Greg Mankiw isn’t interested in running the NBER; David Warsh explains why. It isn’t that the NBER job pays badly: the current occupant of the job, Martin Feldstein, earns $600,000 in salary, with another $151,000 in benefits, on top of his Harvard University paycheck. Rather, it’s that $600,000 is relatively small beer for Mankiw.
How much is Mankiw already taking home? The answer must be: Plenty. For it was in December 1992 that Mankiw startled the textbook world by leaving the publisher of his intermediate macroeconomics text to write in introductory text for a rival firm, for a $1.4 million advance…
Fifteen years on, Mankiw’s intermediate macro text is still the best-selling book in its niche, ahead of competitors Andrew Abel/Ben Bernanke, Olivier Blanchard and Stephen Williamson. His introductory text, too, has gradually worked its way to the very top of its market…
That adds up to a formidable income stream – with editions in 20 languages, perhaps as much as $6 million per edition of the principles text alone, or more than $2 million a year…
He is an indifferent producer of new economic knowledge, but only six months or so of hard work are now required every three years to earn the next $6 million.
The enormous income stream from his textbooks clearly gives Mankiw the ability to do whatever he loves: teaching Harvard’s introductory economics course, writing NYT columns, blogging, raising three children. Most people would find it hard to turn down a job paying $600,000 per year; Mankiw can, literally, afford to take a step back and ask which of his loves he’d need to give up in order to do it.
(Incidentally, Mankiw responds to Warsh’s "indifferent producer of new economic knowledge" jab here, without linking to Warsh. According to Mankiw’s chosen ranking, he’s in 13th place; Robert Barro is first, followed by Joe Stiglitz and Andrei Shleifer. Martin Feldstein is 8th, while Feldstein’s possible successor at the NBER, James Poterba, is 36th.)