CEA Fellow: Gregor Smith

Gregor Smith is a Professor of Economics at Queen's University and obtained his D. Phil. from Oxford University. He has made highly-cited contributions in three fields: international macroeconomics, macro-econometrics, and economic history. His work has appeared in the top journals in economics, including Econometrica, the Review of Economic Studies, and the Journal of International Economics.

Smith is a two-time recipient of the prestigious Bank of Canada Research Fellowship. Smith has also been directly involved with public policy institutions, such as the Bank of Canada and the US Federal Reserve system.

The work of Backus and Smith (1993) represented a major advance in international macroeconomics. The ‘Backus-Smith puzzle’ refers to their striking evidence (reproduced since in many other studies) that many countries have few barriers to capital flows, experience enormous flows of lending and borrowing across their borders, yet do not seem to reap the rewards in reduced risk for consumption spending. The paper has more than 1000 citations on Google Scholar, but it is often referenced without citation, as the enormous list of web search results for the term shows. The Backus-Smith puzzle forced economists to rethink models of the international economy and is a central ingredient of modern exchange rate theory.