The high point of the past year for MIT Economics came when Bengt Holmström was awarded the Nobel Prize in Economics. The prize, formally the 2016 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, was awarded jointly to Holmström and to Oliver Hart of Harvard University for their research on contract theory. Their pioneering work opened up a broad field of inquiry that studies incentives within organizations, the optimal design of contracts between employers and employees, and the role of asymmetric information in many other settings.
Two other MIT Economics faculty members received particularly notable honors in the past year. Dave Donaldson, an expert on international trade who was an MIT faculty member from 2009 until 2014, and who rejoined the MIT faculty in July 2017, was selected as this year’s John Bates Clark Medalist by the American Economic Association. The award recognizes the outstanding American economist under the age of 40.
Daron Acemoglu, who studies political economy, technical change, and economic growth, received the 2017 BBVA Foundation Frontiers of Knowledge Award for Economics, Finance, and Management. This award, a relatively recent honor that recognizes an important contribution to economics, has rapidly emerged as one of the most competitive and highly-regarded in economics.
There were many other faculty honors during the year. Alberto Abadie, Jonathan Gruber, and Parag Pathak were elected Fellows of the Econometric Society. Isaiah Andrews and Alp Simsek were awarded NSF CAREER grants. Esther Duflo was elected to the National Academy of Sciences. John Van Reenen was named an officer of the Order of the British Empire (OBE). This short list excludes a wide range of other recognitions.
In July 2017, Nancy Rose (PhD ’85) succeeded Glenn Ellison (PhD ’92) as Department Head. Rose, who taught at the MIT Sloan School prior to joining the Economics faculty in 1994, is a distinguished scholar of industrial organization and regulatory economics. She served as Deputy Assistant Attorney General for Economic Analysis in the U.S. Department of Justice Antitrust Division from 2014 through 2016. David Autor continues as Associate Department Head.
In addition to welcoming Dave Donaldson’s return from Stanford, the department added two new faculty members and promoted two others in 2017. Martin Beraja, a macroeconomist who received his PhD from the University of Chicago, and Simon Jäger, a labor economist who received his PhD from Harvard University, joined the department as assistant professors. Isaiah Andrews was promoted to the rank of Associate Professor without Tenure, and David Atkin was promoted to the rank of Associate Professor with Tenure.
Unfortunately, not all our news of the past year was happy. The MIT Economics and Sloan communities were deeply saddened when Stephen Ross, a long-time member of both faculties and the holder of the Franco Modigliani Professorship of Financial Economics, passed away unexpectedly in early 2017.
The Economics Department introduced two new undergraduate initiatives during the past two years. In the Fall of 2016, it launched a new major in Mathematical Economics (14-2), which offers deep and broad training in both economics and mathematics, and highlights the synergies between the two fields. This new major offers empirically-minded students the opportunity to master frontier “big data” tools while also enabling theoretically-minded students to explore the nexus between economic theory and pure mathematics. Many students will probably choose to do both.
In the Fall of 2017, the Economics department launched a new undergraduate major in Computer Science, Economics and Data Science, run in collaboration with the department of Electrical Engineering and Computer Science (EECS, or Course 6). This new offering capitalizes on the rapid growth of collaborative scholarship among economists, computer scientists, and engineers. The major builds on research areas including online markets, crowdsourcing platforms, spectrum auctions, crypto-currencies, and large-scale matching/allocation systems such as kidney exchanges and public school choice systems. These electronically-mediated platforms combine complex human decisions with intensive computation and data processing, all operating within an engineered economic environment. Students are already expressing substantial interest in this new major.
Many faculty members are engaged in substantial service to the economics profession. Two in particularly prominent current roles are Olivier Blanchard and Drew Fudenberg. Blanchard, now an emeritus faculty member, was elected President of the American Economic Association in 2016. He was a key member of the MIT macroeconomics faculty for nearly 25 years, and then served for eight years as the Economic Counselor and Director of the Research Department at the International Monetary Fund. Fudenberg, a member of the MIT faculty in the 1980s, who taught at Harvard for several decades before returning to MIT in 2016, is currently serving as President of the Econometric Society.
Many other faculty members also play significant professional leadership roles. David Autor directs the National Bureau of Economic Research (NBER) Disability Research Center and is an executive committee member of the American Economic Association. Arnaud Costinot serves as Foreign Editor for the Review of Economic Studies and Co-Editor of the Journal of International Economics. Esther Duflo is the Director of the Development Program at the Center for Economic Policy Research (CEPR) and the Editor in Chief of the American Economic Review. Amy Finkelstein and Jon Gruber serve as program directors for public economics and health care respectively, Robert Gibbons and Parag Pathak direct working groups on organizational economics and market design, and James Poterba serves as president, at the NBER. Jon Gruber is the President-elect of the American Society of Health Economists. Whitney Newey serves on the Executive Committee of the Econometric Society; he and Rob Townsend are members of the society’s North America Council. Townsend is also the president of the Society for the Advancement of Economic Theory. Ben Olken is a Co-Editor for the American Economic Journal: Applied Economics.
Other faculty continue the department’s tradition of broader public service. David Autor and James Poterba serve on the Panel of Economic Advisers, and Amy Finkelstein serves on the Panel of Health Advisers, for the Congressional Budget Office. Parag Pathak serves as a member of the Scientific Board at the Institute for Innovation in Public School Choice.
Massachusetts Institute of Technology • Department of Economics
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