The median family income in the U.S. is lower than it was a quarter-century ago, and if people don't have income, they can't consume, and you can't have a strong economy. There's significant risk - actually it's no longer a risk - a significant likelihood of a marked slowdown not only in China, but also in a lot of other countries like Brazil, which is in recession. All of the other countries that depend on commodities, including Canada, are facing difficulties. So it's hard to see a story of a strong U.S. economy.

As I noted in my Nobel lecture, an early insight in my work on the economics of information concerned the problem of appropriability - the difficulty that those who pay for information have in getting returns.

Moreover, because we chose to finance the way by borrowing, our deficits and debt has soared, and this means we have less room for maneuver, less money available to stimulate the eocnomy in the way needed.

Amherst was pivotal in my broad intellectual development; MIT in my development as a professional economist.

Amherst is a liberal arts college, committed to providing students with a broad education.

There was a hope then by some people that what we call trickle-down economics would work. That if you made the economy pie bigger, everybody would benefit. Twenty-five years after NAFTA, we know that that is not true. We should have known then that it was not true.

But individuals and firms spend an enormous amount of resources acquiring information, which affects their beliefs; and actions of others too affect their beliefs.