Prof. Langlois reports about his travels in Europe

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Professor Richard Langlois is currently traveling in the United Kingdom as a Visiting Fellow of the Academy of Advanced International Management. He will be giving a series of talks in Lancaster, London, and Edinburgh. As part of the trip, he will also attend conferences in London, Scotland, and Denmark. Professor Langlois’s first stop in the UK was Nottingham, where he spoke at the Nottingham University Business School and touched base with UConn’s Marshall Scholar Michelle Prairie (pictured), who is completing her M. S. in Economics at Nottingham before moving on for another Masters degree at the London School of Economics in the fall.

On June 13 he visited the Lake District of Cumbria, where he discovered not only another Storrs but also a Storrs Hall, built in the 1790s and famously the home of John Bolton, a Liverpool ship owner who engaged in the “triangular trade” – including slaves – among Africa, the West Indies, and Britain.

Prof. Couch publishes in American Economic Review

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An article based on the work of Prof. Kenneth Couch that examines the experiences of workers who have lost jobs they held for a long time is contained in the current issue of the American Economic Review. The paper, entitled “Earnings Losses of Displaced Workers Revisited“, is co-authored with Dana Placzek who is a research analyst for the Connecticut Department of Labor. The research makes use of state administrative records to show that workers displaced due to large-scale layoffs and plant closures experience sustained earnings losses. Those losses are seen as the proportion of earnings attributable to specific human capital. The analysis also demonstrates that the size of the earnings losses depends heavily on whether workers take Unemployment Insurance benefits during the period of job transition.

The same research project that resulted in this publication in the centennial issue of the American Economic Review (Volume 100, Issue 1) also resulted in an additional publication in Research on Aging regarding specific experiences of older displaced workers in Connecticut that was co-authored with Dana Placzek and Nicholas Jolly, when he was a graduate student in our program. Additional work from this project showing the impact of the business cycle on the depth of earnings losses is still under review.

Summer 2010 Issue of The Connecticut Economy: Summer Fun with a Dose of Reality

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A rising tide of shopping and recreation activity along with a small surge in jobs offer hints that the recovery is making some waves. But the state’s budget crunch reminds us that it is still no day at the beach for Connecticut’s economy. With the economic climate improving, the Summer 2010 issue of ‘The Connecticut Economy: A University of Connecticut Quarterly Review’ explores the potential for baseball and winemaking to spur economic development. Mindful of the economic risks ahead, the magazine also examines the looming threat of the state’s unfunded pension liabilities.

A guest commentary by Robert Santy, President and CEO of the Connecticut Economic Resource Center, examines the convergence of forces that gave rise to the state’s 30 vineyards, making them a vibrant tourist draw and potential source of economic growth. Santy also spoke and responded to media questions at the June 8th press release of the summer issue at CERC’s Rocky Hill headquarters.

Rumor has it that Connecticut could be in line for a major-league baseball team. The state has a rich heritage of professional baseball (surely you recall the Hartford Dark Blues and the New Haven Elm Citys), and the Tampa Bay Rays — despite being perennial contenders in the American League East– cannot seem to attract a crowd in their current home. Executive Editor Steven Lanza analyzes the logic behind such a move and the potential benefits to the Nutmeg State of relocating the Tampa Bay team to “a geographic ‘sweet spot’ midway between Gotham and Beantown.”

Connecticut may need a good diversion: its unfunded liability for state retiree pensions and benefits totals $7,395 for every state resident, based on 2009 Census population figures. Compared with more populous states, Nutmeggers’ liability is 2.6 times New York’s, 3.2 times Massachusetts’, and 4.4 times California’s. Quarterly co-editor Arthur Wright and UConn economics professor emeritus Peter Barth examine the available “solutions” as Connecticut tries to honor its retirement promises to state employees.

Commercial winemaking in Connecticut began in the mid-1970s, and the industry, as in other states, has sought to encourage growth by promoting “wine tourism.” The spillover benefits of winemaking to other businesses–food, lodging, and entertainment–and its compatibility with farmland preservation goals might justify targeted subsidies or tax credits, similar to those offered to the film industry. Co-editor Dennis Heffley and graduate students Christopher Jeffords and Jeremy Jelliffe examine the features of winemaking that might warrant a public effort to promote its production, but they also note that such policies are not universally endorsed.

Other features of the summer issue include summaries of recent data and forecasts for the state’s largest labor market areas, as well as a centerfold map of public library resources and usage in each of the state’s 169 towns.

For free access to this and other issues of The Connecticut Economy, visit: http://cteconomy.uconn.edu/.

Joseph Rebello joins department as Assistant Professor in Residence

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Joseph Rebello, PhD candidate from the University of Massachusetts-Amherst and Political Science BA from the University of Rhode Island, will be joining the department this Fall as Assistant Professor in Residence. A specialist of political economy, economic methodology, history of economic thought and macroeconomics, his research “combines a critique of essentialist dualisms in monetary thought and the surplus notion of class in order to develop a Marxian account of non-commodity money.”

At UConn, he will be teaching some large principles classes as well as some upper level undergraduate Economics classes for our majors.

Lei Chen defends, takes positions at UConn

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Lei Chen defended his dissertation in April 2010. His thesis focused on the productivity and efficiency of general dental practices in the U.S. His research lies at the intersection of applied microeconomics, health economics, and operations research. He is going to take a joint position of assistant professor in residence at UConn Health Center and UConn Avery Point. During his study at our department, Lei worked with his major advisor, Prof. Subhash Ray on a variety of projects and published a couple of papers in journals such as the International Journal of Production Economics and the Indian Economic Review.

At the UConn Health Center, Lei will continue doing empirical studies in dental care, especially the effectiveness and efficiency of dental services at Federally Qualified Health Centers (FQHCs). He will also teach principles of macroeconomics and principles of microeconomics at the UConn Avery Point campus in the next academic year.

Prof. Kimenyi joined by PhD Alum at Brookings

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Prof. Kimenyi is currently a Senior Fellow at the Brookings institution where he is working for the Africa Growth Initiative. He has recently been joined there by Ezra Suruma, a 1976 Economics PhD from UConn who completed his dissertation under the supervision of Morris Singer.

After his PhD, Suruma taught at Florida A&M University, Makerere University (Uganda) and Coppin State University (Maryland), at the latter as department head. He then started an administrative career in Uganda, first at the (central) bank of Uganda, 1987 as the Director of Research, 1990 as Deputy Governor. After various stints in commercial banks, in 2005, he was appointed 2005 as Minister of Finance, Planning and Economic Development of Uganda. In 2008, he received from The Banker (Financial Times, UK) an award as the best Finance Minister in Africa. Since 2009, he has been a Senior Presidential Advisor for Finance and Planning.

At Brookings, Kimenyi and Suruma are trying trying to influence development policy both in Africa and the United States and OECD. They interact also regularly with policy makers at the World Bank and the International Monetary Fund and other development institutions and foundations that focus on development. Prof. Kimenyi is in particular pushing for a food security initiatives and overall transformation of African Agriculture. He is also working on natural resource management and industrial policies. Ezra Suruma is writing a book on the growth success story in Uganda over the last decade.

Read more at the East African.

Economics alumnus runs for Senate seat

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Noted economist, fund manager, entrepreneur, race car builder, and UCONN alumnus Warren Mosler is seeking the office of US Senate to add ‘fixed the US economy’ to his long list of accomplishments. Mosler, a native of Connecticut who graduated from Storrs with a B. A. in Economics in 1971 is running for the US Senate seat being vacated by Senator Christopher Dodd.

Since graduation, Warren has spent 37 years in various financial institutions from Manchester, Hartford, New York, Chicago, and South Florida, including the founding III Offshore Advisors in 1982 and, in 1983, AVM L.P., a broker/dealer providing advanced financial services to large institutional clients. During these years he developed numerous investing strategies utilizing US Government securities and created the mortgage swap and euro swap futures contract. He maintains strong connections to the academic world as Co-Founder, along with L. Randall Wray, of the Center for Full Employment And Price Stability at the University of Missouri in Kansas City. Mosler also has supported research projects and graduate students at the London School of Economics, the New School, Harvard University, and the University of Newcastle, Australia. Additionally, Warren is an Associate Fellow at the University of Newcastle, Australia. Warren is the author of numerous publications, of which the latest is ‘The Seven Deadly Innocent Frauds of Economic Policy’ (Mosler, 2010), which challenges several contemporary assumptions about the relationship between government spending, federal debt, and taxation and opens the door to an immediate return to economic prosperity.

Warren is the original contemporary proponent of what has come to be called Modern Monetary Theory (MMT). MMT begins with the operational fact that Federal taxes serve to regulate aggregate demand, rather than to raise revenue per se, and that funds to pay Federal taxes indeed originate from government spending itself. Warren’s campaign platform is based on three proposals designed to fix the nation’s economy within 90 days. The three proposals are as follows:


  1. Declare a “payroll tax holiday” where the U.S. Treasury will suspend deduction of all FICA taxes. That means the take home pay of someone earning $50,000 a year will rise by approximately $325 per month, fixing the economy from the bottom up, vs the current top-down bailout method.
  2. An unrestricted $500 per capita Federal revenue sharing distribution to all the State governments. This proposal mean about $1.75 billion for Connecticut.
  3. Fund an $8/hr. National Service Jobs program for anyone willing and able to work to facilitate the transition from unemployment to private sector employment, as the first two proposals will cause the large increases in private sectors business sales that quickly translates into the millions of new jobs we desperately need.

Since leaving Connecticut for Wall Street in 1976, Warren has lived and worked in New York City, Chicago, South Florida, and the US Virgin Islands. Additionally, while in Florida, he founded Mosler Automotive, which produces the world’s top performing sport cars. Warren returned to Connecticut this year to run for the US Senate solely as a matter of conscience, and not ambition. He sees himself as uniquely qualified to fix the economic problems facing the US economy.

Mikhael Shor to join department

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Mikhael Shor, currently Assistant Professor of Economics at the Owen Graduate School of Management, Vanderbilt University, will be joining the department in Fall 2011. He specializes in the study of behavioral game theory and its applications to firm-level decision making. Professor Shor has authored many scholarly articles on auctions, behavioral aspects of marketing, and electronic commerce. His research has appeared in such journals as Games and Economic Behavior, Journal of Management Information Systems, Economic Theory, Journal of Economic Psychology, and Contemporary Accounting Research. He has participated in merger analysis and strategic game theory consulting for the Federal Trade Commission and several companies. research interests are in game theory, industrial organization, and experimental economics. His current theoretical research is on the implications of mergers in auction markets, and my experimental research (supported by a grant from the National Institutes of Health) is on decision making when faced with an overwhelming number of options.

Professor Shor has taught game theory, industrial organization, pricing strategies, economics of networks, and law and economics. His educational innovations and materials have been featured in Science, Scientific American, and The Wall Street Journal. Professor Shor holds a BA from the University of Virginia and an MA and PhD from Rutgers University. He is living in Coventry with two kids, Eliana and Jacob, and a soon-to-be-added pound puppy. His wife is an Assistant Professor in Chemical Engineering at UConn.

Emeritus Steve Sacks reports on life after retirement

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There have been some rough times: lots of nights sleeping in a homeless shelter and quite a bit of time in jail. But in the end it’s worked out well, and now we’re comfortably settled in a small but very pleasant apartment in Brooklyn Heights.

This year I’ve cut down to one night a month at the homeless shelter, but when one of the other volunteers doesn’t show up, I may put in an extra night on short notice. I can’t say it’s fun, setting up cots for the “guests” and serving dinner, then sleeping on a cheap cot in an overheated hallway where there’s always a light on, and then getting up at 5:30 a.m. But there’s considerable satisfaction in knowing that I’m playing a small part in providing a safe, warm, dry night to some people who’ve had bad luck.

Let me explain about the time I spent in jail. My part in a project to study average time from arrest to arraignment in Manhattan started with a phone call from a consulting firm in Cambridge. Over a period of about 20 years, I had worked frequently with this firm to develop software intended to optimize patrol patterns for police cars in urban areas. In this new project for the New York City Office of Criminal Justice, we were asked to create a computer simulation of the steps taken from the time an arrest is made until the accused is brought before a judge. In New York, the law says that arraignment before a judge must occur no more than 24 hours after an arrest. During that time quite a lot has to happen: finger prints must be taken and sent to Albany and to the FBI, a database of arrest warrants must be searched to find out if the accused is wanted in another part of the state or in any of the other 49 states, the Attorney General’s office must decide whether to recommend bail and must write up formal charges, an affidavit has to be written and signed by the arresting officer, in many cases a Legal Aid attorney must be called in, … The amount of paperwork is substantial and the appropriate documents must be in the right place at the right time. Then, too, the prisoner must be in the right place at the right time, and that involves moving him or her from the scene of the offense to the precinct to holding cells to the courtroom. All of this has to be completed within 24 hours or the Civil Liberties Union gets upset. (Sometimes, on a busy day, the 24-hour limit is exceeded.)

The purpose of our simulation is to give criminal justice planners a tool that lets them do what-if analysis: what would happen to the process if more fingerprint clerks were hired? suppose we increase the number of printers available for downloading warrants from Albany? would it matter if we did the medical exam after the fingerprinting instead of before? would the whole process be faster if we built more holding cells under the courthouse? Experimenting with the virtual reality of this analytical tool is an alternative to actually hiring more people, really changing procedures, or physically building more cells. The goal is to find the most effective, and least expensive, modifications to a set of interconnected queues so as to reduce the total time a prisoner is in the system.

In order to create an accurate simulation, we needed to have a very complete understanding of how the system works. We spent months studying every detail. Since I live in New York, I was part of the team that spent a lot of time behind bars, mostly in the basement of Manhattan’s central courthouse. Now that our project is finished, I don’t spend any time in jail, but there were many days when I was in fact inside. To step through those metal gates and hear them snap closed behind me was a sobering experience, even though I was pretty sure that they would let me out. We also sat behind a judge in a courtroom as he dealt with a rapid-fire series of defendants, lawyers, and Assistant Attorneys General. All of this was a real education for me, endlessly fascinating.

I realize now that I haven’t said anything about how I spend most of my time in retirement. But that must be obvious if you know that I live in New York city, where there’s theatre, concerts, movies, museums, readings, ethnic neighborhoods to explore, Brooklyn’s magnificent Promenade to stroll along, swimming (yes, there are swimming pools in New York city), yoga classes, … Retirement is terrific. Everyone should do it.

I miss Storrs and the people there. But I’m glad that we have made this big move. Living in New York continues to be an exciting adventure. Occasionally, we get back to Connecticut for a visit and sometimes old friends come to New York. Most important, making new friends here didn’t take as long as I had feared, even in a city of eight million people.

New class set to graduate

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On Saturday May 8, 2010, a new class of students will walk in the commencement ceremonies and get well-deserved degrees. As there are no December ceremonies any more, the walking class in larger than usual. 212 students will be receiving the BA in Economics, of which 40 are double majors. Seven students will be graduating with Honors in Economics: Joseph Antelmi, Michael Bokoff, Taylor Brown, Charles Johnson, Bryan Murphy, Eric Roy, and William Watson. The Economics major is very popular on campus, in previous years it has been the third most sought after. Note also that among all Economics degree granting institutions in the United States, the University of Connecticut ranks 26th by the number of degrees conferred last year.

We also have a graduating class in our graduate programs. Are graduating with a MA: Jay Adams, Demet Cimen, Amy Druckenmiller, Elnara Eynullayeva, Elizabeth Kaletski, Xingkang Liu, Xiaoyin Shen, Rijesh Shrestha, Li Wang, Menxi Ying and He Zang. And with a PhD: Lei Chen, Onur Burak Celik, Marina-Selini Katsaiti, Monica Lopez-Anuarbe, Zinnia Mukherjee and Natalya Shelkova.