Department of Economics - Fall 2005 Newsletter

Once again I send greetings from Boulder, where the summer went by rapidly and the weather remains fabulous. One morning in July I gave a talk to a group of incoming freshmen about “how economists do research?as part of their orientation at the university. I wish I could say they were all interested in the intricacies of profit-maximization, price-setting, and regression analysis, but they were certainly good sports about it, rather like friendly people resigned to what would happen at the dentist’s office. It reminded me that we faculty members encounter eager new faces each fall and hope to help them mature intellectually and emotionally over the next four years. It’s a pretty good job when you think about it, even better than what dentists get to do.

Speaking of the fall, I am happy to report that the CU football recruiting scandal has died out and people here are actually looking forward to the season. The team might even be pretty good, I am told. The great thing is that the focus again is on competition, not allegations of wrongdoing. It’s great because I am, to put it mildly, tired of reporting to you about the university’s problems that are outside of the economics department. You might wonder, for example, about the Ward Churchill affair. In case you haven’t heard, Professor Churchill is a colleague in another department who is given to making sharply controversial remarks in public about U.S. foreign policy. I think the consensus in the economics department is to regard him as somewhere between an unfortunate distraction and a misguided idiot. However, he is the university’s problem and we just want to get on with our work.

And so we have, in a big way. Despite ongoing budget problems at the university, the department had a terrific record of success in academic year 2004?5. In this report I will highlight the record of accomplishment, which is complemented by the Faculty Notes section in the margins of the newsletter. And I will make a strong appeal to you to consider providing some financial support for the department in the next few months. As economists say about lunches, "There is no free Report from the Chair."

Faculty News and Appointments
I am pleased to report that Assistant Professor Anna Rubinchik-Pessach has successfully completed her midterm comprehensive review. Anna is a specialist in microeconomic theory and public economics, and has been doing fascinating work on the political economy of federalism, the gains from contract enforcement, and additional topics.

The department saw two successful tenure cases in the last year. Assistant Professors Martin Boileau and Murat Iyigun were both granted tenure and promoted to associate professor. Martin is a specialist in international finance and the international transmission of real business cycles. He has published a series of important articles on these subjects, offering new and insightful explanations for the propagation of business cycles. These articles appear in such outstanding journals as Journal of Monetary Economics, International Economic Review, and Journal of International Economics. His models prominently feature the role of asymmetric information between economic agents in explaining macroeconomic fluctuations.

Murat is also a macroeconomist, though recently he has specialized in economic development and the economics of the family. He has published recent articles in such journals as International Economic Review, Economic Journal, Journal of International Economics, Journal of Development Economics, and European Economic Review. He has written extensively on the growth impacts of decisions people make to accumulate human capital through education and training, while analysis of technological change is also important in his work. We are delighted that both Martin and Murat were promoted and will serve as the backbone of the department’s offerings in macroeconomics, international finance, and economic growth for years to come.

Finally, Associate Professor Yongmin Chen was successfully promoted to full professor. Yongmin is a specialist in microeconomic theory and industrial organization, with particular interests in strategic behavior and pricing. He has published in outstanding outlets such as RAND Journal of Economics, International Economic Review, and Journal of Industrial Economics. Yongmin explains some of this work in an accompanying article in this newsletter.

In addition to these positive decisions, the department had an extraordinarily successful year in recruiting new faculty members. At the assistant professor level, we were able to recruit Jennifer Lamping, a microeconomic theorist who just completed her PhD at Columbia University. Jennifer wrote an intricate and interesting theoretical dissertation on the nature of decisions made in auctions, analyzing certain remarkable features of price signals made available to auction participants. Jennifer will teach graduate and undergraduate economic theory in our department.

We also undertook a joint search with the Institute of Behavioral Science (IBS), resulting in the hiring of Tania Barham, who recently successfully defended her PhD dissertation at the University of California, Berkeley. Tania is a health economist, which is an area of need that we had been hoping to fill for some time. Tania’s dissertation analyzed the effects of Mexico’s Progresa program on infant mortality. Progresa is a welfare program in rural Mexico that was implemented in the late 1990s and provides monetary support, health care, and health education to poor mothers. Tania discovered that the program has had a large impact on reducing infant mortality. She will teach microeconomics, statistics, health economics, and economic development in our department.

The department was also extremely fortunate to hire two prominent economists from the University of Texas. First, Carol Shiue, who will be a tenured associate professor, is a specialist in economic development and Chinese economic history. She has written seminal papers on the extent of market integration and the role of disaster relief in 18th-century China. She has worked recently on the role of market integration in economic development, with comparative analyses of imperial China and Europe before the industrial revolution. These papers are prompting reconsideration within the economic history profession of what really caused European economic growth and Chinese stagnation. Her papers appear in American Economic Review, Journal of Economic History, and elsewhere. Carol discusses her work in a companion piece in this newsletter. She will teach economic history and economic development in our department.

Second, Wolfgang Keller, who also will be a tenured associate professor, is a leading authority on international trade, technological innovation, and the diffusion of new information across borders. He has published papers in American Economic Review, Journal of Political Economy, Journal of Development Economics, and other outstanding journals. He is also a research associate at the National Bureau of Economic Research. Wolfgang will teach economic theory, international trade, and economic growth.

Together, these economists will do much to push the research and teaching programs here beyond what we have achieved to date. The fact that the department was able to hire four outstanding scholars in the face of significant budgetary difficulties at the university was almost miraculous. I am grateful to my colleagues for their hard work in the recruiting process and to the Dean of Arts and Sciences for supporting our requests.

Unfortunately, I must also report the resignation of Associate Professor Tom Rutherford, who moved to Ann Arbor, Michigan for family- related reasons. Tom will continue to be affiliated with our department in certain teaching and research activities. We look forward to working with him for some time to come.

Teaching Notes
Undergraduate students at the university continue to make the Department of Economics their academic home, in large numbers. We currently have nearly 1,000 declared majors and another 250 minors in economics. Our graduation ceremony in May was again very large, with over 150 graduating seniors and about 1,000 family members and friends in attendance. In academic year 2003?4 the number of undergraduate students in economics courses exceeded 9,500. We still teach the greatest number of student credit hours on campus.

It is a challenge teaching so many students, but we strive to ensure quality instruction in the classroom. Despite these large enrollments, overall student evaluations of economics classes have improved. One reason is that we are fortunate to have many outstanding visiting instructors who do a good job in the classroom. Another is that our graduate teaching assistants are committed to the teaching mission of the department. Ultimately, however, the high marks reflect a real dedication on the part of our faculty to provide rigorous and engaging course experiences for undergraduate students. Surveys of senior economics majors indicate considerable satisfaction with their learning experience.

We also maintain an outstanding honors program, which now enrolls over 20 students per year. These students are well-trained, curious, and smart. We expect our honors students to undertake an entirely new piece of analysis, combining basic economic theory with original data sets and reaching conclusions to interesting questions. The quality of these theses is truly outstanding. Another opportunity for broader study is our large and successful internship program, in which students complete an internship with a local or national enterprise and, under faculty supervision, write a research paper about the experience.

At the graduate level, interest in our doctoral program remains high. The number of outstanding applicants has risen rapidly over the last three years. This semester we expect to enroll around 15 to 18 new students, which is a reasonable number for us. As you know, our students come from the United States and from countries all over the world.

One reason for this interest is our continued strong record in placing our doctoral students into satisfying careers. The new economists who completed training since the last newsletter have taken jobs at George Washington University, the Thailand Development Research Institute, California State University at Long Beach, Allegheny College, University of Denver, and KPMG, a major consulting firm. We will have a large group of students entering the professional market this coming year and we expect them to be similarly placed.

An excellent new feature of our graduate training is that we now provide training in English, accent reduction, and classroom pragmatics for our foreign graduate students who wish to be supported as teaching assistants and graduate instructors. Despite their commitment to solid teaching, occasionally there are difficulties in communication arising from differences in language, accents, and culture, especially when the TAs and freshman students are in a classroom together for the first time. The new program should do much to alleviate the concerns of undergraduate students on this score and help train our doctoral students for academic careers.

Staff News
The department was delighted to welcome Georgiana Esquibel back to our staff for a few months earlier this year. Former graduate students will recall Georgiana as our graduate secretary for many years. And we were sorry to see Grace Norman leave us at the end of July, 2005. Grace, who was a patient and generous member of our community for many years, retired in order to spend more time with her new grandson. We wish her all the best.

A Special Request
It has been the tradition in past newsletters not to make particular pleas for financial support from alumni and friends, hoping that simply listing the mailing address for donations would be sufficient to encourage you to think of us. With this newsletter, however, I must begin the process of soliciting your advice and support more personally. I do this because we have developed a special need over the last few years that must be addressed with a departmental fundraising campaign.

The campaign itself is explained later in this newsletter. In a nutshell, however, the costs of recruiting top-quality faculty have risen very rapidly in the last few years. The university has been as supportive as possible in terms of salaries. However, CU is unable to help with the costs of interviewing prospective faculty members and offering financial packages at the hiring stage, including startup funds for summer research support and computers. Similar expenses are incurred for retaining excellent faculty who may be recruited by other universities. For example, in the last academic year the department had to compete with offers from top universities for two senior scholars on our faculty. It is clear to me that these costs are going to mount higher in the future.

For this reason, we will be undertaking a campaign in the next few academic years to establish a Faculty Enhancement Fund. We hope to raise at least $750,000 for the fund, which will put the department on a sustainable basis for meeting the costs of competing for excellent faculty. Contributions from existing faculty and members of our advisory board have established a good start for this campaign, but we definitely need the help of our friends and alumni. Please take the time to fill out the donation form provided in the newsletter and submit your contribution in the envelope provided. Please mark the contribution for "Economics Faculty Enhancement Fund" to be sure it is allocated correctly. Of course, if you wish to contribute to the department for other purposes, we would greatly appreciate that as well. The Enhancement Fund, however, is our top priority for the coming year.

Thank you, Keith Maskus, Chair

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