From Yale College to MIT’s economics program to Stockholm
Yale College, New Haven, Connecticut. Photo courtesy: Hypathway
Hypathway’s Notes: New York Times' columnist Paul Krugman is a true liberal voice on social and economic issues around the world. His view points on China and economic policy in the United States make some of his readers difficult to align him with the status of an economist who actually won a Nobel Prize in 2008. As I asked this question to my son, he said his friend, who was a Harvard undergraduate concentrating math/economics, indicated that the essays Krugman has published in NY Times' column were completely different from his academic papers in economics. Krugman got his bachelor of arts (B.A.) from Yale College before he went on to learn economics at MIT. The pattern happened again for the newest Nobel Prize for Economics: this year's Laureate Peter A. Diamond of MIT earned his undergraduate degree on mathematics from Yale and his PhD in economics from MIT. Diamond's Yale degree of summa cum laude is the highest ranking of Latin Honor system which placed him in the top five percent of that year's Yale undergraduates. Interestingly enough,Yale Daily News also documented that 2001 Nobel Economic Laureate George Akerlof was also graduated from Yale College and MIT's graduate school. Three individuals followed the same pattern in terms of college and graduate school choice. Except MIT’s current president was Yale’s former provost, Yale and MIT hardly share a common ground on their academic strengthens. However, it seems students showed some advantages when a solid liberal arts education was established at Yale College prior to their pursuing a special training at a place like MIT or Stanford where deep discussions on hardcore sciences were available.
How come a technology focus-school like MIT have such a strong program in economics, particularly if you are aware that its counterpart in California (Caltech) does not even have a PhD program for economics? Some would say that MIT uses its strengthen in math and physics to emphasis the quantitative part of modern economics, and others might be credit to the initial recruitment of Paul A. Samuelson, America's first Nobel Economics Laureate who was widely cited as one of the most influential economists in the last century. MIT has not only produced the Nobel Laureates, it also generated a group of powerful figures who are shaping this country's economic and political policy. This statement can be easily justified when you look at Obama's economic team in which Lawrence Summers (son of Paul Samuelson's brother), White House Economics Adviser, was an MIT undergraduate prior to his PhD from Harvard; Ben Bernanke, Federal Reserve Chairman, got his bachelor from Harvard and PhD from MIT; Christina Romer, Chairperson of Obama's Council of Economics Advisers, also had a PhD from MIT. But the bottom line is how was the performance of MIT's dream team for the recovery of this country's economy? Now with Summers' departure from White House in returning to Harvard for his teaching post and Romer’s out-going, it is probably only history could answer this question.
How come a technology focus-school like MIT have such a strong program in economics, particularly if you are aware that its counterpart in California (Caltech) does not even have a PhD program for economics? Some would say that MIT uses its strengthen in math and physics to emphasis the quantitative part of modern economics, and others might be credit to the initial recruitment of Paul A. Samuelson, America's first Nobel Economics Laureate who was widely cited as one of the most influential economists in the last century. MIT has not only produced the Nobel Laureates, it also generated a group of powerful figures who are shaping this country's economic and political policy. This statement can be easily justified when you look at Obama's economic team in which Lawrence Summers (son of Paul Samuelson's brother), White House Economics Adviser, was an MIT undergraduate prior to his PhD from Harvard; Ben Bernanke, Federal Reserve Chairman, got his bachelor from Harvard and PhD from MIT; Christina Romer, Chairperson of Obama's Council of Economics Advisers, also had a PhD from MIT. But the bottom line is how was the performance of MIT's dream team for the recovery of this country's economy? Now with Summers' departure from White House in returning to Harvard for his teaching post and Romer’s out-going, it is probably only history could answer this question.
Yale graduate wins Nobel Prize
By David Burt, Emily Wanger, Staff Reporters, Yale Daily News, Oct. 12, 2010.
Yale graduate and Massachusetts Institute of Technology professor Peter A.Diamond ’60 won the 2010 Nobel Memorial Prize for Economic Sciences on Monday for his work examining the job market.
Diamond was recognized along with his colleagues Dale T. Mortenson, a professor at Northwestern University,and Christopher A. Pissarides of the London School of Economics and Political Science. The three collaborated on models that provide insight into the ways in which regulation and economic policy affect unemployment, job vacancies and wages.
Diamond said he heard the news as his wife was driving him home from the Boston airport.
“Fortunately, I was sitting down, and I wasn’t behind the wheel,” he joked Monday morning at an MIT news conference.
Diamond said policymakers should make sure that unemployed workers do not remain jobless for so long that they become detached from the labor force. But he said he is optimistic that the economy will recover.
“I think the economy is very adaptive,” he said. “Workers and employers will adapt to what will make the economy function.”
Diamond received his Ph.D. from MIT in economics after graduating from Yale College in 1960. He then taught at the University of California, Berkeley, but returned to MIT as a faculty member in 1966 and has remained in Cambridge since then.
Yale economics professor Giuseppe Moscarini, who specializes in lab oreconomics, said the laureates’ work is the foundation of his research and that of any scholar who studies unemployment, wages and worker turnover. It was “about time” such scholars win the Nobel Prize, he added.
“Their work successfully reconciles the rigor and elegance of equilibrium analysis with the messy tangle of imperfections that characterize real-world labor markets, such as lack of information about existing vacancies,” he said.
Yale econometrics professor C. Lanier Benkard said Diamond’s award suggests that the prize committee appreciates that labor markets do not always behave according to traditional models.
Ben Polak, the chairman of the Yale Department of Economics, said that he was delighted to hear that Diamond had won the Nobel Prize.
“I hope his winning the Nobel Prize will push people to go back and read some of his papers again,” Polak said in an e-mail, citing some of Diamond’s papers about taxation, overlapping-generation economies and risk aversion as “classics” that have changed the way people view economics.
In addition to the Nobel Prize, Diamond received recognition from President Barack Obama when he was nominated in April for a position on the board of the U.S.Federal Reserve, though the Senate rejected the nomination based on a procedural rule. But Diamond is back in the running after President Obama re-nominated him on Sept.12.
Although the first Nobel Prizes were awarded in 1901, Rangar Frisch and Jan Tinbergen earned the first Nobel Prize for Economics in 1969. This year’s winners will received 10 million Swedish kronor, or about $1.5 million.
Economists Share Nobel for Studying Job Market
By Catherine Rampell, NY Times, Oct.11, 2010.
PeterA. Diamond, a nominee for a Federal Reserve Board position, and two other economists were awarded the 2010 Nobel Memorial Prize in Economic Science on Monday for their work on markets where buyers and seller shave difficulty finding each other.
The work of the winners, Professor Diamond of the Massachusetts Institute of Technology, Dale T. Mortensen of Northwestern University and Christopher A. Pissarides of the London School of Economics, is best known for its applications to the job market.
The researchers spent decades trying to understand why it takes so long for people to find jobs, even in good economic times, and why so many people can be unemployed even when many jobs are available.
Traditional economics, after all, would predict that wages should simply drop,helping the labor supply to meet labor demand automatically and sweeping jobless workers into whatever positions were immediately open.
These researchers’ explanation addresses the complications that come from searching for jobs and job candidates: it takes time for unemployed workers to be matched with the proper opening, since people are not identical, cookie-cutter units,and neither are jobs.
While all this may seem intuitive, in the 1970s it was considered quite radical.The resulting insights about how search costs can affect markets also helped revolutionize not only labor economics, but fields like public finance and housing economics as well. The work is especially relevant today, as policy makers try to understand and combat the causes of stubbornly high unemployment in countries like the United States.
Ina phone interview, Professor Diamond, 70, said that one of the implications of his work was that more fiscal and monetary stimulus was probably necessary to speed up job growth.
“The slower it happens, the more workers lose their skills and stop searching, and so the process goes more poorly after that,” Professor Diamond said.
President Obama nominated Professor Diamond in April for a Fed board position, where he would serve under his former student, Ben S. Bernanke, the Fed chairman. But in August, under an obscure procedural rule, the Senate sent Mr. Diamond’s nomination back to the White House before starting its summer recess, and a senator questioned his experience.
President Obama renominated Professor Diamond for the Fed position on Sept. 13. A hearing on his confirmation is still to come.
The work honored Monday also suggests that policies intended to help workers can have unintended consequences. Unemployment benefits, for example, can prolong joblessness by making it less costly to be without work.
“That’s a big controversy in the U.S.recently,” said Robert Shimer, an economics professor at the University. “Most of these models suggest that even in a depressed economy, more generous unemployment benefits tend to raise the unemployment rate. Benefits are obviously good for the unemployed, but there are some clear trade offs.”
The models help explain why European labor markets tend to be much more rigid than American ones, where people can move from job to job relatively easily, at least in good times.
“Many European countries put restrictions on the ability of firms to hire and fire,” said Lawrence F. Katz, a Harvard economist. “If you make it harder to hire and fire, then you end up with what’s called a sclerotic labor market, with less movement between jobs and more long-term unemployment.”
Europe’s struggles in the 1970s and 1980s with an underclass of chronically unemployed workers helped inspire Professor Pissarides, 62, a Cyprus native, to study the search costs of labor markets in the first place, he said.
Monday’s announcement also played into current debates about the government’s role in addressing long-term unemployment and about whether the elevated unemployment levels today represent a “new normal.”
“I think the economy is very adaptive,” Professor Diamond said in a news conference at M.I.T. “Workers and employers will adapt to what will make the economy function. I see no reason why, once we get fully over this, we won’t go back to normal times,” with more “normal”unemployment rates.
Professor Mortensen, 71, of Northwestern, said additional measures to get credit functioning more normally, and in particular to make it easier for small businesses to get loans, were crucial to reducing unemployment.
“From my perspective the problem right now is not the labor market,” he said during a phone call with reporters. “What’s happening in the labor market is a symptom of more complicated problems with the financial market.”
The line of research begun by the three Nobel laureates is still active today. “Search theory” has been applied to many other areas, like money systems and venture capital markets — really, any market that can be considered heterogeneous.
“Which is most markets,” said Robert E. Hall, a Stanford economist, “except for maybe things like grain.”
Justin Wolfers, a University of Pennsylvania economist, has applied the theory in his own work on marriage and divorce, for example.
“Labor economists think about firing costs, and family economists think about divorce costs,” Professor Wolfers said. Just as restrictions on firing an employee make fewer workers available for new positions — and therefore make companies skittish about making too many changes to their work force — low divorce rates can be self-perpetuating. With divorces rare, unhappy spouses may think twice about getting a divorce themselves, since there would be so few eligible new mates available.
While the applications of Professor Diamond’s Nobel-winning work are broad,his practical experience was questioned this year when he was nominated for the Fed governor position.
In August, Senator Richard C. Shelby, Republican of Alabama, said Professor Diamond did not have enough experience for the position. The Web site CqPolitics.com quoted him as saying, “I do not believe that the current environment of uncertainty would benefit from policy decisions made by board members who are learning on the job.”
Itis believed that Senate Republicans will ultimately not try a filibuster to block Professor Diamond now that he has been renominated.(His nomination was said to have been initially blocked in retaliation for a refusal by Democrats to give a full 14-year term to Randall S. Kroszner, who served on the Fed board from 2006 to 2009.)
If confirmed, Professor Diamond would complete a 14-year term that expires on Feb. 1, 2014.
The Nobel in economic science is awarded by the Royal Swedish Academy of Sciences and is not one of the original prizes created by Alfred Nobel. In addition to a medal and a diploma, the laureates collectively will receive 10 million Swedish kronor, or about $1.5 million.
Sewell Chan contributed reporting.
Posted 星期二, 10/12/2010 - 06:11 by Fishville at www.tongjiyiren.com (hypathway@hotmail.com).
Posted 星期二, 10/12/2010 - 06:11 by Fishville at www.tongjiyiren.com (hypathway@hotmail.com).
