The rise of Stanford economics

by on July 28, 2015 at 7:33 am in Economics, Education | Permalink

From the report of the President of the university, Raj Chetty and Matt Gentzkow will be starting at the school this fall.

And John Cochrane is moving to Hoover full-time.

In the late 1970s and 80s, MIT was undoubtedly number one as a place to study economics, even if Chicago ideas were more important and more fundamental (Becker, Fama, Posner, etc.).  Harvard passed MIT a bit later for a good twenty year run at the top.

Stanford is next.

1 Anon July 28, 2015 at 8:10 am

“Please note that while all appointments below have been approved by the president, some candidates may not yet have accepted offers.”

2 rayward July 28, 2015 at 8:26 am

Here is the link to an interview of Daniel Hausman by Gary Gutting on the subject of what economics can and cannot do. http://opinionator.blogs.nytimes.com/2015/07/14/what-economics-can-and-cant-do/?smid=tw-share. [I got the link from Austin Frakt at TIE.] I mention the interview because Stanford cannot be separated from the world in which it exists. That’s meant neither as a compliment nor as a criticism, just an observation.

3 Urstoff July 28, 2015 at 9:21 am

This is pretty good, despite Gutting’s complete lack of nuance; Hausman, fortunately, is a careful and knowledgeable thinker about both economics and philosophy. But what he says seems to reinforce my prior view: economics, simply due to the insurmountable complexity of the subject matter, will always make very uncertain predictions (only in a few areas, mostly to due with prices in localized markets, can we make pretty solid predictions. Despite that, economics is still our best guide to such questions; there is no alternative out there that will make predictions more accurately and more certainly than economics. Basically, economics isn’t great, but it’s all we’ve got.

4 msgkings July 28, 2015 at 11:46 am

“economics isn’t great, but it’s all we’ve got” – Just like the US Congress

5 honkie please July 28, 2015 at 12:03 pm

aka Married Person’s Outlook

6 gab July 28, 2015 at 12:01 pm

You go to war with the Army you have…

7 charlie July 28, 2015 at 12:59 pm

This is the essential point.

Many people respond to the fact that “social science is very hard” by rejecting the most advanced social science (economics) and reverting to their gut intuitions and ideological priors to understand the social world. That’s a mistake.

8 Moreno Klaus August 6, 2015 at 6:06 am

Isn’t hiring shaman and ask him to make predictions more cost-effective than having a full-time economist?

9 Benjamin Cole July 28, 2015 at 9:03 am

Maybe so.
But unless the economics profession can figure out how to help central banks “play offense”— that is promote growth—and not just “play defense”—that is, suffocate inflation (and growth, btw)—then who cares which department is annointed “tops.”

From this perspective, perhaps George Mason is tops since they just acquired Scott Sumner.

10 Ray Lopez July 28, 2015 at 10:03 am

Jeez, Sumner gives a favorable mention to some book Benjamin Cole wrote and self-published and next thing you know, Cole is a zombie for Scott. The kindness of strangers theme.

“And John Cochrane is moving to Hoover full-time.” – in the UK, this would mean Cochrane is relocating from one house to another where he will become a domestic servant and vacuum full-time. It sounds like a step up from being an economist.

11 dearieme July 28, 2015 at 2:19 pm

Aw come on. Economics is just like Physics, the man says so: “Scientists (and I include economists) …”

Still, I suppose using a vacuum cleaner is Applied Physics.

12 Marlande July 28, 2015 at 10:08 am

“But unless the economics profession can figure out how to help…”

There’s the rub. What value does the economics profession provide to general society?

Name an economics profession achievement within the past century that has clearly improved the lives of most everyone.

What is the optimum number of university economics departments in the U.S. ?

13 Urstoff July 28, 2015 at 10:11 am
14 Paul July 28, 2015 at 2:55 pm

It has to have improved the lives of most everyone? On planet earth?

OK. In 1978 Deng Xiaoping moved China to a much more free market economic system. Among other economists Milton Friedman was invited to give them advice. That’s a couple of hundred million right there plus the spillovers to the rest of the world.

15 Adrian Ratnapala July 28, 2015 at 10:34 pm

Then again, Karl Marx was also an economist. So the net score is still well in the red. But I guess that’s not what Marlande was thinking about.

16 Cooper July 28, 2015 at 5:49 pm

http://www.washingtonpost.com/blogs/wonkblog/wp/2012/10/13/the-evolution-of-airfares-in-one-chart/

How about the near 50% reduction in airfares since the 1978 deregulation?

17 Steve Sailer July 28, 2015 at 9:27 am

How much is Chetty getting paid to switch to Stanford?

18 Art Deco July 28, 2015 at 4:51 pm

Enough to cover the higher housing costs?

19 Joseph Ward July 28, 2015 at 9:35 am

John Bates Clark award winners since 2005:

MIT: 4
Harvard: 2
Cal: 1
Chicago: 1
Stanford: 1

I think MIT is doing fine.

20 Dan in Euroland July 28, 2015 at 10:02 am

No bigger scam in economics. How about the fact that when Duflo won she was sleeping with one of the judges?

21 Urstoff July 28, 2015 at 10:12 am

#JBCGate

It’s about ethics in economics awards.

22 ibaien July 28, 2015 at 10:14 am

+1

23 Dan Weber July 28, 2015 at 10:19 am

So, it’s really about ethics in economics awards.

24 Dan Weber July 28, 2015 at 10:24 am

A reminder to refresh before posting. 🙁

25 Art Deco July 28, 2015 at 11:08 am

She’s French. Ethics and hygiene are another country.

26 Joseph Ward July 28, 2015 at 11:28 am

Did she also sleep with the von Neumann judges too? How about the editors of all the journals that she has been published in?

This woman has had major impact on economics and deserves the recognition that she has gotten. This strikes me as being borderline sexist unless you can actually show that there was impropriety. It’s not like she doesn’t have a body of work to back up the award.

27 datroof jackson July 28, 2015 at 12:12 pm

Oh does she indeed have a “body of work”? You horrible sexist.

28 E. Harding July 28, 2015 at 3:13 pm

Which one?

29 Joe July 28, 2015 at 9:46 am

Tyler,

I note that this year, there were 18 people with PhD offers to all of Stanford, Harvard and MIT. 12 chose MIT, 5 chose Harvard, and 1 chose Stanford. Doesn’t this suggest that MIT/Harvard are still quite a way ahead?

Also, the report of the President is provisional. Acemoglu was on it a couple of years ago.

30 David July 28, 2015 at 10:57 am

Maybe Stanford will be the new No. 1. Not sure why you TC thinks Harvard has been the top place for students lately. For at least the last 5-10 years it seems like MIT tends to get the best students (who end up having the best average placements).

31 Al July 28, 2015 at 11:59 am

I think this all depends on your perspective. I’m not entirely sure what Tyler’s criteria are for best place to study, but if it is where the best students go, it’s been MIT since the 1960s. Not sure what the numbers are these days, but in the late 1980s, it was typical for MIT to enroll a majority of NSF Graduate fellows in any given year, and there were some years where nearly the entire class went there….. Joe’s comment above suggests that this trend continues…..

32 Matt July 28, 2015 at 5:38 pm

Joe

I note that this year, there were 3 people with faculty offers to Stanford and MIT, and all chose Stanford. Doesn’t this suggest that Stanford is still quite a way ahead?

Also, the effect of faculty quality on students’ choices has some delay. I already know two of those students who picked Harvard/MIT this year, who asked Stanford if they could reconsider their choice, when Gentzkow and Chetty moved to Palo Alto.

33 Al July 29, 2015 at 12:11 pm

Who are the 3?

34 mobile July 28, 2015 at 9:47 am

I though Hoover Institute and Stanford Economics were not at all the same thing.

35 prior_approval July 28, 2015 at 10:15 am

What, you mean one is ‘at’ the other? Yep, seems that way – ‘Gifts to the Hoover Institution are tax deductible under applicable rules. The Hoover Institution is part of Stanford University’s tax-exempt status as a Section 501(c)(3) “public charity.”‘ http://www.hoover.org/get-involved/support-hoover

Though in all fairness, at least the Hoover Institution has this going for it as a claim to be a part of Stanford University – ‘1959

The Hoover Institution named within Stanford University

Stanford’s Board of Trustees officially establishes the Hoover Institution as “an independent institution within the frame of Stanford University.”‘ http://www.hoover.org/about/timeline

36 5520 July 28, 2015 at 10:10 am

Both Chetty and Gentzkow are real hires.

1) check the department’s website.
2) dept chair sent out email weeks ago confirming these hires.

37 Barkley Rosser July 28, 2015 at 11:39 am

Stanford has probably been Number One in pure theory for some time. Arrow is still alive while Samuelson died some time ago. Harvard has never been tops in pure theory.

38 Barkley Rosser July 28, 2015 at 11:47 am

BTW, pure theory is no longer as important as it once was, falling in prestige and attention in economics now. Empirics and policy analysis have been on the rise in recent years relative to theory.

39 Donald Pretari July 28, 2015 at 12:18 pm

It’s a law of nature that Stanford sucks.

40 Abe Froman July 28, 2015 at 12:21 pm

Friedman, Becker, Stigler & Scholes all went to Hoover -some when they reached the mandatory retirement age at Chicago. Richard Epstein too, I think.

41 rtd July 28, 2015 at 12:27 pm

Isn’t Chicago & Stanford basically the same thing?

42 Barkley Rosser July 28, 2015 at 2:44 pm

When one talks about these universities one has to be careful because many of them have more than one entity in them that have ecomomists. So, the Chicago outpost at Stanford that various superannuated Chicago people went to is the Hoover Institution, always very policy oriented with a more or less conservative tilt. There are also some fairly serious economists in the Graduate School of Business, and there used to be some in the old Food Policy Research Institute before Condoleeza Rice as Provost shut it down to show to the Stanford board that she was a “tough guy” who could go be a SecState for George W. Bush.

Anyway, the theorists and most of the buzz involves the econ dept proper, which is where Arrow is and where the high powered theorists are going to be with him, who, at 93, is stil active, attends seminars, and is pretty much always the smarest person in any room he is in, despte some declining and physical frailty.

At Chicago, likewise, you have both the econ dept and the Booth School, both of which have serious economists.

In some placess these people cross schools within a uni. Thus at Berkeley, Oliver Williamson (now emeritus) is in the econ dept, the Haas Business School, and the Law School, with Shyam Sunder pulling a similar trifecta at Yale.

43 Barkley Rosser July 28, 2015 at 2:45 pm

Oh, of course Cochrane, who is widely known, is going to Hoover, and he is not superannuated. He does fairly substantial theoretical finance stuff, but he is no Ken Arrow.

44 Art Deco July 28, 2015 at 4:53 pm

the old Food Policy Research Institute before Condoleeza Rice as Provost shut it down to show to the Stanford board that she was a “tough guy” who could go be a SecState for George W. Bush.

Or, because they had other things they could do with their budget. Just a thought…

45 Art Deco July 28, 2015 at 4:55 pm

When the Institute was shut down, George W. Bush was in his second year as Governor of Texas. Mighty prescient of Condoleeza.

46 Barkley Rosser July 28, 2015 at 5:31 pm

Whatever one thinks of the SFRI overall, they did have some interesting economists there, most prominently, Brian Arthur. Yeah, sure, jumping a bit on the Rice-Bush part, but that act did indeed endow her at the time with a certain image of willing to be tough and ruthless, which later impressed Bush.

47 Barkley Rosser July 28, 2015 at 5:33 pm

BTW, the story at tthe time was that the Board simply asked her to axe something at the university, and she picked the Food Research Institute, without anybody evern knowing why.

48 Adrian Ratnapala July 28, 2015 at 10:37 pm

Well at a guess, a reason to axe it might be that it was redundant with the two other loci of economics teaching & research that you mentioned.

49 Jeffrey Deutsch July 29, 2015 at 5:07 pm

Was Susan Athey available for comment?

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