑ Judd, Kenneth L. (1997). The Optimal Tax Rate for Capital Income is Negative (Report). NBER Working Paper. National Bureau of Economic Research.
  9. ↑ Hubbard, R. Glenn; Judd, Kenneth L. (1987). "Social Security and Individual Welfare: Precautionary Saving, Liquidity Constraints, and the Payroll Tax". American Economic Review. 77 (4): 630–646.
  10. ↑ Judd, Kenneth L. (1998). Numerical Methods in Economics. MIT Press. ISBN 0-262-10071-1.
  11. ↑ Judd, Kenneth L. (1992). "Projection methods for solving aggregate growth models". Journal of Economic Theory. 58 (2): 410–452.
  12. ↑ Judd, Kenneth L.; Kubler, Felix; Schmedders, Karl (2003). "Asset trading volume with dynamically complete markets and heterogeneous agents". Journal of Finance. 58 (5): 2203–2217.
  13. ↑ Cai, Yongyang; Judd, Kenneth; Steinbuks, Jevgenijs (2017). "A nonlinear certainty equivalent approximation method for dynamic stochastic problems". Quantitative Economics. 8 (1): 117–147. doi:10.3982/QE533.
  14. ↑ Tesfatsion, Leigh; Judd, Kenneth L., eds. (2006). Handbook of Computational Economics, Volume 2: Agent-Based Computational Economics. Elsevier. ISBN 978-0-444-51253-6.
  15. ↑ Burdett, Kenneth; Judd, Kenneth L. (1983). "Equilibrium price dispersion". Econometrica. 51 (4): 955–969.
  16. 1 2 Judd, Kenneth L. (1985). "On the performance of patents". Econometrica. 53 (3): 567–586. JSTOR 1911655.
  17. ↑ Judd, Kenneth L. (1985). "Credible spatial preemption". RAND Journal of Economics. 16 (2): 153–166.
  18. ↑ Cai, Yongyang; Judd, Kenneth L.; Lontzek, Thomas S. (2013). The Social Cost of Stochastic and Irreversible Climate Change (PDF) (Report). NBER Working Paper. National Bureau of Economic Research.
  19. ↑ Cai, Yongyang; Lontzek, Thomas S. (2019). "The Social Cost of Carbon with Economic and Climate Risks". Journal of Political Economy. 127 (6): 2684–2734. doi:10.1086/701890.
  20. ↑ Lontzek, Thomas S.; Cai, Yongyang; Judd, Kenneth L.; Lenton, Timothy M. (2015). "Stochastic integrated assessment of climate tipping points indicates the need for strict climate policy". Nature Climate Change. 5 (5): 441–444. doi:10.1038/nclimate2570.
  21. ↑ "Cost of carbon should be 200% higher today, say economists". Carbon Brief. 2015. Retrieved 21 October 2026.
  22. ↑ Cai, Yongyang; Judd, Kenneth L.; Lenton, Timothy M.; Lontzek, Thomas S.; Narita, Daiju (2015). "Environmental tipping points significantly affect the cost−benefit assessment of climate policies". Proceedings of the National Academy of Sciences. 112 (15): 4606–4611. PMC 4403162.
  23. 1 2 "American Academy of Arts and Sciences elects seven Stanford scholars". Stanford News. 2003. Retrieved 21 October 2026.
  24. ↑ "Fellows Database". Alfred P. Sloan Foundation. Kenneth Judd, Northwestern University, Economics, 1985. Retrieved 21 October 2026.