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|Featured Research: Grow your own way
Warming temperatures will take a heavy toll on agricultural productivity, according to climate scientists. How will society adjust? One possibility might be increased trade: If one country suffers a decline in, say, wheat production but can still grow as much rice as ever, then — in theory — it might grow more rice and trade for its usual amount of wheat instead. But a new study co-authored by Professor Arnaud Costinot suggests that international trade will do little to alleviate climate-induced farming problems. Instead, the report indicates that countries will have to alter their own patterns of crop production to lessen farming problems — and even then, there will be significant net losses in production under the basic scenarios projected by climate scientists.
|George-Marios Angeletos elected Fellow of Econometric Society
Professor George-Marios Angeletos is one of the 13 new Fellows elected to the Econometric Society in recognition for innovative and influential work. The Econometric Society is an international society for the advancement of economic theory in its relation to statistics and mathematics.
|Honoring Rob Townsend's Legacy to Development Economics
Elizabeth & James Killian Professor Robert M. Townsend was recently honored with a conference at the Becker Friedman Institute at the University of Chicago. The conference was organized by his former students, and it featured keynote speeches by his mentors Thomas J. Sargent (the Nobel Laureate from NYU) and Neil Wallace (Penn State).
|Heidi Williams wins 2015 MacArthur Fellowship
Heidi Williams, Class of 1957 Assistant Professor, has been named a MacArthur Fellow, recognizing her pioneering work in innovation and health economics. There are usually fewer than 25 MacArthur Fellowships awarded each year.
|Featured Research: Democracy Does Cause Growth
Many experts, academics and pundits warn that democracy can be pernicious to economic growth because of the political gridlocks it engenders, its inability to act fast in the face of crisis, and its unwillingness to adopt growth-enhancing reforms. In "Democracy Does Cause Growth", Daron Acemoglu, Suresh Naidu, Pascual Restrepo and James Robinson show that the evidence runs very much counter to this widespread belief. The main finding is that a country that switches from nondemocracy to democracy achieves about 20 percent higher GDP per capita in the next 25 years or so, and this result is very robust to different econometric approaches and samples. The key to this conclusion are two departures from much of the previous literature: first, the approach adopted in this paper does not compare democracies to nondemocracies, but investigates how a country's growth changes once it becomes democratic (or reverts back to nondemocracy). Second, it recognizes that many countries switch to democracy in the midst of economic problems (making it important to correctly model GDP dynamics). The effect of democracy appears remarkably stable when one focuses on all switches to and from democracy, and when one exploits the regional waves of democratizations as a source of exogenous variation (to avoid the concern that countries might be democratizing just before they embark on a more favorable growth trajectory).
How do democracies achieve this better growth? They do so by investing more in public goods such as education and health, and also increasing investment in physical capital. But perhaps more surprisingly in the face of the beliefs about the problems of democracy, they are also more likely to adopt economic reforms and bring stability.
What about the argument that not all countries are ready for democracy and poor countries are better governed by the iron fist of a benevolent dictator? The data are not favorable to this widespread belief either. The impact of democracy on subsequent growth is positive regardless of the level of economic development or the educational achievement of the workforce.
|Grant to MIT's Poverty Action Lab increases focus on working with governments
The Abdul Latif Jameel Community Initiatives (ALJCI) has committed a substantial grant to the Abdul Latif Jameel Poverty Action Lab (J-PAL) at MIT. The new funding will allow J-PAL, which champions the use of randomized controlled trials to help answer critical policy questions in the fight against poverty, to greatly expand the reach and real-world impact of its research by increasing its work with governments to scale up antipoverty policies that work. J-PAL will use this support to create the Government Partnership Initiative (GPI), which will work with governments to design, evaluate, and scale up programs that aim to reduce poverty. GPI will also provide technical support to help governments scale effective policies and further institutionalize evidence-informed policymaking.
|Alp Simsek receives National Science Foundation CAREER Award
Professor Alp Simsek was awarded a NSF CAREER Award for his work on the role of amplification mechanisms in economic crises. NSF CAREER Awards are a Foundation-wide activity that offers the National Science Foundation's most prestigious awards in support of junior faculty who exemplify the role of teacher-scholars through outstanding research, excellent education and the integration of education and research within the context of the mission of their organizations.
|Esther Duflo awarded 2015 Princess of Asturias Social Sciences prize
Abdul Latif Jameel Professor of Poverty Alleviation and Development Economics Esther Duflo has been awarded the 2015 Princess of Asturias Social Sciences Prize for her studies in development economics and pioneering work in adapting and applying the randomized methods that scientific research uses to test drugs and vaccines - control and treatment groups - to the field of economic studies. The Princess of Asturias Awards are aimed at rewarding "the scientific, technical, cultural, social and humanitarian work carried out at an international level by individuals, institutions or groups of individuals or institutions." The Princess of Asturias Award for Social Sciences are conferred on those "whose creative work or research represents an outstanding contribution to the benefit of humanity in the fields of History, Law, Linguistics, Teaching, Political Science, Psychology, Sociology, Ethics, Philosophy, Geography, Economics, Demography or Anthropology, including the disciplines corresponding to each of these fields."
|James Poterba elected to National Academy of Sciences
Mitsui Professor of Economics Jim Poterba is one of the 84 new members and 21 foreign associates from 15 countries elected to the National Academy of Sciences in recognition of their distinguished and continuing achievements in original research. Poterba joins MIT colleagues Samuel A. Bowring (Earth and Planetary Science), Tomasz Mrowka (Mathematics), and Sara Seager (Earth, Atmospheric and Planetary Sciences) as new members in 2015.
|Ivan Werning elected to the American Academy of Arts and Sciences
Robert M. Solow Professor Ivan Werning is among the 197 new members of the American Academy of Arts and Sciences elected for 2015. They include some of the world's most accomplished scholars, scientists, writers, artists, and civic, business, and philanthropic leaders. One of the nation's most prestigious honorary societies, the American Academy is also a leading center for independent policy research. Members contribute to Academy publications and studies of science and technology policy, global security and international affairs, social policy and American institutions, and the humanities, arts, and education.