Economics Newsletter Department of Economics Number 45 New Series Spring 2006

A Message from the Chairman Barry Sopher R UTGERS U NIVERSITY Greetings to Friends and Alumni from all of us in the D EPARTMENT OF Department of Economics. In the three years of my chairmanship we have made a number of excellent faculty E CONOMICS hires: Tomas Sjöström as Professor, Anne Morrision Piehl Phone 732-932-7363 as Associate Professor, and Giuseppe Ragusa and Francesca Mazzolari as Fax 732-932-7416 Assistant Professors. You can read more about them, as well as the recent activities of other faculty members, inside the newsletter. Tom Prusa has done http://economics.rutgers.edu an outstanding job of heading up the undergraduate program in a period of rapid change in the University, and Jeff Rubin has led the undergraduate Fed Editors Challenge team to another successful outcome in the national competition. Eugene White Rich McLean has ably directed the graduate program. You can read details about the undergraduate and graduate program inside as well. Two significant [email protected] projects are afoot in the department, although the results are not yet evident. Dorothy Rinaldi The department, funded by the Sidney Simon endowment and led by [email protected] Giuseppe Ragusa, is investing in a high speed computing cluster which will Debra Holman enable researchers in econometrics to complete complex calculations, which [email protected] currently can take days or weeks to complete, in a small fraction of the time. We expect this to increase the productivity of a number of our faculty and graduate students, and that this will be a draw for prospective new faculty. I NSIDE Planning is also underway for major renovations to house a new experimental A Message from the Chair….…….1 social science computer laboratory for the conduct of experiments in economics and related fields, funded largely by a grant from the University’s Awards………………………….…..1 Academic Excellence Fund. We also expect to refurbish the department library Profiles………… ……....………2 - 5 and to remodel space in New Jersey Hall to add two new faculty offices. By Report From the Graduate Director the next time you hear from us, the building will have a new look. Visitors are ………………………………………5 welcome! Report from the Director of Undergraduate Studies…………..7 AWARDS Undergraduate Economics MONROE BERKOWITZ SELECTED FOR THE 2006 ROBERT M. BALL Instruction In The 21st Century…..8 AWARD Honors Program…………………..8 "This award is presented to an individual whose recent work has made a Rutgers Fed Challenge…………..9 significant impact on the U.S. social insurance system. Dr. Berkowitz is an outstanding researcher, policy advisor, and teacher who has worked on issues Undergraduate News…………….9 related to disability and workers’ compensation over the course of five Visitors……………………………..9 decades”.

Faculty Research Activities….….10 HENRY LEVIN (Ph.D.66) SELECTED FOR THE 2006 GRADUATE SCHOOL New Faculty………….……….…..11 LIFETIME OF DISTINCTION ALUMNUS AWARD. After retiring from Stanford Graduate Alumni News….………12 University as the David Jacks Professor (Emeritus) of Higher Education and Economics, Henry Levin joined the faculty of Teachers College, Columbia Birth Announcements……………15 University as the William Heard Kilpatrick Professor of Economics and Director In Memoriam….….……………….16 for the National Center for the Study of Privatization in Education. Hank has published extensively on the economics of education and is teaching the Contributions….………………….16 Economics of Education at Columbia. He was honored by the Graduate School on March 3, 2006. Hank also presented a paper, “Vouchers and Public Policy: When Ideology Trumps Evidence” in the department.

Economics Newsletter 1 Profiles Part of my time was devoted to understanding intercarrier compensation. This is a very old issue Martin K. Perry concerning how carriers compensate each other for the exchange of telecommunications traffic. These prices are governed by a morass of federal and state rules. Our wanderlust colleague, As a result, the prices per minute vary by a factor of Marty Perry, was on leave one hundred depending on the identity of the again during 2004 serving as originating and terminating carrier. Except for the the Chief Economist of the subsidized rural carriers, everyone agrees that the Federal Communications system causes major distortions and inefficiencies. Commission. As Chief Economist, Marty reported However, there is wide disagreement on how to directly to the Chairman of the Commission, who was improve the system. One reason for the disagreement Michael Powell (son of Colin). Several well-known is that only a very few economists adequately academic economists in the field of industrial understand the system. But what shocked me was organization have served in this position. In the that Commission had not encouraged its economists to following discussion, Marty comments on some of the study the issue or to educate academic economists projects he worked on. about the issue. During 2004, the Commission postponed action or study of the issue while hoping for The Chief Economist (CE) at the FCC does not have a ad hoc group of carriers to reach an agreement on staff of economists or interns. Instead, the CE is a reform of the system. The carriers could not reach an roving ombudsman for good economic analysis within agreement, so the Commission is still unprepared to the Commission. The Chairman generally decides propose and justify its own reforms. With a small what projects the CE should work on. But in my case group of economists in the Commission, we made Chairman Powell let me rove at will. He and his legal some progress in evaluating the newest proposed staff probably regretted that because it would have reforms coming from various carriers. been less painful to rein me in at the beginning rather than to ignore my successively tougher memos once I The third project on which I spent some time is media was involved. ownership. The Commission has a cumbersome set of rules on ownership within and across various media While at the FCC, I worked on three primary projects: industries, including broadcast television, cable the merger of Cingular and AT&T Wireless, intercarrier television, radio, and even newspapers. The compensation, and media ownership. Most of my time Commission under both the Clinton and Bush was spent on the merger, attempting to structure the administrations was not able to block media mergers. competitive analysis and examine the data requested As a result, several media companies were near the from the wireless carriers. My recommendations for market share limits of the rules. Prior to my arrival, the both the structure and content of the competitive Commission adopted new rules to raise the market analysis were ignored by the Wireless Bureau charged share limits. The new limits raised concerns in with writing the Commission’s merger order. In Congress and outrage among consumers groups. Like addition, the analysis of the data was effectively all Commission orders, the new rules challenged in excluded from the order approving the merger. The court, and they were overturned. The primary reason data contained a wealth of information about the for overturning the rules was that the order provided wireless plans and pricing by the national carriers. almost no economic justification for the higher market Unfortunately, that data is now buried, probably share limits. The court ordered the Commission to forever, under strict confidentiality. The merger was revisit the rules, but the Commission made little approved with a few divestitures in small local markets progress while I was there. The issues are very where Cingular and AT&T both had substantial market complicated because the primary competitive concern shares. The merger order made attached little is how concentration in distribution will affect the competitive significance to the fact that Cingular’s production of new programming. parents, SBC and Bell South, are two of the four remaining regional Bell companies with dominance over residential and business wireline access and rapidly growing share of wireline long-distance service.

Economics Newsletter 2 provided to Members are confidential, tax bills considered before the House and Senate contain A Taxing Time in revenue tables that are public. These revenue tables, Washington as well as the estimates provided to Members, are Rosanne Altshuler central to the policy process. As a result, it is important that the public understand the methodology and procedures used to produce revenue estimates. One of my tasks at JCT was to prepare a document that explains the JCT revenue estimating process to the general public (see http://www.house.gov/jct/x-1- After years of studying and teaching federal tax policy, 05.pdf). I recently decided that it was time to go to Washington and participate in the policy process. I was invited to Most of the revenue estimates use what is commonly be Special Advisor to the Joint Committee on Taxation referred to as “conventional” or “microdynamic” (JCT) and started in the summer of 2004. My plan was analysis. Conventional revenue estimating takes to spend the entire academic year working at the JCT. possible behavioral responses of taxpayers into Things changed in January of 2005 when President account when considering the effect of tax law Bush announced in his State of changes while holding the size of the overall economy the Union address that he would (GNP) fixed. For instance, taxpayers may respond to appoint a panel to study and changes in marginal tax rates by changing the mix of recommend tax reform options. A assets they purchase or the timing of their decisions. few weeks later I was offered the The JCT also has the ability to produce estimates of Senior Economist position on the the effect of tax proposals on the overall economy. staff of the President’s Advisory This revenue estimating method is often referred to as Panel on Federal Tax Reform (the “macroeconomic” or “dynamic” analysis and is Panel). Although I loved my job at JCT, I decided that particularly useful for proposals that envision broad or working on the Panel was an opportunity of a lifetime. fundamental changes in the tax system. I moved from Capital Hill to an office next to the Treasury Department in February of 2005. In what Members of the economics department at Rutgers will follows, I briefly describe my experiences at both jobs. be surprised to hear that I spent part of my time at JCT working with the macroeconomic analysis team. The The nonpartisan staff of the JCT is closely involved in staff published an analysis that compared the every stage of the tax legislative process. The staff of macroeconomic effects of three different proposals to about 35 tax policy experts is split between lawyers cut taxes: a reduction in individual tax rates, an and economists (in addition to a few accountants). It is increase in the personal exemption, and a reduction in impossible to describe all of the support the JCT corporate tax rates. The analysis shows that despite provides to Members of Congress throughout the tax the fact that all three proposals reduce revenues by the legislative process in a short document. Suffice it to same amount according to conventional revenue say that the JCT is at the center of all tax policy estimates, their effects on the economy can vary legislation. greatly. The report is available on the JCT website (http://www.house.gov/jct/x-4-05.pdf). It was hard to keep up with the pace at the JCT. Although I frequently advised and met with the lawyers, One of the most intellectually stimulating projects I I mainly worked with the economists responsible for worked on at the JCT was initiated by Senate Finance estimating the revenue impacts of tax policy proposals. Committee Chairman Charles Grassley and Ranking The staff receives thousands of requests for revenue Member Max Baucus. The Senators asked the JCT to estimates each year from Members of Congress (over prepare periodic reports to the Congress containing 3,500 in 2004). The staff economists respond to these proposals to reduce the size of the “tax gap.” The tax requests by providing a “score” of the proposal. The gap is a term used to describe the difference between score indicates how tax revenues would change the total tax that should have been paid and what relative to a projection of present law revenues (the taxpayers actually paid on time. In its most recent “revenue baseline”). I quickly learned that joining the study, the IRS estimates that the overall tax gap for world of revenue estimation is much like entering a 2001 comes to $345 billion. secret society with special rules and a foreign language that no one else fully understands. The JCT report on options to improve tax compliance, issued in February 2005, received widespread The objective of the estimating process is to produce attention in Washington (see accurate, consistent, fair, and impartial estimates that http://www.house.gov/jct/s-2-05.pdf). The report can be relied upon by Members of Congress in making contains proposals that touch on virtually every aspect legislative decisions. While revenue estimates of current tax law. Some of the options, including a

Economics Newsletter 3 few of the international proposals I worked on, were expire after only a few years. These myriad changes included in the reforms recommended by the tax have decreased the stability, consistency, and reform panel. transparency of the current tax system while making it drastically more complicated, unfair, and economically In February I packed up my office at JCT and began wasteful. work on the President’s Advisory Panel on Federal Tax Reform. The President formed the Panel to identify the One particular problem that major problems in our nation’s tax code and to the Panel decided could not recommend options to make the code simpler, fairer, be ignored is the rapidly and more conducive to economic growth. We were to growing reach of the present a report to Treasury Secretary Snow on July Alternative Minimum Tax 31, 2005. (AMT). The AMT is a tax 3 system that is separate from, The bipartisan Panel was comprised of nine but parallel to, the regular tax system. The tax was distinguished individuals from widely varying enacted in 1969 to target a small group of high-income backgrounds. The Chairman was former Senator taxpayers who were avoiding paying all income taxes. Connie Mack III, a Republican from Florida. Former Since then, changes to the AMT and inflation have Democratic Senator John Breaux of Louisiana served transformed the AMT into a stealth tax on a growing as the Panel’s Vice Chairman. Additional members number of middle-income taxpayers. The AMT denies included former Congressman William Frenzel, former taxpayers exemptions and credits that are available IRS Commissioner Charles Rossotti, Elizabeth Garrett, under the regular tax system while leaving many of the a law professor at the University of Southern California, highest earners in the country untouched. Tim Muris, a former Chairman of the Federal Trade Commission, Liz Ann Sonders, the chief investment About 4 million taxpayers this year and 21 million strategist for Charles Schwab, and two economists, taxpayers next year will pay the AMT. Not only will James Poterba of MIT and Edward Lazear of Stanford they have to make a separate set of calculations to University who was recently confirmed as chair of the determine their AMT liability, but they will also pay an Council of Economic Advisors. While the members of average of $2,770 more in taxes. By 2015, 52 million the Panel kept their day jobs, it was up to the staff of taxpayers - 45 percent of all taxpayers with income tax the Panel to manage the process and produce the final – are projected to be on the AMT. As one of the report and any interim statements. witnesses commented, good tax policy should be simple, efficient, and fair, and the AMT violates all We divided our work into two stages. The first stage three of these principles. The Panel decided early on involved undertaking a comprehensive examination of that any recommended proposal must repeal the AMT. the existing tax system. The second stage involved developing reform options based on our understanding Building tax reform options of the current tax code. turned out to be much more difficult than I had We immediately set up a website expected. The Executive (www.taxreformpanel.gov), requested comments from Order establishing the the public, and began organizing a series of public 2 Panel directed us to hearings. By the end of the process, we had held 12 propose options that were revenue neutral. This public meetings across five states and Washington, DC meant that the plans had to raise roughly the same and heard testimony from nearly 100 witnesses. amount of revenue that the federal government Highlights included testimony from James Baker, Alan projects it will collect under the current tax system. Greenspan, Nobel Prize Winners Milton Friedman and Repealing the AMT in a revenue-neutral way required James Heckman, Governor Arnold Schwarzenegger, the Panel to replace $1.2 trillion of revenue from the and Mayor Richard Daley. Together, our witnesses AMT with other changes to the tax code. Recouping and the comments received on our website described AMT revenues involved proposing offsetting changes, the dismal state of the current tax system. Milton such as limits on the home mortgage interest Friedman described the tax system as a blackboard deduction and repeal of many tax preferences that has been filled up with so much writing that the including the state and local tax deduction. slate must be wiped clean. After having our deadline extended twice by the White It was easy to build a case for reform. As April 15th House, on November 1, 2005, the Panel delivered its approaches, we can’t help but be reminded of the report to Treasury Secretary Snow. The Panel complexity of the tax code. Since the last major reform unanimously endorsed two plans: the Simplified effort in 1986, there have been more than 14,000 Income Tax Plan (the “SIT”), which is based on the changes to the tax code, many adding special current income tax system, and the Growth and provisions and targeted tax benefits, some of which Investment Tax Plan (the “GIT”), which shifts the

Economics Newsletter 4 current tax system toward a consumption tax. The false assumptions, a false view of the world. Rather, individual aspects of both plans are similar and what bothered him is that it was done in an uncaring, incorporate a simplified filing structure based on newly- unsympathetic and willful ignorance. That is not how designed family and work tax credits along with tax he worked. benefits for homeownership, charitable giving, and health insurance. Both plans would eliminate the AMT Bob “grew up” in a period when data on the Soviet along with numerous individual and business tax Union was difficult to get, and where getting it involved preferences. The two plans diverge most significantly understanding how the Soviet system worked in in the treatment of saving by individuals and the practice – taking a ride to an out of the way town and treatment of business investment. Under the SIT, going to the bookstore, which received the same there would be three marginal statutory tax rates of 15, allotment of statistical books to sell as the bookstore in 25, and 33 percent and all large business entities central Moscow. But a lack of data never stopped Bob, would be taxed at a 31.5 percent rate. Under the GIT, his understanding of the institutions, the incentive the individual statutory rates would be 15, 25, and 30 structure, the behavior, of the Soviet economic system percent and a flat 30 percent tax rate would apply to all – his thinking, his ability to view in this context the few business cash flow. data points available – insured an insightful and important paper as its outcome. What are the prospects for tax reform? It is now up to the Bush administration to decide how to proceed. Here in the department we will miss his wit, wisdom Although I have learned it is impossible to predict what and humor, but wish him and his wife Bev all the best. will happen in Washington, I do believe that our report will influence any future tax reform effort. I learned an enormous amount from both jobs and am enjoying passing this knowledge on to our students. REPORT OF THE GRADUATE DIRECTOR Rich McLean Robert Stuart By Ira Gang We welcomed 16 new graduate students for the fall semester of 2005: 3 from Turkey, 5 from Korea, 2 from China, 2 from India, 1 from Taiwan, 1 from Poland, 1 The department roasted from Colombia, and 1 from Peru. Five were awarded Professor Robert Stuart at a fellowships. Two continuing students, John Bowblis dinner held in Winants Hall to and Yoko Ibuka, were awarded research celebrate Bob’s retirement from assistantships from the Institute for Health, Chetan Rutgers last spring. Mannige received an RA from the Bloustein School Bob not only left Rutgers but and Jeff Birchby has an RA working with Barry New Jersey as well, for he and Sopher on his NSF grant. his wife Bev decided to spend their retirement in their native In 2004-2005, 8 students successfully defended their British Columbia and the state doctoral dissertation:

of Washington. Bob had a long and distinguished career Sonal Dhingra, “Capital Markets: Access and here at Rutgers. Bob was - and remains - a good friend Denial,” Supervisor: Michael Bordo. and colleague. During his tenure at Rutgers, he served as Graduate Director and Department Chair and also Oleg Korenok, “Essays on Dynamics of Output and was an editor in chief of the Comparative Economic Prices,” Supervisor: Bruce Mizrach. Studies. Raymond MacDermott, “Essays on Foreign Direct Bob is a giant in the field of Comparative Economics Investment,” Supervisor: Thomas Prusa. (though he would never admit it himself). His field changed on November 9, 1989. But, his descriptions Xufeng Qian, “Three Essays on Econometrics of and ideas of what would happen in the different parts Interest Rate and Housing-Mortgage Market,” of Central and Eastern Europe were right on target, in Supervisor: Hiroki Tsurumi. contrast to the world viewed by the many pundits – from all sides– who received acclaim. Chiung Min Tsai, “Alternative Dynamic Capital Asset Pricing Models: Theories and Empirical Result,” The rush of research, ignoring what he understood and Supervisor: Cheng Few Lee. wrote about, and the analyses offered and implemented in policy, bothered him. What bothered him was not that it was wrong because it was based on

Economics Newsletter 5 Defne Turker, “Bayesian Cost-Effectiveness Analysis outstanding performance and promise in the first two of Blood Transfusion for Hip Fracture Repair Patients,” years of graduate study. The winners were Jeffrey Supervisor: Louise Russell. Birchby, Yue Li and Leah Traub.

Wenhui Wei, “Foreign Direct Investment in China,” Sidney I. Simon Prize for Outstanding Second year Supervisor: Manoranjan Dutta. Research Paper. It is given in recognition of a second year student’s achievement in writing the best second Byoung Hark Yoo, “Bayesian Financial and year research paper that contributes to economics and Macroeconomic Analysis,” Supervisor: Hiroki Tsurumi has a potential for publication. The winner was Levent Ulku for his paper, “Rational Expectations and Self- Eight students received their Master’s Degree and will Fulfilling Mechanisms in Finite Economies.” continue in the Ph.D. program: Alejandro Arrieta, Nii Ayi Armah, Zhaohua Huang, Sidney I. Simon Prize for Outstanding Graduate Ilker Dastan, George Joseph, Xianghua Liu, Leah Student Teaching Award. Given to a graduate Traub, and Levent Ulku, student who has completed their third year in the Ph.D. program for the most outstanding teaching in courses The following students received M.A. degrees with the offered by the department. The award is based on thesis option: student’s evaluations, syllalbi and a faculty review. We had two winners: Geetesh Bhardwaj and Volkan Deepa Bhat, “Strictly Speaking: The effects of liability Cetinkaya. rules on the speed of state superfunded cleanups,” Supervisors: Hilary Sigman and Thomas Prusa. Peter Asch Memorial Scholarship established in 1991 by family and friends of Peter. This prize is for a Anindita Basu, “Maximum Likelihood and Bayesian student who has performed to the highest standards Estimation of the Binary Probit Model: An Application and is writing a dissertation in the area of applied to Health Insurance Choice.” Supervisor: Hiroki microeconomics. We had two winners: Volkan Tsurumi. Cetinkaya and Yoko Ibuka. Volkan for his paper in industrial organization,” Vertical Restraints with Seo Yeon Hong, “Application of CKLS Model with Demand and Cost Uncertainty,” and Yoko for ARMA-GARCH Errors to Weekly Data on Foreign “Bayesian Estimation of Discrete Time Asset Pricing Exchange Rates.” Supervisor: Hiroki Tsurumi Models,” which concentrates on the econometrics of finance. Iryna Kosse, “Income Inequality,” Supervisor: Ira Gang. We have four students in the job market:

Volodymyr Kosse, Estimation of the Intertemporal Geetesh Bhardwaj, “Essays in Prediction and Elasticity of Substitution Coefficient and Testing for Specification Analysis,” Supervisor: Norman Swanson Constancy of this Coefficient over Time,” Supervisor: Hiroki Tsurumi. Bodhisattava Ganguli, “Essays in International Trade, Protectionism and Business Cycles,” Supervisor: Arnav Sheth, “A Deeper Look at Subjective Discount Thomas Prusa Rates,” Supervisor: Barry Sopher. Sung Won Kang. “The Political economy of Social Seetha Vaidyanathuan (M.A.) “An Analysis of Marital Security expansion: from 1935 to 1983,” Supervisor: Durations in the United States,” Supervisor: Mark Hugh Rockoff Killingsworth. George Joseph. "Essays on the Economics of The following awards were presented at the graduate Decision Making," Supervisor: Barry Sopher awards ceremony in May. The graduate students continue to attend conferences, Rie Ashizawa Memorial Award. This award was present and publish papers: established in 2002 by the family of Rie Ashizawa in her memory. The award is given to a student for an Geetesh Bhardwaj has had two papers coauthored outstanding performance on the qualifying with Norm Swanson accepted for publication. “A examinations. The recipient this year was Yue Li. Predictive Comparison of Some Simple Long Memory and Short Memory Models of Daily U.S. Stock Returns, The Sidney Brown Prize in Economics. This prize with Emphasis on Business Cycle Effects” will appear was established in 1990 by Mr. Thornton O’glove in in Nonlinear Time Series Analysis of Business Cycles memory of his friend, Sidney Brown (RC’40). This and “An Empirical Investigation of the Usefulness of award is given to the student(s) who demonstrates ARFIMA Models for Predicting Macroeconomic and

Economics Newsletter 6 Financial Time Series” will appear in the Journal of Econometrics. Geetesh also had two papers published The Teaching Assistant Program used funding from in Environment and Development Economics: the Graduate School under the Head TA program to “Consumption Pattern, Trade and Greenhouse Gas conduct in-class assessment of all TAs and to Leakage” (with R Sengupta) and “Comparing the cost encourage greater utilization of university and effectiveness of market-based policy instruments department technology designed to simplify grading versus regulation: the case of emission trading in an and reporting of grades. This year the Head TAs will integrated steel plant in India” (with R. Pandey). provide constructive criticism for all TAs who will be required to make a video taping. John Bowblis presented a paper, “Parametric and semi-parametric approaches to demand for The Graduate Economics Student Association (GESA) antidepressants in the elderly Medicare population: elected a new president, Luis Palacios. The Role of Supplemental Insurance,” at the Institute Once again GESA held a get-together in September to for Health, Health Care Policy and Aging Research at welcome new students and faculty. Rutgers. John presented joint work with Ayse Akincigil (in poster form) on “Refill Persistence with Beta- Blocker and ACE Inhibitor Therapy after Acute Myocardial Infarction, “Utilization of Statin Therapy during the Two Years following Acute Myocardial Report from the Infarction,” “Physicians Diagnoses Associated with Director of Antidepressant Use between 1995 and 2001,” at Undergraduate various conferences. John also made an oral presentation, “The Pharamaceutical Industry: Studies Implications of ‘Direct to Consumer,’” at the MBAA Thomas Prusa Conference

If you have been gone for a few years, you will be Lili Cai’s paper, “The Impact of Stock Futures Index amazed at all the changes to the undergraduate on Malaysian Stock Market,” was published in Applied program. And from where I sit, all of these changes Business Research Conference 2005, Vol. 3, Orlando, are good. Over the past few years the university has Florida. encouraged its faculty to try new and exciting things in

the classroom and the economics department has Bodhisattva Ganguli’s paper, “The Trade Effects of emerged as a leader in this initiative. Indian Antidumping Actions,” was accepted for

presentation at the Second Pan-Hellenic Conference Let’s start at the top – intro micro and macro. These on International Political Economy-“Global Political are not only our most popular courses but are two of Economy and the New Challenges for Development,” the most popular courses in the whole university. Athens , Greece. What’s changed? Well, after hours and hours of

discussion with students and amongst ourselves we George Joseph’s paper “College-to-Work Migration of decided to eliminate recitations in the introductory Technology Graduates and Holders of Doctorates micro and macro sequence. Simply put, students felt within the United States,” coauthored with P. Gottlieb, that they were not getting enough out of recitation and was published in the Journal of Regional Science. wanted more time with the faculty. We listened. Intro

economics classes now meet twice a week for 80 Chetan Mannige attended the 16th Summer School in minutes. No more first period Friday recitations!! Economic Theory at the Hebrew University in Yeah! Homework problems are reviewed on a daily Jerusalem. basis instead of only once a week in recitation. Yeah!

(Well, I must admit a few students say “ugh” to that We have a new workshop this semester, the Empirical idea!) In addition, we have incorporated a lot of Microeconomic Workshop (coordinator Hilary technology into the introductory courses. Not only are Sigman), as well as the Money, History Workshop powerpoint lectures now the norm but most of our (Michael Bordo), Microeconomic Theory (Colin sections feature web-based tutorials, problems, and Campbell), Macroeconomic Theory (Roberto Chang) bulletin boards. These are very popular with our and Econometrics (Norman Swanson). You can students, with upwards of several hundred entries a check out schedules and papers on the Department week on the bulletin boards. Yes, students really can Website (http://www.economics.rutgers.edu). learn from their fellow students. I should mention that

the university has recognized our efforts and has We also have a new faculty member teaching in the rewarded us with an educational grant so we can graduate program, Tomas Sjöström, who is teaching incorporate some of these innovations in our other the second course in the Industrial Organization field classes. sequence.

Economics Newsletter 7 Changes are also found in our upper-level classes. Instructors can review students’ performance and Two biggies – (i) we eliminated the distribution automatically notify those who missed work or are requirement and (ii) we divided the economics performing poorly. In class, electronic ‘clickers’ allow electives into lower- and upper-level classes. Lower- instructors to tabulate, display, and record responses level electives only require intro micro and macro and to questions about material just covered, or homework, serve as a great way to learn what economics is about. or opinions. Clickers can also be used to monitor and The upper-level classes have additional requirements ensure attendance. The overall result is that and deepen a student’s knowledge of economics. We productivity is increased, students and faculty are more are convinced that this new way of thinking about involved, students learn more, and large classes can electives is a big improvement. seem smaller and more personal. As one example of the gains in productivity, in many of the Introductory How have students responded to these changes? courses, the traditional, much maligned recitations Well, let’s just say business is booming. In the late have been replaced successfully by on-line discussion 1990s we had about 650 majors a year. We now have boards. over 1000 majors and we are the second largest major in the university! The number of minors has also Last year we experimented with CMS and clickers in increased substantially. large Introductory Economics classes using publisher- hosted Blackboard and infrared clickers (Blackboard Finally, I would be remiss if I failed to mention the great ran on the textbook publisher’s server rather than success the Rutgers “Fed Challenge” team has had Rutgers’). There was also use of Aplia for graded over the past few years. Fed Challenge is an homework in Intermediate Microeconomics. This year intercollegiate competition where students present their we are continuing to explore Blackboard and Aplia in view of monetary policy to Federal Reserve officials. additional classes. Faculty are also experimenting with Rutgers students compete with students from dozens Sakai, an education community developed, open- of well-known schools (NYU, Columbia, Boston source collaboration system designed for research as College, Northwestern, University of Chicago, etc.). well as instruction. In Introduction to Microeconomics, And, I am proud to say, we do great. In the past few Econometrics, and Economics of Japan, instructors are years, in the Northeast regional we have finished first using Sakai to securely post notes and assignments, (twice), and second (twice). Last year we went to the for announcements and web content, and for nationals and finished second. How about a round of discussion boards. applause for the old alma mater? The Office of Instructional and Research Technology I am happy to say that there are many other exciting (OIRT) and the Center for Advancement of Teaching developments in our undergrad program. Stay tuned. are in the process of evaluating alternative CMS with I’ll talk about new courses next time! the likelihood that they will select and support one (or two) which will allow the Department to greatly expand their use. The next generation RF clickers are here with faster response times and two-way capabilities. We are already using them in courses. UNDERGRADUATE ECONOMICS HONORS PROGRAM INSTRUCTION IN Neil Sheflin THE 21ST CENTURY Neil Sheflin The Department actively provides additional learning The Department has moved undergraduate education opportunities for our best undergraduates, both in and into the 21st century with the introduction of Course out of the classroom. These include: Management Systems (CMS), Personal Response • Honors sections of Intro Micro and Macro, have Systems (PRS or clickers), and other technology into been taught by Jeff Rubin, Neil Sheflin, Roberto undergraduate econ courses. Students can do Chang, Mark Killingsworth and others. These courses homework and quizzes anywhere, anytime and get provide a small, interactive and more personal graded results instantly. Students interact with each experience for students in any of the college’s honors other and with the instructor on discussion boards, programs (Rutgers, Douglass, Livingston). again anywhere, anytime (often 2 in the morning and • Department faculty, most recently Jeff Rubin and sometimes from foreign lands). Instructors can give Thomas Sjöström, have taught honors seminars for the regular, graded assignments in even the largest College Honors programs. classes, as well as online quizzes done wherever the • Jeff Rubin is on the Executive Board of the Rutgers student wants, or in a proctored testing center which College Honors Program, and both he and Neil Sheflin the department is currently experimenting with. serve as Rutgers College Honors Program mentors for

Economics Newsletter 8 prospective economics majors, providing advisement, of research), Richmond and Chicago banks. The free lunches, and other opportunities for their mentees. Rutgers team greatly benefited from the extensive • Joe Hughes coordinates the Department’s Senior input and advice of Ray Stone (RU, Ph.D. 1981). Ray Honors Seminar in which some of our brightest has graciously volunteered his time every year and he students work on original research under various has even helped students participating in the faculty in the department. Challenge find internships and employment. • ODE, the International Economics Honor Society, is in its fifth decade in the Department, and has more The 2005 College Fed Challenge is expanding to than one-hundred current student members. Advised include many more schools and areas of the country. by Neil Sheflin, ODE runs a series of roundtable The Rutgers team is hard at work preparing to defend conversations between students and faculty throughout their NY title and return to Washington to capture the the year as well as hosting a Voice of Experience interdistrict championship. Evening in which former students come back to discuss their experiences in the real world. Hiroki In the 2005 College Fed Challenge the team from Tsurumi, Jeff Rubin, John Landon Lane, Marty Perry, Rutgers advanced to the semi-finals in the NY region Tom Prusa, Hilary Sigman, and other faculty have with a victory over three other local schools. They been involved, as have several graduate students returned to NY the following week to face Boston including John Bowblis and Leah Traub. College and Harvard in the semi-finals. The RU team, along with BC, advanced to the NY finals from their Rutgers Fed Challenge 2004 bracket. In the other bracket teams from Seton Hall and SUNY Geneseo also advanced. In the finals RU Jeff Rubin came in second to SUNY Geneseo, losing in their bid to return to Washington by one point. For their efforts A team of students from the Department of Economics the RU team received $10,000 from The Moody's won the College Fed Challenge held at the New York Foundation. This brings the total prize money received Fed last November. in the last three Fed Challenge competitions to $70,000. You can read more about the team and its After advancing in the preliminary competition against preparation in an article that appeared in the Home 4 schools, the team met other teams from SUNY News at Geneseo, SUNY Binghamton and Boston College. http://www.thnt.com/apps/pbcs.dll/article?AID=/200511 This was the second title for a team from Rutgers in 17/NEWS02/511170394/-1/register01 the last three competitions.

For the first time, the winning team from New York Undergraduate News participated in an interdistrict competition at the Federal Reserve Bank in Washington. Other Mark Fields who holds an economics degree from competitors in Washington were Northwestern and Rutgers has recently been named Executive Vice Lafayette. Rutgers was the runner-up, finishing just President, Ford Motor Company, and President, The one point behind Northwestern. For its efforts the America’s. He is responsible for all operations involved Rutgers team received the obligatory trophies and in the development, manufacturing, marketing and $30,000 in prize money awarded by the Moody’s sales of Ford, Mercury and Lincoln vehicles in the US, Foundation. Canada, Mexico and South America.

Under the direction of Jeff Rubin the students spent VISITORS a large portion of the fall semester preparing for the competition. Nine students were involved in the Kim Oosterlinck of the Solvay Business School in Challenge with a group of 5 making the actual Brussels visited the Department in the Fall of 2005. He presentation. The team prepared a 20 minute is currently working on projects with John Landon- presentation during which they described the current Lane, Eugene White, Filippo Occhino and Michael economic situation both domestically and Bordo, ranging from the repudiation of Tsarist bonds internationally as well as assessing financial and to Nazi predation in Vichy France. monetary markets. The team concluded with a Myeong-Su Yun (Ph.D. 2000), currently an Assistant recommendation for interest rate policy and also Professor at Tulane, spent the Summer and Fall, 2005, included a draft statement, comparable to what the visiting the department. He thus avoided the need to Federal Open Market Committee releases in flee when Hurricane Katrina hit New Orleans where conjunction with its meeting. Following the Tulane is located (we attribute this to the forecasting presentation panel of judges probed the students’ skills he learned while a grad student in the knowledge of monetary policy, the state of the department). During his visit, he enjoyed a few operas, economy and other issues. The judges in Washington symphonies and recitals, in addition to writing papers were economists from the NY (Joe Tracy, the director and attending seminars.

Economics Newsletter 9 Faculty Research Activities (2005). In addition, she has presented papers to the Urban Institute-Health Affairs Roundtable and a variety Colin Campbell, was promoted to Associate Professor of health organizations in 2005. with tenure beginning July 2005. Hilary Sigman has been working on “brownfields.” Oriol Carbonell presented his research at the Second She has presented research at MIT, Yale and the New World Congress of the Game Theory Society Jersey Department of Environmental Protection and (Marseille, 2004) Penn State University (Fall 2005), received a research grant from the Environmental Princeton University (Spring 2005), and the University Protection Agency a project on environmental liability of Pennsylvania (Fall 2004). and the redevelopment of old industrial sites (brownfields). She traveled to the Tropical Agriculture After a year at Princeton’s International Economics Research and Higher Education Center ("CATIE") in Section, as the Peter Kenen Visiting Fellow Roberto Turrialba, Costa Rica to present a paper on trade and Chang is back at Rutgers. In May, he was made a trans-boundary rivers at a conference co-organized by Research Associate of the National Bureau of the International Food Policy Research Institute Economic Research. (Hilary: “It rained and rained.)

Jan Dutta’s published “China’s Industrial Revolution Barry Sopher’s newest papers include “An and Economic Presence” in Advanced Research in Experiment on Learning with Limited Information: Asian Economics Studies – Vol. 2 (2005); and "The Nonconvergence, Experimentation Cascades, and the Theory of Optimum Currency Area Revisited: Lessons Advantage of Being Slow,” (with Eric Friedman, Scott from the euro/dollar competitive currency regimes" in Shenker and Mikhael Shor), Games and Economic the Journal of Asian Economics (2005) and has been a Behavior, Vol. 47 (2), 2004 and "Analysis of frequent lecturer in the Fulbright Senior Specialist Intertemporal Choice: A New Framework and program. Experimental Results", (with Gary Gigliotti), Theory and Decision, (2004). “Advice, Trust and This summer Mark Killingsworth presented "Testing Trustworthiness in an Experimental Intergenerational for Racial Discrimination in the Discipline of Police Game,” Experimental Economics,( 2005) “On the Officers in a Major City," at the Fourth Annual Informational Content of Advice: A Theoretical and Transatlantic Meeting of Labor Economists,” in Buch Experimental Study,” Economic Theory,( 2005) “Advice am Ammersee, Germany and "Changes in Mothers' and Behavior in Intergenerational Ultimatum Games: Labour Supply in the U.S. and the U.K: Evidence from An Experimental Approach,” Games and Economic Longitudinal Analyses," at the Centre for Longitudinal Behavior, (2005). Studies, University of London. He has received two grants: "The Impact of Advice on Hugh Rockoff presented a paper "Capitalizing Decision Making," NSF Project #SES-0424568, with Patriotism: the Liberty Bonds of WWI" at the Stern Andrew Schotter, July 2004-June 2007 and the School at NYU, and the CEPR-Pompeu Fabra Rutgers Academic Excellence Fund Grant for the conference in Barcelona, this summer. His paper with Center for the Analysis and Design of Social Ignacio Briones, “Do Economists Reach a Conclusion Institutions, January 2005 (funding for a new on Free Banking Episodes?” appeared in Economic experimental laboratory). For the latter he was Journal Watch. designated as Director of the Center. Not content with being chair he was a Faculty Fellow for 2004-2005 at Louise Russell’s recent publications include the Center for the Critical Analysis of Contemporary “Comparing Model Structures in Cost-Effectiveness Culture, Rutgers University, a Research Affiliate, Analysis,” Medical Decision Making, (2005) “Reviewer Center for Experimental Social Science, New York Critique of ‘An Economic Evaluation of the 2003 ESH- University, and Research Fellow, Institute for the Study ESC Guidelines for the Management of Mild-to- of Labor (Forschunginstitut zur Zukunf der Arbeit), moderate Hypertension in Greece’,” American Journal University of Bonn, 2004. of Hypertension, (2005) “Hospitalizations Attributable to Arthritis, Smoking, and Hypertension: A Comparison Professional Service - Coordinating Editor, Theory and Based on NHEFS and NHANES III, “ Arthritis Care and Decision, April 2005; National Science Foundation Research, (2005), “Hospitalizations, Nursing Home Panel Member: Decision and Risk topic panel of the Admissions, and Deaths Attributable to Diabetes,” Human and Social Dynamics priority area, 2004; Diabetes Care, (2005) with Elmira Valiyeva one of our Executive board member: Economic Science former graduate students, “How Much Time Do Association, 2004-2007. Patients with Diabetes Spend on Self-care?,” Journal of the American Board of Family Practice, (2005) and Conference presentations - Economic Science “Time Requirements for Diabetes Self-Management: Association International Meeting (contributed paper), Too Much for Many?,” Journal of Family Practice, June 14-16, 2004, University of Amsterdam,

Economics Newsletter 10 Amsterdam, the Netherlands. “A Deeper Look at of the 1920s” at the Venice International University Hyperbolic Discounting.” Eleventh Conference on the Summer School, the University of Copenhagen, the Foundations and Applications of Utility, Risk and Banco de Espana, and the Swedish School of Decision Theory (contributed paper), June 30-July 3, Economics; “Conflicts of Interest in the Financial 2004, Cachan, France. “A Deeper Look at Hyperbolic Industry,” to the Danish National Bank and the Discounting.” Economic Science Association Sesssion, Riksbank; “The Highest Price Ever: The Great Seat Winter ASSA Meetings (contributed paper), January NYSE Seat Sale of 1928-1929,” to Swedish School of 2005, Philadelphia. “On the Informational Content of Economics the , Macro Lunch Advice: A Theoretical and Experimental Study.” Group, the Universidad Carlos III, and the New York Stock Exchange; “Competition Among the Exchanges Norman Swanson was promoted to full professor this Before the SEC: Was the NYSE a Natural Hegemon?” year. He served as guest editor for a special volume of at the NBER Summer Institute, “The Krach of 1882 and the Journal of Econometrics in honoring of Clive W.J. the Paris Bourse,” to the European Historical Granger, the 2003 Nobel laureate in economics. He Economics Society, Istanbul, and “How Occupied adds to his resume several publications: (with France Financed its own Exploitation in World War II,” Valentina Corradi, "A Test for Comparing Multiple to the Economic History Association, Toronto. Misspecified Conditional Interval Models," Econometric Theory, 2005 and " Predictive Density and Conditional Confidence Interval Accuracy Tests", Journal of Econometrics, 2005 and (with John C. Chao) "Consistent Estimation With a Large Number of Weak The Department is pleased to report Instruments," Econometrica, 2005. that it has hired three new faculty Hiroki Tsurumi’s recently published with Xufeng members: Quian, Rie Ashizawa, and Hiroki Tsurumi "Bayesian, MLE, and GMM Estimation of a Spot Rate Model," in the Communications in Statistics, Theory and Methods Anne Piehl, from Kennedy School at Harvard. She 2005 and with Elena Goldman, "Bayesian analysis of a arrives as Associate Professor in Economics and is a doubly truncated ARMA-GARCH model," Studies in member of the interdisciplinary Program in Criminal Nonlinear Dynamics & Econometrics, 2005 and with S. Justice. She has also been a faculty fellow at the Radchenko. “Limited information Bayesian analysis of National Bureau of Economics Research since 1996, a simultaneous equation with autocorrelated error and served as director of research of the terms and its application to the U.S. gasoline market,” Massachusetts Governor’s Commission on Corrections the Journal of Econometrics, 2005. Reform. Anne has been the recipient of awards or This summer he presented "Tests for Convergence of fellowships from NSF, the Robert Wood Johnson MCMC Draws: Frequentist and Bayesian Tests," at the Foundation, the Harry Frank Guggenheim Foundation, International Symposium on Bayesian Applied the National Institute of Justice, and the U.S. Multivariate Analysis at the University of Tokyo, with Department of Education, among others. Elena Goldman and Elmira Valieva. Francesca Mazzolari, from University of California at San Diego, Assistant Professor. She specializes in Tomas Sjöström, joined our faculty in Fall 2004 from labor economics and public economics. This past year Penn State University as Professor after a leave at she was a fellow at the Center for Comparative Center for Advanced Study in Princeton. Professor Immigration Studies. Sjöström is an economic theorist, specializing in mechanism design. Giuseppe Ragusa, from University of California at San Diego, Assistant Professor. His specialty is Eugene White was promoted to Professor II in July. econometrics. He received the 2004 Clive W. J. His more recent publications include “How Could Granger Fellowship for Outstanding Graduate Everyone Have Been So Wrong? Forecasting the Research in Econometrics. Great Depression with the Railroads” with Adam Klug and John S. Landon-Lane, Explorations in Economic History (2005), “Quis Custodiet Ipsos Custodes? Controlling for Conflicts of Interest in the Financial Industry,” Market Discipline Across Countries and Industries (MIT Press, 2004), and “France's Slow Transition from Privatized to Government-Administered Tax Collection: Tax Farming in the Eighteenth Century,” Economic History Review (2004). He has presented “Bubbles and Busts: the 1990s in the Mirror

Economics Newsletter 11 Dennis Shea (Ph.D.90) is Chair of the Department of Graduate Alumni News Health Policy and Administration at Penn State. Dorothy Rinaldi Libby Rittenburg (Ph.D.80) is now Dean of the Summer School at Colorado State. HENRY LEVIN (Ph.D.66) SELECTED FOR THE 2006 GRADUATE SCHOOL LIFETIME OF DISTINCTION Roy Rotheim (Ph.D.77) is Chair and The Quadracci ALUMNUS AWARD. Professor of Social Responsibility and Economics at After retiring from as the David Skidmore College. Jacks Professor (Emeritus) of Higher Education and Economics, Henry Levin joined the faculty of Teachers Ananish Chaudhuri (Ph.D.97) was promoted to College, Columbia University as the William Heard Associate Professor at Auckland University (this is Kilpatrick Professor of Economics and Director for the equivalent to a full professor in the U.S.). National Center for the Study of Privatization in Education. Hank has published extensively on the “A Ph.D. from Rutgers University, NJ, USA was named economics of education and is teaching the Economics in the top ten in the State of Assam, India.” [India of Education at Columbia. . He was honored by the Press] Graduate School on March 3, 2006. Hank also Amiya Sharma (Ph.D.94) was named as one of the presented a paper, “Vouchers and Public Policy: When ten leading persons from Assam (India) whose work Ideology Trumps Evidence” in the department. has changed the state of affairs. Amiya continues to have success with the micro credit system helping Peter Zangari (Ph.D.94) and Tatjana Curovic 6000 poor families in India. He and his wife, Sumitra, (Ph.D.97) were the principal speakers at the Graduate have also set up a trust to help unemployed youths, School’s “Panel on Careers at the Intersection,” a women and NGOs. The trust is associated with a micro panel which highlighted careers outside of the finance institute and financed forty families to date. academy and teaching. Peter is at Goldman Sachs; Tatjana at National Exchange Carrier Association. Howard Bodenhorn (Ph.D.90) presented “Usury They both had high praise for the economics Ceilings, Relationships and Bank Lending Behavior: Graduate program as they shared their experiences Evidence from Nineteenth-Century New York” in our and expertise with the graduate students present. Money, History Workshop.

Peter was also instrumental in obtaining a summer Suduk Kim (Ph.D.03) also presented a seminar, internship at Goldman Sachs for “Korean Energy Market,” in one of our departmental Arnisa Abazi (Ph.D.exp.06). Arnisa now works for seminars. Suduk plans to work in the coming year with American Express where she met up with Yang Lou Hiroki Tsurumi to develop a stochastic model of (M.A.2000) who was promoted to Director there. renewable energy viability analysis program.

Ray Stone’s (Ph.D.81) help and guidance has proven Xufeng Qian’s (Ph.D.04) paper, “Bayesian, MLE and to be invaluable once again to the Economics’ GMM Estimation of a Spot Rate Model, “with Rie undergraduate team competing in the Fed Challenge Ashizawa (M.A.02) and Hiroki Tsurumi was Competition in New Jersey and Washington, D.C. published in the Communications in Statistics, Theory where they came in first and second place and Methods 2005. respectively. Ray has also found time to assist some high school Fed Challenge teams, both of which he Xufeng recently left NYU and joined Moody in New finds rewarding. York City working with its Structured Finance group, developing econometric models for mortgage backed Ray and Ward McCarthy (Ph.D.82) recently sold securities. Stone McCarthy Research Associates Elena Goldman’s (Ph.D.02) paper, “Bayesian Analysis of a Doubly Truncated ARNA-GARCH Model,” David Dean (Ph.D. 88), while teaching at the with Hiroki Tsurumi was published in Studies in Non University of Richmond, also completed a 2.5 year linear Dynamics & Econometrics. project for the Veterans Administration examining their job training program for veterans with service- Stan Radchenko’s (Ph.D.02) paper, “Limited connected disabilities. His five year contract with information Bayesian analysis of a simultaneous Monroe Berkowitz with the Social Security equation with autocorrelated error terms and its Administration is now finished. He is presently working application to the U.S. gasoline market,” was published on a 2-year project analyzing Virginia’s vocational in the Journal of Econometrics. rehabilitation program.

Economics Newsletter 12 Elena Goldman (Ph.D.02) and Elmira Valiyeva Professor at the Institute she presented “Refill (Ph.D.03) with Hiroki Tsurumi presented “Tests for Persistence with Beta-Blocker and ACE Inhibitor Convergence of MCMC Draws: Frequentist and Therapy after Acute Myocardial Infarction” at the Bayesian Tests” at the International Symposium on AcademyHealth Annual Research Meeting, as well as Bayesian Applied Multivariate Analysis at the a poster presentation at the 6th Scientific Forum on University of Tokyo. Quality of Care and Outcomes Research in Cardiovascular Disease and Stroke,” both with co- Elmira Valiyeva’s (Ph.D.03) paper, “Effects of authors J. Bowblis, C. Levin, S. Jan. M.Patel and S. Prehypertension on Admissions and Deaths: A Crystal. Ayse and John also made a poster Simulation” with Louise Russell was accepted in the presentation of “Utilization of Statin Therapy during the Archives of Internal Medicine. Elmira presently lives in Two Years Following Acute Myocardial Infarction” at Canada where her husband was awarded a post doc. the AcademyHealth Annual Research Meeting.

Shigeru Hirota (M.A.99) working for the Government Wenhui Wei (Ph.D.04) left the Institute for Health and of Japan, Economic Planning Agency, wrote “the White is now Manager of Health Outcomes for Sanofi- Paper on Support to Child-Rearing. Now he is Aventis, a pharmaceutical company. preparing the next issue of “The White Paper on Support to Career-Switching.” Cliff Waldman’s (M.A.90) paper, China’s Demographic Destiny and Its Economic Implications: Fabio Sanchez Torre’s (Ph.D. 87) paper on A Empirical Analysis,” received the National Colombian Monetary History is going to be published in Association for Business Economics (NABE) Harvard Press Book on Colombian history. He is Contributed Papers Award. working on another paper on the Bretton Wood period in Colombia. Fabio is mentor to Andres Fernandez, Sonal Dhingra (Ph.D. 05) presented "Equity Market who is a first year graduate student in the doctoral vs. Capital Account Liberalization: A Comparison of program. Growth Effects in Developing Countries" at the Conference on Pacific Basin Finance, Economics, and Chien-Chung (Jeff) Nieh (Ph.D.96), who is currently Accounting, Rutgers Business School. Chairman and Director of the Department of Banking and Finance, Tamkang University, Taiwan, had his She also presented "What Lowered Sovereign Risk paper, “Analysis of Long-Run Benefits from Premium: Gold Standard or Colonial Status? The Case International Equity Diversification Between Taiwan of British India, 1870 -1914" at the 4th East West and Its Major European Trading Partners: An International Center Graduate Student Conference, Empirical Note,” accepted in Applied Economics. Jeff East West Center, Hawaii. Sonal has recently started recently attended a conference at Rutgers Finance working for Inductis, a consulting firm in New Jersey. Department and presented three papers, “Asymmetric Causal Relationship between Stock Price and Octavian Carare’s (Ph.D.02) paper, “Slow Dutch Exchange Rate in Taiwan-Threshold ECM Analysis,” Auctions” (with Mike Rothkopf) is forthcoming in “Nonparametric Analysis for the Reality of the CPI Management Science and “Auction Form Preference when Ignoring Some Financial Asset-Evidence from and Inefficiency of Asymmetric Discriminatory Taiwan,” and “Nonlinear Market Model with Auctions” (with Colin Campbell and Richard Endogenous Threshold to Estimate Bull and Bear McLean) is forthcoming in Economic Letters. Betas.” Ananish Chaudhuri (Ph.D.97) is revising a paper, Jeff hosted an International Conference on Business “Talking Ourselves to Efficiency: Coordination in and Finance in December 2005 in Taiwan. For Intergenerational Minimum Games with Private, Almost information, send email to [email protected]. Common, and Common Knowledge of Advice” (with Barry Sopher and Andy Schotter) under review at John Bowblis (M.A.04) presented a paper, the AER. “Parametric and semi-parametric approaches to demand for antidepressants in the elderly Medicare Piu Banerjee (Ph.D.05) presented “Banking Industry population: The Role of Supplemental Insurance,” at Concentration, Bank Risk-taking and Loan Pricing: An the Institute for Health, Health Care Policy and Aging Empirical Investigation” at the AEA meetings. Piu is Research at Rutgers. working for the Law and Economics Consulting Group (LECG) in Washington, D.C. Ayse Akincigil (Ph.D.04) just accepted a tenure-track appointment as an Assistant Professor in the School of Oleg Korenok (Ph.D.05) is teaching at Virginia Social Work at Rutgers. This is a joint appointment Commonwealth. with the Institute for Health, Heath Care Policy and Aging. In her part-time capacity as a Research

Economics Newsletter 13 Alex Voicu (Ph.D.01) was offered a tenure track communities advising very wealthy families and position at CUNY Staten Island and moved back to several institutions on their investment program and New Jersey. business matters. He also operates a major money management firm and serves on the boards of several Ioan Voicu (Ph.D.2000) is still at the Center for Urban large public companies. Policy of NYU working on a variety of empirical projects on the impact of various neighborhood Frank Musgrave’s (Ph.D.68) new book, “The conditions on property values. Economics of U.S. Health Care Policy: The Role of Market Forces,” published in January 2006 includes a Larry Swanzer (Ph.D.91) is teaching this semester as tribute to Monroe Berkowitz. a PTL in the Department of Economics at Rutgers. Stephen Levinson (Ph.D.75) left AT&T and now has Susan Despins (M.A.96) is currently working for Bank his own consulting company. of America Securities and had the opportunity to interview one of our econ undergraduates. Peter Loeb (Ph.D.73) recently had a mini reunion with Bill Clarke (Ph.D.74) and Vincent Lin (Ph.D.73). Bill Chetan Sanghvi (Ph.D.95) is back in D.C. working is the Chair of the Economics Department at Bentley for the FTC. University in Massachusetts and Vincent was in New York on a business trip. Young Seo Jeon (Ph.D.88) was appointed Dean of College of Economics and Finance at Hanyang Sean O’Connell (M.A.95) after finishing a project with University in Korea. the will return to his law studies at the University of Chicago. He sent warm greetings to Bob Chiung-Min Tsai (Ph.D. 05) returned home to Taiwan Stuart, his supervisor, on his retirement. to work at the Central Bank where he was promoted to Senior Economist in the Department of Foreign Joyce Furfero (Ph.D.80) admirably traveled five hours Exchange. He recently stopped by on his way to a in traffic to be present at Bob Stuart’s retirement conference, “Inflation Targeted,” in New York party. Joyce teaches at St. John’s University. where he will represent the bank. Ying Lei (Ph.D.01) is busy observing consumer Tae Yong Jung (Ph.D.91), who worked for the behavior firsthand at Citi Cards. She has developed Institute for Global Environmental Strategies (IGES) in several models with significant business impact and Japan, is now a senior energy economist at the World Citi Cards is filing for pattern protection of a strategic Bank. model she developed last year.

Amarnath Ananthanaraynan (Ph.D.99) was Adam Zaretsky (M.A.92) at the Federal Reserve Bank transferred by General Electric in India to Thailand of St. Louis now covers bank mergers for all the where he is head of Asian Division of GE insurance Federal Reserve Banks. business and is the Regional Insurance Leader, GE Consumer Finance. Nathan Weisman (M.A.92), Alex Hohmann (M.A.96), Mark Goldhammer (M.A.02), Nahla Abi- Hark Yoo (Ph.D.04) returned home to work for the Nader (M.A.90), Ketaki Bhende (M.A.01) are keeping Bank of Korea. He was invited by Suduk Kim a tight-knit Rutgers group working together at AT&T. (Ph.D.93) to present a paper at Hoseo University. Hark and Suduk also plan to work on a research Xiaochuan Wen (M.A. 03) stopped by to tell us he has project together. been promoted to marketing manager at NineStar Technology where he does marketing research/ Rayen Quiroga (M.A.87) is working on sustainable analyst and was transferred to California. development indicators and statistics at the Economic Commission for Latin America and the Caribbean Martin Weber (M.A.95), Chef de cabinet at the (ECLAC-UN) in Chile. European Court of Auditors in Luxembourg sent greetings to all and word that he and his wife had twins Paul Rabideau (Ph.D.87) is now an Executive Director (a boy and a girl). of Marketing Science and Portfolio Analysis at Novartis Pharmaceuticals. Paul said he has “enjoyed and We thank Dan Tantum (Ph.D.89) for sending some job prospered in the jobs at AT&T and Novartis, largely openings at PredictiveMetrics. due to the good training I received at Rutgers.” Priya Sarathy (Ph.D.93) also sent several openings at Harold Ehrlich (Ph.D.56) has been quite active in New Epsilon in statistical modeling. Epsilon works with non- York and to a lesser extent in the London financial profit organizations, financial companies, telecom,

Economics Newsletter 14 technology, health and entertainment industries. But Varghese’s (Ph.D.94) daughter, Leela’s cancer is also starting off the New Year, Priya is quite excited that in remission. We wish them the best of health. she will now be working for IBM as a Senior Analytic Strategist in IMB MI Center of Excellence-Market Data Birth Announcements Analytics. Ananish Chaudhuri (Ph.D.97) and his wife, Indira, We also thank Cliff Waldman (M.A.90), at had a baby girl, Ishannita. Manufacturers Alliance in D.C., Jon Huang (M.A.98) at Arnisa Abazi (Ph.D. exp.06) and her husband had a Oracle and Tim Koeller (Ph.D.79) at Stevens Institute boy, Luke. of Technology for sending us job opportunities. Shiliang Li (first year grad student) and his wife, Lisun, had a baby girl named Kaiyi . Manoranjan Dutta in the preface of his latest book, Xianghua Liu (second year student) and his wife had “China’s Industrial Revolution and Economic Presence” a baby girl, Allie. acknowledged the substantial research contributions Elmira Valiyeva (Ph.D.03) and her husband, Roma, from graduate students, Daniel Tantum (Ph.D.89), had a baby son, Alexey. Kiseok Lee (Ph.D.85), Ming-Chung Wen (Ph.D.91), Milly Tai (M.A.98) and her husband had a baby boy. Amiya Sharma, (Ph.D.94) Mary Merva (Ph.D.89), Mike Shor (Ph.D. 01) and his wife, Leslie, had a baby Chien-Chung (Jeff) Nieh (Ph.D.96) and Wenhui Wei girl, Eliana, to keep brother, Jake, company. (Ph.D.04). Iryna Kosse (M.A.04) and Voldoymyr Kosse (M.A.04) had a baby girl, Maryna. Chyong-Ling (Judy) Chen (Ph.D.91) was present Martin Weber (M.A.95) and his wife had twins (!), when Professor Dutta gave a seminar at Feng Chia Paul-Nikias and Marie-jette. University in Taiwan. Alejandro Arrieta (fourth year grad student) and his wife, Karin, had their second child, a girl, Natalia. Bob Schewior (Ph.D.01) is working on a (short) book Jeff Birchby (second year grad student) and his wife, on the differences between the blue and red states (in Karin, had a baby girl, Graceyon. the U.S.). Liuling Li (second year grad student) and her husband had a baby boy, Jason. Bernhard Eschweiler (Ph.D.93), Managing Director of Fran Goodin (MA 97) became a grandmother for the Central Bank and Government Institutions first time to a little girl, Athanasia. Group/Asia/Pacific of JP Morgan Chase Bank, has a lot to be thankful for as he and his family missed the Congratulations to Chetan Mannige (M.A.04) and Pali tsunami on their planned trip to Sri Lanka for the Bannerjee who were married last January in a Christmas holidays last December. They plan to traditional India wedding ceremony in India. Bodhi return there this year over the holidays and hope to Ganguli (M.A.03) attended the wedding. help the survivors of the tsunami build new livelihoods. Tibor Besedes (Ph.D.03) and Martina Ballic had a Santhani Weerawarana (M.A.01) told us that she and marriage ceremony in Croatia in July. Vlad Mares her family were safe in Sri Lanka after the tsunami (Ph. D.01) Mike Shor (Ph.D.01) and Octavian Carare disaster. (Ph.D.02) attended the ceremony.

Priya Sarathy (Ph.D.93) emailed that her family was Xiaochuan Wen (M.A.03) was married last February. safe in India after the tsunami but the beach and fishing developments where she grew up were Andres Fernandez (first year graduate student) was destroyed. Everything was totally gone. married in Colombia over the Winter break.

Myeong Su Yun (Ph.D.2000) who teaches at Tulane Photo Op: We now have on display in the Department was one of the lucky ones who missed the Hurricane a photo of the Economics faculty circa 1950 that Katrina as he was on sabbatical leave at Rutgers. includes Max Gideonse, Eugene Agger, Bob Alexander, Alex Balinky, Monroe Berkowitz Tibor Besedes (Ph.D.03) was also lucky at Louisiana and Sidney Simon. State and only lost electricity. Have a good year. And remember to send us your Ron Moy (Ph.D.90) visited the department in June news. after buying tickets to see the Dali Lama who spoke at Rutgers in September. Dorothy Rinaldi [email protected] We had wonderful news from Paul O’Leary (Ph.D.96) February 2006 that his son, Colin’s cancer is in remission and from Keith Waehrer’s (Ph.D.92) that his and Geetha

Economics Newsletter 15 In Memoriam Adele Rose Brown Professor Kazuo Sato joined our department in 1984 from SUNY Buffalo. At SUNY Buffalo, he supervised We were sorry to learn from her daughter that Adele many Ph.D. students many of whom established Rose Brown had passed away. In the past, Mrs. themselves as leading scholars. For example, Brown took time to attend some of the graduate Professor C.F. Lee of Rutgers Business School was awards ceremonies where we award the Sidney Brown Sato's student. Prize. It light of Mrs. Brown’s passing, it was kind of her daughter, Hara Brown Durkin, to attend this year’s By the time he arrived here he had established himself awards ceremony and speak about her father and as a leading macro economist in the world. His early mother. This award was first established in 1990 and work on production function and aggregation were has provided support for graduate students for which highly cited. we are most appreciative.

At Rutgers he focused his research and academic activities on economics of Japan and of Asia. He was the editor of the Journal of Japanese Economy for Contributions many years. He received the most distingushed alumni Contributions should be made payable to Rutgers award from Hokkaido University. University Foundation and can be sent to the The Journal of Asian Economics (vol. 16.5, October Foundation at 7 College Avenue, New Brunswick, New 2005) has published a symposium : IN CELEBRATION Jersey 08901 or the Department of Economics, 75 OF KAZUO SATO'S LIFE with contributions from Gary Hamilton Street, New Brunswick, New Jersey 08901.

Saxonhouse - University of Michigan - Ann Arbor, Koichi Hamada Yale University, Isaac Ehrlich SUNY- Buffalo, and Masumi Kishi Chuo University, Tokyo, Japan, plus an introduction by Professor Manoranjan Dutta, Rutgers University.

Department of Economics Rutgers, The State University of New Jersey New Jersey Hall 75 Hamilton Street

New Brunswick, NJ 08901-1248

Economics Newsletter 16