UNIVERSITY OF CALIFORNIA, BERKELEY The Econ Exchange NEWS AND NOTES FROM THE DEPARTMENT OF

VOLUME FIVE, NUMBER 2 FALL 2002

THE ECON CENTENNIAL CELEBRATION MARKS 100+ YEARS OF ECONOMICS AT CAL by It was a wonderful opportunity to review distinguished economists with close the history of economics at Cal and to connections to our Department. Vice- Richard J. Gilbert, Chair see how the Department has influenced Provost and Berkeley Econ professor Jan the economics profession as we know it DeVries, Provost Paul Gray, and Dean today. Roy Radner, a noted economic George Breslauer kicked off the festivi- theorist and former Berkeley professor, ties. Some of the day’s events show- summed it up when he said that “a large cased economic policy debates at the fraction of the world’s great economists highest levels of government. Janet either now teach at Berkeley or have Yellen, Mike Boskin, and Bob Hall pre- passed through the Berkeley Economics sented their perspectives on macroeco- Department at one time or another.” This nomic policy. is a member of was a day when the Department reflected our department and was Chair of the This is a very special year for the Depart- on its accomplishments, thought about Council of Economic Advisors in the ment of Economics as we celebrate 100 the future, and shared experiences with Clinton Administration. Mike Boskin (’67 years of the Department of Economics at its alumnae. It was indeed a day to B.A., ’71 Ph.D.) was Chair of the Council rejoice. in the first Bush Administration, and Bob the University of California. Before 1902, Hall (’64) directs the research program on economics, if it was taught at all at Cal, The Centennial Celebration featured economic fluctuations and growth of the was taught in the Department of History presentations by more than fifteen National Bureau of Economic Research. and Political Science. What is now Predictably, our panelists did not the Department of Economics began entirely agree on the precise mix of with a single faculty member, policies to stimulate growth and Bernard Moses. Today, the Depart- balance inflation and unemploy- ment has more than 35 full time ment. But they did agree that faculty, serves over 800 under- Berkeley gave them the academic graduate majors and 177 graduate preparation and intellectual students, and offers courses for stimulation that allowed them to thousands of other students at excel in both research and in Berkeley. government.

We marked our Centennial with an Other presentations offered all-day celebration on November 8th Photo top left: New Approaches to Economic Theory and different perspectives on econom- of last year. More than 200 Experimentation panel: Professor David Wise (Harvard and NBER), ics and Cal. Bill Dudley (’82 Professor Hal Varian ’73 (Berkeley), Professor Daniel McFadden, alumnae, students, faculty, and and Professor Charles Manski (Northwestern). Above: Audience Ph.D.), Chief Economist of friends of the Department attended. reaction to Hal Varian’s “Berkeley Economics in the 70’s”. Goldman Sachs and a Berkeley CHAIR, continued on page 5

THE ECON EXCHANGE, FALL 2002 1 ALUMNI EXCHANGE THANK YOU TO OUR FRIENDS The Department of Economics gratefully acknowledges the alumni, friends, and organizations who made donations to the Economics Annual Fund and Centennial Fund from May 2002 through February 2003:

Economics Annual Fund: Gold Bennett Cera & Sidener LLM Mr. Steven O. Sidener ’82 and Mrs. Susan L. Leong (in honor of Professor George Akerlof) Mr. Jerry F. Benzl The Roger and Madeleine Traynor Foundation Mr. Michael L. Briggs ‘65 (in memory of Professor Barbara Nachtrieb Armstrong) Dr. Lisa D. Cook ‘97 Ms. Michelle A. Crane ‘82 Centennial Circle Mr. Daniele Facchini ’84 and Ms. Suzanne L. Palmer Professor Gregory Grossman ’41 (in honor of Dr. Andris Trapans) The Dr. Charles F. Haywood ‘55 Mr. and Mrs. Jeffrey T. Holman ‘01 Additional Centennial Fund Donations Mrs. Martha M. Killebrew ‘43 Professor Keun Lee ‘87 Mr. Koon-Huat Ang ‘95 Mr. and Mrs. Pertti J. Lindfors ‘47 Mr. and Mrs. Richard Aschenbrenner ‘69 Mr. and Mrs. Richard J. McMichael ‘64 Mr. and Mrs. Naohiko Baba ‘99 Mr. Robert T. Mott ‘63 Mr. and Mrs. Phillip B. Brownell ‘61 Mr. and Mrs. Raul A. Nicho ‘77 Mr. and Mrs. Marc J. Desoer ‘74 Mr. and Mrs. Makoto Ohta ‘71 Dr. William C. Dudley ‘80 Ms. Rowena G. Pelayo ‘86 Professor Barry Eichengreen Mr. and Mrs. Clinton E. Rapley Professor and Mrs. Albert Fishlow Mr. Steven O. Sidener ’82 and Mrs. Susan L. Leong Mr. and Mrs. William J. Fong ‘72 Mr. Stanley S. Stuka Mr. Bruce H. Hsu ‘97 Mr. Eric V. Swanson ‘76 Dr. Elizabeth S. ‘88 and Mr. Stephen S. Laderman Mr. and Mrs. Christopher Swenson Mr. Lawrence E. Muilenburg ‘53 Mr. and Mrs. Michael Traynor ‘55 Mr. and Mrs. Raul Nicho ‘77 Mr. and Mrs. William H. Tyler ‘56 Mr. Drew Planting ‘81 and Ms. Allison Keller Professor Lloyd Ulman (in honor of Professor Bent Hansen) Mr. Justin A. Radell ‘00 Ms. Judy L Wade ’85 and Mrs. Alex C. Dodd Mr. and Mrs. Mark V. Raynard ‘79 Dr. and Mrs. Charles M. Wolin ‘67 Mrr. David R. Reynolds ‘83 Professor Mahmood Zaidi ‘66 Mr. and Mrs. Kneave Riggall ‘79 Professor and Mrs. Daniel Rubinfeld Economics Centennial Fund: Professor Carl Shapiro ‘77 Mr. and Mrs. Eldon Spencer ‘71 Millennial Circle Ms. Aleta Thielmeyer ‘61 Professor Hal Varian ‘73 Professor George Akerlof and Professor Janet Yellen Mr. Stephan A. Weiler ‘94 East Bay Community Foundation Professor and Mrs. Oliver Williamson

ALUMNI UPDATES Editor’s Note: Below are the first of what we hope will be many alumni updates. Please send your submissions c/o Editor to: [email protected]. Eric Emch ’99 reports that he is spending the 2002-03 academic year as a Victor Kramer Fellow at the University of Chicago Law School. He can be reached at [email protected]. 2002 Economics Nobel Laureate Daniel Kahneman is a behavioral economist who completed his Ph.D. at Cal in Psychology in 1961 and then taught in that department from 1986-1994, when he became Eugene Higgins Professor of Psychology and Professor of Public Affairs at Princeton University. Mark Kamlet ’80 is Professor of Economics and Public Policy at Carnegie Mellon University. He also currently holds the position of Provost, having previously been Dean of H. John Heinz School of Public Policy and Management, Associate Dean of ALUMNI, continued on page 5

2 THE ECON EXCHANGE, FALL 2002 DONORS RECOGNIZED AT CENTENNIAL CELEBRATION

This list of donors appeared in Michael J. (’67, ’68, ’71) and Christien (’67) Boskin The Michael and Chris Boskin Scholarship Fund the Econ Centennial Robert D. Burch (’50, ’53) The Robert D. Burch Center for Tax Policy Celebration program. Our The Robert D. Burch Chair in Tax Policy Institute of Business and Economic Research Fund benefactors during the past Peter Buttenweiser and Terry Ann Marek ten years were invited to join The Marek Endowed Fund The Estate of Mrs. Rachel Carter us as guests for the event and Professor John P. Carter Fund in Economics dinner afterwards. Those who Roy B. Christie, Jr. (’42) The Roy Christie Scholarship attended were recognized at Warren (’51, ’52) and Erna Clifford an awards ceremony following James Fish (’66) and Carolyn Corwin The Marek Endowed Fund the symposium. They include Graduate Student Award for Public Policy Research

(photos from top to bottom): Richard J. Gilbert, Professor of Economics

Warren and Erna Clifford, Bronwyn Hall, Professor of Economics Paul (’42) and Ardyce Handlery Richard and Elisabeth Jay, The Handlery Scholarship

Sherman and Ellen Shapiro, Richard E. (’53, ’63) and Elisabeth Jay Richard E. and Elisabeth Jay Endowment for and Don Vial (who accepted Interdisciplinary Graduate Students on behalf of Michael Peevey, Edward G. (’51) and Nancy S. Jordan Edward G. and Nancy S. Jordan Family Endowed Chair in Economics as well). Not shown: Professor The Family of Daniel E. Koshland, Sr. Koshland Distinguished Professorship in Economics Michael Boskin. The Michael Peevey (’51) and Carol Liu (’64, ’65) Department of Economics Peevey/Vial Chair in Labor Economics John M. Quigley, Professor of Economics thanks all of its friends who Sherman and Ellen Shapiro have helped—and who Institute of Business and Economic Research Fund continue to help—us to reach Steven and Diana (’81) Strandberg Strandberg Family Graduate Fellowship Fund our goal to continue to provide Craig Swan (’65) Eliot J. Swan Prize a world-class teaching and Abbas I. Yousef research environment for Yousef Family Endowment for Labor Economics current and future economists. Note: Every effort has been made to avoid errors, and we apologize for any that may have appeared. Please report corrections to the Office of College Relations: 510-643-1964.

THE ECON EXCHANGE, FALL 2002 3 Department and their dedication to the Berkeley at the center of an exciting new A LETTER FROM Department’s outstanding students and field that combines economics, EPARTMENT HAIR faculty. While Janet was serving as a psychology, and political science to D C Governor of the Federal Reserve Board examine the ways that people make RICHARD J. GILBERT and then Chair of the Council of economic decisions in complex Economic Advisors in Washington, D.C., environments. Dear Friend of the Department of George commuted back to Berkeley so • Support for extraordinary Economics: that he could continue to teach his visitors to supplement undergraduate macroeconomics class. George easily teaching. • Our Economics Centennial Celebration on could have joined the celebrity circuit Support for undergraduate and November 8, 2002 was a huge success, after he received the 2001 Nobel Prize in graduate student research and bringing together an enthusiastic mix of Economic Sciences, but instead he scholarships. • more than two hundred alumni, current quickly returned to the department to Funds for conferences, such as and former faculty and staff, and friends! meet with his students and colleagues. the wonderful Centennial conference that The presentations covered topics Janet, who is in constant demand to talk we enjoyed on November 8. ranging from the natural rate of about economic policy, always manages unemployment to new directions in to make time to contribute to teaching, Dan McFadden, recipient of the year economics teaching and research. The research, and even administration at Cal. 2000 Nobel Prize in Economic Sciences, impressive collection of speakers was a I cannot imagine any two people who emphasized at the Centennial Celebration dramatic illustration of the impact better represent the ideals of Berkeley that economics is undergoing profound Berkeley’s Department of Economics has than George Akerlof and Janet Yellen. changes. An exciting development is had on the careers of so many the field of behavioral economics, distinguished people. For our which challenges the assumption that alumni, the conference provided people are rational actors and instead a terrific opportunity to tries to understand how economics is reminisce and to see what is shaped by uncertainty, culture, and different—and also the same— concerns for fairness and equity. The about the Department today. econometrics and behavioral sciences laboratories are essential teaching and At the conference I was pleased research components for this new field. to be able to share with several With sufficient resources, economics of you the Department’s plan to will become a truly applied and create a “Centennial Fund” to laboratory-based science at Berkeley. recognize the 100th year of The Centennial Fund will help secure Berkeley’s Department of the future of behavioral economics research and teaching at Cal. Economics and to enhance the Janet Yellen, Eugene E.Catherine M. Trefethen undergraduate and graduate Professor of Business Administration, and George The Economics Department has enjoyed teaching programs at Berkeley for Akerlof, Koshland Distinguished Professor of spectacular success. We are very proud the next century. I was delighted Economics. to receive tremendous of our four Nobel laureates, our Clark encouragement from many of our medalists, our exceptional faculty and alumni and friends. Now I have some students, and our dedicated staff. exciting news that will transform the With this generous initial gift from Economics teaching and research have Centennial Fund from a mere possibility George and Janet and the interest always been exceptionally strong at Cal to a reality. Two of our most treasured expressed by other key donors, I am and have even improved over the years. faculty, George Akerlof and Janet Yellen, confident that we can raise $500,000 for But we cannot rest on past have launched the Centennial Fund with the new Centennial Fund by the end of accomplishments. We must strive not a gift of $100,000! 2003. The fund will provide support for just to maintain, but also to improve a host of department activities and Berkeley’s extraordinary record in The terrific offer from George and Janet, programs to enhance teaching and research and to make Berkeley a bastion along with the promise of support of research. Some examples include: for economics education at both the other interested major donors, provides • Endowment for the Department’s undergraduate and graduate levels. We the momentum for our launch of the econometrics laboratory, which has been cannot do this without your help. Economics Centennial Fund. a tremendous resource for graduate and Extraordinary scholars, teachers, and undergraduate teaching and research. Private giving is what allows us to offer friends, George and Janet once again • Funds to help launch a new the enhancements to teaching and have demonstrated through this grant laboratory for experiments in behavioral research that can make the difference their affection for the Economics economics. The laboratory will help put between a very good economics program

4 THE ECON EXCHANGE, FALL 2002 at Berkeley and the premier economics on the career of Clark Kerr, former and we are determined to keep it that department in the world. In this University President and Emeritus way. We inaugurated the Centennial Fund difficult State budget environment, your Professor of Economics at Berkeley. to help assure the Department’s success in contribution becomes all the more Jack Letiche read a memorial about Emily important to enable the Department to these challenging times. The Centennial Huntington, a noted social economist compete for the best faculty and who for many years was the only woman Fund started with a gift of $100,000 from students. This is why I am writing to two of our most treasured faculty, George many of you with the news about the faculty member in the Department. Centennial Fund and the extraordinary Gregory Grossman spoke about Jessica Akerlof and Janet Yellen. We set a goal to gift from George Akerlof and Janet Yellen. Peixotto, whose many years of teaching raise $500,000 and we are well on our I invite you to join me in honoring defined a new field of endeavor at Cal way. Steve Sidener (’82 B.A.) and Mike George and Janet by becoming a and led directly to the establishment of Traynor (’55 B.A.) deserve special thanks founding member of the new Centennial the School of Social Welfare in the early for their support. Mike’s donation is in Fund. 1940s. Gregory also affectionately remembered Carlo Cipolla, Bent Hansen, memory of Barbara Nachtrieb Armstrong, I encourage you to get in touch with me and other faculty who are no longer with who earned a degree in law from Boalt Hall to discuss any thoughts and suggestions us. Earlier in the day, Janet Yellen had in 1915 and held a joint appointment at you might have about the future of our begun her talk on macroeconomic policy Berkeley in Law and Economics until her Department. Feel free to call me at (510) by arguing that “the field of macroeco- retirement in 1961. 642-1507 or e-mail me at gilbert@econ. nomics was invented at Berkeley 100 berkeley.edu. years ago” by Wesley Clair Mitchell, who The Centennial allowed us to thank the joined Cal’s Department of Economics in CHAIR, continued from first page 1903. Mitchell, who undertook Department’s many friends and supporters and to spend some time together doing graduate, discussed the U.S. financial groundbreaking research on business what we like—economics! We hope to outlook and had everyone thinking about cycles, would later go on to found the their portfolios. Former Berkeley profes- National Bureau of Economic Research. continue the trend and involve our sor and Department Chair Albert Fishlow community of alumnae, students, faculty, It was a great day and it made us all very identified the challenges for sustained and friends in more Department activities. proud to see the imprint that the economic growth in Latin America. We’ll keep you posted. Berkeley Department has made on the Berkeley professors Alan Auerbach and economics profession. Our Department John Quigley discussed the likelihood for has four Nobel Laureates, most recently ALUMNI, from page 2 change in the federal tax code, and Larry George Akerlof (2001) and Dan Katz (’81 B.A.) described trends in the the College of Humanities and Social return to higher educa- Sciences, and Head of the Department tion. Drew Fudenberg, of Social and Decision Sciences, all George Akerlof, and positions at Carnegie Mellon. Kenneth Arrow talked William True ’50 and his son about Berkeley’s contri- Deryck have just finished collaborating bution to the evolution on a book about True’s World War II of economic theory, and experiences entitled The Cow Spoke Dan McFadden and Hal French (Bennington, VT: Merriam Press, Varian did the same for 2002). From his arrival via parachute in developments in quanti- Normandy on D-Day, then-Sergeant True tative methods for recalls his participation in the battle economic analysis. campaigns of the 101st Airborne A special panel convened Division. For more information go to by Professor Emeritus merriam-press.com. and former Chair George Professors Michael Boskin (‘67, ‘71), Daniel McFadden and Chair Stephan Weiler ’94 is Associate Break highlighted the Richard Gilbert confer. Professor of Economics at Colorado achievements of past State University, specializing in Urban Department faculty who left a deep McFadden (2000), and many other and Regional Economics. He is also co- impression on the Department and the decorated colleagues. Berkeley contin- director of the Center for Research on field of economics. Lloyd Ulman reflected ues to be a central force in economics the Colorado Economy at CSU.

THE ECON EXCHANGE, FALL 2002 5 SCENES FROM THE ECON CENTENNIAL CELEBRATION...

Steve Sidener, ’82: “The Centennial event was a fantastic success…what really impressed me was the Department’s continuing commitment to being the leading trendsetter in the development of new economic thought and policy. Clearly, the message I took away from the event was that as the Department begins its second [century], the best is yet to come!”

Counterclockwise from top right: Professor Drew Fudenberg (Harvard), Professor Emeritus George Break, Lisa Cook (Ph.D. ’97), Professor Gérard Roland; our illustrious emeriti+ 1: Professors John Letiche, Michael Reich, Lloyd Ulman, and Gregory Grossman; Haas Professor Emeritus Frederick Balderston, Nobel Laureate Kenneth Arrow (Stanford), Professor Roy Radner (NYU), 1st year Economics graduate student Yong Zhang, Rick McMichael ’64, 1st year David Albouy, Professor Janet Yellen; Who in this photo did not win the Nobel Prize in Economic Sciences? Steve Sidener ’82 with Nobel Laureates Professors Daniel McFadden and George Akerlof.

6 THE ECON EXCHANGE, FALL 2002 Richard Jay, ‘53: “The...Centennial Celebration...was a real draw for me. In part, because of what it celebrated and the distinguished people whose ideas were sure to stimulate, but also because I was curious to know how many people would be present and vertical from the time in 1947 when I first arrived wide- eyed from Texas to begin graduate studies.”

Clockwise from top left: Professor Robert Hall (Stanford) and Michael Traynor ’55; Professor Emeritus Tom Rothenberg, Professor Roy Radner, Professor David Wise (Harvard and NBER), Mrs. Madeline Wise, Mrs. Beverlee McFadden; Professor Daniel McFadden with birthday cake; Professor Janet Yellen and William Dudley (Ph.D. ’82) of Goldman Sachs; 1st year Yong Zhang, Professor George Akerlof, Professor Lawrence Katz (B.A. ’81) of Harvard, Professor Lovell (Tu) Jarvis (UC Davis).

(All photographs by Peg Skorpinski.)

THE ECON EXCHANGE, FALL 2002 7 UNIVERSITY OF CALIFORNIA, BERKELEY The Econ Exchange NEWS AND NOTES FROM THE DEPARTMENT OF ECONOMICS

The Econ Exchange is published semiannually for alumni and friends of the Department of Economics, University of California, Berkeley.

DEPARTMENT OF ECONOMICS Richard J. Gilbert Chair and Professor of Eco- nomics Steven M. Goldman Vice Chair and Professor of Economics Department Office: (510) 642-0822 Department Website: http://emlab.berkeley.edu/ econ/

THE ECON EXCHANGE Editor Jane Turbiner Contributors Richard J. Gilbert Annie Shun Peg Skorpinski Econ Centennial Celebration participant and donor dinner Jane Turbiner in the Great Hall, The Faculty Club. (Photographs by Peg

Skorpinski)

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