SCU Economists Spring 2015

SPRING 2015

THE SCU

ECONOMIST

Leavey School of Business

S a n ta C l a r a Un i v e r s i t y In This Issue 1-2 » A Message from Linda Kamas 2-3 » Graduation Photos 4

» 2015 Student Awards

4

» Students in the News

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» Economics Department Recruits New Faculty

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» A Message from the Economics Association

6-15 » Faculty News

We invite your comments and questions - economics@scu.edu.

On the web at: http://www.scu.edu/business/economics

A Message from Linda Kamas Economics Department Chair I am very excited to announce the resumption of our Economics Department Newsletter. It has been a few years since we have sent one out and we are happy to have the opportunity to introduce our new faculty and to share our research and teaching activities with our alumni and friends.

The financial crisis has shown us once again just how important the economy is to our well-being and interest in studying economics has never been higher. Ten years ago, we had about 120 majors; that has grown to over 400 majors and 100 minors today. Our 2015 graduating class has 129 students.

Since I took the position of department chair last fall, I have been working very hard with the faculty and Marianne Farag, senior administrative assistant, to improve our program and better connect with our community. In order to help the department identify areas in our program that need improvement, we conducted a survey of the 2014 and 2015 graduating seniors and we would also like to invite alumni to fill out a very short survey here. We plan to put together a future newsletter with short bios on alumni to keep people up-to-date on what we are all doing, so it would be great if you would provide a short bio in the survey or email it to us at economics@scu.edu.

Some of our recent innovations include expanding course tutoring to include upper

www.scu.edu/business/economics

division courses and we now have teaching assistants who hold weekly review sessions.

We have also improved access of majors to core economics courses and electives to ensure they make timely progress toward their degrees. We have scheduled a largely expanded set of economics electives to broaden the course offerings and to accommodate our growing number of majors while keeping class size down.

Each quarter we have sponsored an event for economics majors to meet with faculty to discuss economic issues. In the fall, we had a reception where students and faculty enjoyed a pizza dinner. In the winter, Professors Alex Field and Bill Sundstrom made presentations on economic inequality and the recent book

by Thomas Piketty, Capital in the TwentyFirst Century. In the spring, a panel of three faculty members presented their research: Professor Serguei Maliar, “Supercomputers – What are They? Parallel Computations and Supercomputers in Economics;” Professor Teny Shapiro, “A’s from Zzzz’s? How School Schedules Affect Academic Achievement;” and Professor Linda Kamas (that would be me!), “Competing with Confidence: The Ticket to Labor Market Success for CollegeEducated Women.”

We also have been working to update our LinkedIn group and invite you all to join the SCU Economics Network. We have lots of plans for the future, working with the Economics Association, including implementing a peer advisor program, increasing the use of math and statistics

Spring 2015

Department of Economics

FR OM T H E CH A I R (con’t) in our classes, providing more opportunities for student/faculty research, holding a job fair for graduating students, improving career and graduate school advising, increasing our connections with alumni via this newsletter, LinkedIn, and alumni campus events, and much more.

Graduati on Party

We ended the year with our annual graduation party held at the home of Professor Kevane (after 49 years at Professor Belotti’s home!). Our final activity was a graduation reception for our graduating seniors and their families on June 12, followed by a joyful graduation ceremony the next day. A great time was had by all at these events, as the photos here attest.

- Linda Kamas Chair, Economics Department

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The SCU Economist

The SCU Economist is published yearly by the Economics Department in the Leavey School of Business at Santa Clara University, Santa Clara, CA 95053. 408.554.4341 or economics@scu.edu. We invite your questions and comments.

Gr ad u a t i on Re c ept ion

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Spring 2015

Santa Clara University

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Department of Economics

2015 Student Awards The Charles and Barbara Hazel Award for Excellence in Undergraduate Economics are awarded to Ramsey Fisher (below left), recipient for the College of Arts and Science, and Franchesca Yamamoto (below right), recipient for the Business School.

Ramsey Fisher

Franchesca Yamamoto

Ramsey Fisher grew up in Fremont, CA, in

Franchesca Yamamoto transferred to Santa

a family of scientists and doctors. When he

Clara University’s business school in 2013

came to Santa Clara he found his passion

from De Anza College. Since coming to

for social justice and the desire to become

Santa Clara University, not only has she been

an agent of positive change. He earned

an exceptional student in the classroom,

his Bachelor’s degree with a triple major in

she also served as a teaching assistant

economics, history, and political science (a

for Econometrics and Data Analysis and

true Renaissance man!). Ramsey has contributed to our economics

as an economics tutor at the Drahmann Center for intermediate

community in many ways and his work is always of outstanding

microeconomics courses. The faculty teaching the courses gave her

quality. He has served as a teaching assistant for intermediate

the highest evaluations on her ability to engage and help students

microeconomics, a tutor at the Drahmann Center, and a research

learn as well as her contributions to designing classroom activities

assistant. Last summer he worked for the department as a student

and organization of the challenging material. Franchesca graduated

assistant and did a superb analysis of last year’s survey of graduating

in March and is currently working as a data analyst for Juntos, a small

seniors. Next year, Ramsey will attend law school at Columbia

financial software firm in San Carlos developing mobile technologies

University in New York City with the goal of making a positive

for the “newly-banked” populations around the world. Her future plans

difference in his community as an attorney.

are to grow as a data analyst at Juntos and help more people around the world reach financial inclusion.

Students in the News Tiffany Iskandar ‘16 Tiffany Iskandar, a junior honors student at SCU with a double major in accounting and economics, and a minor in international business, is a founding member of San Francisco Ice Theatre (SFIT). Her team won the national championship last June, for the second consecutive year, which secured their spot to compete in the Nations Cup (World Championship) representing Team USA 2015 in France this April.

The Business School spoke with Tiffany about her experiences with SFIT, the Leavey School of Business, and where she draws her motivation from. Read more»

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The SCU Economist

Two Santa Clara University senior economics majors have been awarded Fulbright Scholarships to study or teach abroad during the 2015-2016 academic year!

Keyra Galvan Senior Keyra Galvan, an economics and international business major and LEAD Scholar, will travel to Mexico City, Mexico, to combine business coursework with an internship at a Mexico-based company. Galvan, a 21-year-old native of San Jose, Calif., says she discovered during her study-abroad in Spain that “cultural awareness” was something she loved and valued. On campus, she has been active in the Multicultural Center and Alpha Kappa Psi, the professional business fraternity.

Read her Profile»

Ty Van Herweg Senior Ty Van Herweg, an economics and theatre double major and English minor will go to villages in Uganda for a project to help entrepreneurs get their products to rural customers, known as “last mile distribution.” The project will utilize a phone app, with the aim of increasing incomes of rural entrepreneurs and motorcyclists who deliver products. While on campus, he has been active in theatre productions and Santa Clara Community Action Program, as well as tutoring for the economics department. Van Herweg, 22, credits his experience as a Global Social Benefit Fellow through SCU’s Miller Center, with helping him win the Fulbright to Uganda.

Read his Profile»

The SCU Economist is published yearly by the Economics Department in the Leavey School of Business at Santa Clara University, Santa Clara, CA 95053. 408.554.4341 or economics@scu.edu. We invite your questions and comments.

ECONOMICS DEPARTMENT RECRUITS NEW FACULTY In the last three years, the economics department has recruited five new faculty members: Professor Gonçalo Pina joined the Leavey School of Business in Fall 2012 where he teaches macroeconomics. He received his B.Sc. in economics from the Universidade Nova de Lisboa, and earned his Ph.D. in economics from the Universitat Pompeu Fabra (Barcelona, Spain).

Professor Serguei Maliar joined the department in Fall 2013. Professor Maliar came to Santa Clara from Stanford University where he was a visiting associate professor in the department of economics and a visiting fellow for the Hoover Institution. He has taught at the University of Alicante, University of Pompeu Fabra and University of Chicago (ICE program).

He also served as the director of graduate studies in economics at the University of Alicante. Professor Maliar earned his B.S.

in Physics and Applied Mathematics from Moscow Institute of Physics and Technology; his M.A. in Economics from Central European University (Czech Republic); his Ph.D. in Applied Mathematics from Zaporozhye State University (Ukraine); and his Ph.D. in Economics from the University of Pompeu Fabra (Spain).

Professor Teny Shapiro came to Santa Clara in Fall 2013 from University of California, Merced, where she was an assistant professor of economics.

She has also taught courses in economics at UC Davis and Drexel University. Professor Shapiro earned her B.A. in Mathematics and Economics from University of California, San Diego and her M.A and Ph.D. from University of California, Davis.

Professor Christian Helmers joined the Leavey School of Business in

Winter 2014 as an assistant professor.

Professor Helmers earned his B.A. in Economics from HEC University of Lausanne, and his M.Sc. in Economics for Development, as well as his D.Phil. in Economics from the University of Oxford.

Professor Lan Nguyen joined Santa Clara in Fall 2014 as an assistant professor. Professor Nguyen’s specializations are in macroeconomics and international macroeconomics. She is the author of multiple papers studying the sources of business cycles in both closed and open economy settings. Professor Nguyen earned her A.B. in Economics and Mathematics from Lafayette College; as well as her M.A. and Ph.D. in Economics from Columbia University.

A Message from The Economics Association The Santa Clara University Economics Association (formerly the Economics Club) is a group of students dedicated to connecting undergraduate economics majors with their professors and providing opportunities to help them explore potential interests and careers.

The Economics Association has hosted professors’ nights so that students can learn more about the wide variety of research that someone can pursue in the field. The Association hopes to expand these lectures to Santa Clara University economics alumni who are currently applying economics in the real world. The main goal of these lectures is to show students the wide variety of opportunities available to them after college. Additionally, the Association has hosted socials for students to network with other economics majors.

The Economics Association is focusing its energies to become a resource for majors to use in order to make the most of their time at Santa Clara as a student. With the help of the department and alumni, we hope to show economics majors that they have many career options after graduating from Santa Clara University.

economics@scu.edu

Spring 2015

Santa Clara University

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Department of Economics

FACULTY NEWS Shireen Al-Azzawi Adjunct Lecturer Over the last year, Professor Al-Azzawi has been working on a study that investigates the relationship between the rising gender wage gap and declining female labor force participation rates in the Egyptian labor market; and the economic reforms that took place simultaneously. Her findings point to the detrimental impact of both industry concentration and trade liberalization on women in the labor market. However, increased openness to international trade appears to reduce the employers’ ability to discriminate against women in initially concentrated industries.

Professor Al-Azzawi presented this paper at the IZA Conference on Labor Markets in the Middle East and North Africa in Tunisia last year and it is now published in the IZA Journal of Labor Policy.

She is currently working on a project that investigates whether there is feminization of poverty in Egypt. This is a phenomenon that has been well documented in many developed countries but is not as prevalent in developing ones. Initial results indicate that when female headship is defined by the household maintenance criteria, as opposed to the way the survey responders designated the head, the share of female-headed households in poverty rises substantially.

Professor Al-Azzawi has continued to explore new teaching methods, and the incorporation of varied in-class activities to aid learning. She introduced the use of video presentations in her classes, encouraged more class participation by using an audience response system, as well as classroom debates on the pros and cons of different poverty alleviation strategies in her Economic Development class.

Adina Ardelean Lecturer Last year, Professor Ardelean taught international economics, growth and development and international trade. She also accompanied a group of students to Germany, where they visited institutions, banks, business and cultural sites as part of the course, “Global Experience: Understanding the Eurozone.� Throughout the year, Professor Ardelean gave a series of talks on various aspects of globalization at the Delphian Study Group in San Jose.

Her current research focuses on understanding trade patterns and their impact on economic well-being. Professor Ardelean has recently completed a paper which shows that trade liberalization, in addition to lowering the prices of imported goods, also induces consumers to switch to higher quality goods which has the opposite effect on the average price. Importantly, both effects have to be accounted for when evaluating the effect of trade liberalization on inflation.

Last year, she presented the paper at the European Trade Study Group in Birmingham, United Kingdom, and the paper is on the program of the Midwest International Trade Meetings at University of Kansas last fall.

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The SCU Economist

The SCU Economist is published yearly by the Economics Department in the Leavey School of Business at Santa Clara University, Santa Clara, CA 95053. 408.554.4341 or economics@scu.edu. We invite your questions and comments.

FACULTY NEWS Mario Belotti W.M. Keck Foundation Professor of Economics During the academic year 2013-2014, Professor Belotti revised and updated his previous study on population and food supply and concluded that there should not be any great difficulties in feeding the projected population growth of another two billion persons by the year 2050. Professor Belotti also investigated the role of the Federal Reserve’s easy monetary policy on the growing inequality in the U.S. distribution of income and wealth. The conclusion of the study shows that savers with saving accounts, low denomination certificates of deposits at banks and in money market funds were, and continue to be, robbed of large amount of interest income. At the same time, the very low interest rates the Fed has maintained for a long period of time, have increased stock market prices to the benefit of the rich.

Currently, Professor Belotti is doing research on technological change and the long-run availability of resources.

The question Professor Belotti is trying to answer is “Does technological change create new resources? And if so, is it possible to redefine sustainability?”

It Was All for the Love for a Horse: A Life Story is the title of Professor Belotti’s memoir which was published this year.

Alex Field Michel and Mary Orradre Professor of Economics During the 2013-14 academic year Professor Field served as a Phi Beta Kappa Visiting Scholar. Each year, the national honor society selects 12 or 13 distinguished individuals, most from Ph.D.-granting institutions, and makes them available for two-day visits to local chapters. Under the auspices of the program, Professor Field visited Southern Methodist University, the Universities of Kansas and Iowa, Texas Christian University, Creighton University, Lawrence University, Davidson College, Elmira College, and St John’s University/College of St. Benedict. He gave public lectures, addressed numerous classes, and “participated fully in the intellectual life of the institution.”

Professor Field’s research continues in two main areas. His interest in altruism (other-regarding behavior) is reflected in his forthcoming “Prosociality and the Military.” While we might expect to find little evidence of biologically altruistic behavior in the military, in fact the reverse is true. Soldiers exhibit a strong reluctance (in the absence of the right training) to shoot to kill the enemy. And they report they would rather die than let down their comrades, and are successfully trained, when necessary, to throw themselves on a grenade to save members of their squads. Professor Field maintains that the predispositions underlying these behaviors are not simply the result of acculturation or socialization, but have a biological substrate (see his 2001 book, Altruistically Inclined).

A related paper, “Schelling, von Neumann, and the Event that didn’t Occur,” (the event referenced is nuclear holocaust), appeared in Games.

economics@scu.edu

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Department of Economics

FACULTY NEWS Alex Field, continued: In productivity and macroeconomic history (see his 2011 book, A Great Leap Forward) he published “Economic Growth and Recovery in the United States, 1919-41” and “The Interwar Housing Cycle in the Light of 2001-2011” is forthcoming in an NBER volume. And his review essay on Thomas Piketty’s Capital in the Twenty First Century (the rare economics book that hits the bestseller list) will appear in the Journal of Economic History. Professor Field summarizes Piketty’s “simply stunning” collection of evidence on growing wealth and income inequality in upwards of twenty countries (approaching record levels) and his explanations for these trends. The review points out however that Piketty defines capital as marketable wealth rather than produced means of production – the definition, which includes plant, equipment and housing, favored by economists -- and that this distinction deserves further exploration.

Professor Field received the Leavey Impact Award for Research from Santa Clara last year, and was elected a fellow of the Cliometric Society in the same month. After serving as chair over most of the last two years, Professor Field turned over the department reins in September to Professor Kamas. In Winter, Professor Field taught macroeconomic theory and policy to MBA students and will be on sabbatical next year.

Christian Helmers Assistant Professor Christian Helmers joined the Economics Department in January 2014. During his first year and a half at Santa Clara, he taught a course in microeconomics as well as a new course on the economics of innovation and intellectual property.

Apart from teaching, Professor Helmers has been busy working on a number of diverse ongoing research projects, ranging from an impact evaluation of a court reform in the UK, to pharmaceutical patents in developing countries, and advertising in luxury online retail markets.

Professor Helmers has also released a number of working papers this year, including a study on the activity of so-called trademark squatters (entities that obtain trademark protection on brands owned by other companies) in Chile and their effect on the behavior of brand owners. In another paper, he examines the incentives and consequences of sharing ownership of a patent between companies that compete in the product market.

This year, Professor Helmers published a review article on the use of intellectual property by companies in the Journal of Economic Literature, an article on peer effects among children in India in Quantitative Economics, as well as an article on the activity of patent trolls in the UK in the Fordham Intellectual Property, Media & Entertainment Law Journal.

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The SCU Economist

The SCU Economist is published yearly by the Economics Department in the Leavey School of Business at Santa Clara University, Santa Clara, CA 95053. 408.554.4341 or economics@scu.edu. We invite your questions and comments.

FACULTY NEWS John Ifcher Assistant Professor John Ifcher has been busy teaching and working on a series of research projects.

Last year he taught the Principles of Microeconomics, the Economics of the Public Sector, the Economics of Poverty and Income Inequality, and an economic research seminar. Ifcher has also been working with a group of dedicated economics majors to improve the Economics Association.

Most of Professor Ifcher’s current research focuses on the relationship between subjective well-being (happiness), income, and social welfare programs. For example, in one recent paper, he found that the expansion of the Earned Income Tax Credit increased single mothers’ happiness and improved their mental health. In another paper, Ifcher examines the relationship between absolute and relative income and subjective well-being. During the last year, Professor Ifcher presented his research at various seminars and professional conferences, helped organize the Economics Science Association conference in Santa Cruz, and the Bay Area Behavioral Conference at Stanford University, and published a paper in the Journal of Neuroscience, Psychology, and Economics. Finally, during the last year, Ifcher’s research has been discussed in the Los Angeles Times, in The Atlantic, and on Al Jazeera America.

Linda Kamas Department Chair, Associate Professor Professor Kamas’s research is in the area of behavioral economics, altruism, and gender. One of her current research streams links behavior in laboratory experiments to real-life economic outcomes, an innovative connection that is missing in most experimental work. Her paper, “Competing with Confidence: The Ticket to Labor Market Success for College-Educated Women,” finds that college-educated women who are confident and willing to compete in laboratory experiments earn substantially higher salaries than men and other women in the three years after graduation before family responsibilities may affect earnings (perhaps Sheryl Sandberg is on to something about “leaning-in”!).

Her current research examines how emotions-in particular, empathy-affect economic behavior. She has just completed a paper, “Gender Differences in Public Policy Views, The Importance of Empathy,” that was presented at the Economics Science Association meetings in Prague and Santa Cruz. Men tend to favor free markets and are less supportive of government action than are women, partly explaining why women vote Democrat more often than men. The interesting finding of the paper is that the gender differences are entirely explained by empathy: the more empathic one is, the more one supports an activist government, so that empathic men are just as pro-government as women. Professor Kamas’s recent work has been published by the Journal of Economic Behavior and Organization, Journal of Economic Psychology, and Feminist Economics.

Professor Kamas has recently introduced a new elective, Economics and Justice, which covers theoretical views of justice and links these to real-life economic issues. Students do projects on the Affordable Care Act/

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Department of Economics

FACULTY NEWS Linda Kamas, continued: Obamacare, economic utopian ideas, and the appropriate role of government policy, as well as write a research paper on their own chosen topic. Very lively discussions made the class a joy to teach and we all learned quite a bit about economic justice.

Michael Kevane Associate Professor Last June, Michael Kevane published the second edition of his book Women and Development in Africa: How Gender Works, published by Lynne Rienner. The book has been used in many classes around the country. The second edition includes an expanded discussion of the increasing use of randomized control trials in development economics. Numerous papers now show that development projects have different outcomes depending on how they address gender issues.

Professor Kevane had two articles accepted for publication. The first is in the prestigious Oxford Handbook of Economics and Africa, edited by Justin Yifu Lin, the chief economist of The World Bank. The paper traces the economic history of gold mining in West Africa. This has been an interest of Kevane’s since gold mining exploded in Burkina Faso in 2005, when the price of gold started to rise to its eventual peak of $1,800 per ounce. Kevane has been asked by villagers to bring metal detectors the next time he comes to the village in Burkina Faso where he does research! The long history of gold mining in West Africa presents a mixed picture, with effects that are sometimes positive and sometimes negative for longer term development. The second article was prepared for the Handbook of Gender and Development to be published

by Routledge Press. The article reviews recent research on women and land tenure in Africa. It turns out that the development community still knows little about what kinds of land tenure reform can effectively enhance the rights and productivity of female farmers in Africa.

Professor Kevane also completed and presented a paper on his sabbatical research in Burkina Faso, on the effects of reading fiction on economic preferences of youth in Burkina Faso. Despite the presumption that reading fiction is “transformative,” Kevane’s research finds no effects at all on rural youth. Finally, Kevane was invited to give a presentation at the U.S. State Department in Washington, D.C. as part of an analytic exchange on current academic thinking on conflict in Africa. He reminded his audience of CIA analysts and Defense and State Department specialists that conflict is political; while climate change might aggravate underlying social tensions, it does not cause conflict on its own.

Rita Madarassy Adjunct Lecturer Professor Rita Madarassy had the opportunity to embark on the exciting mission of developing engaging and rigorous online economics courses starting last summer with Principles of Macroeconomics, working directly with the development team at Santa Clara University and Jesuit Distance Education Network. While she misses the live interaction that we have in our classrooms, she found ways to connect to

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The SCU Economist

The SCU Economist is published yearly by the Economics Department in the Leavey School of Business at Santa Clara University, Santa Clara, CA 95053. 408.554.4341 or economics@scu.edu. We invite your questions and comments.

FACULTY NEWS Rita Madarassy, continued: students online using some of the latest technology. She is very excited to be able to discuss economic theories and current events with her students who might be traveling around the world, or working in another part of the country for the summer. Madarassy finds that another valuable outcome is that students become familiar with many online collaboration tools that are becoming common expectations in the job market. In her online course, she experimented with several web-based tools such as online synchronous meetings on Google Hangout and Zoom, the newly developed Digital Interactives tool from Pearson Higher Education, TopHat’s response system to engage students directly using their cell phones, and Canvas/Camino learning management system for online discussion of current events. She is exploring and evaluating new tools to continue to improve online delivery, and to make interaction even smoother in these online learning experiences.

Serguei Maliar Associate Professor Professor Serguei Maliar taught a one-day pre-conference workshop for attendees of the 20th International Conference on Computing in Economics and Finance, June 2224, 2014 in Oslo, Norway (jointly with Lilia Maliar, Stanford University). The workshop was dedicated to numerical methods for solving large scale dynamic economic models and was sponsored by the Society for Computational Economics. Maliar visited the Canadian Central Bank (August 9-16) where he directs and advises a research team working under development of a computable general equilibrium model of Canadian economy. The model will be used for economic forecasts and the optimal monetary and fiscal policy choice.

Maliar published a chapter (“Numerical Methods for Large Scale Dynamic Economic Models”) in Handbook of Computational Economics (jointly with Lilia Maliar). The chapter describes state-of-the-art numerical methods that can accurately and reliably solve dynamic economic models with a large number of state variables intractable until recently. (Examples of such models are new Keynesian models, life-cycle models, heterogeneous agents’ models, asset pricing models, multisector models, multicountry models, and climate change models.). Maliar also published two articles: “Smolyak Method for Solving Dynamic Economic Models: Lagrange Interpolation, Anisotropic Grid and Adaptive Domain” in Journal of Economic Dynamics and Control (jointly with Kenneth L. Judd, Lilia Maliar and Rafael Valero) and “Merging Simulation and Projection Approaches to Solve High-Dimensional Problems with an Application to a New Keynesian model” in Quantitative Economics (jointly with Lilia Maliar).

Maliar presented the paper, “Envelope Condition Method with an Application to Default Risk Models” (co-authored

by Cristina Arellano, Lilia Maliar and Viktor Tsyrennikov) at the 20th International Conference on Computing in Economics and Finance and in a seminars at Santa Clara University and Boston University; and he presented the paper “Lower Bounds on Approximation Errors: Testing the Hypothesis That a Numerical Solution Is Accurate” (co-authored by Kenneth L. Judd, Lilia Maliar and Serguei Maliar) in the Session Four of the Stanford Institute on Theoretical Economics (SITE), Stanford University.

economics@scu.edu

Spring 2015

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Department of Economics

FACULTY NEWS Hugh McAllister Adjunct Lecturer Professor McAllister has taught a broad range of undergraduate and graduate courses in economics (macro) and finance. His research interests have broadly included topics relating to macro financial economic issues like the impact of structural federal budget deficits on economic growth, factors affecting the effectiveness of monetary policy, discovery of the real size of the spending multiplier (“crowding out”), and currency values, inflation and trade.

Kris Mitchener Professor Professor Mitchener has recently returned from the University of Warwick, where he was professor of economics for two years and taught graduate courses on long-run economic growth and economic history. While in Europe, he consulted with policy makers on the sovereign debt crisis and the European banking union in Brussels and London, sharing insights from his research in these areas. In 2013, he became a Research Associate at the Centre for Competitive Advantage of the Global Economy (CAGE) and in 2014 was appointed a Research Fellow at the Centre for Economic Policy Research (CEPR). Last July, he became co-editor of a leading field journal in economics, Explorations in Economic History.

Professor Mitchener has recently been studying how capital controls are used in response to financial crises – research featured on the policy website VOXEU. Although there have been a few recent instances of the implementation of capital controls in response to crises (Iceland in 2008 and Malaysia in 1998), their effects on macroeconomic performance in these instances is still not well understood. He examines the widespread use of capital controls during the Great Depression as a laboratory for assessing their impact, and concludes that, while they achieved their short run goal of stemming capital outflows, they did little to improve the recovery of countries relative to other policy choices. That is, countries with capital controls did not see relatively more robust recoveries in industrial production, exports, or prices relative to those who abandoned fixed exchange rates altogether or even stayed on the gold standard longer. In research recently published in the International Economic Review, Professor Mitchener explores the relationship between trade and wages in China. He focuses on that country’s first global trade boom shortly after 1900, showing how unskilled wages rose relative to skilled wages in response to a boom in demand for Chinese exports. That trade boom became particularly pronounced once World War I commenced; China was able to supply a variety of simple manufactured foodstuffs and textiles to countries whose supplies had been disrupted or who had increased their demand due to the war. Even after the war ended, China’s exports of unskilled-intensive goods continued to grow.

12

The SCU Economist

The SCU Economist is published yearly by the Economics Department in the Leavey School of Business at Santa Clara University, Santa Clara, CA 95053. 408.554.4341 or economics@scu.edu. We invite your questions and comments.

FACULTY NEWS Gonçalo Pina Assistant Professor In August 2014, Professor Pina took his Accelerated MBA students to South America as part of the global business strategies class. During a week of company, institutional, and cultural visits in Chile and Argentina, students had the opportunity to appreciate how business operates outside of the United States. Following decades of economic growth, Chile faces a slowdown in the demand for copper (copper accounts for more than 50% of Chile’s exports). Its biggest challenge is to diversify an economy that is too dependent on commodities. While the visits showcased the level of economic development of the richest country in South America in per capita terms, Chile faces an uphill battle against a conservative risk-taking culture, a small domestic market and geographical isolation. In Argentina, a recession is looming and the government had just defaulted. With estimates for inflation close to 40%, our students traded US dollars for Argentine pesos in the “blue market” (where a dollar was worth 66% more than in an official exchange house); they learned how import restrictions and the inability to repatriate profits limit private investment and growth, and about how important creativity is for businesses to thrive under unstable economic conditions. Although the short term outlook remains uncertain, optimism reigns in Argentina for the medium and long-run. Besides teaching, Professor Pina has been working on topics such as the accumulation of international foreign currency in developing economies, sovereign debt, financial reforms and behavioral economics. In February 2015, he published a paper on under-performance related to decision making using data from the National Hockey League shootouts in the journal Kyklos. You can read it here.

Helen Popper Associate Professor Last year, Professor Popper’s research focused on one of the key choices made by central banks – on the trade-offs between their domestic monetary policies and their foreign exchange rate policies. Her work took her to Europe where she spoke at the Erasmus University in Rotterdam, a University of Namur workshop, and at the Bank of England. Along with her colleagues Alexandros Mandilaras and Graham Bird from the University of Surrey in England, she published some of this work in the European Economic Review. Take a peek at some of the highlights. Professor Popper pursued similar themes in her work with David Parsley of Vanderbilt University. Together, they showed that the legitimate actions of central banks can be misconstrued as exchange rate manipulation. They went on to clarify how foreign currency targeting can be distinguished from the innocent side effects of homefocused monetary policies. Their work was published in spring in the Journal of International Money and Finance; you can see it here. She brings this and other research to our students through her teaching in macroeconomics and global business courses, and she has brought local researchers together by co-organizing the West Coast Workshops on International Finance and Open Economy Macroeconomics. You can look at last year’s workshop here, and get a preview of the latest one here.

economics@scu.edu

Spring 2015

Santa Clara University

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Department of Economics

FACULTY NEWS Helen Popper, continued: Finally, Professor Popper showed another side last year. A California native herself, she has been giving talks about using native plants in the garden. Her talks – at Huntington, Pacific Grove Natural History Museum, and elsewhere to master gardeners and plant societies – were based on the book she published with the University of California Press: California Native Gardening – A Month by Month Guide. You can see the beautiful and useful book here.

Teny Shapiro Assistant Professor Professor Shapiro has just completed her second year at SCU and has been keeping busy with research, teaching, and exploring San Francisco. She has been continuing her research on maternal and infant health-- her research on the consequences of elective birth timing changes on infant health was published in The Journal of Health Economics, while her latest project explores the determinants of early childhood vaccination in the U.S. Professor Shapiro’s research on school start times continues to be cited as important evidence as to why high schools should start their day later. She is working on a follow-up study to determine the optimal organization of the school day. Inside the classroom, Professor Shapiro has enjoyed getting to know the students at SCU and exploring new ways of teaching economics. She emphasizes the everyday applications of economics, discussing topics such as Uber, iPhone releases, and airline mergers. Professor Shapiro has also been using storytelling to enhance student learning by using podcasts as both a teaching and learning tool. Students in her fall labor economics course wrote and produced podcasts about current issues in the labor market.

Dongsoo Shin Associate Professor During the 2014-2015 academic year, two of professor Shin’s papers were accepted for publication. The first paper, entitled “Incentives and Management styles,” has been accepted and published in the International Journal of Industrial Organization.

If anyone wonders why his/her boss is doing all easy tasks himself/herself, and why all hard tasks are delegated, this paper provides an economic rationale. The second paper, “Price Discrimination with Demarketing,” accepted for publication in the Journal of Industrial Economics, explains why some sellers make it harder for consumers to purchase the products/services. Have you wondered why some really popular restaurants are so small and in very inconvenient locations? Why some fast-food restaurants have “hidden menus” that are only available to those who make an effort to find those menus? This research provides an economics answer to it!

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The SCU Economist

economics@scu.edu

FACULTY NEWS Bill Sundstrom Professor Bill Sundstrom and Michael Kevane continued their project examining the causes and effects of public libraries in the United States during their period of expansion between 1870 and 1930 or so. Library promoters argued that public libraries would, among other things, serve as “arsenals of democratic culture” and increase political participation. One of their goals is to assess whether this is true by comparing voter turnout in counties that had public libraries with those that did not. It sounds simple, but the data demands are daunting!

Last year Professor Sundstrom also joined some projects with colleagues in other departments. One of the most interesting (and successful) is a project led by professor Chris Bacon in SCU’s Environmental Studies Department. Bacon and Sundstrom, along with a team of others, are examining the issue of food insecurity in poor coffee-growing communities of rural Nicaragua. They are interested in identifying factors that make farm families vulnerable to seasonal hunger, including such global factors as price fluctuations in coffee markets and climate change, and in learning how to reduce that vulnerability. Sundstrom’s first paper as a coauthor on this team was published this year in a top journal, Global Environmental Change. Subsequently, the team submitted a substantial grant proposal to the National Science Foundation to continue the project, which was recently recommended for full funding. In terms of teaching, Sundstrom has been leading an effort to increase economics majors’ training in statistics and data analysis, with the introduction of our new required courses, ECON 41 and 42. Professor Sundstrom says: “I am really excited about teaching sophisticated and practical techniques for analyzing real-world data, with lots of hand-on practice using the statistical software R. The challenges are many, but the rewards are great!”

economics@scu.edu

Spring 2015

Santa Clara University

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