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Bengt Holmstrom awarded 2016 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel
Bengt Holmstrom awarded 2016 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel
Bengt Holmstrom, the Paul A. Samuelson Professor of Economics, has been awarded the 2016 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. He shares this honor with Oliver Hart of Harvard, for their deeply influential work on contract theory, including the optimal design of contracts between employers and employees. The Royal Swedish Academy of Sciences, in granting the award, notes that contracts "are essential to the functioning of modern societies," and states that the work of the two economists had been "invaluable in helping us understand real-life contracts and institutions, as well as the potential pitfalls when designing new contracts."
Featured Research: Decoding the medical cost mystery
Featured Research: Decoding the medical cost mystery
A unique study co-authored by Amy Finkelstein, the John and Jennie S. MacDonald Professor of Economics, and Heidi Williams, the Class of 1957 Career Development Associate Professor of Economics, provides a new answer to the medical cost mystery: By scrutinizing millions of Medicare patients who have moved from one place to another, the researchers have found that patients and providers account for virtually equal shares of the differences in regional spending. Specifically, the study finds that nearly 50 percent of the spending differences across geographic areas stems from the characteristics of patients, meaning both their basic health and their varying preferences concerning the intensiveness of medical care. The rest of the spending differences derive from place-specific factors, potentially due to disparities in provider practices and incentives. The finding could help analysts and policymakers better understand the components of medical costs, and could add nuance to the debate about possible inefficiencies in health care spending.
Featured Research: Making a splash in health care economics
Featured Research: Making a splash in health care economics
Class of 1957 Career Development Associate Professor of Economics, Heidi Williams, builds all-new data sets to answer questions about innovation and biomedical research. Do gene patents restrict or enhance medical advances? What is the effect of patent law on cancer research? To what extent does the use of medical technology drive health care cost growth?
Featured Research: Provider, improve thyself
Featured Research: Provider, improve thyself
In the developing world, a large portion of health care providers have no formal medical training. Now a new study of rural India, co-authored by Abhijit Banerjee, the Ford International Professor of Economics, shows that modest levels of medical training can improve the quality of health care furnished by those informal providers. More specifically, the study, in the form of a novel field experiment conducted in the state of West Bengal, India, shows that informal care providers are more likely to handle cases correctly and compile basic checklists of patient information after undergoing about 150 hours of training over a period of months.
Olivier Blanchard elected President of American Economics Association for 2017
Olivier Blanchard elected President of American Economics Association for 2017
Robert M. Solow Professor of Economics, Emeritus, Oliver Blanchard has been elected President of the American Economics Association for 2017.
Featured Research: David Autor on tech, trade & job markets
Featured Research: David Autor on tech, trade & job markets
The 21st century has been hard on American labor. Unemployment soared from a low of 4 percent in 2000 to a peak of 10 percent in October 2009. While the unemployment rate has since recovered to its current 5 percent, labor force participation and productivity have declined, and wage growth is feeble. Many blame America's labor woes (which began well before the Great Recession) on China's surging exports and rapid technological change that seemingly replaced humans with computers and robots. But economists have long insisted that trade liberalization and technological innovation were positive overall economic forces, and that disruptive costs to some workers were small and short-lived relative to total benefits for the economy as a whole. David Autor has shone a bright light on the often-downplayed costs. He and co-authors carefully analyzed the impact of technological change and import substitution on U.S. labor and found that the disruptive costs are much larger and longer-lived than previously recognized. Technology hadn't cost jobs, for the most part, but it had transformed them: polarizing the labor market into routine and nonroutine jobs, increasing the demand for higher education and contributing to earnings inequality. The "China shock," as he termed it, while positive for American consumers, had indeed inflicted severe losses on many workers. Moreover, U.S. labor market adjustment was painfully slow. His work has forced the field to re-examine the benefits and costs of trade, and to pay far closer attention to how labor markets truly respond to economic change.
Victor Chernozhukov elected Member of the American Academy of Arts and Sciences
Victor Chernozhukov elected Member of the American Academy of Arts and Sciences
Professor Victor Chernozhukov is among the 213 new members of the American Academy of Arts and Sciences elected for 2016. 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.
Michael Whinston awarded 2016 Frisch Medal; named Distinguished Fellow of IO Society
Michael Whinston awarded 2016 Frisch Medal; named Distinguished Fellow of IO Society
Sloan Fellows Professor of Economics Management Michael Whinston has been awarded the 2016 Frisch Medal (with B. Handel and I. Hendel) for the article, "Equilibria in Health Exchanges: Adverse Selection versus Reclassification Risk." (Econometrica, July 2015) The Frisch Medal is given every two years by the Econometric Society for an applied article (empirical or theoretical) published in Econometrica during the past five years. He was also named a Distinguished Fellow of the Industrial Organization Society. He joins previous MIT recipients Paul Joskow, Richard Schmalensee, and Jean Tirole. This award is given annually in recognition of excellence in Research, Education and Leadership in the field of Industrial Organization.
Featured Research: How network effects hurt economies
Featured Research: How network effects hurt economies
When large-scale economic struggles hit a region, a country, or even a continent, the explanations tend to be big in nature as well. Macroeconomists - who study large economic phenomena - often look for sweeping explanations of what has gone wrong, such as declines in productivity, consumer demand, or investor confidence, or significant changes in monetary policy. But what if large-scale economic slumps can be traced to declines in relatively narrow industrial sectors? A newly published study co-authored by Elizabeth and James Killian Professor of Economics, Daron Acemoglu provides evidence that economic problems may often have smaller points of origin and then spread as part of a network effect.
Featured Research: A lottery to lose
Featured Research: A lottery to lose
As part of its recovery from Hurricane Katrina, which destroyed many schools in New Orleans, Louisiana undertook one of America's largest school-choice schemes. According to a new paper by Atila Abdulkadiroglu of Duke University, Parag Pathak of MIT and Christopher Walters of Berkeley, it has not gone well.
E52 named in honor of Morris and Sophie Chang
E52 named in honor of Morris and Sophie Chang
MIT will name its historic Building E52 in honor of Morris Chang '52, SM '53, ME '55 and Sophie Chang, who have made a generous gift to restore and renovate the building. The new E52 will provide a fitting headquarters for MIT's preeminent Department of Economics, and centralize and streamline the MIT Sloan's student and administrative services.
Featured Research: Grow your own way
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.
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    Provider Incentives and Health Care Costs: Evidence from Long-Term Care Hospitals
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