World Economy Lab
THE WORLD ECONOMY LABORATORY (WEL)
The World Economy Laboratory (WEL) was a research center of the MIT Department of Economics, established in January of 1992 by Professors Stanley Fischer and Rudi Dornbusch. When Stanley Fischer left MIT in 1995, Rudi Dornbusch took over as director, and remained in charge of WEL until his death in 2002.
The purpose of WEL was twofold: To draw on the collective knowledge of MIT faculty, alumni, and friends to have an informed discussion of world economic issues, and to provide resources to support research by young faculty, students, and visitors.
WEL was financed by a large group of associates, U.S. and foreign corporations, governments, and individuals. Among them: General Electric, Trans-National Research Corp., Union Bank of Switzerland, Santander Investment, Banca d'Italia, Salomon Brothers, the Central Bank of China, Citibank, Goldman Sachs, Chase Securities, Pequot Investments, EXOR America, ICATU, Ufficio de Cambi, GFC Partners, Korea Institute of Research, and Merrill Lynch.
In exchange for their contributions and help, associates were invited to conferences, received papers and commentaries, and, last but not least, had access to Rudi Dornbusch's expertise on what was going on around the world.
WEL typically organized two policy conferences each year, on the U.S. and global economy. One was held in New York, the other in Washington, DC. The summary of the last conference, held in honor of Rudi Dornbusch on September 27, 2002.
The list of speakers who spoke at one or another conference reads like a who's who of economics and economic policy. Among them, Otmar Issing, Mervyn King, Arminio Fraga, Lucas Papademos, Mario Draghi, Jose de Gregorio, Larry Summers, Takatoshi Ito, John Deutch, Maxim Boycko, Lamberto Dini, and Laura Tyson.
WEL Research Reports
WEL working papers included congressional testimonies, reports written by faculty for government and international agencies, and less technical papers on applied issues that were distributed to members on a regular basis. These papers were less formal than the normal departmental working papers that are destined for professional journals.
Each month WEL distributed economic Columns. Professors Rudi Dornbusch, Paul Krugman, and Paul Samuelson typically wrote at least one article a month for Columns. Articles were also written by other faculty members as the opportunity arose. Each issue contained three to five commentaries on current issues pertinent to the world economy.
Special Interest Seminars or Conference Calls
Periodically, WEL conducted a seminar or conference call on a topic of special interest, of special urgency. On such occasions, and on short notice, WEL organized a seminar or a conference call to discuss the issues, and clarify choices.
Turning to the second purpose of WEL: The contributions of the WEL associates were used to finance research either by young faculty or by students. Many students over the years were able to spend the summer working on their research, instead of having to take a summer job in order to finance their summer. Junior faculty members were able to buy data, hire research assistants, something they could not have done without the WEL funds.
In all these activities, Rudi Dornbusch played a central role. As Stanley Fischer noted in his opening remarks at the September 2002 conference in his testimonial to Rudi, "despite and because Rudi always said what he thought, criticizing when necessary, he spoke his mind honestly and straightforwardly, he was always himself. He approached policy issues by leaving irrelevancies and details on the side and addressed the heart of the issue. He was a prodigious worker...WEL was in itself another of his efforts to finance graduate student work." Without Rudi, the department concluded, it did not make sense to continue WEL. WEL was closed in November 2002.
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