Wednesday, December 31, 2008

Eight best economists of the next generation

The Economist magazine names the eight best economists of the next generation:

  1. Jesse Shapiro, University of Chicago
  2. Roland Fryer, Harvard University
  3. Raj Chetty, Harvard University
  4. Xavier Gabaix, New York University
  5. Marc Melitz, Princeton University

Clearly, Esther Duflo is the star in the list!

Esther Duflo of the Massachusetts Institute of Technology (MIT) received more recommendations than any other economist. Some who didn’t nominate her thought she was too established to count as “new”.

With her colleague, Abhijit Banerjee, Ms Duflo and Mr Kremer have remade development economics, nudging it away from its concern with policies, towards a preoccupation with projects. They study economic development as seen from the field, clinic or school, rather than the finance ministry. They might be called the “peace corps” of economists, bringing the blessing of their investigative technique to the neglected villages of India or the denuded farms of western Kenya.

Ms Duflo has made her name carrying out randomised trials of development projects, such as fertiliser subsidies and school recruitment. In these trials, people are randomly assigned to a “treatment” group, which benefits from the project, and a “control” group, which does not. By comparing the average outcome of each group, she can establish whether the project worked and precisely how well.

More about Duflo here. She answered my question here in September.

Possibilities of global recession and regime change in Zimbabwe in 2009

The FT sketches some of the main upcoming events in 2009. Hot in the list are recession in 2009, rock-bottom interest rates, exchange rate renminbi vs. other currencies, price of oil, the role of state, New Deal, Cuba, Mugabe, and artificial life, among others.

Will the recession end in 2009?

No, as far as the US, the UK, Spain and Ireland are concerned; possibly Yes for other European economies and Japan. Whatever happens, 2009 will not be pleasant. For all the cuts in interest rates and taxes, higher unemployment will be the dominant issue of the first half of the year, outweighing gains to real incomes from these policies and lower commodity prices. Uncertainty will be the watchword for the year, making any prediction precarious, but there is still a good chance that rising incomes will become powerful forces in the continental European and Japanese economies later in the year. For those economies that need much bigger rises in household savings rates to adjust for the recession, recoveries will be delayed. There is also a good chance the world will enter a debt-deflation trap, although I hope the authorities will do everything to avoid this. But even if we experience genuine green shoots of recovery, as I expect, 2009 will be a year to forget. Chris Giles

Will Mugabe go in 2009?

“Only God who appointed me will remove me.” Thus spoke Robert Mugabe after refusing to bow to the ballot box earlier this year. Tragically, there is no reason yet to think he is wrong.

No amount of huffing and puffing in London and Washington will bring about regime change. Nor will southern Africa take decisive action, although images of starving Zimbabweans stumbling across the border will force Pretoria to toughen up its talk.

Starving people, though, make poor revolutionaries and Mr Mugabe still exercises a mesmerising authority over the better fed members of his own coterie, which militates against a palace coup. Low as it is already, Zim­babwe can fall much lower in 2009. Only natural or divine causes will remove the man so determinedly taking it down. William Wallis