UNIVERSITY OF CALIFORNIA, BERKELEY

The Econ ExchangeNEWS AND NOTES FROM THE DEPARTMENT OF ECONOMICS

VOLUME EIGHT, NUMBER ONE SPRING 2005

Gerard Debreu dies at 83:First of four Berkeley economists to win Nobel Prize over 18-year span

By Noel Gallagher,Public Affairs12 January 2005(printed with permission of UC Berkeley Public Affairs)

Nobel Prize winner Gerard Debreu,emeritus professor of economicsand mathematics, died Dec. 31 inParis of natural causes. He was 83.

Debreu won the Nobel MemorialPrize in Economic Sciences in 1983for applying mathematical rigor tothe fundamental theory of supplyand demand in economics. The lawof supply and demand dates backto the 18th century, but Debreu’smathematical models providedproof of how prices affect thesupplies of goods bought and sold.Through the work of Debreu andothers, the conditions of the“invisible hand” in the marketplacewere clarified.

A native of Calais, France, Debreualso was an officer of the FrenchLegion of Honor and a commanderof the French National Order ofMerit.

Fellow Nobel laureate and StanfordUniversity economics professorKenneth Arrow said he and Debreufound themselves independentlyresearching similar economic ideasin the early 1950s, whicheventually led to a joint paper in1954 on the existence of

equilibrium in an economy. Arrowwarmly remembered how theycollaborated on the paper.“It was a wonderful experience; hewas just so brilliant to work with,”Arrow said. “One of us would say asingle word, and the other would

just understand immediately. Ilearned quite a bit from him.”

Debreu was born on July 4, 1921.He broke off his studies inmathematics as a young man toenlist in the French Army after D-Day, serving briefly in the Frenchoccupational forces in Germanyuntil July 1945. He resumed hisstudies after the war, shifting hisfocus to economics, a subject inwhich he became interested after

reading a book that described themathematical theory of generaleconomic equilibrium, establishedby Leon Walras in the 1870s.

“During that period, I was anAttaché de Recherches [researchassociate] of the Centre Nationalde la Recherche Scientifique, whichshowed an impressive tolerance forthe absence of tangible resultsassociated with the change fromone field to another distant field,”Debreu dryly noted in anautobiography he prepared for theNobel Foundation.

Prior to his almost-30-year tenureat Berkeley, Debreu worked from1950 to 1960 at the University ofChicago and Yale University for theCowles Commission for Research inEconomics, and at Stanford’s Centerfor Advanced Study in theBehavioral Sciences from 1960 to1961.

Debreu joined the Berkeley facultyin 1962, at a time when theeconomics department waspointedly building up its staff andwould soon be recognized as thepre-eminent economics departmentin the academic world. Debreu’sNobel was the first in a string offour Nobel Prizes in economics wonby Berkeley faculty. John Harsanyiwon in 1994, Daniel McFadden in2000, and George Akerlof in 2001.

See DEBREU page 10

2 THE ECON EXCHANGE, SPRING 2005

Former PUC Chair (and Economics alum) Donald Vial Dies

From Chair Richard Gilbert: I am saddened to report that Don Vial passed away recently.Don was a Berkeley graduate (’49, ‘52) and a long-time friend of the Department. He servedthe State as member and President of the California Public Utilities Commission and asChairman of the Board of Directors of the California Foundation on the Environment and theEconomy. The Peevey/Vial Chair is a source of support for the Center for Labor Economics.Clair Brown and Michael Reich presented a recognition award to Don Vial at our Centennial Celebration [in2002], and spoke eloquently of his dedication to the University.

See CHAIR, page 10

Writing this note to you is one of my finalacts as Chair of the Department ofEconomics. I stepped down on June 30th,after three very busy and exciting years asChair. Ben Hermalin, Professor of Economicsand Willis H. Booth Professor of Banking andFinance at the Haas School of Business,succeeded me as Chair on July 1st.

On May 19th we celebrated the Department’s102nd Commencement in an outdoorceremony at the Greek Theater, and for thefirst time in our institutional memory, itrained! But it didn’t dampen theenthusiasm. It was an uplifting event thatwas much appreciated by everyone. BillDudley, the Chief Economist at GoldmanSachs and a 1980 Ph.D. from ourDepartment, gave the CommencementAddress. Bill’s dissertation research was inmicroeconomics, but he evolved into one ofthe most influential macroeconomists in thebusiness community. It is a great careerstory. Bill joked that his transformation intoa macroeconomist was an effort to provehimself to George Akerlof, who had givenhim his only “B” in graduate school—inmacroeconomics no less! In all, 400undergraduates and 14 Ph.D. candidateswere awarded their degrees this year.

Looking back, one of my first acts as Chairwas to preside over the Department’sCentennial Celebration in November, 2002.It was an honor to do so, and it gave me agreat opportunity to meet a substantialnumber of alumni and friends under suchexhilarating circumstances, as we marked theDepartment’s hundredth anniversary withtestaments to the Department’s many pastsuccesses, intellectual excellence, and futurepotential. The gathering was a vividdemonstration of the many people in theeconomics profession who made their startor advanced their careers at Berkeley. Theday included amusing memories as well asemotionally moving moments and led to thecreation of the Economics Centennial Fund,

which has garnered over $500,000 — from alumni,department faculty, parents of recent graduates,and friends.

During my term as Chair, the Departmentrededicated itself to reaching out to alumni andfriends through symposia such as “California’sFiscal Crisis” and “Prescriptions for Social SecurityReform”, which addressed urgent matters in ourlives and involved some of the leading thinkers onthese issues. I would like to thank Professor AlanAuerbach, who organized both of these symposia,for his great community spirit and enthusiasm. Inthe last three years, we also opened The EconExchange to more input from alumni, which givesme great satisfaction, and I hope to see even morealumni-generated items in future issues.

Since I never miss an opportunity to laud theDepartment’s many successes, let me give you abrief overview of where we stand as I exit from theChairmanship. We added ten new professors to ourfaculty in the past four years, and will welcomeone more—econometrician Bryan Graham fromHarvard University—this summer. A number of ourjunior hires have been selected for the Review ofEconomic Studies tour, which sends the cream of agiven year’s Ph.D.s on a lecture tour of Europeanuniversities to represent the best new research inthe field. This is a great, great honor and I amproud of our success in attracting the very bestjunior faculty to Cal.

Last semester the Department underwent a formalreview conducted by a team of distinguishedeconomists from other universities with supportfrom the Berkeley administration and the AcademicSenate. The last department review of this extentoccurred in 1988. The review concluded that ourDepartment has been extraordinarily successfulover the past fifteen years and praised our effortsto create a productive and congenial environmentfor research and teaching, despite having too fewfaculty to meet instructional demand andinadequate resources to support our graduatestudents. The review remarkedfavorably on the level ofprofessionalism in our

~~~

A N

ote

from

Cha

ir R

icha

rd J

. Gilb

ert~

~~

3THE ECON EXCHANGE, SPRING 2005

Thank You to Our Friends

The Department of Economics gratefully acknowledges the alumni, friends,and organizations who have made pledges and donations to the EconomicsAnnual Fund, Centennial Fund, Grace Katagiri Fund, and other initiatives,from December 2004 through May 2005:

Alumni ExchangeAlumni Updates

Muge Adalet (Ph.D., ’04) recentlyreceived the European Associationfor Banking History’s 2005 “YoungScholar Prize” for best dissertationin the field for “Capital Flows andFinancial Crises: A HistoricalPerspective”.

Chian Choo (B.A., ’02), now abank associate in Singapore, haswon the 2003-04 essaycompetition, organized by theMonetary Authority of Singaporeand the Economic Society ofSingapore, on the theme “How CanSingapore Remain Competitive in aGlobalising World Economy?” Heparticularly enjoyed applying boththeory and empirical research learntand carried out at UC Berkeley, in acontext relevant to Singapore.

Miguel Fuentes (Ph.D., ’04) hasreturned to his home in Chile totake up his position as AssistantProfessor of Economics at thePontifical Catholic University ofChile.

Kenneth N. Kuttner (B.A., ’82)was recently appointed to theDanforth-Lewis Chair in Economicsat Oberlin College. Prior to joiningOberlin, Ken worked at the FederalReserve Banks of New York andChicago, and held visitingteaching positions at ColumbiaBusiness School, New YorkUniversity, and the University ofWisconsin at Madison. He receivedhis Ph.D. from Harvard in 1989.

Eric X. Li (B.A., ’90) is ManagingPartner of Chengwei Ventures inShanghai, China. He will welcomeyour visits. Contact:ELi@chengwei.com sent wirelesslyvia Blackberry from T-Mobile.

Anna Wong (B.A., ’04) presentedher economics senior thesis(written under Professor BarryEichengreen) in the 85th AnnualSouthwestern EconomicsAssociation Conference (NewOrleans) and won 3rd place in theirstudent paper contest (1st place forundergraduate papers).

Economics Centennial Fund:

Millennial Circle

Gold Bennett Cera & Sidener LLPSteven Sidener ‘82 & Susan Leong

Platinum Circle

Leonard ’77 & Jenny ChengMark Desoer ‘74

William Dudley ’80 & Ann DarbyCarl Shapiro ‘77

Gold Circle

George ’72 & Polly AbedJohn ’42 & Agnes ’43 Alden

Joseph ’67 & Anna AmundsenMarcus Berliant ’81 & Clara Asnes

Phillip ’61 & Gale ’66 BrownellWayne Campbell ‘80

Philip Chan ‘93Brian ’72 & Jennifer Cilker

Norman ’54 & Cynthia ’58 DyerSterling ’55 & Virginia ’54 Emerson

David ’63 & Antoinette FarisJohn ’67 & Lorna Flynn

The Gap FoundationThomas Head ‘80Yuko Kameoka ‘94

William ’77 & Patricia KnudsonWinnie Lam ‘03

Robert ’53 & Patricia ’49 LanzillottiSpencer Larson ‘81

Kim Nguyen ‘97Betsy Shum ‘95

Aleta Thielmeyer ‘61Frank Tischer ‘70

John ’55 & Shirley ’57 TraynorOliver & Dolores Williamson

Economics Annual Fund:

3COM Corporation

Terry ’64 & Michele ’64 Aldrich

James Beck ‘83

Frazer Burkart ‘98

Charles Byce ’73 & Laura Powell

Ronald Clark ‘97

Daniele Facchini ’84 &

Suzanne Palmer

Benjamin Garosi ‘02

Myron Harpole ‘47

Davin Miyoshi ‘95

Lawrence Muilenberg ‘53

Yoshiko Okamoto ‘99

Nandita Raghavan ‘03

Clinton ’65 & Petchsuporn Rapley

Clark ‘75 & Marcia Silcox

Craig Sundstrom ‘85

Eric Swanson ‘76

Alden Yan ‘98

Grace Katagiri Memorial Fund:

Grant Itokazu ’83 &

Sandra Stevens ‘80

Kamu & Chiyoko Koito

Alvin & Marianne Matsumoto

James & Janet Ohta

Harold & Dawn Perlis

Marion Ross ‘56

Elizabeth Savoca ‘78

Hal ’73 & Carol Varian

James & Robin ’75 Walther

4 THE ECON EXCHANGE, SPRING 2005

RememberingRememberingRememberingRememberingRemembering

From Xavier Vives (Ph.D., 1983)

When at Berkeley I chose the field of mathematical economics led by Gerard Debreu. His lectures were a pleasure of eleganceand clarity. Gerard Debreu was economical and concise in his communications but I felt warmly supported all along the dissertation

process. I still remember the first time I presented him some results I had obtained on demand theory. The first thing he said is that “this is not obvious”. I panicked for a moment until

I understood that he meant that the results were not trivial.

From ProfessorOliver Williamson

I always marveled at Gerard’squiet, kind and inclusive ways—an

example being his insistence onreferring to me as an “economictheorist”, my protests to the contrarynot withstanding. Plainly, Gerard(also John Harsanyi) defined

theorist very broadly. In theend I got used to it.

From Marcus Berliant(Ph.D., 1980)

Professor Debreu was a complex andgenerous man; his death is a greatpersonal loss for me. He became myrole model—long before I ever methim—when I was exposed to hiswork in my days as an undergraduateat Cornell. I had intended to majorin physics or chemistry, but his ideaschanged my goals completely. Fromthen on I hoped to work with him.It was my great fortune to have himas my mentor, friend, and thesissupervisor.

The graduate students at Berkeleyliked to call him “Uncle Gerard,” butnever had the courage to address himas such. He was the coach of thefootball team of the economicsdepartment and on those occasionswe called him “coach”; he seemed tolike that very much.

When I was writing drafts of mydissertation, as he approved eachchapter, Professor Debreu gave me apiece of paper that simply said,“Imprimatur Chapter X G.D.” AfterI collected all of them, mydissertation was complete. I treasurethese slips of paper.

Professor Debreu was alwaysavailable to his students, providingadvice during our graduate years andbeyond throughout our careers. Hewas always subtle, but we listenedclosely to his precious advice. It istruly a privilege to have known him.I often speak of him in class or to mygraduate students at the Universityof Rochester (1982-1994) andcurrently at Washington University inSt Louis. He will remain aninspiration. Professor Debreu left abedrock foundation for economicsand set a standard to which we canonly aspire.

From Wanjin Kim (Ph.D., 1988)

When I came across with The Theory ofValue as a graduate student at SeoulNational University in 1977, I was instantlyfascinated by the beauty and simplicity ofthe book. Since then, I became an ardentadmirer of Professor Debreu. And I wasoverjoyed to be admitted to Berkeleybecause I could study under his guidance.I still remember the first impression ofhim in the welcome meeting for the newstudents in 1981. His gentle and warmsmile will remain in my memoryforever just as the fascination of

his book has thrilled me overmy entire career as an

economist.

From Hal Varian( Ph.D., 1983)

…I must say a word aboutDebreu as a teacher. I was

fortunate to attend hislectures on mathematical

economics at Berkeley during theFall of 1970. Without a doubt they

were among the highlights of mygraduate career. Each lecture was

carefully prepared and delivered; andeach lecture was characterized by the

elegance of presentation that I havereferred to several times in this essay. Indeed

it was Debreu’s role as a teacher and as anexponent of the interest and importance ofmathematical economics that must remainone of his most satisfyingaccomplishments. For through theseactivities, as well as through his writtenwork, Debreu has played a major rolein the development of moderneconomic theory.

[Source: Hal Varian, TheScandinavian Journal ofEconomics, Vol. 86, 1984pp. 13-14]

From Beth Allen(Ph.D., 1978)

Early during my first yearof graduate school, Professor

Debreu—as I called himthen—asked me how I liked

Berkeley so far and I respondedthat I missed the change of season

and especially the lack of snow. It wasjust a brief and casual hallway or coffeeroom conversation. Several months later,

when it did actually snow an inch or so inBerkeley, he came to find me in mywindowless office inside 608 Evansand insisted that I follow him to his

office to see the snow. I wasamazed that he had remembered

my earlier remark and veryimpressed by his kindness

and thoughtfulness tofetch me when it

snowed.

5THE ECON EXCHANGE, SPRING 2005

GerarGerarGerarGerarGerard Debrd Debrd Debrd Debrd Debreueueueueu

From Martha Olney (M.A., 1980, Ph.D., 1985) inconjunction with several participants in the first LittleBig Game in 1979: Curtis Grimm (Ph.D., 1983), SpencerKrane (Ph.D. , 1985), and Robert Powell (Ph.D., 1985).

The very first Little Big Game was held at Stanford in 1979,under threatening skies that opened with a torrentialdownpour in the second half. Both Gerard Debreu and KenArrow were present as coaches. Berkeley led at halftime 6-0.During the half, Arrow came over to the Berkeley side of thefield to greet Professor Debreu. Arrow and Debreu shookhands, chatted briefly, and then, as the game was about tobegin again, Arrows said as he departed, “May the best teamwin.” Professor Debreu, with a twinkle in his eye, repliedquite formally, “It appears they already are.” Cal took twolate safeties and hung on for a 6-4 win in the very first LittleBig Game.

And from the post-game party: First, Gerard gave a graciousvictory speech and said something like “I hope that, over theyears, the sequences measuring the frequencies that the coreresides in Berkeley and resides in Stanford both converge to½—but I also hope that they don’t converge too quickly.”Second, the post-game party was held at a pizzeria inStanford. Always the gourmand, Gerard noted: “The pizza isbetter at Kip’s.” But always the gentleman, this fact was justquietly relayed to a couple of Berkeley folks seated nearby.

From Jean-MichelGrandmont (Ph.D., 1971)

I remember vividly my time in Berkeley asGerard Debreu’s Ph.D. student in 1968-70.

Coming from France, attracted by his worldwidereputation, I soon discovered with great astonishment

that I was to be among the FIRST THREE Ph.D. studentsever registered with Gerard: apparently, the towering

scientific stature of the man may have made a few prospectivestudents apprehensive? The three of us (Truman Bewley,Richard Cornwall and myself) shared a large office in theDepartment, then in Barrows Hall, during 1969-70.

Gerard gave us friendly scientific support by visiting us often there.But you had to win his approval by meeting his high standards! Iremember giving him regularly hand written notes on what I haddone, that were noticeably piling up on a shelf in his office, andbeing in great despair as I wasn’t getting more than a neutral “keepgoing, it is interesting...” in return. Gerard had warned me early onthat I would be “on my own”, as I had elected a field, the integrationof money in general temporary equilibrium and the microeconomicfoundations of macroeconomics, which “he had not thought about”,but still... Until I gave him in April 1970 a short piece on atechnical issue that I had discovered during my research work. Istill see him coming to our office two days later and throwing agreat smile: “Jean-Michel, I READ your paper!” That was themost explicit evaluation of that piece I got from him, but Itook it to mean something...

Gerard was always a wonderful person, ready togo out of his way to support a friend or a

student in case of need. Beyond his greatscientific achievements, he will live

in our hearts for a long time.

From Jean-Pascal Bénassy(Ph.D., 1973)

Everybody knows Gérard Debreu thescientist. But because he was such a

discreet person fewer people know somemore personal aspects of his character. So

here is a little anecdote that will tell about that.

We were both in a conference, and just beforeentering the room for my talk, he told me he was

hoping we could get together, but because he hadalready so busy plans this might simply not be feasible.

It turned out to be one of these unlucky days and, to make along story short, I had a really tough session. Just as weexited, Gérard came to me and asked with an innocent lookon his face: “So, Jean-Pascal, have you decided which dayyou want us to have lunch?” I tried to tell him that heshould be the one to tell me whether and when hemight be available, but he said nothing, and weended up having lunch at a time of my choosing.

This was Gérard. He would never show off,but was always present to give you moralsupport when it was needed. And to allhis students such “hidden” qualitiesare remembered as dearly as thescientific ones everybody knows.

Photo Credit: Curt Grimm. TOP ROW: Chuck Mason (Ph.D. ’83), DonAndrews (Ph.D. ’82), Frank Rimlinger, Bob Jacobsen (B.A. ’77, Ph.D. ’81),Coach Gerard Debreu, Brian Newton, James Peoples (Ph.D. ’84), StevePopper (Ph.D. ’85), Mike Luger (MCP ’77, Ph.D. ’81), Bob Powell (Ph.D.’85). BOTTOM ROW: Curt Grimm (Ph.D. ’83), Stu Gabriel (Ph.D. ’81), PhilYoung (Ph.D. ’84), Spence Krane (Ph.D Ph.D. ‘85), Ken Myers (Ph.D.’84), (front) Barry Ickes (Ph.D. ’84), (behind) John Henly, Larry Jones(Ph.D. ’81).

6 THE ECON EXCHANGE, SPRING 2005

EconEchoes...a column of recollections ofEconomics at Cal

”Econ Echoes” (a title coinedby alum Dr. Richard E. Jay,PhD ’53) is a new column inThe Econ Exchange. Alumni(of any vintage), friends,faculty, and students areinvited to write originalessays which recall specialoccasions or people in theDepartment of Economics—Commencement, a favoritefaculty member or course orfellow student, or an event—for publication under theirown byline in the semi-annual Econ Exchange.

Please send your entries nolater than October 1 (for Fallissue) or April 1 (for Springissue) to the Editor, The EconExchange, Department ofEconomics, 549 Evans Hall,#3880, University ofCalifornia, Berkeley, CA94720-388 or emailalumni@econ.berkeley.edu.Essays should not exceed 500words and selection is at thediscretion of the Editor.Please remember to includeyour name, degree, anddegree year with yoursubmission, if you are analum.

GerarGerarGerarGerarGerard Debrd Debrd Debrd Debrd DebreueueueueuByRobert Anderson,Professor of Economics andMathematics

Gerard was a perfectionist.Every paper he ever wrote waspolished to perfection. Theassumptions were clearly statedand very general, the proofswere unfailingly elegant, and nota single word could be added orsubtracted without weakeningthe presentation. He refused tocomment on the reasonablenessof assumptions, believing thathis job was to make theassumptions clear, and it wasthe reader’s job to assess them.In a profession that rewardsbrash scholars who overstate theimportance of their results, herose to the very top by makingno claims for his work beyondthe unvarnished statements ofhis theorems.

He wrote far fewer papers thanmost famous economists. Eachwas a gem, not just ofexposition, but also of content.His work defines what isimportant in general equilibriumtheory. General equilibriumtheory studies four mainquestions: the existence ofWalrasian equilibrium, thewelfare properties of equilibrium,determinacy of equilibrium, andthe justification of the Walrasianassumption that agents act asprice-takers. In Arrow-Debreueconomies, that is economieswith a finite number of goods,finite number of agents,

completemarkets, andsymmetricinformation,Gerard played apivotal role onall fourquestions. TheArrow-Debreutheorem onexistence ofequilibrium anda similar paper

by Lionel Mackenzie were thefirst reasonably general existencetheorems for Walrasianequilibrium. Although theconcept of the First WelfareTheorem goes back to AdamSmith, Gerard and KennethArrow, in separate papers,provided the first modernformulations and rigorousproofs, under reasonably generalassumptions, of both the Firstand Second Welfare Theorems.Determinacy of equilibrium—thefact that, for a generic set ofeconomies, there are onlyfinitely many equilibria and theymove smoothly in response tochanges in underlying economicparameters—was firstestablished by Gerard; it is thecritical theoretical underpinningof comparative statics results,which are so important inapplied analysis. There are manyapproaches to justifying theassumption that agents act asprice-takers, but the core is theone that has been the moststudied. The core of an economywas introduced by Edgeworth in1881, who gave a geometricargument for core convergence,but the paper by Gerard andHerb Scarf in 1964 generalizedEdgeworth’s claim and providedthe first rigorous proof; it led toa very active literature throughthe early 1980’s.

General Equilibrium Theory hasexpanded far beyond the Arrow-Debreu context. In each newcontext, researchhas focused on

See ECON ECHOES page 11

7THE ECON EXCHANGE, SPRING 2005

123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123

Faculty News & Notes

The recent Supreme Court decision to strike down individual state’s discriminatory laws which prevented directintra-state shipments of wine between producers and consumers was informed by an Amici Curiae written by agroup of leading economists, including Cal’s George Akerlof, John Letiche, and Daniel McFadden. The groupfound that “the principles of open state borders and non-discrimination, as they have been explicated in thisCourt’s decisions under the Commerce Clause, are consistent with the economic profession’s well-acceptedviews on the benefits of free trade and competitive markets. Those views support the invalidation of thediscriminatory state regulations at issue in these cases.”

Professors Ron Lee (Demography and Economics) and Bob Powell (Political Science, Economics Ph.D., ’85) aretwo of Cal’s five new Fellows of the American Academy of Arts and Sciences.

Joe Farrell, Hal Varian, and Carl Shapiro are the authors of The Economics of Information Technology, a newbook published by Cambridge University Press in December, 2004.

George Akerlof has received a three-year National Science Foundation grant to study “Identity and theEconomics of Organizational Behavior”. This project will integrate economic theory and practice with findingsin sociology and psychology by considering the implications of the concept of identity for economics. Usingthe Xlab, it will yield a better understanding of the relation between economics and human motivation,especially within groups and organization, and could increase our understanding of gender discrimination,minority poverty, academic achievement in schools, the division of labor in households, corporate governance,and the role of compensation as an incentive. [Source: IBER Bulletin, Dec. 2004]

In December and January, Pranab Bardhan gave two sets of lectures in India, one the K.C. Basu MemorialLecture at the National University of Juridical Sciences on “Law and Economics in Development”, and theother, the Kalinga Lectures at the N.K.C. Center for Development Studies on “The Global and the Local in theLives of the Poor”. During March, April and May, he lectured at the East-West Center of the University of Hawaii,Yale University, and the University of Siena, where he presented three talks. His book, Scarcity, Conflicts, andCooperation was published by MIT Press in January.

Ken Chay reports that three papers have been accepted for publication: (with Michael Greenstone) “Does AirQuality Matter? Evidence from the Housing Market”, Journal of Political Economy, April 2005; (with PatrickMcEwan and Miguel Urquiola) “The Central Role of Noise in Evaluating Interventions that Use Test Scores toRank Schools”, American Economic Review, forthcoming; and (with Douglas Almond and David Lee) “The Costsof Low Birth Weight”, Quarterly Journal of Economics, forthcoming. Four of Chay’s co-authors have ties to Cal:Lee is an Economics faculty member, Greenstone a former postdoctoral fellow, and Urquiola and Almond areformer Ph.D. students. Chay was further honored as Best Teacher by the Graduate Economics Association for2004-05.

Raj Chetty has been awarded a three-year National Science Foundation grant to study behavioral responses totaxation. The aim of the project is to improve our understanding of how individuals and firms change theirbehavior in response to taxes, which is an important step in evaluating optimal policies. Specifically, theproject will focus on examining the effects of dividend taxation on corporate behavior and the link betweenthe salience (or visibility) of a tax and the extent to which agents respond to it.

The National Science Foundation has recently awarded Stefano DellaVigna a three-year grant for his project“Attention, Demographics, and the Stock Market”. He explores the question “Do some really big changes gounnoticed by the market” by attempting to determine if a forecastable variable—demographic changes—maybe partially neglected, both by individual investors and companies. DellaVigna hopes to improveunderstanding of the economic consequences of demographic changes as well as the empirical support for theefficient market. [Source: IBER Bulletin, Dec. 2004]

8 THE ECON EXCHANGE, SPRING 2005

123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123

Faculty News & Notes

Aaron Edlin (a founder of the Press) reports that the Berkeley Electronic Press (bepress) has created threenew prizes in Nobel Laureate Kenneth J. Arrow’s name (in addition to the existing Junior and Senior FacultyPrizes): the Kenneth J. Arrow Prizes in Theoretical Economics, Macroeconomics, and Economic Analysis andPolicy. Three each of these new prizes will be awarded annually, for a total of nine prizes. For moreinformation, please visit www.bepress.com.

Barry Eichengreen delivered the annual Thornton Lecture at the Cass School of Business, City University,London, on “The Dollar and the New Bretton Woods System”. In April, he was in the UK again to present theTawney Lecture at the Annual Meetings of the Economics History Society in Leicester on the subject “Sterling’sPast, Dollar’s Future? Historical Perspectives on Reserve Currency Competition”.

A paper by Bronwyn Hall and coauthors Adam Jaffe and Manuel Trajtenberg entitled “Market Value and PatentCitations” was published in the RAND Journal of Economics this Spring. Although Hall’s two terms as a memberof the Science, Technology, and Economic Policy Board of the National Academies came to an end this June,she recently joined the Research Advisory Board of the Deutsche Bundesbank, Frankfurt, and will be travelingeven further afield for board meetings.

In February, Ted Miguel was awarded a two-year Alfred P. Sloan Fellowship to support his research indevelopment economics. He also received a Harry F. Guggenheim research grant for new work on “War andEconomic Development in Vietnam and Sierra Leone”. This grant will fund applied microeconomic empiricalwork estimating the impact of war damage on a variety of postwar institutional and economic developmentoutcomes in the two countries. And in addition to being named Best Advisor of 2004-05 by the GraduateEconomics Association, he was also honored with the Distinguished Teaching Award from the Division of SocialSciences at Berkeley.

The Carroll Round conference on international economics brings undergraduates from top economicsprograms to present their original research. Maury Obstfeld presented the keynote lecture at the 4th annualconference on April 23rd. The three earlier keynoters were: R. Glenn Hubbard, John Williamson, and NobelLaureate John Forbes Nash, Jr. (of “A Beautiful Mind” fame). In addition, Obstfeld gave another keynoteaddress in May at the Bank of Japan’s annual research conference in Tokyo.

Martha Olney, 2003 recipient of the campus-wide Distinguished Teaching Award, was invited to speak in theFrontiers of Education program as part of Chancellor Birgeneau’s inauguration activities. The program focusedon the newest approaches to teaching across the nation. Her presentation was entitled “Why Come to Class?The Future of the Large-Enrollment Class in the Age of Webcasting”. Despite increasing access to web-basedlearning tools, Olney has found that students will continue to come to class only if the faculty make class“indispensable” by developing in-class activities, involving students, and teaching without lecturing.

In October, 2004 Oliver Williamson received an honorary degree from Valencia University in Spain andpresented the Richard T. Ely Lecture on “The Economics of Governance” at the Annual Meetings of theAmerican Economic Association in Philadelphia in January. In April he was named the 2004 DistinguishedFellow of the International Industrial Organization Society at the Society’s conference in Atlanta, and in Mayhe delivered the Eli F. Heckscher Lecture on “Business History and Economic Organization: The Lens ofContract/Governance Perspective” in Stockholm, Sweden.

On April 8th, Glenn Woroch gave the keynote address on “Facility Sharing and Infrastructure Investment” atthe Workshop on ICT Market Policy, organized by the Ministry of Internal Affairs & Communications, Tokyo,Japan.

9THE ECON EXCHANGE, SPRING 2005

123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901123456789012345678901

Und

ergr

adua

te &

Gra

duat

e St

uden

t U

pdat

es

The following Economics graduate studentswere recipients of 2004-05 IBER Mini-Grants to support new research projects:Avraham Ebenstein (“The Effect of LateMarriage on Women and the Family:Evidence from Taiwan’s Dragon Year BabyBoom”); Miguel Fuentes (“MicroeconomicEvidence on Exchange-rate Pass-through ofImported Goods in an EmergingEconomy”); Kory Kroft (“Peer Effects inProfessional Golf”); Ting Lu (“An EmpiricalStudy on China’s Enterprise Privatization—Effects and Determinants”); KristyPiccinini (“The 1/n Effect in Public GoodProvision”); and, Gerardo Zuniga-Villasenor (“Measuring the Efficiency ofBanks: An Application to the MexicanBanking System”). [Source: IBER Bulletin,Spring 2005]

First year graduate student Marina Halacreports that her article (with Sergio L.Schmukler) entitled “Distributional Effectsof Crises: The Financial Channel” waspublished in the Fall 2004 issue ofEconomia – Journal of the Latin Americanand Caribbean Economic Association.

David Reinstein’s article (with ChristopherSnyder) “The Influence of Expert Reviewson Consumer Demand for ExperienceGoods: A Case Study of Movie Critics” was

published in the March 2005 issue of theJournal of Industrial Economics.

From Michael Jones: The UC Berkeley Chapterof Omicron Delta Epsilon (ODE) EconomicsHonors Society was reinstated in August2004 with the help of UndergraduateAssistant Sandy Jaeger and May 2004graduate Michael H. Jones. Although ODE isthe world’s largest undergraduate economicshonors society, it had been dormant on theBerkeley campus for years. Jones served asPresident of the Berkeley chapter for the2004-05 academic year and on the ExecutiveBoard with four other recent Economicsgraduates: Shi Ying Lim, Shruti Malani,Jennifer Wright and Katherine Zhou. Sinceits reinstatement, the Berkeley Chapter of ODEattracted over 50 exceptional economicsstudents as members and initiated numerouseducational economics-related activities,including a private conference with thePresident and CEO of the Federal Reserve Bankof San Francisco, Dr. Janet Yellen. Continuingstudents have already been recruited to serveon next year’s board, ensuring that thechapter will remain active. The outgoing boardmembers would like to thank Sandy Jaeger andProfessors Roger Craine and George Akerloffor all of their support during thereinstatement process.

The Shapiro Fellow-ship in Economics for 2004-05

was held by first-year Ph.D. studentJohn Bellows of Ft. Collins, Colorado.

Bellows’ primary interest is in appliedmicroeconomics, with a focus on health and

development, and he looks forward to workingwith faculty such as Ted Miguel and David Card,whose research maps well with his interests.

The Shapiro Fellowships are funded by Shermanand Ellen Shapiro to strengthen the Department’sability to attract superior students to its gradu-ate program. The Department heartily thanksthe Shapiros, who have renewed their gen-

erous support for another fellowship for2005-06!

[Source: IBER Bulletin,Spring 2005]

Annual GraduateStudent Skit Party

held April 17th

From Joshua Tasoff: Grad studentsand faculty alike were brought to tears

[of joy?] at this year’s annual Skit Party.The first years, as always, delivered hilarious

impersonations of the core-curriculuminstructors. The second years presented a

multimedia PowerPoint presentation about thekidnapping of a vector. The third and fourth yearscame on strong, mocking the orals anddissertation-writing processes. The much-anticipated faculty skit revolved around theconcept that hiring terrible junior facultycan be used as an identificationstrategy to test the effects ofdepartment matching. You had tobe there.

10 THE ECON EXCHANGE, SPRING 2005

DEBREU from page 1

Debreu remained an activeresearcher and teacher after hisretirement in 1991. He was also aneconomic adviser to severalgovernments and touredextensively in Europe to lecture oneconomic theory.

“He really was the most importantcontributor to the development offormal math models withineconomics,” said Professor RobertAnderson, who holds a jointappointment in economics andmathematics at Berkeley. “Hebrought to economics amathematical rigor that had notbeen seen before.” That rigor madelasting changes to the field ofeconomics, making it a more formaland precise science, Anderson said.Debreu is remembered by friends asunfailingly polite and gracious,with a love of hiking in the BayArea and of good food andaccommodations when traveling.He also took an interest in politics,deciding to become an Americancitizen after the Watergatehearings were over and he saw howthe country had dealt with theconstitutional crisis, friends said.

“After the impeachment, he said:‘This is a great country. I willbecome a citizen,’” Arrow recalled.Debreu became a U.S. citizen inJuly 1975.

Arrow said Debreu also showedgreat courage when he went toChile around 1980 on a human-rights fact-finding mission onbehalf of the National Academy ofSciences to report on howscientists were being treated.

It was a more playful Debreu whowas seen on campus in 1979,before he won the Nobel, when heenthusiastically volunteered tocoach the first-ever “Little BigGame” between economics graduatestudents from Berkeley andStanford — despite knowingnothing about American football.Debreu coached the Berkeley teamwhile Arrow coached the Stanfordteam. The intradepartmental touch-football game became an annualevent, with the winner awarded abronzed-apple-core trophy inhonor of Arrow’s and Debreu’s NobelPrize-winning theoretical work on

the equilibrium (or “core”) of aneconomy.

“Everything he did was withelegance,” Anderson said. “In hislectures he would always make abeautiful presentation, whichclearly identified all of theassumptions and explained theproof in detail — and then endedprecisely when it was supposed to.”

Debreu is survived by his formerwife, Francoise Debreu; twodaughters, Chantal De Soto andFlorence Tetrault; fivegrandchildren, and four great-grandchildren. A service at theColumbarium of the Pere LachaiseCemetery in Paris was held onFriday, Jan. 7.

CHAIR from page 2

Department and the collegialitythat was communicated by faculty,students and staff. There was ageneral sense that Berkeley is onthe right track to building andmaintaining the premier publicinstitution for teaching andresearch in economics. Othersappear to agree, as reflected by therecent ranking of Cal’s EconomicsDepartment as the third best in theworld by US News and World Report.

It takes a lot of work by a lot ofpeople to make a great economicsdepartment and I want to take thisopportunity to thank the manyfaculty and staff whose efforts havecontributed to our success. Ourfaculty worked together to recruitand retain the best and brightestprofessors and to present ourstudents with an outstandingteaching program. Our dedicatedadministrative staff labored hard,often behind the scenes, to attendto the many operational detailsthat are necessary to run a topeconomics program. My thanks goout to all of you!

This was also a year touched bysadness over the loss of two closefriends of our Department, GerardDebreu and Grace Katigiri. Indifferent ways, Gerard and Gracesymbolize the best of Berkeley.Gerard Debreu won the Nobel Prizein Economic Sciences in 1983 forhis pioneering work in

mathematical economics andgeneral equilibrium theory. Gerardjoined the Berkeley faculty in1962. His book, The Theory ofValue, published in 1959,developed the theory of supply anddemand on a grand scale and didfor the entire economy what AdamSmith did for microeconomictheory in his Wealth of Nations.Grace Katigiri was our Department’sinformation technology managerand the manager of theEconometrics Laboratory and thenew Experimental Social ScienceLaboratory. Dan McFadden, withwhom Grace Katagiri workedthroughout her professional life,described her contributions to hiswork and to the Department ofEconomics in the last issue of TheEcon Exchange. The Departmentcreated the Grace Katagiri Fund tosupport graduate students andinitiatives in behavioral andapplied microeconomics. Gerardand Grace left their mark on ourDepartment in different ways:Gerard as a towering intellect andGrace as a superb administrator andcomputer analyst. As friends andcolleagues, we will miss both ofthem dearly.

Before I end, I would like to say afew words about my successor, BenHermalin, who will be at theDepartment’s helm for the next fewyears. Ben received his Ph.D. in1988 from MIT. He specializes inindustrial organization, withinterests in corporate finance,governance and contracts. Inaddition to his award-winningteaching, Ben is an avid andcapable administrator who hasserved as both Interim Dean andAssociate Dean for Academic Affairs& Chair of the Faculty of the HaasSchool of Business. He bringsenthusiasm and vigor to theDepartment, as well as a keeninterest in building still strongerrelations with our alumni andfriends, as the Department pressesahead in its second century.

I now embark on a much-neededsabbatical year during which I willrededicate myself to my variousresearch projects. I’d like to wishall of you the very best and thankyou for your support of, andenthusiasm for, the Department ofEconomics. And Go Bears!!

11THE ECON EXCHANGE, SPRING 2005

ECON ECHOES from page 6

the same four questions, thatis, in following the agenda setout by Gerard. When marketsare incomplete, existenceresults were not proven untilthe 1980’s, and the welfaretheorems and determinacy donot extend. Infinite-dimensional commodityspaces provide the naturalmodels for commoditydifferentiation, interest-ratedetermination, and choiceunder uncertainty (particularlyFinance). Gerard flagged theimportance of infinite-dimensional spaces, andestablished welfare theorems,in the 1950’s. The existencequestion was not resolveduntil the mid-1980’s, withmajor contributions byTruman Bewley (Gerard’sstudent) and Andreu Mas-Colell, Gerard’s colleague inthe 1970’s here at Berkeley.It is worth noting, however,that the equilibrium existenceproblem in continuous-timefinance markets, where agentscan only trade a pre-specifiedset of securities, remains avery difficult open question.Determinacy was resolved inthe late 1990’s, with a majorcontribution by ChrisShannon, whom I am veryfortunate to have as acolleague here at Berkeley.Core convergence results wereobtained by Bill Zame andmyself in the mid-1990s, butmany open questions remain.This coming October, Berkeleywill be hosting aninternational conference onGeneral Equilibrium Theory, inmemory of Gerard.

Gerard supervised sixteendissertations while atBerkeley. Many of hisstudents have risen to greatacademic prominence. Healso profoundly influencedmany who were not hisstudents, most notably WernerHildenbrand and Andreu Mas-Colell. Throughout the 1970’sa steady stream of the leadingeconomic theorists came

through Berkeley to learnfrom him.

All of us who were fortunateto overlap with Gerard atBerkeley remember himfondly. We remember hisunfailing courtesy and grace.We remember his formality,leavened with a dry andslightly mischievous sense ofhumor. He loved books andthe cinema. Although he wasfriendly and had interestingthings to say on just aboutany subject, he was alsorather shy, and extremely

protective of his personalthoughts and feelings. In thedecade I overlapped with himat Berkeley, I recall only onetime when he asked aquestion in a seminar. But ifyou talked with him privatelythe day following a seminar,he would have the mostinsightful and penetratingcomments. When he onceasked a question during aseminar by Andreu Mas-Colell,before I arrived at Berkeley, Iam told Andreu responded bysaying “But Gerard, if you areasking the question, you mustbe the one to answer it.”

In addition to setting theagenda for General EquilibriumTheory, Gerard had a profoundinfluence on the way alleconomic research is carried

out. B.G. (before Gerard),few economics papers hadclearly specified models, andvirtually none showed thattheir models were internallyconsistent by exhibitingequilibria. If you look atarticles in major researchjournals today, virtually allclearly specify a model.Theoretical papers analyze theproperties of these models,and along the way almostalways establish existence ofequilibrium, using thetechniques developed byGerard and those whofollowed him. Empirical papersvirtually always set out amodel, which they thenproceed to test, usingeconometric techniques, on adata set. Experimental papersvirtually always set out amodel, which is then tested ina laboratory setting withhuman participants. So whilemathematical economics is asmall subfield withineconomics, Gerard’s insistenceon mathematical clarity andrigor has had a profoundeffect on virtually alleconomic research.

When I first came to Berkeleyin 1983, general equilibriumtheory was taught in thetheory course required of allfirst-year Ph.D. students, butfew of the proofs werepresented. To get the proofs,students had to take the fieldsequence in mathematicaleconomics, a pair of classesthat Gerard and I taught, to arather small audience. Today,virtually all leading economicsprograms include in the first-year theory class a full half-semester of generalequilibrium theory, proofs andall. They cover four issues:existence of equilibrium, thewelfare theorems, determinacyof equilibrium, and coreconvergence. That is to say,they cover the work of GerardDebreu.

The Econ Exchange is publishedsemiannually for alumni and friendsof the Department of Economics,University of California, Berkeley.

DEPARTMENT OF ECONOMICS

Richard J. Gilbert Chair and Professor ofEconomics

Steven M. Goldman Vice Chair andProfessor of Economics

Department Office (510) 642-0822Department Website http://elsa.berkeley.edu/

econ/

THE ECON EXCHANGE

EditorJane TurbinerContributors

Robert M. AndersonNoel Gallagher

Richard J. GilbertJane Turbiner

NEWS AND NOTES FROM THE DEPARTMENT OF ECONOMICS

UNIVERSITY OF CALIFORNIA, BERKELEY

The Econ ExchangeNon Profit Org.

US PostagePAID

University of California

UNIVERSITY OF CALIFORNIA

DEPARTMENT OF ECONOMICS

The Econ Exchange549 EVANS HALL #3880BERKELEY, CA 94720-3880

New assistant professoron board:Bryan S. Graham

Bryan Graham, who recentlyearned his Ph.D. in Economicsat Harvard University, will jointhe Department of Economics in2005-06. Originally fromPortland, Maine, he is therecipient of both the Fulbright Scholarship (to studyat Australian National University) and the RhodesScholarship (St. Antony’s College, Oxford University).Graham’s primary research fields includeeconometrics, development economics, and laboreconomics, and he also teaches the history ofeconomic thought. His dissertation, “Essays on theEconometrics of Social Interactions” focuses onmethodological issues that arise when attempting totest for the presence, and measure the magnitude, ofsocial interactions. Graham will be teaching Econ141:Econometric Analysis during the Fall 2005 semester.Welcome to Berkeley!