Obituary: Peter Neary

19 Oct 2021

Peter Neary died on the 16th of June this year, having been ill for some months. He was one of the world’s foremost international trade economists and made major contributions to the development of the profession, particularly in Europe, holding presidencies of the Irish Economic Association, the European Economic Association, and the Royal Economic Society.

Peter was born on the 11th of February 1950. His BA and MA degrees were at University College Dublin, from where he went to a lectureship at Trinity College Dublin, working principally as an econometrician and focusing on the performance of the Irish economy. His ability, ambition, and international orientation took him to Nuffield College, Oxford in 1974 for further graduate coursework (the BPhil in Economics), followed by his doctorate (DPhil) which he completed in two years, holding a prestigious research fellowship. This period unlocked the theorist in Peter, under the influences of Jim Mirrlees, Joe Stiglitz, and junior faculty including Nick Stern. His thesis was on ‘Factor-market disequilibrium in Neoclassical and Neo-Keynesian models’, and appeared to be leading him into macroeconomics with work on fixed price neo-Keynesian models (1), as well as papers with Stiglitz and with fellow student Kevin Roberts (2,3).

It was during this time that his interest in international trade was fired, particularly in conversations with Max Corden. Papers started flowing fast, principally on trade models with varying degrees of inter-sectoral capital mobility, and in environments with a variety of market imperfections. His 1978 paper on ‘Short-run capital specificity and the pure theory of international trade’ (4) is known by anyone who has taught international trade in the last 40 years, and its content and expositional treatment is the basis of a chapter in most trade textbooks. And it is from this period that his most cited paper comes, ‘Booming sector and de-industrialisation in a small open economy’ (5) with Max Corden. Its simple way of capturing the harm that natural resource wealth can do to an economy – the Dutch disease – is central to modern thinking. It remains heavily cited although, as Peter wryly remarked, its new citations go up and down with the price of oil.

In 1978 Peter returned to Dublin, first to Trinity College, and then in 1980 to the Professorship of Political Economy at University College. The core of his research turned to developing and extending the duality techniques that entered trade theory in the early 1980s. He demonstrated the power of this approach in his elegant restatement of his Dutch disease paper (6), and pushed the technical frontiers in work withAlbert Schweinberger and Jim Anderson. The work with Anderson addressed the question of how to understand and evaluate the effects of different trade policy instruments in a full general equilibrium setting. It culminated in their 2005 book Measuring the Restrictiveness of International Trade Policy (7) which provides rigorous methods for quantifying countries’ trade restrictiveness and practical ideas on how to implement these measures. During this period he also entered the debate on the interactions between trade and industrial policy in a series of papers, many of them co-authored with Dermot Leahy.

In 2006 Peter moved from UCD back to Oxford, as professor of economics and fellow of Merton College. New lines of work in international trade developed, particularly studying trade in imperfectly competitive markets. The observation that globalization appeared to favour large firms relative to small ones led to papers on multi-product firms, and a line of work with his former DPhil student Monika Mrazova establishing the precise relationships between measures of firm heterogeneity and firm performance (8).

International trade was Peter’s core field, but not his only one. He had a lifelong interest in measurement, and a belief in its central importance. This underpinned his work on trade policy, and also work on aggregation theory and index numbers, always motivated by the need to combine rigorous theory with practical measurement. His work on purchasing power parity brought theoretical clarity, and revised estimates of Chinese real GDP, to the data from the Penn World Table (9,10).

Alongside his prodigious research output, Peter was dedicated to the profession, taking on responsibilities in teaching, in administration, and in promoting the profession at the highest levels. He had two terms as head of department at UCD, where he is credited with raising standards in the department and bringing it into closer alignment with the modern discipline. He took on first-year undergraduate principles courses, while at the same time building a graduate programme and supervising research students. He served on numerous committees in Ireland and worldwide, addressing professional and wider policy matters. He was one of the first fellows of the Centre for Economic Policy Research and the founding director of its International Trade Programme. He served on the councils of the Irish Economic Association, the Royal Economic Society, and European Economic Association, becoming president of each of these bodies.

What of Peter as a colleague and friend? First, his professionalism. The research papers are all perfectly executed and beautifully polished, master statements of how to develop and present an argument. His lecture notes are remarkable in precision and in detail – no shortcuts allowed in getting students to fully understand the material. His knowledge of the discipline – and the people in it – was encyclopedic, a stock of information that he shared gladly.

He was an internationalist, thoroughly enjoying travel (some 70 research visits and plenary lectures listed on his CV, plus a dozen conferences per year), and always engaging with faculty and students on these visits. He was committed to European integration, in the profession and more broadly. He played a leading role in establishing and developing the European Economic Association as a founder member of the EEA council, as President, and as editor of its journal. And he was extremely angry about Brexit.

Above all, he had energy, enthusiasm, and wit. He was always willing to engage in conversation, in particular – but not only – about economics. He was an inspiration for many young economists as a teacher and for time spent discussing their research. For many years he gave the after-dinner speech at CEPR’s annual trade conference, always hitting the right balance between humour and a serious message.

His many contributions were recognized through his life, with fellowships (British Academy, Econometric Society, European Economic Association) and prizes, including the Royal Irish Academy’s Gold Medal. Poignantly, at the very end of his life he received an honorary degree from the National University of Ireland.

Peter is survived by his wife, Mairéad Hanrahan, and his children, Philip and David Neary, and Róisín and Eoin Hanrahan.

Anthony Venables, University of Manchester