Economics at Carolina

THE UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

From the Editor 2004

Welcome to the 2004 curriculum reform. The plan is to have the faculty (The Journal of Econometrics and edition of the Econom- new curriculum operational by Fall 2006. The Journal of Economic Development). ics Department News- We continue to be pleased with our re- Department members have continued the letter. Because there vamped basic math course and statistics strong participation in international was a positive response courses, and with the contributions of our projects in various countries of the world to last year’s combined senior economics major TAs who have been that we focused on in the last newsletter. newsletter, we again are combining both assisting in Econ 10, the Principles of Eco- Faculty have been particularly active in Asia undergraduate and graduate news items. We nomics course. We are now in the second where they continue to be involved in think that the combined format allows for year of this experiment and it appears to projects in China, Korea, The Philippines, more complete coverage of activities and have had a significant positive impact on Vietnam, Bangladesh, and Cambodia. hope that all of you will find this edition the learning environment in these courses. In summary, the Department has had a interesting and informative. In another vein, the Department is in the productive, albeit financially difficult, year. This past year saw us facing similar process of establishing a minor in Entre- Let me again thank all of you who took the budget constraints to those of previous preneurship which is a core element of the time to contact us this past year, either by years. This has occurred at a time when broader University push to develop an edu- written communications or stopping by the both student enrollments and declared Eco- cational focus in this area. The success of Department. As usual, we thoroughly en- nomics majors have remained at high lev- this endeavor was apparent in the recent joyed spending time with those of you who els. We continue to have in the neighbor- Forbes magazine article which ranked the came by the office when you were in Chapel hood of 510 juniors and seniors declaring UNC-Chapel Hill Entrepreneurship pro- Hill, and bringing us up-to-date on what Economics as their first or second major, gram tops in the country. The Department had happened in your life since leaving and approximately 600 total majors if early is excited about this new program and our Carolina. I hope that you have had a good declared majors in the General College are role in developing this, our first, Depart- year and that life has treated you well dur- included. One item of interest is that there ment minor. For this reason, we have de- ing the ups and downs of this past election is an increasing number of students declar- voted a special section to the Entrepre- year. We hope that you will continue to ing Economics as their second major. We neurship minor later in the newsletter. We keep in touch with us regarding important taught a total of 5575 undergraduate stu- hope you will find this information both events that you have experienced as well dents in the 2003/2004 school year. The interesting and informative. We, of course, as providing feedback on how we can im- quality of our undergraduate majors con- welcome any comments or ideas you might prove the educational program for our ma- tinues to be high, as reflected in their strong have about this new academic endeavor. jors. If you know of internship or job academic records, the high quality of our Department faculty have continued to possibilities that you feel might profitably senior honors theses, and the number initi- lead active research lives and to be success- be brought to their attention please let us ated into Phi Beta Kappa and the Econom- ful in obtaining research grants, publishing know. A final reminder is that the most ics honorary, Omicron Delta Epsilon. Our in high quality journals and consulting with current information about the Department majors have also continued to do well in government agencies and international or- can always be found on our website the job market, even though it has been a ganizations. Several spent part or all of www.unc.edu/depts/econ. As usual, my relatively lean market for undergraduates last year on funded research leaves at top very best wishes for a successful, prosper- in general the past couple of years. research institutions both in the United ous and interesting year. I encourage you The College of Arts and Sciences is in States and in Europe. Two major econom- to stop by and see us anytime. the midst of implementing an extensive ics journals continued to be edited by our Al Field

Economics at Carolina -- Page 1 Economics Resea Faculty at Carolina continue to be spans. The share of the U.S. popula- is provided by employers until eligibil- engaged in research, both theoretical tion aged 65+ is expected to increase ity for Medicare begins at age 65. Some and applied, in many different areas at from 13 percent today to about 20 per- employer health insurance plans pro- both the micro and macro levels. This cent by 2030. This is an unprecedented vide coverage for retired workers, but year we focus on the current research change, and will have far reaching im- others do not. The absence of retiree activities of three professors working plications for many aspects of the health insurance coverage creates a in both theoretical and applied fields. economy. With funding from the Na- link between employment decisions This group includes Professor David tional Institute on Aging (part of NIH), and health insurance coverage that Blau who discusses several research Blau has conducted research on sev- may affect the incentive to retire be- projects dealing with the economics of eral of the economic implications of an fore age 65. This link does not exist for aging, Professor Richard Froyen who aging population. With his background workers who are eligible for retiree provides an overview of his various as a labor economist, studying retire- health insurance coverage from their research efforts in macro and monetary ment from the labor force was a natural employers, or who have coverage from policy, and Professor Gary Biglaiser place to begin. His early research other sources. This is an important who describes several of his ongoing showed that the timing of retirement is policy issue because reform proposals research projects in the areas of micro strongly influenced by the age of eligi- that would make health insurance cov- theory and industrial organization. bility and the level of Social Security erage independent of employment sta- It is important to again note that benefits (Econometrica, 1994). This is tus could increase the already-high much of the research which takes place a key issue for policy makers con- rate of retirement before age 65, thus in the Department is dependent upon cerned about the long run solvency of worsening the financial condition of outside grants and endowments from Social Security. Most Social Security Social Security and Medicare. In a se- prestigious organizations as well as reform plans give workers incentives ries of papers with UNC-CH colleague from private contributions to the De- to retire later, and Blau’s research Donna Gilleskie, Blau has explored the partment Trust Fund. We very much shows that such incentives could have empirical importance of this link. They appreciate all the contributions many large effects on retirement timing and found that older men with employer- of you have made to the Department could help stabilize Social Security in provided health insurance are about in recent years which have supported the long run. Subsequent research two percentage points more likely to our research efforts by helping fund showed that another major change in retire in a given year if they have re- research assistants, the acquisition of labor force behavior, dramatically tiree health insurance coverage than if important costly data sets, computa- higher labor force participation of mar- they lack such coverage, controlling tional facilities and faculty travel to ried women, also has important impli- for many other factors (Review of Eco- professional meetings and confer- cations for retirement behavior. Many nomics and Statistics, 2001). In addi- ences. For more specific information two-career married couples prefer to tion, this is the first research to ana- about Department research needs and retire within one or two years of each lyze health insurance and retirement of funding, please contact John Akin, other, but economic incentives often women, and the findings suggest the Chair, [email protected]. work against this preference. For ex- need for richer models to understand ample, employer-provided Defined the behavior of women. Benefit pension plans can provide very Blau’s most recent research tackles The Economics of Aging strong incentives to remain employed another major public policy issue: the in spite of the retirement plans of the adequacy of saving for retirement. David Blau is an spouse. Blau’s research showed that Consumption expenditure declines aging economist who these incentives matter but are gener- sharply at the time of retirement for is also an economist ally trumped by preferences (Journal many households. Some analysts ar- interested in the eco- of Labor Economics, 1998; Labor Eco- gue that this is inconsistent with the nomics of aging. The nomics, 1997, 1999). behavior implied by forward-looking population in the U.S. One of the hottest topics in retire- life-cycle models and implies that and many other countries will be ag- ment research in recent years is the households do not save adequately for ing rapidly in the next few decades, impact of health insurance on retire- retirement. However, most studies of thanks to low fertility and longer life ment. Most health insurance in the U.S. saving for retirement take the timing of

Page 2 -- Economics at Carolina arch at Carolina

retirement as given, and analyze con- tions: (1) What are the characteris- mography and economics of aging re- sumption behavior conditional on re- tics of establishments in which older search; and (3) Support for an internal tirement. Blau builds a life cycle model workers commonly are employed part- UNC working group of researchers with in which both consumption and em- time, for flexible hours, and in which research interests in the DEAR area. ployment are choices. The model in- gradual retirement is relatively com- Examples of pilot studies funded by the corporates key constraints facing older mon? (2) Are the relatively limited job DEAR program include “Informal Care households, including Social Security opportunities for older workers a re- and Medicare Expenditures;” “An retirement and disability programs, sult mainly of cost considerations Evaluation of the Impact of the Social employer pensions, stochastic earn- such as fewer expected years of em- Security Disability Insurance Program ings and asset returns processes, lay- ployment over which a firm can recoup on Labor Force Participation in the off risk, job-offer risk, and health and its cost of investment in training the 1990s;” “Family Care and Support for mortality risk. The main finding is that worker; or of labor supply behavior, the Elderly in China;” “Nutrition and there is a drop in consumption at re- i.e. high reservation wages? (3) How Aging in African Americans;” “Costa tirement in simulations of the model. can matched employer-employee lon- Rican Healthy Aging Study;” “ “The While a drop in consumption at retire- gitudinal data be used to distinguish Effect of Increasing Longevity on ment is avoidable for most households, among alternative explanations for ri- Long-Term Care Use;” and “Alcohol it appears to be part of the optimal life gidity in the labor market for older and Unintentional Home Injury Death cycle plan in many cases. The implica- workers? Blau and his colleagues will Among Older Adults in North Caro- tion of these findings is that we cannot focus on the role of labor demand fac- lina.” Among the outside speakers infer that consumption expenditure de- tors (cost, age discrimination), labor sponsored by the DEAR program are clines at retirement because of inad- supply factors (firm-specific human Peter Diamond, recent president of the equate savings. In ongoing work on capital, short remaining horizon for American Economic Association, this issue, Blau is working on estimat- employment, high cost of search), and speaking on Social Security reform. ing the key parameters of the model. government policy (the Social Secu- A new research project currently in rity Earnings Test and others). Behavior of Banks in an the planning stages was initiated by In addition to the demands of his Uncertain Environment Blau during his recent research leave previously described research at CREST, a research institute in Paris. agenda, Blau is also the Director of I am happy to re- In collaboration with French econo- the Demography and Economics of spond to Al Field’s mists, he plans to undertake a compara- Aging Research (DEAR) program at request regarding re- tive study of French and U.S. labor UNC-CH (see www.cpc.unc.edu/ search because it market institutions that affect retirement dear). The program is housed at the gives me the chance behavior. The labor market for older Carolina Population Center, and col- to tell you about the workers is widely believed to suffer laborates with the Institute on Aging work of some former from rigidities that make it difficult for at UNC-CH to promote research and students. older workers to carry out their desired research training on the demography One area of long trajectories from work to retirement. The and economics of aging. The program standing interest for me has been the rigidities that are often cited include the has been supported by a grant from behavior of central banks in an uncer- lack of opportunity for part-time and the National Institute on Aging, and tain environment. In recent years Alfred flexible-hours work at many firms; the recently received a new four-year Guender and I have done research in low wages and lack of benefits in the award with increased funding which this area. Our joint work started during part-time employment opportunities will allow it to expand its research pro- a visit of mine to his home at the Uni- that are available; and the lack of train- gram. Specific activities of the program versity of Canterbury in New Zealand. ing and promotion opportunities for include: (1) Seed funding for pilot That work resulted in a paper on opti- older workers both at their career em- studies on issues in the demography mal monetary policy in small open ployers and at potential new employ- and economics of aging intended to economies which was published in the ers. The proposed study will take lead to grant proposals submitted for Review of International Economics in advantage of rich establishment level external funding; (2) Sponsorship of 2000. We are expanding this research data to address the following ques- seminars by outside speakers on de- into a book on the subject. Alfred has

Economics at Carolina -- Page 3 come back to visit in the Department to as a “new generation” of the soft- and I made a second visit to Canterbury ware. One can think of Windows 2000 as an Erskine Fellow this past spring. as an example of a new generation. They Hakan Berument and I have also been model this problem as a durable good Gallman Lecture doing joint research on a number on monopolist who generates a quality en- empirical questions in the monetary hancement to their good in each period policy area. Hakan is at Bilkent Univer- in an infinite horizon setting, where con- On October 28, 2004, David sity in Ankara, Turkey. During his visit sumers have private information about Galenson visited the Econom- here for the 2002-2003 academic year we their valuations for the products. The ics Department to give the 6th completed a paper, “Monetary Policy fundamental problem is: how does a mo- annual Robert E. Gallman Me- and Long-Term U.S. Nominal Interest nopolist price discriminate over time? morial Lecture. Galenson, Pro- Rates.” Both he and Alfred have very They find equilibria that mimic many of fessor of Economics at the Uni- active research agendas of their own the practices in the software industry, versity of Chicago, spoke to an which I try to keep up. such as a periodic new generation of appreciative audience about Another area of long term interest to the software. In a future paper, they will “Young Geniuses and Old Mas- me is that of monetary policy reaction examine the monopolist’s incentive to ters: The Two Life Cycles of Hu- functions. Much of my work in this area conduct R&D to generate innovations man Creativity.” The lecture ex- has been with Roger Waud, a long time in a similar setting. amined the careers of painters, member of our faculty. Our latest paper Gary has just completed a paper with poets, and novelists to better appeared in the Journal of Macroeco- Nikos Vettas of the Athens University understand the creative pro- nomics in 2002. Roger has retired from of Economics and Business. In that pa- cess. The talk was part of a se- academia but follows other interests in per, they examine a model that is based ries honoring Robert Gallman, Alexandria, Virginia. on a setting such as the airplane manu- an economic historian on the I notice in writing this that all research facturing industry. This industry is UNC faculty for over 30 years. I talk about is joint research. I think this dominated by two producers: Boeing may be explained by a quote from the and Airbus. The planes are long last- rocket scientist Werner Von Braun who ing, durable, and take a great deal of said “Research is what I am doing when time to complete. In particular, if a pro- I don’t know what I’m doing.” In such a ducer receives large orders in one pe- situation it helps to have company. I do, riod, then this will reduce their capacity however, keep on with my macro text to fill orders in the future. When airline which came out this fall in an 8th edi- companies are deciding on what pur- tion. chases to make today, they need to take Richard Froyen into account the fact that if they and The Robert E. Gallman other firms make most of their purchases Graduate Student Fund was es- Theoretical Industrial from one producer today, then they will tablished to honor the memory reduce competition in the future be- of a man who devoted his life to Organization tween the two manufacturers, since the his discipline as teacher, men- producer that they bought from today tor and research scholar. The may not be able to supply as many fund is used to improve the Gary Biglaiser is planes in the future. This will lead to competitiveness of our gradu- working on an array higher future prices. The manufactur- ate program by providing finan- of problems in theo- ers know this and take it into account cial support that helps to attract retical Industrial Or- when setting current and future prices. outstanding students. We ganization. One pa- Gary and Nikos model this behavior as thank all of those who have per is with James a dynamic game. The most interesting generously contributed to this Anton of Duke’s feature of the equilibrium is that airlines endeavor. If you are contem- Business School. The motivation for the prefer to buy planes both for their cur- plating a gift to UNC, we encour- paper is to try to explain the following rent short-term needs and for their age you to consider contribut- behavior by software firms, such as longer-term needs at the beginning of ing to the Gallman fund by con- Microsoft. Many of these firms use busi- the decision period. This is because it tacting Brook Alexander, in the ness strategies where consumers have will induce the stiffest competition be- Arts and Sciences Foundation, the option of buying the latest innova- tween the manufacturers. This is con- [email protected]. tion to a firm’s software and also have sistent with the practice of airlines plac- the option to periodically buy a pack- ing orders for planes to be delivered age that includes all previous innova- soon and with the option of buying tions. These packages are often referred planes in the future at the same price.

Page 4 -- Economics at Carolina Graduate Alumni News The Department of Economics was dents from marketing, accounting, pub- rics course for second-year students. pleased to welcome another talented lic policy, environmental science, Professor Ghysels follows with time incoming class to the University this health policy, and a few from Duke. In- series econometrics in the spring se- fall. At the beginning of August, stu- deed, our own students are now out- mester; Professors Guilkey and van dents began the three-week session of numbered by graduate students from der Klaauw alternate the cross sec- Econ. 210 (Quantitative Methods), also other departments for the first semes- tional course. As featured elsewhere known as Math Boot Camp. Within a ter course. The growth in enrollments in the newsletter, Professor Guilkey few days of returning from a semester here mirrors changes throughout the won a well-deserved graduate teach- in Italy, Professor Mezzetti began country as more disciplines adopt rig- ing award in the spring of 2004. teaching the course. Not surprisingly, orous economic models. Faculty often report having seen he provided the incoming class with A number of non-economics majors many of you at professional meetings an excellent introduction to the rigors also take our econometrics courses. and have seen your research work in of graduate school. As in the past, the The department offers a truly out- print. If you are in Chapel Hill, please lounge area on the 4th floor was used standing econometrics sequence with stop by. Also, your fellow classmates for discussions of the many assigned Professor van der Klaauw teaching the and those of us still in Chapel Hill homework problems. fall statistics course and Professor would enjoy reading your news items. First-year students continue to take Mroz the spring applied econometrics You can update us by phone, e-mail core courses in econometrics, macro- course. Professor Renault, who joined ([email protected]), web form (http:/ economics and microeconomics. One the faculty this fall, and Professor /www.unc.edu/depts/econ/newslet- change in recent years has been the Campo teach the theoretical economet- ters/register.htm), or snail mail. growth in enrollments in the microeconomics and econometrics courses. For years, the finance stu- 2003-2004 Degree Recipients dents from the business school en- rolled in the core microeconomics courses. They are now joined by stu- Ph.D. Recipients

Susan Chen, “The Impact of Disability Insurance on Labor Supply in the 1990s” (Advisor: van der Klaauw) 2004 - 2005 Entering Class Ai-Ru (Meg) Cheng, “Essays in Financial Econometrics” (Advi- sor: Gallant) Michelle Danis, “Competition in Equity Option Markets” (Advi- Basak Altan, Middle East Technical University sor: Tauchen) Frimpomaa Ampaw, Northeastern University Kathryn Felter, Miami of Ohio Andrew Dyke, “Crime and Punishment: Economic Models of Crime Olesya Fomenko, UNC-Chapel Hill and the Criminal Justice System” (Advisor: Tauchen) Georgian Gajewski, Florida State University Peter Lance, “The Demand for Health Care in Lower Income Na- Zubeyir Kilinc, Bilkent University tions: Theory, Econometrics, and Empirical Evidence from Indone- Zongqiang Liao, Kent State University sia” (Advisor: Akin) Peter Malaspina, Vassar College Xin (Alex) Li, “Essays on Identification and Estimation of Treat- Steven McMullen, Bethel College ment Effects in Sample Selection Models” (Advisor: van der Klaauw) Roxanne Miles, Emory University Elena Ielceanu, “Two Essays on Managing Innovation” (Advisor: Andrew Monroe, UNC-Chapel Hill Biglaiser) Zafar Nazarov, New Mexico State University Mai Noguchi, Emory University Chung-Ping (Albert) Loh, “Physical Activity and Employment Jeremy Petranka, VPI Decisions under Working Hours Inflexibility” (Co-Advisors: Akin Serban Ranca, Louisiana State University and Mroz) Rhett Robinson, Clemson University Sandeep Sarangi, UNC-Chapel Hill M.S. Recipients Tatevik Sekhposyan, Ohio University Yao Song, Northwestern University Stephanie Childress (Advisor: Gilleskie) Ling Wang, Central Michigan University Scott Hinds (Advisor: Mezzetti) McDonald Mirabile (Advisor: van der Klaauw) Sumanta Mukherjee (Advisor: van der Klaauw)

Economics at Carolina -- Page 5 The Carolina Entrep The University of North Carolina- neurial spirit of UNC has already re- Planning is taking the lead on the social Chapel Hill has undertaken the Carolina ceived national attention. An October ventures course. The capstone of the Entrepreneurial Initiative (CEI), seeking 22, 2004, article in Forbes.com ranked minor will be a summer internship. to make entrepreneurship part of the UNC as number one on their list of The Economics Department is very weave and fabric of the University. In America’s Most Entrepreneurial Col- excited about this new minor and is en- this context, entrepreneurship is broadly leges. One unique feature of the CEI couraged by the student interest the perceived as the transformation of ideas cited by Forbes is that the entrepreneur- program has already received. into enterprises that add value (eco- ship programs are centered in the Col- Professor John Stewart nomic, artistic, social, environmental, lege of Arts and Sciences rather than in Director, Entrepreneurship Minor etc.) and are sustainable. This section the Business School and to involve the focuses on CEI and the role of the Eco- whole in a range of activities that runs nomics Department in the endeavor. It from high-profile campus speakers to a University Entrepreneur-in- goes without saying, that many of our faculty research seminar focusing on Residence former majors are leading interesting and academic research addressing entrepre- productive entrepreneurial lives. At the neurship. A small office on close of this section, we focus on three The Economics Department is tak- the second floor of who demonstrate several different di- ing a leading role in the CEI by design- Gardner Hall is the mensions of entrepreneurship represen- ing a new minor in Entrepreneurship new home for Buck tative of the goals and ideas of CEI. that will be offered to non-business ma- Goldstein, University jors beginning in the fall of 2005. The Entrepreneur-in-Resi- new minor, directed by Professor John dence and newly Economics Department to Offer Stewart will allow non-business stu- named Senior Lec- Entrepreneurship Minor dents to explore the context, core tools, turer in the Department of Economics. and process of entrepreneurial activity. Goldstein, who is a graduate of the Col- Much work and planning have gone lege of Arts and Sciences and of the Entrepreneurship is a into creating the new minor. Working UNC Law School, returned to the Uni- word that has different with UNC Entrepreneur-in-Residence, versity over the summer after a thirty- meanings to different Buck Goldstein, John Stewart has re- year career as an entrepreneur. His ap- people. At its core is searched programs at other universities pointment is part of a University-wide change; change as a re- and consulted with successful entre- effort to imbue entrepreneurship into sult of individual imagi- preneurs to design the content and the lifeblood of the campus through the nation and initiative. structure of the new program. The new CEI, an $11,000,000, five-year effort The driving force behind entrepreneur- minor is unique in that it is designed to funded in part ($3.5 million) by The ship can be purely commercial; new-for- appeal to students with interests in Ewing Marion Kauffman Foundation in profit ventures. But, it can also be new both social and business entrepreneur- Kansas City, Missouri. What follows social ventures to meet social objectives ship. Starting with the historical and is an interview with Buck Goldstein. for the common good. Many of the ma- social context of entrepreneurship, the jor changes that have occurred in our minor will then take the students Q. What will you be doing as Univer- economy and society are the result of through the process of transforming an sity Entrepreneur-in-Residence? entrepreneurial activity. However, in ei- idea into to a workable plan, including A. I will be acting as a partner with a num- ther case there is a common process of exposure to entrepreneurs and a sum- ber of faculty champions as they begin to transforming an idea into a reality. mer internship experience. After the in- implement the various initiatives that com- prise the CEI. For instance, the Depart- In December of 2003, the University troductory course, which will be taught ment of Economics will house the new mi- by Goldstein and Stewart, the students of North Carolina at Chapel Hill was one nor in Entrepreneurship and I have been of eight universities to receive a grant will take a course in new venture cre- working with Professor John Stewart on the from the Kauffman foundation to pro- ation. There will also be a separate track curriculum as well as the syllabus for the mote entrepreneurship across the cam- for those interested in social or com- Introduction to Entrepreneurship class to pus. CEI is a multifaceted program en- mercial entrepreneurship. The commer- be offered next fall. This minor is for non- compassing many units of the univer- cial venture course will be provided by business students interested in learning the sity and a broad range of educational the Kenan-Flagler Business School, and skills necessary to turn an idea into a real- and research activities. The entrepre- the Department of City and Regional ity. Many of the approaches we plan to take

Page 6 -- Economics at Carolina preneurship Initiative in that course will be introduced this spring in a First Year Seminar called The Entrepre- Entrepreneurship Minor neurial Imagination. Q. What other projects are you work- ing on? Prerequisite: Principles of Economics, Econ 10 A. The Carolina Challenge is a venture plan competition that will take place this spring Entrepreneurial activity, both social and commercial, takes place within the involving students and faculty. There will be economic system within which we exist. An appreciation of economic institu- a business track and a social entrepreneur- tions and process is an important part of the knowledge base of entrepreneurs. ship track and $25,000 in prize money. The Challenge will galvanize the entire campus 1) Introduction to Entrepreneurship, (new course, ECON) and spotlight the best ideas in all depart- The course will begin with a historical overview of the role and importance of ments and schools. I am particularly ex- entrepreneurship in the economy and society. It will integrate the substantive cited about the Social Entrepreneurship track material of the course with the Carolina Entrepreneurial Initiative Speaker Series. of the Challenge. We are also lining up a Students will both attend the Speakers Series and have the opportunity to interact Speaker Series for the spring and next fall. with speakers in classroom sessions structured to reinforce the importance and relevance of particular concepts or practices of successful entrepreneurship. An- Q. Are there others working on CEI? other central theme in the design of the course is that the required core competen- A. Actually, there are scores of people par- cies are common to both business and social entrepreneurship. The course will be ticipating in the effort in addition to the 14 co-taught by John Stewart and Buck Goldstein. program champions, including the Deans of the College of Arts and Sciences and the 2) Social Venture Creation, (new course, DCRP) or Business Venture Kenan-Flagler Business School, the Vice Creation (new course, BUSI) Chancellor for Research and Economic De- A unique feature of the minor is that it will be applicable to both students inter- velopment, the Chairperson of the Faculty ested in business entrepreneurship as well as those with an interest in social entre- and two former Chairpersons. The effort is preneurship. After completing the introductory course, students will choose to led by Jack Kasarda, former Chair of the pursue either a business or social track. These courses will cover the concepts and Sociology Department and currently Kenan tools that are particularly relevant to the two different types of ventures. These courses will concentrate on the specific issues in launching ventures in either the Distinguished Professor of Management and business or social realm. The primary objective of both courses will be to get the Director of Kenan-Flagler’s Kenan Institute students through the process of creating a business plan. These courses will also be of Private Enterprise. closely integrated with the Speaker Series and with the Carolina Challenge. Q. What makes the CEI different than other Entrepreneurship Programs? 3) Internship in Entrepreneurship, (new course, ECON) A. UNC has a long history of entrepreneur- Direct experience in the process of entrepreneurship will be a key part of the ship education and was recently named the minor. Supervised internship experiences will be provided for all minors. Differ- number one campus for entrepreneurship ent internship experiences will be made available for students in the commercial and social entrepreneurship tracks. The internship experience will generally take in the United States. In the past, most of our place in the summer after completing the introduction and venture creation efforts were concentrated in the Business courses. School. The CEI complements these efforts by focusing upon the entire University. It also defines entrepreneurship broadly to in- 4) One elective from a list of approved courses clude social, artistic and educational entre- BUSI 71 Financial Accounting STAT 22 Decision Models for Business preneurship as well as traditional commer- SOCI 31 Social Relations in the Workplace cial entrepreneurship. Virtually all of the SOCI 110 Formal Organizations and Bureaucracy initiatives involve both academics and prac- SOCI 112 Social Stratification titioners with the goal of integrating an ex- SOCI 115 Economy and Society periential component into all of the major SOCI 127 The Labor Force projects of the CEI. This approach is unique COMM 25 Introduction to Organizational Communication and, if we are successful, we have a chance PHIL39 Morality and Business to make a real impact on the nature of un- ECON 135 Economic History of the United States HIST 64 History of American Business dergraduate education here at Carolina and HIST 161 Technology and American Culture. around the world. PLCY 67 Ethical Basis of Public Policy Decision Making For additional information on the CEI, JOMC 130 Principles of Public Relations go to www.unc.edu/cei or contact Buck JOMC 170 Principles of Advertising Goldstein at [email protected]. JOMC 175 Concepts of Marketing

Economics at Carolina -- Page 7 The Carolina Entrepreneurial Spirit Joseph R. “Pitt” Hyde III

Pitt Hyde (Econ ‘65) Malone & Hyde in 1979, Steve Jones is a nationally-known en- Mr. Hyde guided its trepreneur and philan- growth to become the Morehead Scholar Steve Jones thropist whose leader- largest company in the (Econ ’74) became Dean of The Uni- ship has transformed his auto parts industry, with versity of North Carolina at Chapel hometown of Memphis, more than 3,200 retail out- Hill’s Kenan-Flagler Business Tennessee. With a life lets nationwide. Mr. Hyde School in 2003 following a 30-year that is equal parts busi- is owner and President of career in business, including 15 ness acumen and strate- investment company years overseas. gic philanthropy, he con- Pittco Holdings Inc., and An Elkin, NC, native, UNC gradu- tinues to be a force for Chairman of Memphis ate and Harvard MBA, Mr. Jones is economic, civic and cul- Bioworks Foundation, widely known for helping companies tural progress. which is leveraging Mem- develop strategy, lead change and Mr. Hyde worked for the wholesale phis’ assets to develop its unique niche build organizational capability, often food company founded in 1907 by his in the biotechnology industry. in challenging circumstances. grandfather, expanding Malone & Hyde, Through The Hyde Family Founda- Inc., specialty retailing division into tions, Mr. Hyde leverages his philoso- drug stores, sporting goods stores, su- phy of strategic giving to inspire major permarkets, and auto parts stores. Un- initiatives and innovative thinking, in- der his leadership, the company became cluding two first-class museums in the third largest U.S. wholesale food dis- Memphis and the Annual Freedom tributor. In 1972 he was elected Chair- Awards ceremony to honor national and man and, for 10 years, was the young- international human rights leaders, from est CEO on the New York Stock Ex- Nelson Mandela to Lech Walesa, Harry change. Belafonte to Sidney Poitier, and Colin As founder of AutoZone as part of Powell to Jimmy Carter.

Jill Olsen Prior to becoming Dean, Jones was CEO of Suncorp Metway Ltd., Morehead Scholar Jill Olsen (Econ ’93), a small-town girl from Goldsboro, based in Brisbane, Queensland. first visited New York City as a summer intern for Merrill Lynch. Suncorp is one of Australia’s top 25 After graduation, she returned to Wall Street where she served as analyst companies and its sixth-largest bank, for Tiger Management investment firm, an associate economist for Goldman second-largest general insurer and Sachs & Co and finally as Associate Director at Tiger, responsible for analyzing 18th- largest funds manager. Its LJ currencies and bonds in developed countries. Hooker subsidiary is the largest real A decade later, Ms. Olsen uses her knowledge of economics, passion for estate agency franchiser in Austra- philanthropy and entrepreneurial skills to help talented NYC students from lia, with 600 offices. disadvantaged backgrounds achieve their potential Prior to Suncorp, Jones was man- and succeed. aging Director and CEO of ANZ-New She serves as a trustee of the Tiger Foundation, Zealand, one of the country’s four Tiger Management’s foundation that helps main banks. He served six years as a nonprofits working to break the cycle of poverty in management consultant for NYC. She also serves on the board and volunteer McKinsey & Co., where he helped economics teacher with Teak Fellowship, an NYC clients in construction materials, nonprofit that helps gifted students from chain drug stores, alcoholic bever- economically disadvantaged backgrounds enter and ages, electricity, textiles and bank- ing develop growth strategies and succeed at top high schools. A Former Teak Fellow with Jill (right) improve operations.

Page 8 -- Economics at Carolina Life After Carolina Keith Bradsher on such diverse topics as forestry, pig breed- economics, and, eventually, domestic eco- ing, monetary policy, colonization, and tax nomic policy, especially the Federal Reserve. policy. While beginning as a reasonably or- In January, 1996 he moved to Detroit where Since he graduated from UNC in 1986 with thodox mercantilist, Vauban eventually be- he became the Times bureau chief with an his AB degree in economics and history, Keith came distressed at the inequalities of taxation emphasis on reporting on the automobile in- Bradsher has parlayed an early interest in eco- borne by the French lower classes and pro- dustry. “For a little over a year after The New nomics to a journalistic career that has taken posed the elimination of all taxes and the sub- York Times assigned me to be the paper’s him from New York, to Washington, DC, De- stitution of a single flat tax of 10 percent on Detroit bureau chief, I was as enthusiastic as troit and now Hong Kong. Along the way he all land and trade, with no exemptions. This every auto writer about the boom times that has reported on the telecommunications in- proposal earned the displeasure of King Louis SUVs had brought to the auto industry. Then dustry, international economics, domestic eco- XIV, to whom Vauban had been a trusted advi- my editor asked me what happened when SUVs nomic policy and the automobile industry. His sor, but it did mark him as one of the influ- hit cars. It turned out that the stiff, high- stay in Detroit resulted in a book that has ences on later Enlightenment economists in- riding underbodies designed for optimal off- been hailed by a number of critics as the most cluding the Physiocrats. The honors thesis road driving performance had made SUVs three important book on automotive safety since was so interesting and so elegantly written times as likely as cars to kill the occupants of Ralph Nader’s Unsafe at Any Speed. that the Department submitted it to a cam- the vehicles they hit. I have been investigat- Keith’s current residence in Hong Kong as pus-wide competition. Failure to win that com- ing SUV problems ever since.” the New York Times bureau chief brings him petition did not stop Keith from graduating in A series of articles on SUVs and their prob- full-circle back to the place where he first 1986 with distinction and highest honors in lems led to Keith’s receiving the 1997 George developed an inter- economics. Polk Award for national reporting and his be- est in economics. Before entering Princeton’s Woodrow Wil- ing a finalist for a Pulitzer Prize. Extending Living there with his son School in the fall of 1986, Keith spent his reporting on SUVs, Keith published High foreign correspon- the summer as a freelance journalist in Mexico and Mighty: SUVs—The World’s Most Dan- dent father and fam- and Nicaragua, “...calling up and selling sto- gerous Vehicles and How They Got That Way ily during the years ries to the Miami Herald and the Wall Street in 2002. The book won the New York Public 1970-75, Keith re- Journal. I wrote the stories by renting a stool Library’s Helen Bernstein Award and and members noticing and a manual typewriter in the Plaza of landed Keith on the “Today” show as well as the rapidly rising Scribes, the place in Mexico City where people CNBC several times and NPR. This year, an gasoline prices that accompanied the Arab oil have been going for centuries to find writers!” updated paperback edition was published. embargo of 1973. His mother gave him a copy Keith entered Princeton thinking that he “Auto executives have credited me with per- of Newsweek that explained the the Arab-Is- was headed for a career in the foreign service. suading them to change the design of SUVs to raeli war and its economic aftermath, and Keith While he eventually received the Masters in make them less deadly to other motorists. reports that he “began reading news maga- Public Policy with a concentration in eco- After a series of stories that I wrote about the zines every single week without exception nomics, his career path changed forever when dangers posed when SUVs override the from fifth grade on.” In the seventh or eighth he received a summer internship at the Los bumpers and door sills of cars during colli- grade he switched to The Economist thereby Angeles Times after his first year at Princeton. sions, Ford added steel bars below and behind solidifying a continuing interest in economics The internship eventually extended to four- the bumpers of Ford Excursions to act like and foreign affairs. teen months after which, “I was hooked on cow catchers. Ford engineers nicknamed them Returning to the United States, Keith lived journalism for life.” ‘Bradsher bars.’” in suburban Virginia and attended St. Albans “I was lucky to have specialized in econom- In Hong Kong as Times bureau chief since School in Washington, DC where he wrote for ics, as big newspapers were all hiring young April, 2002, Keith continues to report on a the high school newspaper. His senior year at business reporters in the late 1980s as demand variety of business and economics stories as St. Albans brought an admission offer from for business reporting soared. I’ve always been well as stories of more general interest. “For Yale and a Morehead Scholarship nomination glad that the New York Times hired me with- the business section, I cover business and eco- to UNC. “I thought going to Yale would feel out realizing that I was the son of a former nomic news from Pakistan to Taiwan to New like more years of the same kind of study I journalist — I mailed in my résumé with a Zealand. I’ve particularly written about the had been doing at St. Albans, with much less cover letter to complete strangers, got in- Chinese economy, and its slowdown has been interesting summers than the Morehead of- vited in for interviews and was eventually hired my biggest story this year. I basically have fered at UNC.” by the head editor of the entire business sec- most of Asia except for Japan and the Koreas. Keith double-majored in economics and tion. The business editor, like me, had grown For general foreign news, I cover political history at UNC and, while never taking a course up mainly in Virginia, then went to college in developments only in Hong Kong and Tai- at UNC’s School of Journalism, scratched his North Carolina (he went to Duke) and then wan. In addition, I’ve developed an odd sub- journalism itch by “put[ting] in a lot of time did a masters at Princeton. If I had not gone specialty for the science section in covering at the Daily Tar Heel, which I loved.” He to Chapel Hill, he never would have noticed frightening diseases emerging in Asia. I wrote spent his junior year at the University of the eerie parallels in our lives on my résumé dozens of stories about SARS, my biggest story Seville in Spain using his Christmas break to and never would have called me in for an in- last year, and I’ve been writing about bird flu hitchhike “alone across the Sahara desert terview. As it is, we have spent the last fifteen this year.” from oasis to oasis with a succession of Arab years discussing ACC basketball, in person Although he’s not been back to Chapel Hill truckers.” The following summer he did an while I was in New York and then by e-mail since 1991, Keith credits UNC, and especially internship with a business magazine in Lon- through my tours in Washington, Detroit and the Morehead Scholarship, with giving him a don, International Management. Hong Kong.” crucial boost into journalism. As for the eco- For his senior honors economics project, Keith spent the years 1989-95 first cover- nomics major, Keith’s experience illustrates Keith chose to write on Marshal Vauban ing the telecommunications industry and then yet another way that economics can lead to a (1633-1707) of France, the foremost mili- moving to Washington, DC where he was a rewarding and fascinating career. tary engineer of his age and a prolific writer national correspondent covering international Boone Turchi

Economics at Carolina -- Page 9 Undergraduate Majors Preparing for Spring 05 Carolina Economics Club As we approach the spring semester let me remind graduating seniors to check with Participation at Carolina Economics Club meetings during the past three an Arts and Sciences academic advisor to verify you have met all College requirements years continues to outpace the stock market, with more than 1,100 members for graduation and to complete required per- of the UNC community attending Club functions during 2004. One Club goal mits and paperwork prior to receiving your is to provide a forum to discuss a wide array of economic issues, ranging degree. You can make a first pass by going from the economics of everyday life to hot topics and current events. to “Degree Audit” at Student Central on the Other formal meetings in 2004 addressed such issues as: (1) “Bootstrap UNC-CH website. If you have questions Banking” [micro-loans to small-scale entrepreneurs in less-developed-coun- about meeting your economics major require- tries], (2) “The Economics of True Love”, (3) “America’s Holy War” [the ments, stop by the office. Please remember record and prospects of the ‘War on Drugs’], (4) “A Debate on Economic that you must have at least one “advanced” Policies,” [a panel of UNC graduate students discussed the economics of economics course to complete degree re- quirements. The advanced courses being Republican and Democrat proposals], and (5) Graduate Programs for Eco- offered this spring are Econ 162, 170 and nomics Majors. 185. For those of you in the Senior Honors Co-presidents James Lee and Ben Hill (2003-2004) were succeeded for Program, Econ 98 and 99 count as advanced 2004-2005 by Angelica Mathews and Lekith Lokesh in a relatively tame elec- courses; however, participants must have tion. Please contact us if you would consider being a panel member to eight economics courses to complete the discuss “What alumni have learned about careers for economics majors major. We will send invitation letters to ris- after finishing UNC.” ing seniors whose academic records qualify Future events for the Club will be posted at http://www.unc.edu/stu- them for 2005-06 participation. To learn dent/orgs/econclub/. Whenever you’re going to be on campus, check our more about the honors program, contact the Director of Undergraduate Studies. If you schedule and think about attending one of our future scheduled events, are contemplating graduate work in econom- which will include such presentations as “The Economics of AIDS” [on ics, it is important to obtain a strong under- World AIDS day], “Career Opportunities for Economics Majors,” “The Eco- graduate background in mathematics. To nomics of the Family,” “Twin Deficits: The Federal Budget, the Balance of learn more about math courses which are of Trade, and the Future of the Dollar,” and “Models of Job Search and the critical importance, stop by the Economics Quest for a Soul Mate.” Office. Finally, I encourage you to actively participate in the activities of the Econom- ics Club. It is a great way to get to know fellow-travelers in economics and engage in Paul Krugman Lecture economic issues outside of the classroom. sponsored by the Econ Club Undergraduate Research Fund

Funds are available through the Herbert B. Mayo Undergraduate Research Fund for data collection, travel, software, etc. This fall, Alexandra Samet was awarded funds to help cover costs related to data collection for her honors thesis. Funds are available to support undergraduate internships to work Princeton University economist and New York Times op-ed columnist with faculty. If you are interested, contact Paul Krugman delivered the Club’s annual “Distinguished Lecture” in Professor Al Field, [email protected]. April. An overflow crowd heard Professor Krugman’s The Mayo Fund is an excellent example thoughts on economic policies from the 1980s to the of how outside funding contributes to the teaching, learning, and research experience present, the state of international relations, and the of our majors. The Department and student economic policies proposed by President Bush and recipients express our appreciation to Dr. Senator Kerry. Krugman, the controversial author of Mayo for his continuing support. If you 18 books and hundreds of articles, is widely expected are interested in supporting the Department, to win a Nobel-prize in the near future because of contact our Chair, John Akin or Brook pathbreaking work in international trade theory. Alexander in the Arts and Sciences Fdn., [email protected].

Page 10 -- Economics at Carolina Undergraduate Awards 2004 Senior Honors Theses

This past year, 207 students received de- Nine of our most outstanding economics directed by Professor Stanley Black. Five grees in Economics. We currently have more majors successfully completed the Senior of the participants graduated with “Highest than 600 declared first and second majors. Honors Program in 2004. The Program con- Honors,” and four received “Honors.” The In 2004, ten of our majors were initiated sists of participating in two seminars in eco- Department’s Undergraduate Honors Prize into Phi Beta Kappa, a reflection of the con- nomics, Econ 98 and 99, completing an hon- in Economics was presented to Douglas Sue, tinuing high quality of our students. New ors thesis under the close supervision of a who worked under the supervision of Pro- members include Scott Brittain, Lewis Fos- faculty member, and passing an oral defense fessor Ralph Byrns. The Class of 2004 par- ter, III, Alexa Kleysteuber, Melissa Lassiter, of the research. This year the program was ticipants are: Elizabeth Makrides, Rachel Norton, Peter Richmond, Joel Segel, Joshua Simmons, and Highest Honors Graduates Zephyr Taylor. In addition, a large number Robert Benjamin Hill, Jr. (Highest Honors), “The College Decision? Tracking the Re- of our majors were inducted into the Eco- turns to Education for Men and Women During the Expansion and Recession of the Last nomics honorary, Omicron Delta Epsilon. Decade” In addition, two graduating seniors received Mary Laura Johnson (Highest Honors), “The Influence of Income on Adolescent Health special Department recognition. Kasey Outcomes: Differentiating Between Generations of Residence in the U.S.” Maggard won the Undergraduate Prize in Kasey Q. Maggard (Highest Honors), “The Role of Social Capital in the Remittance Economics, awarded annually to the top eco- Decisions of Mexican Migrants” nomics major. Douglas Sue received the Douglas R. Sue (Highest Honors), “Cognitive Anomalies and the Assumption of Eco- Undergraduate Honors Prize in Economics nomic Ratinality: An Empirical Investigation of UNC Students” for the top honors thesis. Doug also re- Jennifer Wade (Highest Honors), “Pricing and Advertising Strategies and Their Effect on ceived the Johnson Foundation Award for Consumer Decisions” best undergraduate economics thesis in North Carolina, May 2004. Honors Graduates Leia Kelly (Honors), “Forecasting Optimal Monetary Policy in Europe Following the Omicron Delta Epsilon 2004 Eastern European Expansion” Melissa Lassiter (Honors), “Household Bargaining and Child Labor in Nepal” President Katherine Theyson and Vice- Robert W. May (Honors), “An Empirical Study of Factors Influencing Federal Antitrust President Hamilton Fout led ODE this past Cases” year. The annual induction for new mem- Peter Jeffrey Richmond (Honors), “An Examination of the European Union’s Regional bers was held on April 20, 2004. Fewer Policy in Spain: Is It Necessary, Has It Worked, and Should It Be Coordinated with than 10% of our junior-senor economics ma- Agricultural Policy?” jors, along with 10 graduate students, were invited into membership. The new student Economist in Training inductees included James Bruzzinni, Kavita Aildasani, Ashley Batten, Meredith Britt, I graduated last May with a double major in Spanish and Economics. I completed an Liang Ding, William Grider, R. Benjamin Hill, honors thesis in the Economics Department entitled “The Roll of Social Capital in the Matthew Hurst, Catherine Joo, Alan Keesee, Remittance Decisions of Mexican Migrants.” Through a UNC Economics Depart- Alexa Kleysteuber, Gregory Knudsen, ment alumnus I found out that the Federal Reserve Bank of Atlanta Bidisha Lahiri, Sumanta Mukherjee, Vinh was holding a conference on my thesis topic, remittances. Since I Nguyen, Nilufer Ozdemir, Kristin Pappas, would not be starting my full time job with the Atlanta office of The Judy Pham, Andrew Pike, Justin Rao, Valerie Boston Consulting Group until the fall, I pursued an internship with Rawlston, Sahminan Sahminan, Joel Segel, the Atlanta FED. I was offered an internship with the Latin American Nicholas Stefanski, Ekaterina Tsibarova, Research Group for eight weeks this summer. Yaraslau Zayats, and Yun Zhang. While at the FED, I had the opportunity to continue to expand Professor Ralph Byrns was chosen to and share my knowledge about remittances by giving a presentation on remittances to receive the Outstanding Economics Profes- the Atlanta branch staff. I was also given the opportunity to write an article for a FED sor award. He was honored for the many publication on the topic of banks and the growing remittance market. It was really contributions he has made to the Depart- exciting to have my work published in a magazine, now available under “Publications” ment and University since his appointment at http://www.frbatlanta.org. I spent the majority of my time during the internship in 2001. Byrns has worked actively with continuing my thesis work. Using a newly released updated data set, I expanded the undergraduate majors both in and out of the scope of my thesis and delved deeper into specific topics. classroom, and was selected by undergradu- I also had other responsibilities such as collecting data for the economists and ate students to receive the Economics De- followed the economic events of the Central American and Caribbean countries to partment Excellence in Undergraduate write country reports for an internal publication. It was very interesting to sit in on Teaching Award in 2002. He can be fround meetings of economists where they discussed interest rate policy. daily on the steps outside Gardner discuss- By interning at the FED, I was able to view a different option for economists besides ing various academic and policy issues with a professorship. It also provided me opportunities to apply the knowledge that I many students. In addition, he has effec- gained from four years of economics classes. Overall my internship with the Latin tively served as Faculty Advisor to the Eco- American Research Group at the FED was a great experience. nomics Club, directed numerous honors the- Kasey Maggard ses and been a mentor to countless students.

Economics at Carolina -- Page 11 Faculty and

Professor Michael Salemi will be ap- cross-campus Program in Philosophy, Latané Professor pointed as a UNC Bowman and Gordon Politics and Economics. He is the edi- Gray Distinguished Term Professor, ef- tor of Economics and Philosophy, fective July 1, 2005. serves on the boards of several other Eric Renault is the newly ap- Professor John Stewart was named scholarly journals, and is a member of pointed Henry A. Latané Distin- Director of the Minor in Entrepreneur- the Australian Academy of Social Sci- guished Professor of Economics. ship in the Department of Economics. ences. Professor Professor John Akin was named a Dennis R. Appleyard, James B. Duke Renault re- Champion of the entrepreneurship mi- Professor of International Studies and ceived his nor in the Carolina Entrepreneurship Economics at Davidson College and Masters in Initiative (CEI). Buck Goldstein, newly Professor Emeritus at UNC-CH, re- Economics appointed University Entrepreneur in ceived the Thomas Jefferson Award at and Statistics Residence, will work to implement vari- the annual fall Davidson College awards from ENSAE, ous CEI initiatives and was appointed convocation. The award recognizes a Paris, and his Senior Lecturer in the Department. faculty member who by personal influ- PhD in Ap- Professor Paul Rhode was named a ence, teaching, writing, and scholarship plied Math- UNC-CH Faculty Partner. Rhode was promotes the high ideals of Thomas ematics for Social Sciences from matched with Scott Custer’s gift to the Jefferson. Paris University Dauphine. He Faculty Partners Fund. As a Faculty previously held the Canada Re- Partner, he will receive financial support Faculty Leaves search Chair in Financial Econo- for research, conference participation, metrics at the University of and research publications. Montreal and is a fellow of the Professors Richard Froyen, Tom Professor Koleman Strumpf’s re- Econometric Society. Mroz, Steven Rosefielde, and Koleman search on the economics of gambling Professor Renault is widely Strumpf received one-semester re- and illegal downloading of popular mu- known for his research in econo- search-and-study leaves during the sic from the internet was featured in a metrics, with a particular focus on 2003 -2004 academic year. Froyen spent recent article in the UNC-CH Endeav- financial econometrics. His work time doing collaborative research at the ors magazine. In addition, Strumpf’s has appeared in a number of jour- University of Canterbury in New work with Professor Paul Rhode on the nals, including the Journal of Zealand; Mroz spent the year as a vis- history of gambling on US presidential Econometrics, the Journal of the iting scholar at Yale; Rosefielde spent elections was recently reported on CNN Royal Statistical Society, Econo- several months working with colleagues and cited in the Wall Street Journal and metric Theory, Econometrica, and in Moscow; and Strumpf spent time as the Economist magazine. Mathematical Finance. He is a visiting scholar at the CATO Institute Professor Geoffrey Brennan was se- founding co-editor of the Journal in Washington, D.C. lected as the first Keohane Distin- of Financial Econometrics and an Professor David Blau was awarded a guished Visiting Professorship at UNC associate editor of several econo- W.R. Kenan, Jr., leave. He spent the (Department of Philosophy) and Duke, metrics journals including year as a visiting scholar at the Insti- and appointed Adjunct Professor in the Econometrica and the Journal of tute Nacionale de la Statistique et des Department of Economics at UNC-CH. Econometrics. Etudes Economique in Paris, France. Brennan is an economics professor in Professor Renault joined our Professor Claudio Mezzetti was the Social and Political Theory Group Department effective July 1, 2004. awarded a W.N. Reynolds leave. He in the Research School of Social Sci- In the fall of 2004 Professor was a visiting scholar at the European ences at Australian National University Renault taught an advanced University Institute in Florence, Italy. in Canberra. He is well-known for his graduate econometrics course and Professors Patrick Conway, Paul work in public finance, public choice will teach a course in continuous- Rhode, Sandra Campo, Donna theory, welfare economics and eco- time finance in spring 2005. Gilleskie, and John Stewart will each nomic philosophy. He will be teaching receive a one-semester research-and- and working with faculty on both the study leave during the 2004-2005 aca- UNC and Duke campuses to develop a demic year.

Page 12 -- Economics at Carolina d Staff News

Retired Economics Professor years. Last year, after 38 years on the other elder peers struggle with the tribu- Graduates from Law School faculty, he gave up teaching to commit lations of finances, insurance and other to his law studies full time and graduate vexing legal matters, he decided he After teaching an estimated 10,000 on time. wanted to help. Wilde wants to focus students and serv- Wilde hopes to practice elder law — on estate planning, reverse mortgages ing as Director of a skyrocketing profession — out of his and the realities of giving up indepen- Undergraduate home. After watching his mother and dent living. Studies in Econom- ics, James Wilde graduated from the UNC Law School Awesome Instruction! May 2004.

The following was published at http:// We are proud of the high quality of Department teaching at both the gradu- abclocal.go.com/wtvd/news/ ate and undergraduate levels. This past year was notable in that we had one 050904_APlocal_eldergrad.html on 5/09/04. individual who received a University-wide award as well as four who re- ceived Department awards for outstanding performance in the classroom. 66-year-old to Graduate from UNC Chapel Hill Law School By The Associated Press University Distinguished Teaching Award

For Jim Wilde, Sunday’s cap-and- Professor David Guilkey received a 2004 Distinguished gown ceremony at UNC-Chapel Hill Law Teaching Award for Post-Baccalaureate Instruction. He and School won’t be the defining academic other recipients of University teaching awards were recog- moment of his life. nized on Sunday, February 15, 2004, during the half-time cer- The 66-year-old public finance expert emony at the UNC-Maryland men’s basketball game in the and former economics professor already Dean E. Smith Center, a fitting locale for David, who can al- has a doctorate from Princeton. The old- ways be found in the stands at home games. est in his class of law students, Wilde didn’t fight the good fight for the best internships, didn’t push to manage the Departmental Teaching Awards law review and didn’t work to graduate the top in his class. His goal? Graduat- As in the past, voting processes organized and carried out by the Under- ing within the five years that the Ameri- graduate Economics Club and the Economics Graduate Student Association can Bar Association requires so that he led to the selection of the Department teaching award winners. can embark on a new career at a time when many of his contemporaries are Professor Ralph Katherine Theyson plotting retirement. Byrns won the De- received the Depart- “I feel very good about what has partment of Econom- ment of Economics happened,” Wilde said. “I feel very for- ics Excellence in Un- Best Teaching Assis- tunate that the Law School was willing dergraduate Teaching tant Award. to give me a chance. I feel fortunate that Award. the Law School has enough diversity interest to think of age diversity, too.” Professor David Guilkey received Arnie Aldridge won Beginning in 1999, through a phased- the Department’s Jae-Yeong Song the Vijay Bhagavan retirement plan at the University of and Chunuk Park Award for Graduate Award for the best North Carolina at Chapel Hill, Wilde al- Teaching. Econ 10 teaching as- ternated a semester of law school with a sistant. semester of teaching economics for four

Economics at Carolina -- Page 13 Alumni News My thanks again to those of you who to New York where she is working for the Graduate Alumni News took the time to get in touch with us and Federal Reserve Bank. bring us up to date on what has happened in After a nine month hiatus, one of our Since arriving in West Virginia where he your life since leaving Carolina. Hearing recent graduates, Lara Whittaker (2003), is now Director of the Division of Econom- about all the interesting things you are is enjoying being back in school doing ics and Finance, William Trumbull (1985) engaged in both in your professional life and graduate work in public policy at the College has been doing research on comparative eco- communities is truly one of the enjoyable of William and Mary. nomic systems. For the last several years, aspects of editing the annual Newsletter. Lauren Duquette (2001) lives in the he has been teaching a course on the Eco- Please note that this edition contains Washington, D.C., area where she works for nomics of Cuba jointly with the faculty at information from both our undergraduate the Economic Research Service of the the University of Havana. He has also taught and graduate alums. I hope you will enjoy USDA. study abroad courses on the Eastern Euro- catching up with some of your former Robin Anderson (2002) is currently pean and Chinese economies. Pictures are classmates. The number of communications pursuing a Ph.D. in Economics at the available on his web page at http:// we have received from you has slowed down University of Washington. www.be.wvu.edu/divecon/econ/trumbull/. a bit this year so I encourage all of you In December 2003, the Board of Directors Bruce Caldwell (1979) is nearby in to take a moment and update us by of American International Group, Inc., Greensboro. This year, his book, Hayek’s phone, or email [email protected] or elected Donald P. Kanak (1975) AIG Vice Challenge: An intellectual Biography of F.A. [email protected], or web form http:/ Chairman and Co-Chief Operating Officer Hayek, was published by the University of /www.unc.edu/depts/econ/newsletters/ of AIG. He is now based in New York. Chicago press. Bruce has also worked to register.htm. Of course, we always like Dwight Wells (1998) is currently a develop the new PhD program at the Uni- seeing you in person, so if you find yourself stand-up comedian, writer, and actor in New versity of North Carolina-Greensboro. in Chapel Hill please stop by the York City and Los Angeles. However, his After spending 22 years in government Department to say hello. heart will forever be devoted to post-Soviet positions, Chris Klein (1980) has returned economic policy because of Dr. Rosefielde. to academics and is now at Middle Tennes- Undergraduate Alumni News Dwight is grateful to UNC and will make a see State University where he joins Charlie sizeable donation when he makes it big. Baum (1999). Chris was formerly with the Ann-Marie Martin O’Donnell (1987) Federal Trade Commission in Washington Brett Southworth (2001) writes that is married with three children, Megan (6), and the Tennessee Regulatory Authority. he is now working at Merrill Lynch in their Peter (3), and Katie (8 months). Her posi- Both Chris and Charlie are involved in the Public Finance Health Care Department in tion with Lowes has enabled her to put her new PhD program at MTSU. New York City. He notes that working on interest in the global market place to great Myriam Quispe-Agnoli (1997) and Wall Street is very different than the Peace use. She is glad she took international eco- Curtis Florence (1997) are now in Atlanta. Corps work he did in the Islamic Republic nomics with Pat Conway! Myriam is a Research Economist and Policy of Mauritania immediately after graduating Lynn Cathryn Fogarty (2000) is en- Advisor with the Federal Reserve Bank of from Carolina. gaged to be married in August 2005. She Atlanta and Curtis is on the faculty of the Chris Weber(1984) is living in Seattle, graduated from UVA Law School in May Rollins School of Public Health in Emory. Washington, where he teaches in the 2004. She is studying for her Master’s de- Dan Kress (1995) left the World Bank Department of Economics and Finance at gree at the London School of Economics to join the Bill and Melinda Gates Founda- Seattle University. He was recently before beginning work in environmental law tion in Seattle. He is a program officer with promoted to Full Professor and appointed with a Richmond, Va., firm. the Global Health Policy and Finance team. The Robert D. O’Brien Chair in the Albers Norman M. Davis, Jr. (1964) received After serving as Chief of Staff to the School of Business and Economics. a Masters in Healthcare Administration Minister of Public Works and Transport in Melodie Potts (2002) just completed a from Duke in 1969. He worked as a hospi- Chile, Rodrigo Pizarro (1998) entered the two-year stint with the Boston Consulting tal administrator 1969-1990. He operated a private sector and founded an NGO in envi- Group in Atlanta and is on the way to do family retail business from 1990-1993. ronmental policy of which he is now Execu- graduate work in public policy at the Currently he is working as a nursing home tive Director, www.terram.cl. Also, he is Kennedy School of Government via a one- administrator. working as a consultant to the Panamanian year detour in Australia. This year Melodie Jason York (1998) was married to government developing a system of envi- is serving as the Think Tank Coordinator Marjorie Sack on August 30, 2003, at the ronmental accounts. for the newly-formed Cape York Institute Carolina Inn. In 2001 he completed a MBA Rupinder Kaur Saggi (2000) and her for Policy and Leadership on Cape York at William and Mary 2001. He earned the husband, Kamal, have 20-month-old Peninsula. She will be working on Aboriginal rank of Captain in USAF before leaving to twins—a daughter, Neha, and son, Kunaal. policy, development and reform agendas. join BB&T in 2002. He graduated from the Since Mike Quinn (2002) joined the A recent migrant to the Big Apple is BB&T Management Development Program faculty at Bentley College, he and Sherry Kristin Wilson (2002). After working two in 2002 and served as credit analyst until are adjusting to the Boston winters. Last years in the Brookings Institute in 2003. He was promoted to Banking Officer November, Mike took a break from the cold Washington, D.C., Kristin recently moved and Commercial Banker in 2004. weather for the Southern meetings.

Page 14 -- Economics at Carolina Greetings to Friends and Alumni

A Letter from the Chair

The state’s budget woes have continued for yet another year, but in spite of the constraints of limited funds in many areas the Department had a very good year. Much of the credit for the Department’s holding its level of excellence through the past several lean state budget years goes to you alumni and friends who have so kindly supported us financially. We have been able to use our sources of non-state money for things as diverse as paying for the 100th Anniversary Celebration a couple of years ago, buying important software for faculty and students, and sending faculty members to professional conferences where they presented important research papers and were able to listen to and discuss the ideas at the forefront of knowledge in their fields. These are just some of the ways we have used your contributions, both large and small, to enhance the Department. We have also been much protected as a “Department of Excellence” by having three Distinguished Professorships funded by gifts from supporters of the Department. These three distinguished professorships provide a base of three exceptionally talented scholars always in the Department, irrespective of the vagaries of state funding. Three years ago, I mentioned that Bernstein Distinguished Professor, Eric Ghysels, a highly respected financial econometrician, had joined the equally distinguished Dr. Ron Gallant (who held the Latané Distinguished Professorship) in a new field for the UNC Economics Department, Financial Econometrics. The field has developed well and students are starting to reach the dissertation stage. The bad news is that Ron Gallant has now retired and is teaching at Duke, but the good news is we have been able to replace him with Dr. Eric Renault, who also specializes in Financial Econometrics and basic Econometric Theory. Dr Renault now holds the Latané Distinguished Professorship. Repeating from two years ago, in case you missed it, we believe we now offer (in an alliance with the Kenan-Flagler Business School), if not the best, without doubt some of the world’s best training in Financial Econometrics. Tell your undergraduate students with an interest in financial statistics to consider us for graduate work! Our enrollments and number of majors have continued to be very large relative to our faculty size. In the past academic year we did not hire any new faculty except Eric Renault, but we have been given permission by the Dean to hire a new Macroeconomist during the coming recruiting season. We continue to pursue outside funding for additional distinguished professorships in the Department, knowing that state funds cannot be the full answer to our quest for greater excellence. If you are interested in discussing the possibility of a major gift (or a smaller one) please call me at 919-843-9452 or contact Brook Alexander at the Arts and Sciences Foundation at 919-843-0345. I should remind you that any gifts to the University, including those to annual giving or the CAROLINA FIRST CAMPAIGN, can be designated to “The Department of Economics.” There are other events of the past year, such as teaching awards, grants successfully competed for, and placements of students to be proud of, but to lessen the risk of going on too long I will leave most of those positive announcements for other sections of this newsletter. I would, however, like to draw your attention to the fact we are developing a minor in Entrepreneurship within the Economics Department, to start next year with approximately 40 students. You can read more about that program at http:// www.kenaninstitute.unc.edu/centers/cei/?y=home&t=Home. Buck Goldstein, the University’s Entrepreneur-in-Residence has joined the Department as a Senior Lecturer, and will be working with John Stewart on design and implementation of the new minor. His office is in 207 Gardner Hall. The Department is also cooperating with the Philosophy and Political Science Departments at UNC and with Duke University to create a new program in Philosophy, Politics and Economics (P, P and E) to be housed in the Philosophy Depart- ment. Dr. Geoffrey Brennan, an economist by training, who works actively on issues that relate to economics, rationality, and political philosophy, will be developing that program. Dr. Brennan will be an Adjunct Professor in the Economics Department. I will close with what has become my annual plea for financial support from you, readers who care enough about the Department to have reached this point in my greetings note. Even in good budget times state funds alone simply are not sufficient to allow for the level of excellence we desire and believed the state, our alumni, and our students deserve. Even as the state budget has begun to improve, the need for outside financial support cannot be overemphasized. Please give some thought to what the Economics Depart- ment has meant to your professional and personal success, as well as to the value of first-rate economics training at UNC for future students, and give to the Department to the extent your financial situation allows. Both faculty and student activities can be improved immensely with even small amounts of flexible funds. At a time in academic history when many universities are attempting to entice faculty from other institutions to replace their own who retire, we must put together the funding to maintain excellence. This requires keeping our best present faculty and attracting outstanding individuals to fill both vacant faculty positions and those of retiring faculty. We are working toward raising sufficient funds to compete financially with the absolute best departments in both salary and other costly inputs. As I say every year in this space, and mean in all sincerity, you and your accomplishments are an important component of the department’s contribution to society. We in the Department try to keep up with you and your lives and careers, but it is difficult not to miss information. Please keep us informed about yourselves and your families. I hope all of you will feel free to drop in at the Department anytime you are in Chapel Hill. I will try to personally welcome you and make you feel at home. I will also be glad to take you out for a coffee or lunch, so please do stop by. I hope you all have a good year and that I get to see many of you during the course of the year. John S. Akin

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