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Ed Prescott was named Regents' Professor of the University of Minnesota last June. This is the highest honor the University can bestow on a member of the faculty. Ed joins John Chipman, Walter Heller, Leo Hurwicz, and Vern Ruttan as members of the department who have been so recognized, a record of achievement that is unsurpassed by any other department at the University.
His work in business cycles and the theory of economic policy is well known to today's graduate students and would have made a strong case for being named Regents' Professor by itself. What is remarkable about Ed is the breadth of his interests and contributions. Areas where Ed has done and is doing important work include general equilibrium analysis, finance, monetary theory, growth theory and industrial organization.
While Ed is perhaps best known for his work in macroeconomics, he rejects labels that subdivide economics as well as artificial divisions between theoretical economics and its applications. For Ed, economic theory offers organizing principles that one applies to understand the world. Perhaps this approach to the unity of economic science explains why Ed has been such an important figure over such a wide range of the discipline.
Beyond the impact of his own published work, Ed has had a substantial impact on economics through his students. His record of thesis advisor must be unique in the profession. Since coming to Minnesota in 1980, Ed has advised 30 Ph.D. dissertations. His Minnesota students include Fernando Alvarez ('94), Ian Bain ('85), Antonia Diaz ('95), Javier Diaz-Gimenez ('90), Andres Erosa-Etchebehere ('96), Terry Fitzgerald ('95), Gerhard Glomm ('88), Ann Guenther ('88), Scott Hakala ('89), Gary Hansen
('86), Allen Head ('92), Hugo Hopenhayn ('89), Bruce Horning ('88), Andreas Hornstein ('91), Mark Huggett ('91), Ayse Imrohoroglu ('88), Beverly Lapham ('90), Joseph Lin ('86), George Lo ('87), Rodolfo Manuelli ('86), Michael Meurer ('86), Maria Muniagurria ('89), Steve Parente ('90), John Proctor ('90), Ricardo Raineri ('93), Jose-Victor Rios-Rull ('90), Richard Rogerson ('84), James Schmitz ('86), Shinichi Watanabe ('83), Yuo-Jin Yun ('89).
As Wendy Williamson describes below, Ed was recognized by the Board of Regents at its November meeting. In his brief comments Ed said that while he appreciated the recognition that came with the nomination by his colleagues, he really wanted to thank his students and hoped that they had learned as much from him as he had from them.
The September 1996 issue of The Region, a quarterly publication of the Federal Reserve Bank of Minneapolis, includes an interview with Ed, conducted by Art Rolnick ('73). When asked who had influenced his work, Ed responded first by naming Nobel Laureate Robert Lucas. Ed went on to talk about the impact of working with Rob Townsend ('75) when Rob first went to Carnegie Mellon:
Another person that influenced my thinking a lot is Robert Townsend. He was a graduate of the University of Minnesota. He came to Carnegie-Mellon, around 1976, as an assistant professor. He introduced me to some of the ideas at Minnesota -- in particular to mechanism-design theory, which can be used to study economic situations where there are contracting problems. This is proving to be increasingly useful in constructing models with financial intermediation. Such models are needed to understand issues such as bank regulation.
There are two other people for whom I have incredible respect for making economics better. These two people have been associated with the Minneapolis Federal Reserve bank -- Tom Sargent and Neil Wallace. They along with Lucas were the ones responsible for the use of dynamic economic theory to study macroeconomic phenomena.
When I came here, the University of Minnesota had the only graduate program that trained students in the use of dynamic economic theory in the study of macroeconomic phenomena. Neil Wallace and Tom Sargent were responsible for this. I like working with students, and having students trained in dynamic theory made Minnesota a very attractive place for me. The Minnesota graduates in macro-economics have had a major influence upon economics and many are now in positions of leadership in the other top economics departments.
The interview concluded with this following exchange:
ROLNICK: Let me finish with one last question that a lot of people wanted me to ask. I have been told, mostly by you, that you were a pretty good football player in college and that your bowling average was close to 170. Some say you are no longer the athlete that you once were. Do you accept that view or do you think you still have a few good years left?
PRESCOTT: Well, I just made a big decision: I'm going to start playing golf.
The full interview is available on the Web at
woodrow.mpls.frb.fed.us/pubs/region/int969.htm
Remembrances by Clifford Hildreth
At the end of the summer in 1933, Cliff and two of his friends, Kenny and Gib, decided to ride the rails from McPherson Kansas, to the mountains in Colorado. His mother agreed to let him go only after Cliff agreed not to panhandle and not to hitch a ride on a freight train in McPherson. The three young men began their adventure with $15, $5 apiece.
Our food plans went something like the following. The backpack would contain mainly non-perishable meat --ham, baloney, canned corned beef. There would be a few cookies, cheese, crackers and peanut butter snacks and a few fresh items -- apples, carrots, lettuce. To avoid spillage, we would eat the fresh items in the first two or three days.
On a typical day we would purchase our three breakfasts at 5 cents each; a large loaf of day-old bread at 6 cents; and two quarts of day-old milk at 5 cents each. Lunch and dinner would be meat sandwiches (the pack would contain a small jar of mustard -- not grey poupon) with milk and with some of the fresh items as long as they lasted. Sometimes we would have a cracker and/or cookie. In 28 such days, the 31 cent outlay (at deep depression skid-row prices) would use less than $9 of our $15 hoard. Movies were ten cents and huge ice cream cones five cents so one or two instances of indulgence might be contemplated.
Cliff and his two friends spent a very cold night on the top of a moving train in the high desert of southwestern Colorado.
Approximately fifteen transients were sitting in a compact line that extended along the front half of the ... car. Each person, except for the first, had his legs alongside those of the person immediately ahead of him and had his arms around the chest of that person. Someone said that one of us should take the front position now and that the front person was permitted after about fifteen minutes to go to the rear where it was warmer and less windy. As one worked toward the middle it would be still warmer.
The train arrived in Pueblo, Colorado, the next morning. The boys got off the train, ate breakfast in a city park and stopped in at the library across the street from the park to read the newspaper.
In the park Gib had called my attention to a ten inch rip in the seat of my light seersucker pants. This was undoubtedly the result of sitting and sometimes sliding a little on rough cut planks on top of last night's boxcar. I got a little view of it in the restroom mirror and it looked terrible. After some consideration and with great embarrassment, I approached the middle-aged librarian and asked if she had a needle and thread I could borrow. I explained the need. She had noticed.
Rummaging through drawers of a nearby desk she found a needle and said she had plenty of thread but no cloth. I took the needle and thread to the rest room and removed my trousers. The tear looked too much to just tack up. I needed a piece of cloth. I folded the handkerchief I had been carrying and found the tear could be completely covered. I sewed the handkerchief underneath the tear as best I could. It seemed well fastened except that I could not make a proper knot where I finished sewing. I donned the trousers and explained the circumstances to the librarian. She said she could tie a knot that would probably hold a few days if there were no severe stress. We went to a little room used for storage of yet-to-be-catalogued books and she tied the knot. I had returned the needle but had used quite a bit of thread. It was to be my only panhandling of the trip.
Preston Miller ('72) completed his reign as President of the Minnesota Economics Association by presiding over the annual meeting of the MEA at the University. Faculty member Tom Holmes talked about his work on the impact of right-to-work laws on the economic growth of states. Ed Fagerlund ('79) chaired a session on regulation of telecommunications. Leo Hurwicz introduced James Tobin who delivered the inaugural Walter Heller Distinguished Lecture. Rob Townsend ('75) delivered the Leonid Hurwicz Distinguished Lecture, "Financial Systems: From Theory to Data and Back."
Michael Stutzer ('81) continues as a Director of the MEA and Marsha Blumenthal ('85) was elected to a two year term as Director.
In recent years the MEA meeting has been followed by the Minnesota Meeting on Development Economics. Karine Moe ('95) presented joint work she has done with Deborah Levison in the Humphrey Institute of Public Affairs on "Household Work as a Deterent to Education Among Girls in Peru." The evening's keynote address was delivered by T. Paul Schultz, a member of the Minnesota department in the early 1970s.
Please join as at the cocktail party for alumni and friends of the department, Saturday evening, January 4, 6 - 8 pm at the New Orleans Hilton-Riverside. Check your convention program for the exact location.
Salih N. Neftci ('77)
An Introduction to the Mathematics of Financial Derivatives., (Academic Press, 1996)
John Y. T. Kuark ('66)
Comparative Asian Economies (JAI Press, 1996). This edited volume includes a preface by Martin Bronfenbrenner, former member of the department.
Oz Shy ('86)
Industrial Organization: Theory and Applications, (MIT Press, 1995). Oz also visited Minneapolis last Christmas with his wife and son, Daniel, when he was on sabbatical at the University of Michigan.
Fernando Vega-Redondo ('84)
Evolution, Games, and Economic Behaviour, (Oxford University Press, 1996). At the moment the book is only available in England.
John Y. T. Kuark ('66) sent us a letter this summer and says, "I went to the University of Denver from Minnesota in 1962, and taught economics and statistics at the Graduate School of Business, now the Daniels College of Business, until 1992. From 1993 to the present I have been teaching at the College of Management, Long Island University, C. W. Post Campus, New York as Halla Visiting Professor of International Business and as Director of the Halla Executive Training Program. We are now expanding the training program to Seoul, Korea as an on-site executive MBA program starting Summer 1997, whereby two semesters will be taught in Korea and the remaining two terms in residence at Long Island University's C. W. Post Campus. I have also taught every summer at Yonsei University's International Summer Program in Seoul since 1990, including this year as well." (Also see John's new book listed under "Recent Books")
R. J. Mody ('70), after teaching at St. Olaf College for three years, returned to India as professor and was later promoted to Director of Sarder Patel Institute of Economic and Social Research in Ahmedebad. His areas of interest are macroeconomics, finance and economic development. Mody is a visiting professor at the Indian Institute of Management, Ahmedabad. He has been a member of consultative panels of the Finance Ministry and Reserve Bank of India. R. J. now desires to teach in the U.S. for a year or two. Contact address: 20313 Mill Pond Terrace, Germantown, MD 20876-6032 OR (in India): 203 Maruti Centre, Drive In Road, Ahmedabad 380052.
Leigh Tesfatsion ('75) was featured in the July 5, 1996 issue of The Chronicle of Higher Education in an article on evolutionary economics.
Rao Aiyagari ('81) accepted at position in the Department of Economics at the University of Rochester effective this fall.
Tatsuyoshi Saijo ('85) writes from Japan: "Our institute (ISER, Osaka University, home of the International Economic Review) has several visiting positions requiring at least a three
month stay in Japan. For further information, send e-mail to Saijo at saijo@iser.osaka-u.ac.jp"
Kenichi Sakakibara ('86) has moved from Saitama University to the Faculty of Law and Economics at Chiba University in Japan.
Tapen Sinha ('86) is moving from Bond University in Australia to the Instituto Tecnologico Autonomo de Mexico (ITAM) in Mexico City. After Dec. 16th Tapen can be reached at tapen@gauss.rhon.itam.mx
Juan Ketterer ('87) and Miguel Sebastian ('85) are now both working at Intermoney, S.A. in Madrid Spain.
Albert Marcet ('87) is visiting CEMFI in Madrid this year.
Stacey Schreft ('87) has moved from the Federal Reserve Bank of Richmond to the Federal Reserve Bank of Kansas City and visited the Minneapolis Fed this fall. Stacey's new e-mail address is sschreft@frbkc.org.
John Weinberg ('87) has been named associate research officer of the Federal Reserve Bank of Richmond. He joined the bank in 1992.
Mayra Zermeno ('87) is now working at the International Monetary Fund. Mayra was formerly at the World Bank.
Kathy Combs ('88) is spending her sabbatical year here at Minnesota completing some research projects. She writes, "I'm very happy to be back, as is my husband, Russ, who has a position locally as a research chemist. We also don't mind escaping Los Angeles smog and earthquakes for a while. Daughter Krista is enjoying preschool in St. Paul and is learning the fine points of winter dressing. You can contact me at kcombs@atlas.socsci.umn.edu."
Ann (Guenther) Sherman ('88) sent us an e-mail update this summer: "I'm still at Hong Kong University of Science and Technology and wanted to let everyone know that we now have a daughter, Nicole, born November 7, 1995. I seem to have bad timing when it comes to these things. When John Chipman came to Hong Kong to give a talk at UST in May 1994, I had to miss it because I was in the hospital giving birth to my son Nathaniel. When Chris Sims came here last fall, I was in the hospital giving birth to Nicole. We're not planning on having any more children, so I'm ready for anyone else who may visit from Minnesota (I'm hoping Ed Prescott will find his way out here). Another update: my husband, Dan, is now a Vice President and Regional Telecoms Analyst at Salomon Brothers. "Regional" means he'll travel around Asia a lot, and I hope to travel with him occasionally."
Ayse Imrohoroglu ('88) and Selo Imrohoroglu ('88) are on sabbatical this year at Koc University in Turkey.
Roger Lagunoff ('88) has moved from VPI to Georgetown University. Roger's twins are keeping him and his wife Barb very busy!
Rich Barnett ('89) has moved from SUNY-Buffalo to the University of Arkansas. Go Hogs!
Mark Bergen ('90) has returned to Minnesota from the University of Chicago. Send e-mail to mbergen@csom.umn.edu; flood him with messages - we all know how good he is about responding! Mark is on the 12th floor of the Mgmt. & Econ. Building in the Department of Marketing and Logistics Management.
Heetaik Chung ('90) is now at the School of Management and Economics at Handong University in Pohang Korea. He can be
reached at htchung@han.ac.kr.
Steve Parente ('90) is now at the Department of Economics at the University of Pennsylvania. His e-mail address is sparente@ssdc.sas.upenn.edu.
Emily Cremers ('91) and Jeong-Wen Chiang ('88) are on sabbatical at the Hong Kong University of Science and Technology, in the economics and marketing departments, respectively. They can be reached at cremerse@usthk.ust.hk and mkchiang@usthk.ust.hk. Emily and their older son, Travis are learning Mandarin and they are all excited to be there to witness the "hand-over" of Hong Kong to China next summer.
Shomu Banerjee ('92) of Georgia State University and Ping Lin ('93) of Southern Methodist attended the Southeastern Economic Theory and International Trade meetings (SETIT) in Miami this November. Beth Allen was there, as was Neil Wallace. Shomu said Neil "presented a nifty new model of money (based on the lack of double coincidence of wants) that I predict will be the hottest thing since Samuelson introduced the overlapping generations model in the late 50s."
Fernando Alvarez ('94) has moved from the Wharton School at Penn to the Department of Economics at the University of Chicago. He can be reached at falv@spc.uchicago.edu.
Steve Gjerstad ('95) is now at Hewlett-Packard Laboratories in Palo Alto and can be reached at gjerstad@hplabsz.hpl.hp.com. At HP Labs his group is setting up an experimental economics lab and working on incentive contracts for the distribution channel.
Neelam Jain ('95) is now at the Dept. of Accounting and Finance at the University of Auckland, in New Zealand.
Many of our classes now have their own web page. You can check them out by starting at the department home page
http://www.econ.umn.edu
Choose the class list options to see which classes have homepages.
The alumni directory is also available electronically through the department home page. We try to keep it up to date and post changes as we learn about them. Please keep us informed of changes. Where we know of them, we have included hot-links to homepages for individuals. If you have your own homepage and we have missed it, let us know and we can add the hot-link to the alumni directory. Wendy Williamson describes how you can have on-line access to the ERL in her comments below.
I hope all of you who used to receive the printed copy of "Recent Acquisitions" (or "Wendy's News," as Saijo calls it) have been able to successfully access it from our web site [http://www.econ.umn.edu/~econlib]. Books are listed on one page, and each month's lists of papers are separate. If you would like to receive the list by mail, please let me know and I will add you to the mailing list.
This summer I attended my first out-of-town library conference, the Special Libraries Association annual meeting, in Boston. It was fun to sit in on short classes, visit the exhibits, meet colleagues, and learn what other schools are doing with their working paper web-sites and see how we compare. I also visited friends and went sightseeing (i.e. Paul Revere's house and a literary tour of Beacon Hill), rode the subway, and ate at some great restaurants. I wasn't able to see the two MN alums in Boston, however, [Steve Parente ('90) and Gianni de Nicolo ('92)] as they were out of town. After the conference a friend joined me and we went to Maine for 5 days. What a great state. It was beautiful - the weather, the ocean, everything!
I continue to serve on the University's Civil Service Committee this year, and am on the professional development subcommittee (awarding money to employees to attend classes) and I also help maintain the committee's web-site. Every year we are recognized by the Board of Regents, and this last month I was at the same meeting where Ed Prescott was honored for his appointment as Regents' Professor. Ed talked for about 5 minutes and then received a very long ovation. Ed thanked his students most of all and mentioned the rare occurrence this year of having two native Minnesotans on the job market (Betsy Caucutt and Pat Bajari) who also attended Minnesota as undergrads. Ed also said that the Minnesota school of economics has a tradition of "doing things right." Ed then went up to the head of the table to receive his plaque and Regent's medal and to have his picture taken with President Hasselmo and chairman Tom Reagan. I was glad I was there to see Ed get such a deserving award, especially since I had helped two years ago with the voluminous paperwork!
Recent Discussion Papers
from the Center for Economic Research:
289) McLennan, Andrew. Consequences of the Condorcet Jury Theorem for beneficial information aggregation by rational agents. October 1996. 8p.
290) Marshall, Robert C. and Antonio Merlo. Pattern bargaining. November 1996. 45p.
291) Imrohoroglu, Ayse, Antonio Merlo and Peter Rupert. On the political economy of income redistribution and crime. November 1996. 38p.
292) Liu, Zheng. Seasonal cycles, business cycles, and monetary policy. November 1996. 45p.
293) Caucutt, Elizabeth. Peer group effects in applied general equilibrium. November 1996. 53p.
294) Rebelein, Robert P. The effect of strategic behavior on Ricardian equivalence. November 1996. 26p.
Write to me (wendy@atlas.socsci.umn.edu) for copies as well as any news you want to include in the next newsletter. I also keep track of the alumni addresses, so if you have corrections or additions please let me know. Have a good holiday season -
Wendy Williamson
Economics Research Library
525 Science Classroom Bldg.
University of Minnesota
222 Pleasant Street, SE
Minneapolis, MN 55455
USA
Phone: 612-625-2307
Fax: 612-624-0209
E-mail: wendy@atlas.socsci.umn.edu
Web: http://www.econ.umn.edu/~econlib
Andreas Papandreou, former Prime Minister of Greece, and a member of the Minnesota Department of Economics, died on June 23, 1996. Papandreou was at Minnesota from 1947 to 1955, when he left to join the department at Berkeley. Papandreou joined the Minnesota department as an associate professor and was promoted to full professor. While at Minnesota he published Competition and its Regulation (Prentice Hall: 1954). In 1972 his book Paternalistic Capitalism was published by the University of Minnesota Press.
Scott Maynes who came to Minnesota after Papandreou had left for Berkeley writes:
Papandreou visited Minnesota several times. He was a most charismatic character: his eyes seemed to burn with zeal. It bothered me that he seemed to see the CIA under every bed. (Probably true of some beds, but not all.) ... But what impressed me most of all about Papandreou was the strong commitment he inspired in three whom I respected greatly (and who had not been close to him for 10 years): Heller, Hurwicz and Buttrick.
Papandreou was imprisoned in Athens by the Greek military junta in 1967. There was a real concern that he might be killed in prison and a number of economists from Minnesota were involved in efforts to get him out of prison including Walter Heller, who visited Papandreou in prison, and Leo Hurwicz. Remembering this effort, Ed Foster says
I was a witness and minor participant in the drive to get him out of prison, led mainly by Buttrick here and others at Harvard and Berkeley.
John's goal was to get to Lyndon Johnson through as many avenues as possible, to ask him to intercede with the colonels to release Andy; there was concern that he would be killed while in prison. My assignment was to work through the director of the Newman Center to reach one or more cardinals who could pass along a request to the president. Others went to senators, and I think congressmen, businessmen, a governor or two ... But, John told me some time later, the link that actually worked was John Kenneth Galbraith, who was the one person who was willing to spend some political capital on making a direct appeal to LBJ and arguing the case strongly enough for LBJ to pay attention.
John Buttrick adds:
I think the effort succeeded only because JFK had used a lot of economists and Johnson had inherited them. I heard that not only Galbraith but Bill Capron also reached LBJ who then is alleged to have phoned the colonels.
While at Minnesota, Papandreou was active in American politics and helped organize Adlai Stevenson's local presidential campaign in 1952. After leaving Berkeley, Papandreou renounced his American citizenship and returned to Greece. He founded his own political party in Greece, the Panhellenic Socialist Movement and served as Greek Prime Minister from 1981 to 1989 and again from 1993 to January 1996 when ill health forced him to resign.
If you know how to contact any of the following individuals, please let Wendy know.
Paul S. Anderson '57 Nematallah N. Ibrahim '70 Ramineni Ayyana '66 George K. Keyt '70 Shaun C. Bamford '81 Sigmund Krauthamer '63 Mark J. Daniel '74 Melvyn L. Meer '66 Ezzat El-Alfi '68 Paul F. O'Brien '87 Danesh S. Gupta '71 Voruganti S. Rao '70 Chadwick J. Haberstroh '58
Let us hear from you. We can be reached at any of the following:
Mail: Department of Economics
University of Minnesota
1035 Management and Economics
271 19th Ave S.
Minneapolis, Minnesota 55455
Phone: (612) 625 - 6353
Fax: (612) 624 - 0209
E-mail: Econdept@atlas.socsci.umn.edu
Econdgs@atlas.socsci.umn.edu
Homepage: http://www.econ.umn.edu