Recent Developments
Economics was particularly visible on the MIT campus during the 2007-2008 academic year. Nobel Peace Prize winner Muhammad Yunus, who holds a Ph.D. in Economics, spoke at MIT commencement about the efficacy of micro-credit institutions in improving economic growth prospects in many developing countries. While at MIT, he visited the Economics Department’s Abdul Latif Jameel Poverty Action Lab, and spent time with faculty and students who work in the field of development economics.
MIT’s prominence in development economics was enhanced this year by two significant faculty hires. Robert Townsend, a leading theorist who works on entrepreneurship in developing countries, and Benjamin Olken, an expert on corruption and its impact on economic growth, both joined our faculty in July 2008. Together with the outstanding development economics faculty already at MIT, they make MIT an extraordinary place to study this important field.
The MIT Undergraduate Economics Association, which plays a key role in enhancing undergraduate economics education, also contributed to the visibility of our field on campus. The UEA sponsored two public lectures. The first, by then-Federal Reserve Board member Fredric Mishkin (S.B. 1973, Ph.D. 1976) was held in October, 2007. It focused on transparency in Federal Reserve policy making. The second, by Harrah’s Entertainment CEO Gary Loveman (Ph.D. 1989) in March, 2008, examined the role of economics in the gaming industry. Both lectures were very well attended by undergraduate majors as well as other interested students. Undergraduate economics course enrollments trended upward in the last year, extending a recent pattern.
In addition to Robert Townsend and Benjamin Olken, our department also welcomed three other new and exciting faculty members this year. Parag Pathak, who received his Ph.D. from Harvard University last year and spent the past year at Harvard’s prestigious Society of Fellows, is an economic theorist with wide-ranging interests in market design. Arnaud Costinot, who obtained his Ph.D. from Princeton University in 2005 and has spent several years as a junior faculty member at the University of California at San Diego, is an expert on international trade theory. Drazen Prelec, a leader in behavioral economics and the holder of the Digital Equipment Corporation/Leaders for Manufacturing Professorship at MIT’s Sloan School of Management, also joined the Economics Department with a joint appointment.
Four faculty members were promoted to the rank of Full Professor during the 2007-2008 academic year: Marios Angeletos, David Autor, Amy Finkelstein (Ph.D. 2001) and Iván Werning. Josh Angrist was named to the Ford Professorship of Economics. Anna Mikusheva was appointed to the Castle Krob Career Development Chair. Peter Temin (Ph.D. 1964), a member of the MIT faculty for over 40 years, retired from graduate teaching. He will continue his research on economic history and teach an undergraduate course. Two faculty members left the MIT Economics department in the past year. Dora Costa, an economic historian who has been on our faculty since 1993, accepted a professorship at UCLA. Sergei Izmalkov, an economic theorist, joined the faculty at the New Economic School in Moscow.
Several senior faculty members took on interesting new challenges in the most recent academic year. Paul Joskow was named the President of the Alfred P. Sloan Foundation, one of the nation’s leading foundations and supporter of research on science and technology. He is currently on leave from MIT. Olivier Blanchard (Ph.D. 1977) was named Chief Economist of the International Monetary Fund, a post that has previously been held by a number of other MIT Economics graduates including Stanley Fischer (Ph.D. 1969), Simon Johnson (Ph.D. 1989), and Kenneth Rogoff (Ph.D. 1980). He is also on leave in the current academic year. James Poterba was named President of the National Bureau of Economic Research (NBER), the Cambridge-based economics research institution with more than one thousand affiliated economists. He assumed his NBER post on July 1, 2008, and stepped down as department head for MIT Economics on August 31. He remains on the MIT faculty with a reduced-time position.
MIT Economics maintains its position as a fertile training ground for Central Bankers. José De Gregorio (Ph.D. 1979) replaced Vittorio Corbo (Ph.D. 1971) as the Governor of the Central Bank of Chile. José joins Federal Reserve Board Chairman Ben Bernanke (Ph.D. 1979), Mario Draghi (Ph.D. 1976), the Governor of the Bank of Italy, Stanley Fischer (Ph.D. 1969), an emeritus member of the MIT faculty and Governor of the Bank of Israel, and Athanasios Orphanidies (S.B. 1985, Ph.D. 1990) the Governor of the Central Bank of Cyprus, on the list of MIT-trained central bankers. Many other MIT graduates serve in important positions at central banks around the world.
The Abdul Latif Jameel Poverty Action Lab, directed by MIT Economics faculty members Abhijit Banerjee and Esther Duflo (Ph.D. 1999), opened two new offices and expanded its global influence. Narayana Murthy, founder of Infosys, spoke in July 2007 at the opening of J-PAL’s South Asia office at the Institute for Financial Management and Research in Chennai, India. J-PAL has also opened an office at the Paris School of Economics that provides a resource for researchers from across Europe. J-PAL participated in the World Economic Forum in Davos by promoting a global de-worming program. J-PAL is widely recognized as one of the leading global institutions for research on poverty alleviation.
Our faculty devoted substantial effort during the past academic year to reforming our graduate curriculum to better meet the needs of our Ph.D. students. Doctoral students who enter the MIT Economics Ph.D. program starting in September 2008 will begin both microeconomics and macroeconomics in the first semester of their first year. This eliminates the long-standing one-semester delay in the start of macroeconomics coursework. These students will no longer face an economic history requirement or the associated economic history paper requirement. They will consequently have expanded opportunities to explore field courses in their first year.
Many Economics faculty members were honored during the last year for their research and professional contributions. Daron Acemoglu received the Woodrow Wilson Foundation Award and the Heinz Eulau Award for his work in political economy. Marios Angeletos won the Bodossaki Foundation Prize in Social-Economic Science, one of the highest academic honors in Greece. David Autor received the 2008 Sherwin Rosen prize from the Society of Labor Economics. He was also named editor of the Journal of Economic Perspectives. Olivier Blanchard (Ph.D. 1977) was named a Chevalier in France’s Order National de la Legion d’Honneur, one of France’s highest honors. Peter Diamond (Ph.D. 1963) received the Robert M. Ball award from the National Academy of Social Insurance for outstanding contributions to social insurance research and policy analysis. Esther Duflo was the inaugural holder of the “Knowledge Against Poverty” chair at the College de France. Progress magazine named her one of the world’s top one hundred public intellectuals. Mikhail Golosov received both a Sloan Foundation Research Fellowship and a CAREER award from the National Science Foundation. Jonathan Gruber (S.B. 1987) was elected a Fellow of the American Academy of Arts and Sciences. Panle Jia won the Tufts Graduate and Undergraduate Economics Alumni Achievement Award. Stephen Ross received the Jean-Jacques Laffont Prize, which honors an economist whose work combines both the theoretical and applied aspects of economics. Jean Tirole (Ph.D. 1981) received the Medaille d’Or from CNRS, France’s National Center for Scientific Research. This award, the highest scientific award in France, is presented to only one scientist each year.
MIT Economics alumni also garnered a number of important awards and were elected to important positions in professional societies. Michael Whinston (Ph.D. 1984) and Jeremy Stein (Ph.D. 1986) were elected Fellows of the American Academy of Arts and Sciences. Avinash Dixit (Ph.D. 1968) is the President of the American Economics Association (AEA), and Robert Hall (Ph.D. 1967) is the President-Elect. Maurice Obstfeld (Ph.D. 1979) is a Vice President of the AEA, and Janice Eberly (Ph.D. 1991) was elected to the AEA’s executive committee.
MIT Economics faculty members and alumni are active in a range of public service roles. Donald Marron (Ph.D. 1994) is a member of the Council of Economic Advisers. Jonathan Gruber serves on the Commonwealth Health Insurance Connector Authority Board, the governing body that regulates insurance coverage options under the path-breaking Massachusetts health insurance reform plan. Tomasso Padoa-Schioppa (M.S. 1970) is the Finance Minister of Italy; and Luis Videgaray Caso (Ph.D. 1998) is Minister of Finance for the state of Mexico. Jonathan Gruber and Amy Finkelstein are members of the Congressional Budget Office’s Board of Health Advisors. James Poterba serves on the CBO’s Panel of Economic Advisers. Austan Goolsbee (Ph.D. 1995) and David Cutler (Ph.D.1991) are leading advisors to Senator Barack Obama. Jeffrey Brown (Ph.D. 1999) is a member of the Social Security Advisory Board.
Several faculty members, students and staff were recognized during the past year for their outstanding service to the Economics Department and MIT. Glenn Ellison (Ph.D. 1992) and Anna Mikusheva shared the Graduate Economic Association’s Outstanding Teacher Award. Esther Duflo was honored as the Outstanding Dissertation Advisor, and Alp Simsek and José Tessada were voted the outstanding graduate teaching assistants. Greg Fischer received the Robert M. Solow Prize, an award presented each year to a graduating doctoral student who has excelled in both teaching and research. Joshua Angrist and his teaching assistant Tal Gross were honored with teaching awards from the Undergraduate Economics Association. Peter Hoagland won an Infinite Mile Award from the School of Humanities, Arts and Social Sciences.
Ricardo Caballero (Ph.D. 1988), a leading macroeconomist with broad interests in international economic policy and economic fluctuations, became Department Head effective September 1, 2008. Glenn Ellison succeeded Jonathan Gruber as Associate Department Head.