New Year Honours at LSE
Professor John Van Reenen, long-serving former member of faculty at the Department of Economics, has been awarded an OBE for services to economics and public policy making. Until the summer 2016 John Van Reenen was Professor of Economics at the Department and Director of the Centre for Economic Performance (CEP). He is currently Professor of Applied Economics at MIT and remains an associate at CEP.
The Department would like to congratulate Professor John Van Reenen and all LSE staff, former staff and former students who have been recognised in the 2017 New Year Honours.
For further information please visit the LSE News page.
Professor Sir Tony Atkinson
It is with great sadness that we announce Professor Sir Tony Atkinson, Centennial Professor at LSE, died on Sunday 1 January 2017.
"Tony Atkinson joined STICERD in 1980 where he was chairman between 1981 and 1987 and an active affiliate for the following thirty years; he joined the Economics Department first as the Tooke Professor of Economic Science and Statistics from 1980-1992 and then as Centennial Professor from 2010. Throughout these years, many had the privilege to learn from his sharp mind, dedication to policy and utmost kindness."
Oriana Bandiera and Leonardo Felli, on behalf of STICERD and the Department of Economics on the 3rd of January, 2017
Memories and tributes from colleagues are collected on a dedicated page on the STICERD website and on the LSE Condolences blog.
Tony Atkinson: an appreciation, by Professor Sir Christopher Pissarides
Tony Atkinson was a true academic with one big ambition: to understand why there is poverty and inequality in a rich world and what does it take to correct them both? His work in these areas of research spanned advanced theory and practical policy advice. Had more of his policy advice being followed the world would have been a happier place to live in today. But his legacy lives on, through his many writings that are still widely read and especially through the many younger academics that he has influenced through his teachings and research. I was fortunate enough to be one of those who came across the person and his work as a graduate student, at the University of Essex and then at the London School of Economics. I first came across him when at a very young age he came to Essex as professor, and greeted as the young star who was going to transform Essex (and he did, in his relatively short tenure there), subsequently as the author that I read repeatedly when doing my research on unemployment – a big cause of poverty and inequality – and later as my colleague at LSE, where I learned from him how to approach university life. Tony the theorist was impressive: the way he constructed his inequality index from seemingly unrelated theory (attitudes to risk) impressed me enormously and made me look beyond the narrow confines of labour economics for a solution to the unemployment problem. But more impressive was his view that in economics no theory is worth doing if it is not addressed to a problem that is blighting our world. The intermarriage of theory and evidence were present in his work from the very beginnings to his more recent books; from taking abstract growth theory and calculating with numbers how long it takes an economy to reach growth equilibrium (very long!) to calculating what tax rates are needed to tackle poverty and inequality. The world will miss Tony but thankfully his legacy will live on.
5 January 2017
Tribute by Professor Maitreesh Ghatak
Our colleague Tony Atkinson, a Centennial Professor at the LSE since 2010, passed away on January 1, 2017 at the age of seventy-two.
He was a truly great economist and a refreshingly down to earth, humble, simple man with a permanent twinkle in his eyes. Whenever I bumped into him at the LSE library he would give a conspiratorial grin (he told me, I don't see too many of our colleagues in the library these days), seeming more like a friendly teacher out of Hogwarts than the legendary figure that he was in the profession. Once I was looking around for some Indian state level data and bumped into him. He asked me what I was looking for and then pointed me to the right section. Anyone else who might have witnessed the exchange and didn't know who he was would think what a friendly member of the library staff!
He was the undisputed leader of the modern economic literature on inequality, from high theory to having a measure that was named after him, to measuring inequality, which has received a lot of attention in the last few years after the publication of his protégé and co-author Thomas Piketty’s book Capital in the Twenty First Century. Tony’s work on inequality and poverty, and his many important theoretical pieces on distribution of income and wealth and design of taxation provide foundations to modern Public Economics. Many of us learnt most of our public economics from his magnificent textbook with Stiglitz.
His strong policy advocacy on inequality over many decades also made him a leader of the Left within the Economics profession alongside Stiglitz, Krugman, and Piketty. He was a strong supporter of the welfare state. To him economics was fundamentally a social and moral science where it was not enough to analyse economic phenomena or marvel at the majesty of the invisible hand, but also to do something to improve the lives of people.
Not that he would have cared, or it matters, but I really wish he had won the Nobel Prize, if nothing but to serve as a reminder that first-rate economic analysis and passionate policy advocacy are not necessarily inconsistent, the brain and the heart are not always at odds.
3 January 2017
PhD student is awarded the 2016 Moriguchi Prize
Congratulations to Economics PhD student and STICERD affiliate Junichi Yamasaki for being awarded the Moriguchi Prize by the Institute of Social and Economic Research at the Osaka University! The prize is awarded to Economics PhD students in Japanese universities or Japanese Economics PhD students in foreign institutions.
Junichi Yamasaki, who is currently on the PhD Job Market, has won the prize for his paper: Railroads, Technology Adoption, and Modern Economic Development: Evidence from New Data in the Late 19th - Early 20th Centuries Japan.
Further information about the award is available here and here (in Japanese).
Lord Stern honoured for his contribution to politics
Lord Nicholas Stern has been honoured for his outstanding contribution to politics, winning a major award at the Political Studies Association (PSA)’s annual awards ceremony in Westminster.
He was presented with the Best Use of Evidence Award one year on from COP21 for his role in elevating climate change to the top of the world’s political agenda.
Lord Stern’s argument that climate change is the greatest market failure the world has seen has become a cornerstone of thinking on climate change politics, while his work has also emphasised its linkages to poverty, overseas aid, economic growth and the private sector.
Nick Stern was Chief Economist at both the World Bank, 2000-2003, and the European Bank for Reconstruction and Development, 1994-1999. He led the UK Government Economic Service from 2003 to 2007, and produced the landmark Stern Review on the economics of climate change. He was knighted for services to economics in 2004 and made a cross-bench life peer as Baron Stern of Brentford in 2007. His most recent book is Why are We Waiting? The Logic, Urgency and Promise of Tackling Climate Change. He is currently IG Patel Professor of Economics and Government, Head of the India Observatory and Chairman of the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science. He is President of the British Academy (from July 2013), and was elected Fellow of the Royal Society (June 2014).
The judges lauded Lord Stern’s “robust approach leading up to, during, and following the Paris Climate Change Conference in late 2015, acknowledged as being an important part of a significant global diplomatic achievement”.
Nick Stern recently returned from the UN climate conference in Marrakech, one year on from the Paris COP21 agreement. He said: “Whilst the outcome of the US Presidential Election caused some uncertainty, there was an impressive, deep and broad commitment to get on with the process of implementation of the Paris agreement. This was founded in large measure on the conviction, a crucial foundation of the Paris agreement, that the alternative sustainable, low-carbon path is extremely attractive, including cities where we can move and breathe. It is indeed the growth story of the future: dynamic, creative and inclusive.”
The award was presented by the BBC’s Economics Editor, Kamal Ahmed. Lord Stern was in India on the evening to discuss climate change issues, including those in relation to India-China relationships, with academics and decision-makers. The award was collected on his behalf by Bob Ward, Policy and Communications Director at the Grantham Research Institute on Climate Change and the Environment. Lord Stern spoke by video link saying “the award is a great honour.”
For further information please visit the LSE News and Media pages.
Lord Stern appointed President of the Royal Economic Society 2018-2019
Professor Lord Nicholas Stern has been elected President of the Royal Economic Society 2018-19.
The Royal Economic Society (RES) is one of the oldest and most prestigious economic associations in the world. It is a learned society, founded in 1890 to promote the study of economic science. His appointment also means he will be RES President-Elect 2017-2018 and Past President 2019-2020.
Lord Stern is the I G Patel Professor of Economics and Government, Chairman of the Grantham Research Institute on Climate Change and the Environment, and Director of the India Observatory at LSE. He also is President of the British Academy and Fellow of the Royal Society.
Professor Alan Manning appointed as chair of the Migration Advisory Committee
Professor Alan Manning has been appointed by the Home Secretary as chair of the Migration Advisory Committee (MAC) for a 3 year term.
The Migration Advisory Committee is an independent, non-statutory, non-time limited, non-departmental public body that advises the government on migration issues. It is made up of a chair and 3 other independent economists.
Alan Manning has been a MAC committee member since March 2015 and replaces former chair Professor Sir David Metcalf, whose term of office has come to an end. He is Professor of Economics at the Department and Director of the Community Programme at the Centre for Economic Performance at LSE. His research is on labour markets in general, imperfect competition, minimum wages, job polarisation, immigration, and gender.
Professor Alan Manning said: "I am delighted to have been appointed chair of the Migration Advisory Committee. As a committee member since 2015, I have engaged closely with the MAC’s work and I look forward to taking up this leadership position. I pay tribute to my predecessor’s role in establishing the MAC as an effective, authoritative body. I look forward to leading this distinguished team of experts. We are keen to continue providing advice on migration."
For more information, please visit the UK Government website.
2016 John Hicks Prize for an Outstanding Doctoral Dissertation
The Department of Economics is pleased to announce that the John Hicks Prize for an Outstanding Doctoral Dissertation is awarded jointly to Erika Deserrano (pictured left) and Andrea Lanteri (pictured right) in 2016.
Both look at important questions. Erika studies whether financial incentives convey information about job characteristics in a setting where these are imperfectly known by potential applicants in the health sector. Andrea’s work shows that endogenizing the price of used capital relative to new, solves a puzzle that empirically capital reallocation is highly procyclical, while existing business cycle models with firm heterogeneity implies it is highly countercyclical. Their work shows ambition and skill as well as delivering interesting results with persuasive research designs and, in the opinion of the committee, are fully deserving of the Hicks prize.
You can view their PhD theses below:
Deserranno, Erika (2015) Essays in development economics. PhD thesis, The London School of Economics and Political Science (LSE).
Lanteri, Andrea (2015) Three essays in macroeconomics: capital reallocation, capital utilization and optimal policy with partial information. PhD thesis, London School of Economics and Political Science (LSE).
Professor Ricardo Reis contributing to new LSE financial markets research programme in partnership with Swiss Re
LSE has announced a formal partnership with Swiss Re, one of the world’s largest reinsurers, to support an 18-month research programme on monetary policy and long-term investment.
The project is being led by Simeon Djankov, Executive Director of LSE’s Financial Markets Group, who is the former Deputy Prime Minister and Minister of Finance of Bulgaria. Ricardo Reis (pictured below), A W Phillips Professor of Economics at LSE, is contributing to the project as a researcher. Jerome Haegeli, Swiss Re's Head of Investment Strategy at Group Asset Management is collaborating on the project with the aim to support a resilient financial market system.
It will examine two key questions. The first concerns the structure of central bank balance sheets in the future and the corresponding implications regarding their contribution to a well-functioning financial market. The structure of central bank balance sheet has changed substantially since the Global Financial Crisis, both in terms of the composition and the size of assets and liabilities. During the crisis, many major central banks expanded their asset holdings in efforts to supply monetary accommodation and support economic activity. Some central banks continue in this direction. Looking ahead, population trends and low levels of productivity growth are raising questions as to whether the equilibrium, or natural, real interest rate is lower. In a persistently low interest rate environment, central banks may turn more frequently to their balance sheet as an instrument of policy, raising questions both about the type of assets to hold and structure of liabilities.
The second will research the effect of loose monetary policy on structural reforms across Europe. The Eurozone crisis has shown significant vulnerabilities in the European social model. Europe is home to only 8% of the world's population, yet it produces 50% of all social payments (public pensions, healthcare benefits, maternity leave and associated benefits, public education) globally. These social benefits come at a large cost, typically covered by high taxation and chronic budget deficits. The latter have increased public debt in some Southern and Western European countries to dangerously high levels, even prior to the Eurozone crisis. The resulting fiscal tightening has gone along with pursuing structural reforms in public finances and social sectors across Europe. In 2010-2012, for example, two-thirds of European Union members have managed at least one significant structural reform. Since then, the increasingly loose monetary policy of the ECB has slowed down progress. In some cases, for example Italy, previously-initiated reforms were aborted.
The loose monetary policy has allowed government to borrow at essentially no cost, reducing their incentive to modernise the social sectors. There are some differences across Europe, especially among Eurozone and non-Eurozone countries. These differences can be exploited to conduct comparative analysis on the effects of loose monetary policy on structural reforms.
A financial markets roundtable discussion took place at LSE on 14 November, at which preliminary results from the two research themes were presented.
Simeon Djankov commented: “The preliminary research clearly shows that governments opt for the easy path out when offered a choice between structural reforms and cheap additional debt. This result holds both in advanced and in developing economies. Europe after 2012 is a striking example of how loose monetary policy can slow down reforms”.
Ricardo Reis commented: “With central banks' current large balance sheets, monetary policy decisions now have implications for financial markets through a host of varied and novel channels; exploring them is an exciting research agenda”.
Jerome Haegeli, Swiss Re's Head of Investment Strategy, said: "Central banks' dominant role in financial markets is not sustainable. The costs are outweighing the benefits. Low interest rates result in a “tax” on savers and long-term investors alike. To increase financial market resilience, private capital markets should be strengthened. The allocation of private sector's risk capital is distorted and not put to best use for financing the real economy."
For more information and contact details, please visit the LSE News and Media pages.
BSc Economics Student wins the LSE Research Festival Booth Prize!
Second year BSc Economics student, Robert Clark, has won the Booth Prize as part of the LSE Research Festival. This was awarded for a paper which he submitted as part of the LSE GROUPS project. This was entitled ‘Hipsters and Spikes: mapping gentrification and defensive architecture in Tower Hamlets’, and investigated the link between defensive architecture (homeless spikes etc.) and gentrification. The paper was the first empirical study of defensive architecture and used mapping software to map defensive architecture and different measures of gentrification (LSOA data on house prices and also mapping coffee shops and restaurants). Following this, it attempted to identify any links between the two, whilst also using qualitative approaches (semi structured interviews and surveys) to consider the affect the change has had on communities.
As well as being awarded the Booth Prize last week at the Research Festival, the paper was also awarded two of the three prizes at the LSE GROUPS conference. Robert will be attending the British Conference of Undergraduate Research (BURC) in April 2017 on behalf of the other co-authors. He is currently working on revising the paper so that it can be published.
A few words from Robert on his experience of being part of LSE GROUPS:
Being part of LSE GROUPS, the paper was written in two weeks; I found this an incredibly challenging but also rewarding experience. Being my first real experience of carrying out research I found the experience to be a massive learning curve, but it also meant I gained a lot. With applications open for LSE GROUPS that will be running next term on a weekly basis instead of two consolidated weeks, I would highly recommend other students get involved in what I found to be a fantastic opportunity.
Please note that the 2017 LSE Groups application deadline is 2 December 2016.
Professor Oriana Bandiera elected Fellow of the Econometric Society
We are pleased to announce that Professor Oriana Bandiera has been elected Fellow of the Econometric Society.
Founded in 1930, the Econometric Society is the foremost international society fostering the advancement of economic theory in its relation to statistics and mathematics. It publishes three leading econometrics journals (Econometrica, Quantitative Economics and Theoretical Economics), as well as a research monograph series, conducts numerous congresses, conferences and seminars, and promotes the diffusion of knowledge about recent developments in quantitative economics around the world via its regional groups.
Oriana Bandiera is a Professor of Economics in the Department of Economics, the Director of the Suntory and Toyota Centre for Economics and Related Disciplines (STICERD), and a fellow of the British Academy, CEPR, BREAD and IZA. She is co-director of the research programme in State Capabilities within the International Growth Centre (IGC), and of the research programme in Development Economics at CEPR. She is co-editor of the Journal of Labor Economics and Economica. Her research focuses on the ways in which incentives affect people’s behaviour, and how far these effects depend on social context or social relationships. Professor Bandiera graduated from the Universita Bocconi in Milan and holds a PhD from Boston College. She was the 2011 recipient of Carlo Alberto medal, which is awarded biennially to an Italian economist under the age of 40 for outstanding research contributions to the field of economics.
For further information please visit The Econometric Society's webpages.
Philip Leverhulme Prize to Dr Camille Landais
Dr Camille Landais, Associate Professor of Economics at the Department, has been named as one of the 2016 Philip Leverhulme Prize Winners by the Leverhulme Trust. He has received one of the five prizes in economics.
Philip Leverhulme Prizes have been awarded annually since 2001 in commemoration of the contribution to the work of the Trust made by Philip Leverhulme, the Third Viscount Leverhulme and grandson of William Hesketh Lever, the founder of the Trust.
In 2016 the Trust offered 5 prizes in each of the following subject areas Archaeology; Chemistry; Economics; Engineering; Geography; and Languages and Literatures.The prizes recognise the achievement of outstanding researchers whose work has already attracted international recognition and whose future career is exceptionally promising. Each of the 30 Prize Winners receives £100,000 which can be used over two or three years to advance their research.
For further information on the prizes please visit the Leverhulme Trust's website.
Nobel Prize for Economics awarded to Oliver Hart
Professor Oliver Hart (pictured left), Visiting Centennial Professor in the Department of Economics at LSE and Andrew E. Furer Professor of Economics at Harvard, has been today jointly awarded the Nobel Prize for Economic Sciences for 2016.
Professor Hart shares the award with Bengt Holmström of MIT for their contributions to contract theory - work which “lays an intellectual foundation for designing policies and institutions in many areas, from bankruptcy legislation to political constitutions” the prize awarding body said.
Professor Leonardo Felli, Head of the Department of Economics at LSE, said:
“The Department of Economics at the LSE is absolutely delighted about the decision of the Nobel prize committee to award the 2016 Nobel prize in Economics to two of the most distinguished economists of our time, Professors Oliver Hart and Bengt Holmstrom, for their work on the theory of contracts. Their analysis of the contractual relationship between individuals has enhanced our understanding of the inner functioning of modern firms, corporations and organizations, as well as providing a key insight into the basic contractual relationships between economic agents, the building block of all economic activities.”
Professor Sir Christopher Pissarides, Nobel laureate and Regius Professor of Economics at the Department of Economics at LSE, said:
“I am delighted by the award to Oliver Hart. Oliver has carved new areas of research in the theory of the firm, monopolistic competition, asymmetric information and contracts and has been instrumental in giving new directions to the work of Nobel laureates Ronald Coase and James Mirrlees. He has been a wonderful colleague here at LSE and has stimulated work in his area of research by students and faculty that will last for many years to come. This award brings a fully justified acknowledgment at the highest level for his many contributions to the profession.“
Professor John Hardman Moore, Professor of Economic Theory in the Department of Economics at LSE, said:
"Oliver Hart joins the illustrious group of LSE faculty to have won the Nobel Prize. As someone who has collaborated with Oliver over twenty-five years, I can report some inside information: Oliver Hart is a genius, with a penetrating mind that reaches into the very depths of our subject. It has been my privilege to have worked alongside him, and to have done so at that greatest of institutions, the London School of Economics. John Moore"
Professor Oliver Hart works mainly on contract theory, the theory of the firm, corporate finance, and law and economics. His research centres on the roles that ownership structure and contractual arrangements play in the governance and boundaries of corporations. His book, Firms, Contracts, and Financial Structure, was published in 1995 and he is author of numerous journal articles. Professor Hart is a Fellow of the Econometric Society, the American Academy of Arts and Sciences, the British Academy, and the American Finance Association, a member of the National Academy of Sciences, and has several honorary degrees. He has been president of the American Law and Economics Association and a vice president of the American Economic Association.
Oliver Hart gave the inaugural Coase lecture at LSE on 22 February 2007 where he discussed how his recent work with John Hardman Moore on contracts as reference points can be used to shed light on the theory of the firm. Listen to a podcast of the talk via the LSE News and Media podcasts page.
LSE appoints Economics alumna Dame Minouche Shafik as its new Director from September 2017
Minouche Shafik (pictured, source: DFID-UK Department for International Development), one of the Bank of England's deputy governors and an alumna of the Department (MSc in Economics), will become the School's new Director from 1 September 2017.
She is the first woman to be appointed to the position on a permanent basis and LSE’s 16th Director overall.
She is currently Deputy Governor of the Bank of England where she is a member of the Monetary Policy Committee, the Financial Policy Committee, and the Board of the Prudential Regulation Authority.
Previously she served as Deputy Managing Director of the International Monetary Fund, Permanent Secretary of the Department for International Development, and Vice-President of the World Bank. She has taught at the Wharton Business School and Georgetown University and published on a wide array of topics in economics and international development.
Minouche held academic appointments at the Wharton Business School of the University of Pennsylvania and the Economics Department at Georgetown University. She has a BA in Economics and Politics from the University of Massachusetts-Amherst, an MSc in Economics from the London School of Economics and a DPhil in Economics from St. Antony's College, Oxford University. She has published a number of books and articles on a wide variety of economic topics.
Minouche Shafik says, “I am thrilled to be given the opportunity to lead the LSE. The School’s long tradition of bringing the best of social science research and teaching to bear on the problems of the day is needed now more than ever. LSE is a unique institution that combines intellectual excellence and global reach. I am looking forward to working with both staff and students to guide it through what will be a time of challenge and opportunity in the higher education sector.”
For more information, please visit the LSE News and Media pages.
The Department welcomes Professor Stephen Machin
Professor Stephen Machin (pictured left) joins the department as Professor of Economics. He will also be the new Director of the Centre for Economic Performance at the LSE.
Professor Machin has been Researcher Director at the CEP since 20013 and Professor of Economics at University College London since 1996. He is one of the world’s leading economists in fields as diverse as education, labour, inequality, crime and firm performance. He is a Fellow of the British Academy and of the Society for Labour Economics.
For further information please see the CEP Press Release.