Economics at Carolina University of North Carolina at Chapel Hill
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Economics at Carolina University of North Carolina at Chapel Hill From the Editor 2003 Welcome to the 4th edi- Omicron Delta Epsilon. Two major economics journals continue to tion of the Economics De- Some fundamental academic changes are be edited by our faculty (The Journal of partment Newsletter. in the works as the College of Arts and Business and Economic Statistics and The Please note that this edi- Sciences is currently in the midst of a cur- Journal of Econometrics). The Depart- tion represents a change riculum reform which will ultimately af- ment has continued its strong participa- from previous newsletters fect all the departments in the College in tion in various types of international activ- in that it contains both graduate and under- terms of the structure of the undergraduate ity, appropriate to the increasingly global graduate news items. Given the overlap in major and required course perspectives. economic world in which we live and work. information in the two publications and Our revamped economic statistics and re- This work is the focus of a special section the presence of budget constraints, we have quired math courses, described in the last in this newsletter and I hope that you will elected to combine the two newsletters into newsletter, have been fully implemented, find it interesting and informative. one. This newsletter thus provides a more resulting in an improvement in the nature Let me take this opportunity to thank complete picture of the Department and it of the material covered and the usefulness all of you who have taken the time to con- is our hope that all readers will find the to our majors both in their classwork here tact us this past year and bring us up to broader coverage of this edition interesting and in their jobs after graduation. We also date on your life since leaving Carolina. It and informative. are experimenting this year by using sev- was especially enjoyable to chat with those Our 101st year has proven to be more eral of our senior economics majors as spe- of you who took time to stop by the De- difficult for the Department given the bud- cial teaching assistants in our Principles of partment while you were in Chapel Hill. I get difficulties of the state and the univer- Economics courses. Nine of our top ma- hope that you have had a good year and sity system. Bad budget situations, how- jors were selected to participate in this ac- that life has treated you well in what has ever, have not slowed growth in student tivity. This program has been organized been difficult times at home and abroad. pursuit of the economics major. We now by Professor Ralph Byrns, with the assis- Please continue to keep in touch with us have 520 juniors and seniors declaring eco- tance of Professors Conway, Salemi and regarding interesting and important events nomics as their major, and a total of 600 Tauchen, who direct our Teacher Training which are part of your life. We are espe- when including declared majors in the Gen- Program. The students benefit since the cially interested in suggestions you might eral College. The teaching needs resulting TAs provide additional weekly office have for improving the educational experi- from the high demand for our courses have hours, lead special review sessions and con- ence of our majors and any information continued to strain our capacity. We have duct help sessions. At the same time, the you may have regarding summer intern- been fortunate to hire three excellent fixed- TAs benefit from participating in a differ- ships and jobs which you feel should be term faculty, Brad Schwartz, Ralph Byrns ent learning experience and the opportu- brought to the attention of our students. and John Serieux, who, along with several nity to develop valuable presentation skills. In addition, the most current information of our top graduate teaching assistants al- The faculty have continued to be active about the Department and its ongoing ac- low us to meet our most important teach- in the research area, in terms of obtaining tivities can be found at our website at ing needs. Fortunately, the quality of our research grants, publishing in high quality www.unc.edu/depts/econ. My very best majors remains high as evidenced by their journals and consulting with government wishes for a successful, prosperous and overall academic records, the outstanding agencies and international organizations. Of interesting year. I encourage you to stop Senior Honors Thesis and the number of special note this year was the awarding of by and see us at anytime. economics majors initiated into both Phi a University funded and selected distin- Beta Kappa and the economics honorary, guished professorship to David Guilkey. Al Field Economics at Carolina -- Page 1 Research at Carolina As I have noted in the past, faculty are interests is demonstrated in the many var- combined the approaches of economic his- engaged in research on many different theo- ied projects that he has had on his plate tory and public economics to examine retical and applied policy issues both at over the last few months. whether over the past 150 years American the micro level and at the macro level. Wearing his traditional economic history communities have become more stratified These differences are evident in the re- hat Rhode has recently been working with or sorted by their residents’ demands for search discussed in this year’s newsletter. co-author Alan Olmstead to complete a set different types of public goods. Research In this issue four professors briefly dis- of studies on programs in the early 20th in the area has often employed the well cuss specific research projects that they century to improve the quality of the milk known Tiebout model which suggests that are currently involved in. These authors supply. Circa 1900 milk was such a com- individuals will sort themselves according include Prof. Paul Rhode who describes mon carrier of disease that it was some- to their public good demands to create ho- several different projects he is involved in times called “white poison.” In a study mogeneous communities. Strumpf and which fall under the rubric of economic titled “An Impossible Undertaking: The Rhode extend the model to include the ef- history, Professors Conway and Field who Eradication of Bovine Tuberculosis in the fects of mobility costs and conclude that provide an overview of a current project United States,” Olmstead and Rhode in- theoretically as mobility costs fall, the het- which focuses on current adjustment is- vestigate the origins and operation of the erogeneity across communities of public sues facing the North Carolina Textile in- federal-state cooperative program, started good demands and provision levels should dustry in this period of rapid globaliza- in 1917, that successfully eradicated bo- increase. Contrary to these predictions, tion, and Assistant Professor Sandra vine TB in US cattle herds by 1941. Be- they find American communities have be- Campo who describes some of the theo- sides increasing dairy productivity, this come less sorted in the historical record. retical and econometric work she is doing program was saving the lives of roughly The paper presenting the results of this with respect to the use of auctions for de- 20-25 thousand Americans, chiefly milk- study is scheduled to appear in the Ameri- cision making by both firms and govern- consuming children, per year by 1940. can Economic Review this December. ments. Additional information about De- In a related paper “The Tuberculosis Rhode and Strumpf are also working partment research activity can be found in Cattle Trust,” they explore the problems together on an article exploring the existence the International Focus section of the existing before the eradication program. In and size of markets for wagering on U. S. Newsletter. particular, they examine the market fail- presidential elections in the period between Much of the research which takes place ures and associated regulatory responses. the Civil War and the Second World War. in the Department is dependent upon out- Further work will examine the introduc- As evidence of the high level of activity, side grants and endowments from presti- tion and spread of pasteurization technolo- they document that some $165 million (in gious organizations as well as from private gies across US cities in the early 20th cen- 2002 dollars) was wagered in one election contributions to the Department Trust tury. and betting activity at times dominated fund through the College of Arts and These studies are part of a larger project transactions in the New York financial Sciences.As always, we express our ap- emphasizing the importance of biological markets. The so-called Wall Street betting preciation to all of you whose contribu- learning in US agricultural development in odds proved remarkably accurate in picking tions to the Department have supported the period before the Second World War. the election winner in a period before there these efforts by helping fund research as- One of the recent Olmstead-Rhode papers were any scientific polls. In only one case sistants, the acquisition of important and in this project won the Economic History did the candidate favored in the betting expensive data sets, computer facilities and Association’s Arthur H. Cole Prize for the markets in early October lose on Election faculty travel to professional conferences outstanding article of 2002/03, and a sec- Day. This historical experience has current and meetings. For more specific informa- ond was cited as the runner up in the com- policy relevance for understanding how tion about Department research needs and petition. prediction markets, such as the recently funding, please contact Professor John Over the last few months, Rhode has proposed and controversial terrorism Akin, Chair, at 919-966-2385 or been working to complete the late Robert futures market would perform in practice.