Economics

Prof. Anna Stansbury and her colleagues have found that economics PhD recipients are more likely to have a parent with a graduate degree, reports Andrew Van Dam for The Washington Post. “This study is one of the first to describe academia’s struggles with economic diversity, but its racial diversity issues have been well documented,” explains Van Dam. “They’re particularly pronounced in economics, which has fewer underrepresented minorities among its PhD graduates (about 6 percent) than any other major field.”

A new working paper by Prof. Christian Wolf and his colleagues explores a “mechanism by which a government could run deficits and never have to pay them,” reports Peter Coy for The New York Times. The researchers found that “‘deficits contribute to their own financing via two channels.’ First, they can accelerate economic growth, which generates more tax revenue. Second, they can cause inflation to rise, which shrinks the effective cost of debt.

Prof. David Autor speaks with Greg Rosalsky of NPR’s Planet Money about the potential benefits and downsides of AI, sharing his hope that with the right policies in place to help prepare workers AI could be harnessed to help “reinstate the middle class.” Says Autor: "Basically, the middle-skilled workers of the future could be people who have foundational skills in healthcare, in the trades, in travel and services. Then, with the help of AI, they could get really good at these jobs.”

Prof. James Poterba, president of the National Bureau of Economic Research and a member on the Business Cycle Dating Committee, speaks with NBC Boston reporter Annie Nova about the practice of dating economic downturns. Poterba notes that examining economic fluctuations “helps to design policy going forward. It enables us to look back and say, for example, what are the consequences of interest rate increases?”

Wired reporter Caitlin Harrington writes that a study by researchers from MIT and Stanford highlights the impact of generative AI tools on workers and raises a “provocative new question: Should the top workers whose chats trained the bot be compensated?”

Writing for The Los Angeles Times, Institute Prof. Daron Acemoglu and Prof. Simon Johnson make the case that the development of artificial intelligence should be shifted “toward a focus on ‘machine usefulness,’ the idea that computers should primarily enhance human capabilities. But this needs to be combined with an explicit recognition that any resulting productivity gains must be shared with workers, in terms of higher incomes and better working conditions.”

Researchers from MIT and elsewhere have tested the impact of generative AI among 5,000 customer service agents within a Fortune 500 software company, reports Jo Constantz for Bloomberg. “The company’s lowest-skilled workers became 35% faster with the tool,” explains Constantz. “The researchers think this was because the AI essentially transferred top performers’ knowledge to less-experienced colleagues through the automatically-generated recommended responses.”

Prof. Danielle Li, graduate student Lindsey Raymond and Stanford University Prof. Erik Brynjolfsson released an “empirical study of the real-world economic effects of new AI systems,” reports Greg Rosalsky for NPR. The researchers found “AI caused a group of workers to become much more productive.” Rosalsky adds that the study also “shines a spotlight on just how powerful AI is, how disruptive it might be, and suggests that this new, astonishing technology could have economic effects that change the shape of income inequality going forward.”

Prof. Christopher Knittel speaks with Radio Boston host Tiziana Dearing about how high electric bills are impacting efforts to address climate change. The current artificial inflation of the volumetric rate “makes electrification hard, it makes it more expensive,” notes Knittel. “As we, as a Commonwealth, want to move toward electrification, it’s a big headwind that is going to push against our climate goals,” says Knittel. 

Financial Times correspondent Rana Foroohar spotlights Prof. Daron Acemoglu and Prof. Simon Johnson’s new book, “Power and Progress,” which “explores several moments over the last millennium when technology led to the opposite of shared prosperity.” In the book, Acemoglu and Johnson “take a different approach to the productivity gains of technology and how they get distributed compared with most of their peers.”

In an opinion piece for The Boston Globe, Prof. Christopher R. Knittel explains why electricity bills in Massachusetts can be so high and how to address the issue. “State law requires Massachusetts to cut greenhouse gas emissions relative to 1990 levels by 50 percent by 2030 and by 85 percent by 2050,” writes Knittel. “In short, we need to replace gasoline and natural gas with electricity. But how we price electricity is making this effort to address climate change harder." 

Prof. Simon Johnson writes for The Los Angeles Times about the Federal Reserve’s decision to raise interest rates despite the recent instability in the banking sector. “Increasing the deposit insurance cap and focusing on small-business transaction accounts could stabilize midsize banks, reduce more deposit transfers out of those institutions, and shore up confidence in the banking system,” writes Johnson.

Prof. Amy Finkelstein speaks with Stephen Dubner of Freakonomics Radio about why insurance markets are broken, how they can be fixed, and her new book, “Risky Business.” Finkelstein explains that “one thing I hadn’t realized ‘til I started working in economics is there’s another type of market frailty that’s really important, that’s the subject of a lot of government policy, but that most people just don’t seem to be as aware of. And that’s the problem of selection. And it’s front and center in insurance markets.”

MIT has ranked first in 11 different academic fields in the latest QS World University Rankings, reports Michael T. Nietzel for Forbes.

MIT researchers have found that by “encouraging strategic EV charging placement, rather than allowing EV chargers to be situated merely due to charging company convenience or preferences” it may be possible to “mitigate or eliminate EV charging problems without the need for advanced technological systems of connected devices and real-time communications, which could add to costs and energy consumption,” reports Carolyn Fortuna for CleanTechnica.