Allan Meltzer passed away this week. He was one of the great economists I was lucky to have known and to have occasionally worked with. My colleague Jim Dorn wrote a very nice summary of his scholarship and influence here. Jim also recounts his close work with Cato over the years. Jerry O’Driscoll offers a remembrance here.
My own thinking on economic development benefitted substantially from Allan’s work on international debt, foreign aid, and financial crises. I benefitted even more from Allan’s guidance and interest in my work on those issues. He always took whatever time needed to discuss economic and policy topics with me, and recommend readings and research ideas. When Mexico experienced its 1994-95 peso crisis, Allan was an invaluable and generous resource. At the time, few market advocates in Washington criticized the proposed bailout of Mexico. The country, after all, had been considered a star reformer, and the government there was deemed worthy of U.S. support. We at Cato dissented and published a strong critique against “rescuing” Mexico because we thought it promoted moral hazard, it was a use of public resources that was unfair to ordinary Mexicans and Americans alike, and it supplanted and undermined superior market solutions to the crisis. From his perch at Carnegie Mellon University and the American Enterprise Institute, Allan was one of the few making the same arguments. It was useful to have him on our side and to employ some of the arguments he developed.