MIT Reports to the President 1999–2000
We are currently ranked as the best economics department in the world. Our goal is to stay there.
Several department faculty and graduates have received important honors. In October 1999, Robert Mundell (Ph.D.’56) was awarded the Nobel Prize in Economic Science. In January 2000, Andrei Shleifer (Ph.D. ’86) was awarded the John Bates Clark medal of the American Economic Association. This award is presented every other year to an outstanding economist under the age of 40. In March 2000, lifelong faculty member and Nobel laureate Robert Solow was awarded the National Medal of Science by President Clinton.
Graduates of the MIT Economics Department continued to play an important role in many aspects of economic policy-making in the last year. Lawrence Summers was sworn in as Secretary of the Treasury in early July 1999. Stanley Fischer (Ph.D. ’69) served as Acting Managing Director of the International Monetary Fund for several months in early 2000. In January 2000, Joseph Stiglitz stepped down from his position as Chief Economist at the World Bank. Martin Bailey (Ph.D. ’72) began a term as chairman of the Council of Economic Advisors in mid-1999.
Closer to home, at the end of a day-long conference devoted to celebrating Professor Frank Fisher’s 65th birthday, Dennis Carlton (Ph.D.’75) announced that he and his wife, Jane Berkowitz Carlton, had decided to endow a new chair in Microeconomics. Professor Fisher, Dennis' thesis advisor, is the first holder of the Carlton chair.
And a number of faculty and students have received important honors and awards. Professor Ricardo Caballero was named the Ford International Professor of Economics, and Assistant Professor Sendhil Mullainathan was named as the first holder of the Mark Hyman Jr. Career Development Chair. Associate Professors Susan Athey and Jaume Ventura both received Sloan Foundation Fellowships, and Professor Athey also received a prestigious "NSF Career award." One of our graduate students, Chris Spohr, was one of three Karl Taylor Compton Prize winners in May 2000. This Institute-wide prize honors students for outstanding achievement in citizenship and devotion to MIT.
Next year's entering class of 36 Ph.D. students will include 15 international students and 14 women (39%). Eleven of our entering class have National Science Foundation Fellowships.
Undergraduate enrollment decreased this year by 7%. This is a dip on a clear positive trend in enrollment. The increase is of nearly 65% over the last fifteen years.
There were 120 undergraduate majors in economics (28 of whom are double majors), 151 undergraduate minors, and 367 concentrations completed in economics. 56 students received their S.B. in economics in 1999.
Our graduate students on the job market did well this year, with 35% receiving assistant professorships in top 20 economics departments and business schools. A total of 65% accepted academic positions, 17.5% took positions in international organizations, and 17.5% obtained positions in the private sector.
The World Economy Laboratory (WEL), the fundraising unit in the Department of Economics directed by Professor Rudi Dornbusch, continued to provide resources for the department. WEL conferences were held in New York and Washington DC during the academic year. These conferences communicate research findings to a broad audience in business, the economic press, academia and government, and to establish a policy dialogue beneficial to both sides. WEL also made resources available to support policy research for several graduate students and junior faculty. Memberships in WEL continue to grow with each year and allow WEL to continue to support a wide array of student and faculty activities.
Our department is doing well. The general atmosphere is warm and friendly, the research atmosphere is exciting, and faculty members are very productive. Our junior faculty are particularly outstanding, and we see this as our main strength for the future. Some fields where we were less strong, labor economics and development in particular, are in sharp expansion and attracting an increasing number of students. We feel we still have two major senior needs, one in theory and one in macroeconomics. We have two search committees looking at potential candidates. Given our traditional strategy of going after "young senior" researchers, we also have a search committee looking at young researchers across fields. We expect to make offers in the fall of 2000.
At the same time, competition from other departments is becoming more intense, and our competitors are often bigger and richer. We feel that, to thrive in the long run, the department must increase in size, both by expanding its core, and the number of faculty members in major fields. We also have to secure one of our main assets, the quality of our student pool, by increasing the number of fellowships we can offer. This is all the more urgent, given the decline in many of the traditional external sources of such fellowships.
Professor Acemoglu was promoted to Professor. Associate Professor Dora Costa was awarded tenure. David Autor, Esther Duflo, and Xavier Gabaix joined the faculty as Assistant Professors.
Victor Chernozhukov and Muhamet Yildiz will join the faculty as Assistant Professors as of July 1, 2000. Yildiz received his Ph.D. from Stanford Graduate School of Business and is a theorist with research interests in strategic bargaining, bargaining procedures, and the results of strategic bargaining. Chernozhukov also received his Ph.D. from Stanford Graduate School of Business and is an econometrician who, in his thesis, developed a statistical approach for estimating boundaries for economic data.
Professor Paul Krugman and Assistant Professor Robin Wells resigned effective June 30, 2000. They will both assume positions in the Economics Department at Princeton University.
There were six visiting faculty for all or part of the 1999—2000 academic year. Visiting Professor Jean Tirole taught a topics course in industrial organization. Visiting Professor Roger Brinner taught macroeconomics. Visiting
Professor Mathias Dewatripont taught microtheory. Visiting Professor Eric Maskin taught game theory. Visiting Professors Philippe Weil and Francesco Giavazzi both taught macroeconomics.
The department would like to increase the proportion of women and minorities in the department. All search committees are instructed to identify outstanding women and minority candidates as part of their search process. As part of the regular recruitment process for junior faculty, the department solicited/received 214 CVs. Twenty-eight candidates (including seven women) were selected for interviews. All candidates were interviewed by at least two
members of the faculty. Subsequently, eight candidates were invited to come to MIT and present a seminar. As a result of this process, three offers were made, one of them to a woman, Monica Piazzesi, from Stanford. Two of the offers were accepted. Monica Piazzesi, facing a joint career choice, decided to go to Chicago instead.
Professor Acemoglu was invited to give the keynote address at the European Labor Economics Association meetings. He also became the editor of a new Internet economics journal, the QR Journal of Macroeconomics.
Professor Athey was named a Hoover Institution National Fellow, as well as a Sloan Foundation Research fellow. She received a NSF career award, became co-editor of the QR Journal of Theoretical Economics and co-editor of the Journal of Economics and Management Strategy. She was also on the Program Committees for the 8th World Congress of the Econometric Society and the Winter Meetings of the Econometric Society.
Professor Autor was elected a Faculty Research Fellow for the National Bureau of Economic Research and a Faculty Affiliate of the Joint Center for Poverty Research, University of Chicago/Northwestern University. He also received the MIT James H. Ferry Fund Grant for Innovation in Research Education.
Professor Abhijit Banerjee received a Guggenheim Fellowship.
Professor Olivier Blanchard was a member of the Committee on Honors and Awards for the American Economic Association, gave the Horowitz Lectures at Tel Aviv and Hebrew University, and gave the Tinbergen lecture in Amsterdam.
Professor Caballero is the 1999 recipient of the annual award granted by the Foundation of Economics and Business at Catholic University of Chile to one of its alumni, was elected Graduate Teacher of the year in the Department of
Economics, and was named a Ford International Professor of Economics.
Professor Peter Diamond received a Fulbright Fellowship.
Professor Dornbusch received the Concord Prize in Krefeld, Germany.
Professor Duflo was invited to join the MacArthur Foundation Network on the Effects of Inequality on Economic Performance.
Professor Glenn Ellison was appointed editor of Econometrica.
Professor Fisher gave the Eleventh Annual Joseph L. Lucia Public Policy Lecture at Villanova University, the Fourth Annual Gideon Fishelson Memorial Lecture at Tel Aviv University, and was named the inagural holder of the Jane Berkowitz Carlton and Dennis William Carlton Chair in Microeconomics.
Professor Gabaix became a member of Sigma Xi.
Professor Bengt Holmstrom gave the Wicksell lectures at Stockholm School for Economics, and the Astra-Ericsson lecture at the Institute for Industrial Economics in Stockholm.
Professor Paul Joskow was the keynote speaker at the Annual Meeting of the International Society for New Institutional Economics, and was appointed to the Bogen Visiting Chair at Hebrew University.
Professor Mullainathan was appointed to the Mark Hyman, Jr. Career Development Chair, beginning July 2000, and was appointed to be the Zvi Griliches National Fellow by the National Bureau of Economic Research for
2000—2001. He also received a National Science Foundation Grant for 2000—2002, and was awarded the Graduate Student Award for Outstanding Faculty Member in the MIT Economics Department for 2000.
Professor Whitney Newey received the College Honored Alumni Award by the College of Family, Home, and Social Sciences at Brigham Young University.
Professor James Poterba was the inaugural Review of Economics and Statistics lecturer in March of 2000, was awarded the Duncan Black Prize from the Public Choice Society for Outstanding Paper in Public Choice, and was the Institute for Fiscal Studies Annual Lecturer in London.
Professor Nancy Rose was elected to the American Economic Association Executive Committee, and was elected Teacher of the Year by the MIT Undergraduate Economics Association.
Professor Emeritus Paul Samuelson received the John R. Commons Award from Fordham University at the AEA meetings.
Professor Peter Temin gave the John R. Hicks Lecture at Oxford University, and is President-elect of the Eastern Economic Association.
Professor Ventura received a Sloan Fellowship for the 2000—2001 year, and was appointed to the Pentti Kouri Career Development Chair, beginning July 1999.
Professor Acemoglu’s paper "Productivity Differences" (joint with Fabrizio Zilibotti) is forthcoming in the Quarterly Journal of Economics.
Professor Joshua Angrist’s paper "The Interpretation of Instrumental Variables Estimators, with an Application to the Demand for Fish" (joint with Guido Imbens and K. Graddy) was published in the Review of Economic Studies.
Professor Athey’s paper "Mentoring, Discrimination, and Diversity in Organizations" will appear in the September issue of the American Economic Review.
Professor Autor’s paper "Changes in the Wage Structure and Earnings Inequality" was published in the Handbook of Labor Economics.
Professor Banerjee’s paper "Inequality, Control Rights and Rent-Seeking: Sugar Cooperatives in Maharashtra" written with D. Mookherjee, K. Munshi, and D. Ray is forthcoming in the Journal of Political Economy.
Professor Blanchard published "The Role of Shocks and institutions in the rise of European Unemployment: The Aggregate Evidence" a joint paper with Justin Wolfers in the Economic Journal.
Professor Caballero prepared a paper entitled "Aggregate Volatility in Modern Latin America: Diagnostic, Analysis, and Policy Recommendations" for the World Bank’s fiscal year 2000 flagship report "Dealing with Economic Insecurity in Latin America."
Professor Costa’s paper "Power Couples: Changes in the Locational Choice of the College Educated, 1940—1990" (joint with Matthew Kahn) is forthcoming in the Quarterly Journal of Economics.
Professor Dornbusch has a book titled Free Markets, Hard Money, and a Bit of Luck forthcoming.
Professor Duflo’s joint work with Professor Banerjee "Reputation Effects and the Limits of Contracting: A Study of the Indian Software" is forthcoming in the Quarterly Journal of Economics.
Professor Ellison’s paper "The Neo-luddite"s Lament: Excessive Upgrades in the Software Industry" (joint with Drew Fudenberg) was published in the RAND Journal of Economics.
Senior Lecturer Sara Ellison published her joint work with Professor Ellison "A Simple Framework for Nonparametric Specification Testing" in the Journal of Econometrics.
Professor Fisher has an article forthcoming in the Journal of Reprints of Antitrust Law and Economics.
Professor Gabaix's paper "Zipf's law for cities" was published in the Quarterly Journal of Economics.
Professor Jonathan Gruber published "Cash Welfare as a Consumption Smoothing Mechanism for Single Mothers" in the Journal of Public Economics.
Professor Gerald Hausman has an article titled "Microeconometrics" forthcoming in the Journal of Econometrics.
Professor Holmstrom has a joint work with Visiting Professor Tirole forthcoming in the Journal of Money, Credit, and Banking titled "Liquidity and Risk Management."
Professor Joskow’s article "Deregulation and Regulatory Reform in the U.S. Electric Power Sector" is forthcoming in the volume Deregulation of Network Industries: The Next Steps.
Associate Professor Guido Kuersteiner is in the process of publishing his paper "Optimal Instrumental Variables Estimation for ARMA Models."
Professor Mullainathan’s joint work with M. Bertrand "Are CEOs Rewarded for Luck? The Ones Without Principals Are" is forthcoming in the Quarterly Journal of Economics.
Professor Newey’s article "Tax Reform Evaluation Using Nonparametric Methods: Sweden 1980—1991" (joint with S. Blomquist and M. Eklof) is forthcoming in the Journal of Public Economics.
Professor Poterba published "New Evidence on the Money's Worth of Individual Annuities" in the American Economic Review.
Professor Rose’s article with C.D. Wolfram "Has the ‘Million-Dollar Cap’ Affected CEO Pay?" is forthcoming in the American Economic Review Papers and Proceedings.
Associate Professor David Spector published "Rational Debate and One-Dimensional Conflict" in the Quarterly Journal of Economics.
Professor Temin published "The Industrialization of New England, 1830—80" in a volume edited by him titled Engines of Enterprise: An Economic History of New England.
Professor William Wheaton’s article "Decentralized Welfare: Will There be Under Provision?" is forthcoming in the Journal of Urban Economics.
More information about the department can be found on the World Wide Web at http://web.mit.edu/economics/www/.
Olivier Blanchard
MIT Reports to the President 1999–2000