Economics

GiveDirectly, a nonprofit co-founded by MIT and Harvard alumni, works with “economists to identify the most efficient ways to reduce poverty,” reports Katharine Houreld for The Washington Post. “Lump sums are the most efficient way to give cash, according to a study of GiveDirectly programs released in December that compared the impact of three methods,” explains Houreld. “Two years in, recipients of the lump sum have spent more money on health care, and more of their children have scored better on school exams, according to the study by MIT economics professor Abhijit Banerjee and others." 

Prof. Jonathan Gruber speaks with Boston Public Radio hosts Jim Braude and Margery Eagan to explain the relationship between inflation and interest rates. “What’s driving the inflation recently is auto insurance prices,” says Gruber. “Why are insurance prices going up? It actually comes back to the Fed. Auto insurers make a profit in two ways. One is by charging you more than they’ll pay out and the other is investing money and getting rates of return on that money.”

Prof. Esther Duflo will present her research on poverty reduction and her “proposal for a global minimum tax on billionaires and increased corporate levies to G-20 finance chiefs,” reports Andrew Rosati for Bloomberg. “The plan calls for redistributing the revenues to low- and middle-income nations to compensate for lives lost due to a warming planet,” writes Rosati. “It also adds to growing calls to raise taxes on the world’s wealthiest to help its most needy.”

Prof. David Autor speaks with Nature reporter Dalmeet Singh Chawla about the long-term impact of his research on policy documents. Autor’s work from November 2003 “is now the third most cited in policy documents worldwide,” writes Chawla. “Autor thinks his study stands out because his paper was different from what other economists were writing at the time. It suggested that ‘middle-skill’ work, typically done in offices or factories by people who haven’t attended university, was going to be largely automated, leaving workers with either highly skilled jobs or manual work.”

Writing for The Wall Street Journal, Prof. S.P. Kothari and Senior Lecturer Robert Pozen explain why U.S. consumers “continue to feel they are suffering from inflation, although the annual rate of inflation dropped sharply during 2023.” “The answer is that consumers have a broader time horizon,” they write. “[Consumers] are looking at the rate of price increases over the past three years. From January 2021 to January 2024, the consumer price index for all items rose by 17.96%.”

Prof. Emeritus Olivier Blanchard speaks with New York Times reporter Peter Coy about the impact of wage increases on inflation. “Fundamentally, it is hard to believe that when the economy is overheating there is not going to be pressure of some sort on wages and prices,” says Blanchard.

Rich Lyons PhD '87 has been named the new chancellor of UC Berkeley, reports Teresa Watanabe for The Los Angeles Times. Lyons is “a leader of innovation and entrepreneurship who cultivated a culture of questioning the status quo as a business school dean,” writes Watanabe. “Lyons has won numerous teaching awards and is seen as a charismatic insider with skills to navigate the complex Berkeley culture – and enliven campus events with mean guitar-playing skills.”

Prof. David Autor speaks with PBS host Walter Isaacson about the fear surrounding AI’s impact in the workforce and his view that AI could provide new opportunities for middle class workers. “Most of the time, technology is good for the elite and not so good for everybody else,” says Autor. “[AI] is a case where the technology might compete a little bit more with the elite and enable more people to do valuable work,” resulting in higher wages and more job opportunity for the middle class. 

Prof. Amy Finkelstein speaks with New York Times reporter Sarah Kliff about “the impact of medical debt relief on individuals.” “The idea that maybe we could get rid of medical debt, and it wouldn’t cost that much money but it would make a big difference, was appealing,” says Finkelstein. “What we learned, unfortunately, is that it doesn’t look like it has much of an impact.”

Jonathan Levin PhD '99 has been named the next president of Stanford University, reports Stephanie Saul for The New York Times. Levin’s “research has been wide-ranging, covering topics such as early admissions at selective colleges, subprime lending and the impact of financial incentives on health and health care delivery,” writes Saul. “As dean, Dr. Levin has promoted educating business entrepreneurs in developing countries through a program called Stanford Seed.”

Fast Company reporter Shalene Gupta spotlights new research by Prof. David Autor that finds “about 60% of jobs in 2018 did not exist 1940. Since 1940, the bulk of new jobs has shifted from middle-class production and clerical jobs to high-paid professional jobs and low-paid service jobs.” Additionally, the researchers uncovered evidence that “automation eroded twice as many jobs from 1980 to 2018 as it had from 1940 to 1980. While augmentation did add some jobs to the economy, it was not as many as the ones lost by automation.”

Prof. David Autor speaks with New York Times reporter Steve Lohr about his hope that AI can be harnessed to become “worker complementary technology,” enabling individuals to take on more highly skilled work and find better paying jobs. “I do think there is value in imagining a positive outcome, encouraging debate and preparing for a better future,” Autor explains. “This technology is a tool, and how we decide to use it is up to us.”

Forbes reporter Oludolapo Makinde spotlights research by Prof. Daron Acemoglu and Prof. Simon Johnson that explores the impact of AI on the workforce. “Instead of aiming to create artificial superintelligence or AI systems that outperform humans, [Acemoglu and Johnson] propose shifting the focus to supporting workers,” writes Makinde.

Graduate student Dhruv Gaur speaks with Boston.com reporter Lauren Daley about his viral message expressing support for Alex Trebek when he competed on “Jeopardy” in 2019, and his experience being invited back for the show’s first invitational tournament. “I listened to a ton of podcasts — old pop culture from the ‘70s ‘80s and ‘90s; history, Shakespeare,” says Gaur of how he prepared for the tournament. “I got really into quiz games on my phone or computer. I was shocked that nobody realized what I was doing because anytime I got a free second I’d be doing a quiz, or asking friends to go to bar trivia.”

Writing for The Hill, Sloan Prof. Catherine Wolfram and UCLA Prof. Kimberly Clausing explore why they feel U.S. politicians should embrace carbon pricing. “2025 will be a big year for Congress to tackle longstanding fiscal issues and further climate policy efforts,” they write. “Before this can happen, politicians need to hear timely arguments backed by up-to-date evidence.”