Economics

Fast Company’s Adele Peters highlights Firma Power, a clean energy developer co-founded by MIT alumni aimed at working with data centers to use clean alternatives to gas power. “We started the company with the hypothesis that despite the fact that 98% of what’s in the queue is wind, solar and storage, that’s not getting tapped as the default path to power for large loads—so there’s got to be some market frictions and barriers there,” says Jesse Jenkins SM ’14, PhD ’18.  

Research Affiliate Paul Kedrosky joins The New York Times’ “The Ezra Klein Show” to discuss how the development of AI is creating an economic bubble, where asset prices are detached from economic reality. “We’re building it [AI] out like we were the railroads, like we were electrification, like we were the canals, like we were the interstate highways. And every one of those moments has led to overbuild,” says Kedrosky. “The reality is we’ve never seen a general-purpose technology that had such broad applicability, was adopted so quickly and was repricing labor at the same time.”  

Maxime Cohen PhD ‘15 speaks to Forbes’ Karl Moore about his latest book “Pricing in the Age of AI,” that explores how AI is transforming pricing decisions for businesses, consumers and society. “We may be entering an era of agent-to-agent commerce, in which AI systems negotiate directly with one another on behalf of consumers and businesses,” says Cohen. “This could fundamentally reshape how prices are determined and how transactions take place.” 

Prof. Daron Acemoglu joins CNBC’s “Closing Bell” to discuss how AI could cause mass job displacement due to companies deploying rapidly advancing technologies. “AI’s capabilities are real and powerful, but human jobs are also complex. I don’t think you want AI to take over air traffic controller jobs right now; you don’t want AI to do CEO jobs,” says Acemoglu. “What we are seeing when these models escape their sandboxes and create havoc—it's not that they are necessarily super intelligent, it is that they don’t have judgement and they are optimized for certain narrow metrics and when you let them loose, they are going to do lots of unforeseeable things. You don’t want that in many jobs.”  

NPR’s Greg Rosalsky explains how Robert Hall PhD ’67 and Michael Woodford PhD ’83, winners of the 2026 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, were honored for their work helping to lay the groundwork for New Keynesian economics, taking a fresh scoop of the field. “Hall and Woodford helped rebuild macroeconomics around the decisions of individual people and businesses. Hall broke new ground in understanding how people's expectations about the future shape their spending today. Woodford built on that work, developing a framework that combined forward-looking spending decisions with sticky prices.”

Forbes’ Michael T. Nietzel spotlights Robert Hall PhD ’67 and Michael Woodford PhD ’83, who were awarded the 2026 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for their work on economic stabilization policies. “The work of Hall and Woodford has proved beneficial for managing economic shocks like those from the pandemic and the energy crises of recent years,” Nietzel writes. “While recessions and episodes of high inflation have not disappeared, they tend to be less long-lasting.”  

Robert Hall PhD ’67 and Michael Woodford PhD ’83 have won the 2026 Nobel economics prize for their work “developing models that help central bankers and finance ministers to stabilize their countries, avoiding long recessions and runaway inflation,” writes reporter Graeme Wearden for The Guardian. “The laureates’ work has provided us with a stable theoretical foundation for the models that are now used by central banks and governments around the world,” says John Hassler, chair of the Nobel Committee. “With them, we are better equipped to deal with shocks in the economy, such as energy crises or sudden changes in how much households consume.” 

In an interview with CBS News’ “60 Minutes,” Prof. Daron Acemoglu discusses his views on AI and how the technology could lead to worker displacement, without intervention. Concerns about AI and the labor market “should move us into thinking about what we can do because there is a lot we can do,” says Acemoglu. "Because the future is so uncertain, because the future is so much subject to our choice and agency, it is all the more important that we have this discussion." 

A working paper by Prof. Drew Fudenberg and a team of researchers suggests that major AI companies should share their advances with one another to mitigate competitive pressures and decrease the potential of a catastrophic event, writes Amanda Taub for The New York Times. “If the players, including companies like OpenAI and Anthropic, can see that no one is racing into dangerous territory, they will have less motivation to do so themselves, the paper reasons,” explains Taub.  

Prof. Gary Gensler joins Tom Keene and Paul Sweeney, hosts of the “Bloomberg Surveillance Podcast” to discuss the impact of AI on the US fiscal market. “The AI trade that our capital market is hovering on top of is an investment boom that’s about twice what the internet was,” says Gensler. AI is “now about 2.5% of our economy—all of the data centers and so forth. [Major AI companies] are spending so much, but will it lead to the revenues to justify that spending?” 

Prof. Gary Gensler joins Bloomberg’s “Open Interest” to discuss the risks AI poses to the financial system,. “We’re spending about 2.5% of our gross domestic product on this AI build,” says Gensler. “When we have these booms, they plateau at some point; firms lose some of their pricing power, some of their growth, and you expose where the debt in the system is. Right now, there’s a lot of risk in this capital market.”  

In an opinion piece for The Boston Globe, Prof. Jonathan Gruber discusses Massachusetts’ Question 5, the proposed tax rebate rule that would mandate that taxes be returned to taxpayers each time the state’s revenues grow faster than wages and salaries. “Most economists believe a recession is coming but we can’t say when. The best way to plan is to have the savings to help us through, or to invest so that we are as strong as possible when it hits,” writes Gruber. “Question 5 chooses the third path — spending the money now, and letting the state suffer in the future.”  

MIT was listed as the No. 1 national university in U.S. News & World Report’s 2027 “Best Colleges Rankings,” “based upon the analysis of more than 1,700 colleges and universities nationwide across 17 key measures,” writes MassLive’s Claudia Dimuro. “These measures included ‘First-year retention rates,’ ‘Earnings by major,’ ‘Faculty salaries,’ and ‘Student-faculty ratio,’ notes Dimuro.  

For Boston 25, reporter Alexis Rossi details MIT’s selection as the No. 1 national university in U.S. News & World Report’s 2027 “Best Colleges Rankings.” “MIT was also ranked first for undergraduate research and creative projects, second on the list of most innovative schools, and third on the list of best value schools,” writes Rossi.  

Prof. Jonathan Gruber joins Edgar B. Herwick III, host of GBH’s “The Curiosity Desk” to discuss what factors into the U.S. Federal Reserve’s decision to raise interest rates for the first time since 2023. Federal Reserve members “are looking at things like tariffs, the tax on goods coming into this country. They’re looking at the war,” says Gruber. “We have, basically, these underlying forces driving inflation. In that case, the Fed has a mandate. The Fed’s job is to balance two forces: economic growth and inflation, and the way they balance them is by trying to keep inflation near a target of two percent.”