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					 Economics at

From the Editor                                                                                                                           2004

                        Welcome to the 2004       curriculum reform. The plan is to have the      faculty (The Journal of Econometrics and
                    edition of the Econom-        new curriculum operational by Fall 2006.        The Journal of Economic Development).
                    ics Department News-          We continue to be pleased with our re-          Department members have continued the
                    letter. Because there         vamped basic math course and statistics         strong participation in international
                    was a positive response       courses, and with the contributions of our      projects in various countries of the world
                    to last year’s combined       senior economics major TAs who have been        that we focused on in the last newsletter.
newsletter, we again are combining both           assisting in Econ 10, the Principles of Eco-    Faculty have been particularly active in Asia
undergraduate and graduate news items. We         nomics course. We are now in the second         where they continue to be involved in
think that the combined format allows for         year of this experiment and it appears to       projects in China, Korea, The Philippines,
more complete coverage of activities and          have had a significant positive impact on       Vietnam, Bangladesh, and Cambodia.
hope that all of you will find this edition       the learning environment in these courses.         In summary, the Department has had a
interesting and informative.                      In another vein, the Department is in the       productive, albeit financially difficult, year.
     This past year saw us facing similar         process of establishing a minor in Entre-       Let me again thank all of you who took the
budget constraints to those of previous           preneurship which is a core element of the      time to contact us this past year, either by
years. This has occurred at a time when           broader University push to develop an edu-      written communications or stopping by the
both student enrollments and declared Eco-        cational focus in this area. The success of     Department. As usual, we thoroughly en-
nomics majors have remained at high lev-          this endeavor was apparent in the recent        joyed spending time with those of you who
els. We continue to have in the neighbor-         Forbes magazine article which ranked the        came by the office when you were in Chapel
hood of 510 juniors and seniors declaring         UNC-Chapel Hill Entrepreneurship pro-           Hill, and bringing us up-to-date on what
Economics as their first or second major,         gram tops in the country. The Department        had happened in your life since leaving
and approximately 600 total majors if early       is excited about this new program and our       Carolina. I hope that you have had a good
declared majors in the General College are        role in developing this, our first, Depart-     year and that life has treated you well dur-
included. One item of interest is that there      ment minor. For this reason, we have de-        ing the ups and downs of this past election
is an increasing number of students declar-       voted a special section to the Entrepre-        year. We hope that you will continue to
ing Economics as their second major. We           neurship minor later in the newsletter. We      keep in touch with us regarding important
taught a total of 5575 undergraduate stu-         hope you will find this information both        events that you have experienced as well
dents in the 2003/2004 school year. The           interesting and informative. We, of course,     as providing feedback on how we can im-
quality of our undergraduate majors con-          welcome any comments or ideas you might         prove the educational program for our ma-
tinues to be high, as reflected in their strong   have about this new academic endeavor.          jors. If you know of internship or job
academic records, the high quality of our             Department faculty have continued to        possibilities that you feel might profitably
senior honors theses, and the number initi-       lead active research lives and to be success-   be brought to their attention please let us
ated into Phi Beta Kappa and the Econom-          ful in obtaining research grants, publishing    know. A final reminder is that the most
ics honorary, Omicron Delta Epsilon. Our          in high quality journals and consulting with    current information about the Department
majors have also continued to do well in          government agencies and international or-       can always be found on our website
the job market, even though it has been a         ganizations. Several spent part or all of As usual, my
relatively lean market for undergraduates         last year on funded research leaves at top      very best wishes for a successful, prosper-
in general the past couple of years.              research institutions both in the United        ous and interesting year. I encourage you
    The College of Arts and Sciences is in        States and in Europe. Two major econom-         to stop by and see us anytime.
the midst of implementing an extensive            ics journals continued to be edited by our                                           Al Field

                                                                                                               Economics at Carolina -- Page 1
                                                                     Economics Resea
         Faculty at Carolina continue to be     spans. The share of the U.S. popula-       is provided by employers until eligibil-
      engaged in research, both theoretical     tion aged 65+ is expected to increase      ity for Medicare begins at age 65. Some
      and applied, in many different areas at   from 13 percent today to about 20 per-     employer health insurance plans pro-
      both the micro and macro levels. This     cent by 2030. This is an unprecedented     vide coverage for retired workers, but
      year we focus on the current research     change, and will have far reaching im-     others do not. The absence of retiree
      activities of three professors working    plications for many aspects of the         health insurance coverage creates a
      in both theoretical and applied fields.   economy. With funding from the Na-         link between employment decisions
      This group includes Professor David       tional Institute on Aging (part of NIH),   and health insurance coverage that
      Blau who discusses several research       Blau has conducted research on sev-        may affect the incentive to retire be-
      projects dealing with the economics of    eral of the economic implications of an    fore age 65. This link does not exist for
      aging, Professor Richard Froyen who       aging population. With his background      workers who are eligible for retiree
      provides an overview of his various       as a labor economist, studying retire-     health insurance coverage from their
      research efforts in macro and monetary    ment from the labor force was a natural    employers, or who have coverage from
      policy, and Professor Gary Biglaiser      place to begin. His early research         other sources. This is an important
      who describes several of his ongoing      showed that the timing of retirement is    policy issue because reform proposals
      research projects in the areas of micro   strongly influenced by the age of eligi-   that would make health insurance cov-
      theory and industrial organization.       bility and the level of Social Security    erage independent of employment sta-
         It is important to again note that     benefits (Econometrica, 1994). This is     tus could increase the already-high
      much of the research which takes place    a key issue for policy makers con-         rate of retirement before age 65, thus
      in the Department is dependent upon       cerned about the long run solvency of      worsening the financial condition of
      outside grants and endowments from        Social Security. Most Social Security      Social Security and Medicare. In a se-
      prestigious organizations as well as      reform plans give workers incentives       ries of papers with UNC-CH colleague
      from private contributions to the De-     to retire later, and Blau’s research       Donna Gilleskie, Blau has explored the
      partment Trust Fund. We very much         shows that such incentives could have      empirical importance of this link. They
      appreciate all the contributions many     large effects on retirement timing and     found that older men with employer-
      of you have made to the Department        could help stabilize Social Security in    provided health insurance are about
      in recent years which have supported      the long run. Subsequent research          two percentage points more likely to
      our research efforts by helping fund      showed that another major change in        retire in a given year if they have re-
      research assistants, the acquisition of   labor force behavior, dramatically         tiree health insurance coverage than if
      important costly data sets, computa-      higher labor force participation of mar-   they lack such coverage, controlling
      tional facilities and faculty travel to   ried women, also has important impli-      for many other factors (Review of Eco-
      professional meetings and confer-         cations for retirement behavior. Many      nomics and Statistics, 2001). In addi-
      ences. For more specific information      two-career married couples prefer to       tion, this is the first research to ana-
      about Department research needs and       retire within one or two years of each     lyze health insurance and retirement of
      funding, please contact John Akin,        other, but economic incentives often       women, and the findings suggest the
      Chair,                 work against this preference. For ex-      need for richer models to understand
                                                ample, employer-provided Defined           the behavior of women.
                                                Benefit pension plans can provide very        Blau’s most recent research tackles
      The Economics of Aging                    strong incentives to remain employed       another major public policy issue: the
                                                in spite of the retirement plans of the    adequacy of saving for retirement.
          David Blau is an                      spouse. Blau’s research showed that        Consumption expenditure declines
      aging economist who                       these incentives matter but are gener-     sharply at the time of retirement for
      is also an economist                      ally trumped by preferences (Journal       many households. Some analysts ar-
      interested in the eco-                    of Labor Economics, 1998; Labor Eco-       gue that this is inconsistent with the
      nomics of aging. The                      nomics, 1997, 1999).                       behavior implied by forward-looking
      population in the U.S.                        One of the hottest topics in retire-   life-cycle models and implies that
      and many other countries will be ag-      ment research in recent years is the       households do not save adequately for
      ing rapidly in the next few decades,      impact of health insurance on retire-      retirement. However, most studies of
      thanks to low fertility and longer life   ment. Most health insurance in the U.S.    saving for retirement take the timing of

Page 2 -- Economics at Carolina
arch at Carolina
   retirement as given, and analyze con-         tions: (1) What are the characteris-        mography and economics of aging re-
   sumption behavior conditional on re-          tics of establishments in which older       search; and (3) Support for an internal
   tirement. Blau builds a life cycle model      workers commonly are employed part-         UNC working group of researchers with
   in which both consumption and em-             time, for flexible hours, and in which      research interests in the DEAR area.
   ployment are choices. The model in-           gradual retirement is relatively com-       Examples of pilot studies funded by the
   corporates key constraints facing older       mon? (2) Are the relatively limited job     DEAR program include “Informal Care
   households, including Social Security         opportunities for older workers a re-       and Medicare Expenditures;” “An
   retirement and disability programs,           sult mainly of cost considerations          Evaluation of the Impact of the Social
   employer pensions, stochastic earn-           such as fewer expected years of em-         Security Disability Insurance Program
   ings and asset returns processes, lay-        ployment over which a firm can recoup       on Labor Force Participation in the
   off risk, job-offer risk, and health and      its cost of investment in training the      1990s;” “Family Care and Support for
   mortality risk. The main finding is that      worker; or of labor supply behavior,        the Elderly in China;” “Nutrition and
   there is a drop in consumption at re-         i.e. high reservation wages? (3) How        Aging in African Americans;” “Costa
   tirement in simulations of the model.         can matched employer-employee lon-          Rican Healthy Aging Study;” “ “The
   While a drop in consumption at retire-        gitudinal data be used to distinguish       Effect of Increasing Longevity on
   ment is avoidable for most households,        among alternative explanations for ri-      Long-Term Care Use;” and “Alcohol
   it appears to be part of the optimal life     gidity in the labor market for older        and Unintentional Home Injury Death
   cycle plan in many cases. The implica-        workers? Blau and his colleagues will       Among Older Adults in North Caro-
   tion of these findings is that we cannot      focus on the role of labor demand fac-      lina.” Among the outside speakers
   infer that consumption expenditure de-        tors (cost, age discrimination), labor      sponsored by the DEAR program are
   clines at retirement because of inad-         supply factors (firm-specific human         Peter Diamond, recent president of the
   equate savings. In ongoing work on            capital, short remaining horizon for        American Economic Association,
   this issue, Blau is working on estimat-       employment, high cost of search), and       speaking on Social Security reform.
   ing the key parameters of the model.          government policy (the Social Secu-
       A new research project currently in       rity Earnings Test and others).             Behavior of Banks in an
   the planning stages was initiated by               In addition to the demands of his      Uncertain Environment
   Blau during his recent research leave         previously described research
   at CREST, a research institute in Paris.      agenda, Blau is also the Director of                              I am happy to re-
   In collaboration with French econo-           the Demography and Economics of                                spond to Al Field’s
   mists, he plans to undertake a compara-       Aging Research (DEAR) program at                               request regarding re-
   tive study of French and U.S. labor           UNC-CH (see                                   search because it
   market institutions that affect retirement    dear). The program is housed at the                            gives me the chance
   behavior. The labor market for older          Carolina Population Center, and col-                           to tell you about the
   workers is widely believed to suffer          laborates with the Institute on Aging                          work of some former
   from rigidities that make it difficult for    at UNC-CH to promote research and                              students.
   older workers to carry out their desired      research training on the demography                               One area of long
   trajectories from work to retirement. The     and economics of aging. The program         standing interest for me has been the
   rigidities that are often cited include the   has been supported by a grant from          behavior of central banks in an uncer-
   lack of opportunity for part-time and         the National Institute on Aging, and        tain environment. In recent years Alfred
   flexible-hours work at many firms; the        recently received a new four-year           Guender and I have done research in
   low wages and lack of benefits in the         award with increased funding which          this area. Our joint work started during
   part-time employment opportunities            will allow it to expand its research pro-   a visit of mine to his home at the Uni-
   that are available; and the lack of train-    gram. Specific activities of the program    versity of Canterbury in New Zealand.
   ing and promotion opportunities for           include: (1) Seed funding for pilot         That work resulted in a paper on opti-
   older workers both at their career em-        studies on issues in the demography         mal monetary policy in small open
   ployers and at potential new employ-          and economics of aging intended to          economies which was published in the
   ers. The proposed study will take             lead to grant proposals submitted for       Review of International Economics in
   advantage of rich establishment level         external funding; (2) Sponsorship of        2000. We are expanding this research
   data to address the following ques-           seminars by outside speakers on de-         into a book on the subject. Alfred has

                                                                                                         Economics at Carolina -- Page 3
      come back to visit in the Department            to as a “new generation” of the soft-
      and I made a second visit to Canterbury         ware. One can think of Windows 2000
      as an Erskine Fellow this past spring.          as an example of a new generation. They
         Hakan Berument and I have also been          model this problem as a durable good            Gallman Lecture
      doing joint research on a number on             monopolist who generates a quality en-
      empirical questions in the monetary             hancement to their good in each period
      policy area. Hakan is at Bilkent Univer-        in an infinite horizon setting, where con-       On October 28, 2004, David
      sity in Ankara, Turkey. During his visit        sumers have private information about         Galenson visited the Econom-
      here for the 2002-2003 academic year we         their valuations for the products. The        ics Department to give the 6th
      completed a paper, “Monetary Policy             fundamental problem is: how does a mo-        annual Robert E. Gallman Me-
      and Long-Term U.S. Nominal Interest             nopolist price discriminate over time?        morial Lecture. Galenson, Pro-
      Rates.” Both he and Alfred have very            They find equilibria that mimic many of       fessor of Economics at the Uni-
      active research agendas of their own            the practices in the software industry,       versity of Chicago, spoke to an
      which I try to keep up.                         such as a periodic new generation of          appreciative audience about
         Another area of long term interest to        the software. In a future paper, they will    “Young Geniuses and Old Mas-
      me is that of monetary policy reaction          examine the monopolist’s incentive to         ters: The Two Life Cycles of Hu-
      functions. Much of my work in this area         conduct R&D to generate innovations           man Creativity.” The lecture ex-
      has been with Roger Waud, a long time           in a similar setting.                         amined the careers of painters,
      member of our faculty. Our latest paper            Gary has just completed a paper with       poets, and novelists to better
      appeared in the Journal of Macroeco-            Nikos Vettas of the Athens University         understand the creative pro-
      nomics in 2002. Roger has retired from          of Economics and Business. In that pa-        cess. The talk was part of a se-
      academia but follows other interests in         per, they examine a model that is based       ries honoring Robert Gallman,
      Alexandria, Virginia.                           on a setting such as the airplane manu-       an economic historian on the
         I notice in writing this that all research   facturing industry. This industry is          UNC faculty for over 30 years.
      I talk about is joint research. I think this    dominated by two producers: Boeing
      may be explained by a quote from the            and Airbus. The planes are long last-
      rocket scientist Werner Von Braun who           ing, durable, and take a great deal of
      said “Research is what I am doing when          time to complete. In particular, if a pro-
      I don’t know what I’m doing.” In such a         ducer receives large orders in one pe-
      situation it helps to have company. I do,       riod, then this will reduce their capacity
      however, keep on with my macro text             to fill orders in the future. When airline
      which came out this fall in an 8th edi-         companies are deciding on what pur-
      tion.                                           chases to make today, they need to take
                                Richard Froyen        into account the fact that if they and              The Robert E. Gallman
                                                      other firms make most of their purchases      Graduate Student Fund was es-
                                                      from one producer today, then they will       tablished to honor the memory
      Theoretical Industrial
                                                      reduce competition in the future be-          of a man who devoted his life to
      Organization                                    tween the two manufacturers, since the        his discipline as teacher, men-
                                                      producer that they bought from today          tor and research scholar. The
                                                      may not be able to supply as many             fund is used to improve the
                              Gary Biglaiser is       planes in the future. This will lead to       competitiveness of our gradu-
                           working on an array        higher future prices. The manufactur-         ate program by providing finan-
                           of problems in theo-       ers know this and take it into account        cial support that helps to attract
                           retical Industrial Or-     when setting current and future prices.       outstanding students. We
                           ganization. One pa-        Gary and Nikos model this behavior as         thank all of those who have
                           per is with James          a dynamic game. The most interesting          generously contributed to this
                           Anton of Duke’s            feature of the equilibrium is that airlines   endeavor. If you are contem-
      Business School. The motivation for the         prefer to buy planes both for their cur-      plating a gift to UNC, we encour-
      paper is to try to explain the following        rent short-term needs and for their           age you to consider contribut-
      behavior by software firms, such as             longer-term needs at the beginning of         ing to the Gallman fund by con-
      Microsoft. Many of these firms use busi-        the decision period. This is because it       tacting Brook Alexander, in the
      ness strategies where consumers have            will induce the stiffest competition be-      Arts and Sciences Foundation,
      the option of buying the latest innova-         tween the manufacturers. This is con-
      tion to a firm’s software and also have         sistent with the practice of airlines plac-
      the option to periodically buy a pack-          ing orders for planes to be delivered
      age that includes all previous innova-          soon and with the option of buying
      tions. These packages are often referred        planes in the future at the same price.

Page 4 -- Economics at Carolina
               Graduate Alumni News
  The Department of Economics was           dents from marketing, accounting, pub-     rics course for second-year students.
pleased to welcome another talented         lic policy, environmental science,         Professor Ghysels follows with time
incoming class to the University this       health policy, and a few from Duke. In-    series econometrics in the spring se-
fall. At the beginning of August, stu-      deed, our own students are now out-        mester; Professors Guilkey and van
dents began the three-week session of       numbered by graduate students from         der Klaauw alternate the cross sec-
Econ. 210 (Quantitative Methods), also      other departments for the first semes-     tional course. As featured elsewhere
known as Math Boot Camp. Within a           ter course. The growth in enrollments      in the newsletter, Professor Guilkey
few days of returning from a semester       here mirrors changes throughout the        won a well-deserved graduate teach-
in Italy, Professor Mezzetti began          country as more disciplines adopt rig-     ing award in the spring of 2004.
teaching the course. Not surprisingly,      orous economic models.                        Faculty often report having seen
he provided the incoming class with           A number of non-economics majors         many of you at professional meetings
an excellent introduction to the rigors     also take our econometrics courses.        and have seen your research work in
of graduate school. As in the past, the     The department offers a truly out-         print. If you are in Chapel Hill, please
lounge area on the 4th floor was used       standing econometrics sequence with        stop by. Also, your fellow classmates
for discussions of the many assigned        Professor van der Klaauw teaching the      and those of us still in Chapel Hill
homework problems.                          fall statistics course and Professor       would enjoy reading your news items.
  First-year students continue to take      Mroz the spring applied econometrics       You can update us by phone, e-mail
core courses in econometrics, macro-        course. Professor Renault, who joined      (, web form (http:/
economics and microeconomics. One           the faculty this fall, and Professor       /
change in recent years has been the         Campo teach the theoretical economet-      ters/register.htm), or snail mail.
growth in enrollments in the
microeconomics and econometrics
courses. For years, the finance stu-                                   2003-2004 Degree Recipients
dents from the business school en-
rolled in the core microeconomics
courses. They are now joined by stu-                    Ph.D. Recipients

                                                        Susan Chen, “The Impact of Disability Insurance on Labor Supply
                                                        in the 1990s” (Advisor: van der Klaauw)
        2004 - 2005 Entering Class                      Ai-Ru (Meg) Cheng, “Essays in Financial Econometrics” (Advi-
                                                        sor: Gallant)
                                                        Michelle Danis, “Competition in Equity Option Markets” (Advi-
    Basak Altan, Middle East Technical University
                                                        sor: Tauchen)
    Frimpomaa Ampaw, Northeastern University
    Kathryn Felter, Miami of Ohio                       Andrew Dyke, “Crime and Punishment: Economic Models of Crime
    Olesya Fomenko, UNC-Chapel Hill                     and the Criminal Justice System” (Advisor: Tauchen)
    Georgian Gajewski, Florida State University         Peter Lance, “The Demand for Health Care in Lower Income Na-
    Zubeyir Kilinc, Bilkent University                  tions: Theory, Econometrics, and Empirical Evidence from Indone-
    Zongqiang Liao, Kent State University               sia” (Advisor: Akin)
    Peter Malaspina, Vassar College                     Xin (Alex) Li, “Essays on Identification and Estimation of Treat-
    Steven McMullen, Bethel College                     ment Effects in Sample Selection Models” (Advisor: van der Klaauw)
    Roxanne Miles, Emory University
                                                        Elena Ielceanu, “Two Essays on Managing Innovation” (Advisor:
    Andrew Monroe, UNC-Chapel Hill
    Zafar Nazarov, New Mexico State University
    Mai Noguchi, Emory University                       Chung-Ping (Albert) Loh, “Physical Activity and Employment
    Jeremy Petranka, VPI                                Decisions under Working Hours Inflexibility” (Co-Advisors: Akin
    Serban Ranca, Louisiana State University            and Mroz)
    Rhett Robinson, Clemson University
    Sandeep Sarangi, UNC-Chapel Hill                    M.S. Recipients
    Tatevik Sekhposyan, Ohio University
    Yao Song, Northwestern University                   Stephanie Childress (Advisor: Gilleskie)
    Ling Wang, Central Michigan University              Scott Hinds (Advisor: Mezzetti)
                                                        McDonald Mirabile (Advisor: van der Klaauw)
                                                        Sumanta Mukherjee (Advisor: van der Klaauw)

                                                                                                  Economics at Carolina -- Page 5
                                                   The Carolina Entrep
          The University of North Carolina-        neurial spirit of UNC has already re-        Planning is taking the lead on the social
      Chapel Hill has undertaken the Carolina      ceived national attention. An October        ventures course. The capstone of the
      Entrepreneurial Initiative (CEI), seeking    22, 2004, article in ranked       minor will be a summer internship.
      to make entrepreneurship part of the         UNC as number one on their list of             The Economics Department is very
      weave and fabric of the University. In       America’s Most Entrepreneurial Col-          excited about this new minor and is en-
      this context, entrepreneurship is broadly    leges. One unique feature of the CEI         couraged by the student interest the
      perceived as the transformation of ideas     cited by Forbes is that the entrepreneur-    program has already received.
      into enterprises that add value (eco-        ship programs are centered in the Col-                      Professor John Stewart
      nomic, artistic, social, environmental,      lege of Arts and Sciences rather than in        Director, Entrepreneurship Minor
      etc.) and are sustainable. This section      the Business School and to involve the
      focuses on CEI and the role of the Eco-      whole in a range of activities that runs
      nomics Department in the endeavor. It        from high-profile campus speakers to a       University Entrepreneur-in-
      goes without saying, that many of our        faculty research seminar focusing on         Residence
      former majors are leading interesting and    academic research addressing entrepre-
      productive entrepreneurial lives. At the     neurship.                                                           A small office on
      close of this section, we focus on three         The Economics Department is tak-                            the second floor of
      who demonstrate several different di-        ing a leading role in the CEI by design-                        Gardner Hall is the
      mensions of entrepreneurship represen-       ing a new minor in Entrepreneurship                             new home for Buck
      tative of the goals and ideas of CEI.        that will be offered to non-business ma-                        Goldstein, University
                                                   jors beginning in the fall of 2005. The                         Entrepreneur-in-Resi-
                                                   new minor, directed by Professor John                           dence and newly
      Economics Department to Offer                Stewart will allow non-business stu-                            named Senior Lec-
      Entrepreneurship Minor                       dents to explore the context, core tools,    turer in the Department of Economics.
                                                   and process of entrepreneurial activity.     Goldstein, who is a graduate of the Col-
                                                      Much work and planning have gone          lege of Arts and Sciences and of the
                         Entrepreneurship is a     into creating the new minor. Working         UNC Law School, returned to the Uni-
                       word that has different     with UNC Entrepreneur-in-Residence,          versity over the summer after a thirty-
                       meanings to different       Buck Goldstein, John Stewart has re-         year career as an entrepreneur. His ap-
                       people. At its core is      searched programs at other universities      pointment is part of a University-wide
                       change; change as a re-     and consulted with successful entre-         effort to imbue entrepreneurship into
                       sult of individual imagi-   preneurs to design the content and           the lifeblood of the campus through the
                       nation and initiative.      structure of the new program. The new        CEI, an $11,000,000, five-year effort
      The driving force behind entrepreneur-       minor is unique in that it is designed to    funded in part ($3.5 million) by The
      ship can be purely commercial; new-for-      appeal to students with interests in         Ewing Marion Kauffman Foundation in
      profit ventures. But, it can also be new     both social and business entrepreneur-       Kansas City, Missouri. What follows
      social ventures to meet social objectives    ship. Starting with the historical and       is an interview with Buck Goldstein.
      for the common good. Many of the ma-         social context of entrepreneurship, the
      jor changes that have occurred in our        minor will then take the students            Q. What will you be doing as Univer-
      economy and society are the result of        through the process of transforming an       sity Entrepreneur-in-Residence?
      entrepreneurial activity. However, in ei-    idea into to a workable plan, including      A. I will be acting as a partner with a num-
      ther case there is a common process of       exposure to entrepreneurs and a sum-         ber of faculty champions as they begin to
                                                   mer internship experience. After the in-     implement the various initiatives that com-
      transforming an idea into a reality.
                                                                                                prise the CEI. For instance, the Depart-
         In December of 2003, the University       troductory course, which will be taught
                                                                                                ment of Economics will house the new mi-
      of North Carolina at Chapel Hill was one     by Goldstein and Stewart, the students       nor in Entrepreneurship and I have been
      of eight universities to receive a grant     will take a course in new venture cre-       working with Professor John Stewart on the
      from the Kauffman foundation to pro-         ation. There will also be a separate track   curriculum as well as the syllabus for the
      mote entrepreneurship across the cam-        for those interested in social or com-       Introduction to Entrepreneurship class to
      pus. CEI is a multifaceted program en-       mercial entrepreneurship. The commer-        be offered next fall. This minor is for non-
      compassing many units of the univer-         cial venture course will be provided by      business students interested in learning the
      sity and a broad range of educational        the Kenan-Flagler Business School, and       skills necessary to turn an idea into a real-
                                                   the Department of City and Regional          ity. Many of the approaches we plan to take
      and research activities. The entrepre-

Page 6 -- Economics at Carolina
preneurship Initiative
    in that course will be introduced this spring
    in a First Year Seminar called The Entrepre-                                Entrepreneurship Minor
    neurial Imagination.
    Q. What other projects are you work-
    ing on?                                          Prerequisite: Principles of Economics, Econ 10
    A. The Carolina Challenge is a venture plan
    competition that will take place this spring     Entrepreneurial activity, both social and commercial, takes place within the
    involving students and faculty. There will be    economic system within which we exist. An appreciation of economic institu-
    a business track and a social entrepreneur-      tions and process is an important part of the knowledge base of entrepreneurs.
    ship track and $25,000 in prize money. The
    Challenge will galvanize the entire campus       1) Introduction to Entrepreneurship, (new course, ECON)
    and spotlight the best ideas in all depart-          The course will begin with a historical overview of the role and importance of
    ments and schools. I am particularly ex-             entrepreneurship in the economy and society. It will integrate the substantive
    cited about the Social Entrepreneurship track        material of the course with the Carolina Entrepreneurial Initiative Speaker Series.
    of the Challenge. We are also lining up a            Students will both attend the Speakers Series and have the opportunity to interact
                                                         with speakers in classroom sessions structured to reinforce the importance and
    Speaker Series for the spring and next fall.
                                                         relevance of particular concepts or practices of successful entrepreneurship. An-
    Q. Are there others working on CEI?                  other central theme in the design of the course is that the required core competen-
    A. Actually, there are scores of people par-         cies are common to both business and social entrepreneurship. The course will be
    ticipating in the effort in addition to the 14       co-taught by John Stewart and Buck Goldstein.
    program champions, including the Deans
    of the College of Arts and Sciences and the      2) Social Venture Creation, (new course, DCRP) or Business Venture
    Kenan-Flagler Business School, the Vice            Creation (new course, BUSI)
    Chancellor for Research and Economic De-             A unique feature of the minor is that it will be applicable to both students inter-
    velopment, the Chairperson of the Faculty            ested in business entrepreneurship as well as those with an interest in social entre-
    and two former Chairpersons. The effort is           preneurship. After completing the introductory course, students will choose to
    led by Jack Kasarda, former Chair of the             pursue either a business or social track. These courses will cover the concepts and
    Sociology Department and currently Kenan             tools that are particularly relevant to the two different types of ventures. These
                                                         courses will concentrate on the specific issues in launching ventures in either the
    Distinguished Professor of Management and
                                                         business or social realm. The primary objective of both courses will be to get the
    Director of Kenan-Flagler’s Kenan Institute          students through the process of creating a business plan. These courses will also be
    of Private Enterprise.                               closely integrated with the Speaker Series and with the Carolina Challenge.
    Q. What makes the CEI different than
    other Entrepreneurship Programs?                 3) Internship in Entrepreneurship, (new course, ECON)
    A. UNC has a long history of entrepreneur-           Direct experience in the process of entrepreneurship will be a key part of the
    ship education and was recently named the            minor. Supervised internship experiences will be provided for all minors. Differ-
    number one campus for entrepreneurship               ent internship experiences will be made available for students in the commercial
                                                         and social entrepreneurship tracks. The internship experience will generally take
    in the United States. In the past, most of our
                                                         place in the summer after completing the introduction and venture creation
    efforts were concentrated in the Business
    School. The CEI complements these efforts
    by focusing upon the entire University. It
    also defines entrepreneurship broadly to in-     4) One elective from a list of approved courses
    clude social, artistic and educational entre-        BUSI 71 Financial Accounting
                                                         STAT 22 Decision Models for Business
    preneurship as well as traditional commer-
                                                         SOCI 31 Social Relations in the Workplace
    cial entrepreneurship. Virtually all of the          SOCI 110 Formal Organizations and Bureaucracy
    initiatives involve both academics and prac-         SOCI 112 Social Stratification
    titioners with the goal of integrating an ex-        SOCI 115 Economy and Society
    periential component into all of the major           SOCI 127 The Labor Force
    projects of the CEI. This approach is unique         COMM 25 Introduction to Organizational Communication
    and, if we are successful, we have a chance          PHIL39 Morality and Business
    to make a real impact on the nature of un-           ECON 135 Economic History of the United States
                                                         HIST 64 History of American Business
    dergraduate education here at Carolina and
                                                         HIST 161 Technology and American Culture.
    around the world.                                    PLCY 67 Ethical Basis of Public Policy Decision Making
      For additional information on the CEI,             JOMC 130 Principles of Public Relations
    go to or contact Buck                JOMC 170 Principles of Advertising
    Goldstein at                 JOMC 175 Concepts of Marketing

                                                                                                                   Economics at Carolina -- Page 7
               The Carolina Entrepreneurial Spirit
                            Joseph R. “Pitt” Hyde III
          Pitt Hyde (Econ ‘65)                                    Malone & Hyde in 1979,                 Steve Jones
      is a nationally-known en-                                   Mr. Hyde guided its
      trepreneur and philan-                                      growth to become the              Morehead Scholar Steve Jones
      thropist whose leader-                                      largest company in the        (Econ ’74) became Dean of The Uni-
      ship has transformed his                                    auto parts industry, with     versity of North Carolina at Chapel
      hometown of Memphis,                                        more than 3,200 retail out-   Hill’s Kenan-Flagler Business
      Tennessee. With a life                                      lets nationwide. Mr. Hyde     School in 2003 following a 30-year
      that is equal parts busi-                                   is owner and President of     career in business, including 15
      ness acumen and strate-                                     investment company            years overseas.
      gic philanthropy, he con-                                   Pittco Holdings Inc., and         An Elkin, NC, native, UNC gradu-
      tinues to be a force for                                    Chairman of Memphis           ate and Harvard MBA, Mr. Jones is
      economic, civic and cul-                                    Bioworks Foundation,          widely known for helping companies
      tural progress.                                             which is leveraging Mem-      develop strategy, lead change and
          Mr. Hyde worked for the wholesale        phis’ assets to develop its unique niche     build organizational capability, often
      food company founded in 1907 by his          in the biotechnology industry.               in challenging circumstances.
      grandfather, expanding Malone & Hyde,           Through The Hyde Family Founda-
      Inc., specialty retailing division into      tions, Mr. Hyde leverages his philoso-
      drug stores, sporting goods stores, su-      phy of strategic giving to inspire major
      permarkets, and auto parts stores. Un-       initiatives and innovative thinking, in-
      der his leadership, the company became       cluding two first-class museums in
      the third largest U.S. wholesale food dis-   Memphis and the Annual Freedom
      tributor. In 1972 he was elected Chair-      Awards ceremony to honor national and
      man and, for 10 years, was the young-        international human rights leaders, from
      est CEO on the New York Stock Ex-            Nelson Mandela to Lech Walesa, Harry
      change.                                      Belafonte to Sidney Poitier, and Colin
           As founder of AutoZone as part of       Powell to Jimmy Carter.

                                          Jill Olsen                                                 Prior to becoming Dean, Jones
                                                                                                was CEO of Suncorp Metway Ltd.,
           Morehead Scholar Jill Olsen (Econ ’93), a small-town girl from Goldsboro,            based in Brisbane, Queensland.
        first visited New York City as a summer intern for Merrill Lynch.                       Suncorp is one of Australia’s top 25
            After graduation, she returned to Wall Street where she served as analyst           companies and its sixth-largest bank,
        for Tiger Management investment firm, an associate economist for Goldman                second-largest general insurer and
        Sachs & Co and finally as Associate Director at Tiger, responsible for analyzing        18th- largest funds manager. Its LJ
        currencies and bonds in developed countries.                                            Hooker subsidiary is the largest real
            A decade later, Ms. Olsen uses her knowledge of economics, passion for              estate agency franchiser in Austra-
        philanthropy and entrepreneurial skills to help talented NYC students from              lia, with 600 offices.
        disadvantaged backgrounds achieve their potential                                            Prior to Suncorp, Jones was man-
        and succeed.                                                                            aging Director and CEO of ANZ-New
            She serves as a trustee of the Tiger Foundation,                                    Zealand, one of the country’s four
        Tiger Management’s foundation that helps                                                main banks. He served six years as a
        nonprofits working to break the cycle of poverty in                                     management consultant for
        NYC. She also serves on the board and volunteer                                         McKinsey & Co., where he helped
        economics teacher with Teak Fellowship, an NYC                                          clients in construction materials,
        nonprofit that helps gifted students from                                               chain drug stores, alcoholic bever-
        economically disadvantaged backgrounds enter and                                        ages, electricity, textiles and bank-
        succeed at top high schools.                                                            ing develop growth strategies and
                                                                A Former Teak Fellow
                                                                 with Jill (right)
                                                                                                improve operations.

Page 8 -- Economics at Carolina
                                        Life After Carolina
Keith Bradsher                                    on such diverse topics as forestry, pig breed-      economics, and, eventually, domestic eco-
                                                  ing, monetary policy, colonization, and tax         nomic policy, especially the Federal Reserve.
                                                  policy. While beginning as a reasonably or-         In January, 1996 he moved to Detroit where
    Since he graduated from UNC in 1986 with      thodox mercantilist, Vauban eventually be-          he became the Times bureau chief with an
his AB degree in economics and history, Keith     came distressed at the inequalities of taxation     emphasis on reporting on the automobile in-
Bradsher has parlayed an early interest in eco-   borne by the French lower classes and pro-          dustry. “For a little over a year after The New
nomics to a journalistic career that has taken    posed the elimination of all taxes and the sub-     York Times assigned me to be the paper’s
him from New York, to Washington, DC, De-         stitution of a single flat tax of 10 percent on     Detroit bureau chief, I was as enthusiastic as
troit and now Hong Kong. Along the way he         all land and trade, with no exemptions. This        every auto writer about the boom times that
has reported on the telecommunications in-        proposal earned the displeasure of King Louis       SUVs had brought to the auto industry. Then
dustry, international economics, domestic eco-    XIV, to whom Vauban had been a trusted advi-        my editor asked me what happened when SUVs
nomic policy and the automobile industry. His     sor, but it did mark him as one of the influ-       hit cars. It turned out that the stiff, high-
stay in Detroit resulted in a book that has       ences on later Enlightenment economists in-         riding underbodies designed for optimal off-
been hailed by a number of critics as the most    cluding the Physiocrats. The honors thesis          road driving performance had made SUVs three
important book on automotive safety since         was so interesting and so elegantly written         times as likely as cars to kill the occupants of
Ralph Nader’s Unsafe at Any Speed.                that the Department submitted it to a cam-          the vehicles they hit. I have been investigat-
  Keith’s current residence in Hong Kong as       pus-wide competition. Failure to win that com-      ing SUV problems ever since.”
the New York Times bureau chief brings him        petition did not stop Keith from graduating in         A series of articles on SUVs and their prob-
full-circle back to the place where he first      1986 with distinction and highest honors in         lems led to Keith’s receiving the 1997 George
developed an inter-                               economics.                                          Polk Award for national reporting and his be-
est in economics.                                     Before entering Princeton’s Woodrow Wil-        ing a finalist for a Pulitzer Prize. Extending
Living there with his                             son School in the fall of 1986, Keith spent         his reporting on SUVs, Keith published High
foreign correspon-                                the summer as a freelance journalist in Mexico      and Mighty: SUVs—The World’s Most Dan-
dent father and fam-                              and Nicaragua, “...calling up and selling sto-      gerous Vehicles and How They Got That Way
ily during the years                              ries to the Miami Herald and the Wall Street        in 2002. The book won the New York Public
1970-75, Keith re-                                Journal. I wrote the stories by renting a stool     Library’s Helen Bernstein Award and and
members noticing                                  and a manual typewriter in the Plaza of             landed Keith on the “Today” show as well as
the rapidly rising                                Scribes, the place in Mexico City where people      CNBC several times and NPR. This year, an
gasoline prices that accompanied the Arab oil     have been going for centuries to find writers!”     updated paperback edition was published.
embargo of 1973. His mother gave him a copy           Keith entered Princeton thinking that he        “Auto executives have credited me with per-
of Newsweek that explained the the Arab-Is-       was headed for a career in the foreign service.     suading them to change the design of SUVs to
raeli war and its economic aftermath, and Keith   While he eventually received the Masters in         make them less deadly to other motorists.
reports that he “began reading news maga-         Public Policy with a concentration in eco-          After a series of stories that I wrote about the
zines every single week without exception         nomics, his career path changed forever when        dangers posed when SUVs override the
from fifth grade on.” In the seventh or eighth    he received a summer internship at the Los          bumpers and door sills of cars during colli-
grade he switched to The Economist thereby        Angeles Times after his first year at Princeton.    sions, Ford added steel bars below and behind
solidifying a continuing interest in economics    The internship eventually extended to four-         the bumpers of Ford Excursions to act like
and foreign affairs.                              teen months after which, “I was hooked on           cow catchers. Ford engineers nicknamed them
   Returning to the United States, Keith lived    journalism for life.”                               ‘Bradsher bars.’”
in suburban Virginia and attended St. Albans         “I was lucky to have specialized in econom-         In Hong Kong as Times bureau chief since
School in Washington, DC where he wrote for       ics, as big newspapers were all hiring young        April, 2002, Keith continues to report on a
the high school newspaper. His senior year at     business reporters in the late 1980s as demand      variety of business and economics stories as
St. Albans brought an admission offer from        for business reporting soared. I’ve always been     well as stories of more general interest. “For
Yale and a Morehead Scholarship nomination        glad that the New York Times hired me with-         the business section, I cover business and eco-
to UNC. “I thought going to Yale would feel       out realizing that I was the son of a former        nomic news from Pakistan to Taiwan to New
like more years of the same kind of study I       journalist — I mailed in my résumé with a           Zealand. I’ve particularly written about the
had been doing at St. Albans, with much less      cover letter to complete strangers, got in-         Chinese economy, and its slowdown has been
interesting summers than the Morehead of-         vited in for interviews and was eventually hired    my biggest story this year. I basically have
fered at UNC.”                                    by the head editor of the entire business sec-      most of Asia except for Japan and the Koreas.
     Keith double-majored in economics and        tion. The business editor, like me, had grown       For general foreign news, I cover political
history at UNC and, while never taking a course   up mainly in Virginia, then went to college in      developments only in Hong Kong and Tai-
at UNC’s School of Journalism, scratched his      North Carolina (he went to Duke) and then           wan. In addition, I’ve developed an odd sub-
journalism itch by “put[ting] in a lot of time    did a masters at Princeton. If I had not gone       specialty for the science section in covering
at the Daily Tar Heel, which I loved.” He         to Chapel Hill, he never would have noticed         frightening diseases emerging in Asia. I wrote
spent his junior year at the University of        the eerie parallels in our lives on my résumé       dozens of stories about SARS, my biggest story
Seville in Spain using his Christmas break to     and never would have called me in for an in-        last year, and I’ve been writing about bird flu
hitchhike “alone across the Sahara desert         terview. As it is, we have spent the last fifteen   this year.”
from oasis to oasis with a succession of Arab     years discussing ACC basketball, in person             Although he’s not been back to Chapel Hill
truckers.” The following summer he did an         while I was in New York and then by e-mail          since 1991, Keith credits UNC, and especially
internship with a business magazine in Lon-       through my tours in Washington, Detroit and         the Morehead Scholarship, with giving him a
don, International Management.                    Hong Kong.”                                         crucial boost into journalism. As for the eco-
   For his senior honors economics project,           Keith spent the years 1989-95 first cover-      nomics major, Keith’s experience illustrates
Keith chose to write on Marshal Vauban            ing the telecommunications industry and then        yet another way that economics can lead to a
(1633-1707) of France, the foremost mili-         moving to Washington, DC where he was a             rewarding and fascinating career.
tary engineer of his age and a prolific writer    national correspondent covering international                                         Boone Turchi

                                                                                                                    Economics at Carolina -- Page 9
                        Undergraduate Majors
      Preparing for Spring 05
                                                                            Carolina Economics Club
         As we approach the spring semester let
      me remind graduating seniors to check with
                                                           Participation at Carolina Economics Club meetings during the past three
      an Arts and Sciences academic advisor to
      verify you have met all College requirements     years continues to outpace the stock market, with more than 1,100 members
      for graduation and to complete required per-     of the UNC community attending Club functions during 2004. One Club goal
      mits and paperwork prior to receiving your       is to provide a forum to discuss a wide array of economic issues, ranging
      degree. You can make a first pass by going       from the economics of everyday life to hot topics and current events.
      to “Degree Audit” at Student Central on the          Other formal meetings in 2004 addressed such issues as: (1) “Bootstrap
      UNC-CH website. If you have questions            Banking” [micro-loans to small-scale entrepreneurs in less-developed-coun-
      about meeting your economics major require-      tries], (2) “The Economics of True Love”, (3) “America’s Holy War” [the
      ments, stop by the office. Please remember       record and prospects of the ‘War on Drugs’], (4) “A Debate on Economic
      that you must have at least one “advanced”
                                                       Policies,” [a panel of UNC graduate students discussed the economics of
      economics course to complete degree re-
      quirements. The advanced courses being           Republican and Democrat proposals], and (5) Graduate Programs for Eco-
      offered this spring are Econ 162, 170 and        nomics Majors.
      185. For those of you in the Senior Honors           Co-presidents James Lee and Ben Hill (2003-2004) were succeeded for
      Program, Econ 98 and 99 count as advanced        2004-2005 by Angelica Mathews and Lekith Lokesh in a relatively tame elec-
      courses; however, participants must have         tion. Please contact us if you would consider being a panel member to
      eight economics courses to complete the          discuss “What alumni have learned about careers for economics majors
      major. We will send invitation letters to ris-   after finishing UNC.”
      ing seniors whose academic records qualify           Future events for the Club will be posted at
      them for 2005-06 participation. To learn
                                                       dent/orgs/econclub/. Whenever you’re going to be on campus, check our
      more about the honors program, contact the
      Director of Undergraduate Studies. If you        schedule and think about attending one of our future scheduled events,
      are contemplating graduate work in econom-       which will include such presentations as “The Economics of AIDS” [on
      ics, it is important to obtain a strong under-   World AIDS day], “Career Opportunities for Economics Majors,” “The Eco-
      graduate background in mathematics. To           nomics of the Family,” “Twin Deficits: The Federal Budget, the Balance of
      learn more about math courses which are of       Trade, and the Future of the Dollar,” and “Models of Job Search and the
      critical importance, stop by the Economics       Quest for a Soul Mate.”
      Office. Finally, I encourage you to actively
      participate in the activities of the Econom-
      ics Club. It is a great way to get to know
      fellow-travelers in economics and engage in
      economic issues outside of the classroom.
                                                                          Paul Krugman Lecture
                                                                             sponsored by the Econ Club
      Undergraduate Research Fund
          Funds are available through the Herbert
      B. Mayo Undergraduate Research Fund for
      data collection, travel, software, etc. This
      fall, Alexandra Samet was awarded funds to
      help cover costs related to data collection
      for her honors thesis. Funds are available to
      support undergraduate internships to work          Princeton University economist and New York Times op-ed columnist
      with faculty. If you are interested, contact       Paul Krugman delivered the Club’s annual “Distinguished Lecture” in
      Professor Al Field,
                                                                           April. An overflow crowd heard Professor Krugman’s
         The Mayo Fund is an excellent example
      of how outside funding contributes to the
                                                                           thoughts on economic policies from the 1980s to the
      teaching, learning, and research experience                          present, the state of international relations, and the
      of our majors. The Department and student                            economic policies proposed by President Bush and
      recipients express our appreciation to Dr.                           Senator Kerry. Krugman, the controversial author of
      Mayo for his continuing support. If you                              18 books and hundreds of articles, is widely expected
      are interested in supporting the Department,                         to win a Nobel-prize in the near future because of
      contact our Chair, John Akin or Brook                                pathbreaking work in international trade theory.
      Alexander in the Arts and Sciences Fdn.,

Page 10 -- Economics at Carolina
Undergraduate Awards                             2004 Senior Honors Theses
This past year, 207 students received de-           Nine of our most outstanding economics        directed by Professor Stanley Black. Five
grees in Economics. We currently have more       majors successfully completed the Senior         of the participants graduated with “Highest
than 600 declared first and second majors.       Honors Program in 2004. The Program con-         Honors,” and four received “Honors.” The
In 2004, ten of our majors were initiated        sists of participating in two seminars in eco-   Department’s Undergraduate Honors Prize
into Phi Beta Kappa, a reflection of the con-    nomics, Econ 98 and 99, completing an hon-       in Economics was presented to Douglas Sue,
tinuing high quality of our students. New        ors thesis under the close supervision of a      who worked under the supervision of Pro-
members include Scott Brittain, Lewis Fos-       faculty member, and passing an oral defense      fessor Ralph Byrns. The Class of 2004 par-
ter, III, Alexa Kleysteuber, Melissa Lassiter,   of the research. This year the program was       ticipants are:
Elizabeth Makrides, Rachel Norton, Peter
Richmond, Joel Segel, Joshua Simmons, and                                    Highest Honors Graduates
Zephyr Taylor. In addition, a large number
                                                 Robert Benjamin Hill, Jr. (Highest Honors), “The College Decision? Tracking the Re-
of our majors were inducted into the Eco-
                                                 turns to Education for Men and Women During the Expansion and Recession of the Last
nomics honorary, Omicron Delta Epsilon.
In addition, two graduating seniors received
                                                 Mary Laura Johnson (Highest Honors), “The Influence of Income on Adolescent Health
special Department recognition. Kasey
                                                 Outcomes: Differentiating Between Generations of Residence in the U.S.”
Maggard won the Undergraduate Prize in
                                                 Kasey Q. Maggard (Highest Honors), “The Role of Social Capital in the Remittance
Economics, awarded annually to the top eco-
                                                 Decisions of Mexican Migrants”
nomics major. Douglas Sue received the
                                                 Douglas R. Sue (Highest Honors), “Cognitive Anomalies and the Assumption of Eco-
Undergraduate Honors Prize in Economics
                                                 nomic Ratinality: An Empirical Investigation of UNC Students”
for the top honors thesis. Doug also re-
                                                 Jennifer Wade (Highest Honors), “Pricing and Advertising Strategies and Their Effect on
ceived the Johnson Foundation Award for
                                                 Consumer Decisions”
best undergraduate economics thesis in North
Carolina, May 2004.
                                                                                   Honors Graduates
                                                 Leia Kelly (Honors), “Forecasting Optimal Monetary Policy in Europe Following the
Omicron Delta Epsilon                            2004 Eastern European Expansion”
                                                 Melissa Lassiter (Honors), “Household Bargaining and Child Labor in Nepal”
    President Katherine Theyson and Vice-        Robert W. May (Honors), “An Empirical Study of Factors Influencing Federal Antitrust
President Hamilton Fout led ODE this past        Cases”
year. The annual induction for new mem-          Peter Jeffrey Richmond (Honors), “An Examination of the European Union’s Regional
bers was held on April 20, 2004. Fewer           Policy in Spain: Is It Necessary, Has It Worked, and Should It Be Coordinated with
than 10% of our junior-senor economics ma-       Agricultural Policy?”
jors, along with 10 graduate students, were
invited into membership. The new student
inductees included James Bruzzinni, Kavita
                                                                            Economist in Training
Aildasani, Ashley Batten, Meredith Britt,             I graduated last May with a double major in Spanish and Economics. I completed an
Liang Ding, William Grider, R. Benjamin Hill,      honors thesis in the Economics Department entitled “The Roll of Social Capital in the
Matthew Hurst, Catherine Joo, Alan Keesee,         Remittance Decisions of Mexican Migrants.” Through a UNC Economics Depart-
Alexa Kleysteuber, Gregory Knudsen,                                  ment alumnus I found out that the Federal Reserve Bank of Atlanta
Bidisha Lahiri, Sumanta Mukherjee, Vinh                              was holding a conference on my thesis topic, remittances. Since I
Nguyen, Nilufer Ozdemir, Kristin Pappas,                             would not be starting my full time job with the Atlanta office of The
Judy Pham, Andrew Pike, Justin Rao, Valerie                          Boston Consulting Group until the fall, I pursued an internship with
Rawlston, Sahminan Sahminan, Joel Segel,                             the Atlanta FED. I was offered an internship with the Latin American
Nicholas Stefanski, Ekaterina Tsibarova,                             Research Group for eight weeks this summer.
Yaraslau Zayats, and Yun Zhang.                                          While at the FED, I had the opportunity to continue to expand
    Professor Ralph Byrns was chosen to            and share my knowledge about remittances by giving a presentation on remittances to
receive the Outstanding Economics Profes-          the Atlanta branch staff. I was also given the opportunity to write an article for a FED
sor award. He was honored for the many             publication on the topic of banks and the growing remittance market. It was really
contributions he has made to the Depart-           exciting to have my work published in a magazine, now available under “Publications”
ment and University since his appointment          at I spent the majority of my time during the internship
in 2001. Byrns has worked actively with            continuing my thesis work. Using a newly released updated data set, I expanded the
undergraduate majors both in and out of the        scope of my thesis and delved deeper into specific topics.
classroom, and was selected by undergradu-            I also had other responsibilities such as collecting data for the economists and
ate students to receive the Economics De-          followed the economic events of the Central American and Caribbean countries to
partment Excellence in Undergraduate               write country reports for an internal publication. It was very interesting to sit in on
Teaching Award in 2002. He can be fround           meetings of economists where they discussed interest rate policy.
daily on the steps outside Gardner discuss-           By interning at the FED, I was able to view a different option for economists besides
ing various academic and policy issues with        a professorship. It also provided me opportunities to apply the knowledge that I
many students. In addition, he has effec-          gained from four years of economics classes. Overall my internship with the Latin
tively served as Faculty Advisor to the Eco-       American Research Group at the FED was a great experience.
nomics Club, directed numerous honors the-                                                                                  Kasey Maggard
ses and been a mentor to countless students.

                                                                                                             Economics at Carolina -- Page 11
                                                                                           Faculty and
                                                Professor Michael Salemi will be ap-       cross-campus Program in Philosophy,
              Latané Professor                pointed as a UNC Bowman and Gordon           Politics and Economics. He is the edi-
                                              Gray Distinguished Term Professor, ef-       tor of Economics and Philosophy,
                                              fective July 1, 2005.                        serves on the boards of several other
          Eric Renault is the newly ap-
                                                Professor John Stewart was named           scholarly journals, and is a member of
        pointed Henry A. Latané Distin-
                                              Director of the Minor in Entrepreneur-       the Australian Academy of Social Sci-
        guished Professor of Economics.
                                              ship in the Department of Economics.         ences.
                                              Professor John Akin was named a                Dennis R. Appleyard, James B. Duke
                             Renault re-
                                              Champion of the entrepreneurship mi-         Professor of International Studies and
                             ceived his
                                              nor in the Carolina Entrepreneurship         Economics at Davidson College and
                             Masters in
                                              Initiative (CEI). Buck Goldstein, newly      Professor Emeritus at UNC-CH, re-
                                              appointed University Entrepreneur in         ceived the Thomas Jefferson Award at
                             and Statistics
                                              Residence, will work to implement vari-      the annual fall Davidson College awards
                             from ENSAE,
                                              ous CEI initiatives and was appointed        convocation. The award recognizes a
                             Paris, and his
                                              Senior Lecturer in the Department.           faculty member who by personal influ-
                             PhD in Ap-
                                                Professor Paul Rhode was named a           ence, teaching, writing, and scholarship
                             plied Math-
                                              UNC-CH Faculty Partner. Rhode was            promotes the high ideals of Thomas
        ematics for Social Sciences from
                                              matched with Scott Custer’s gift to the      Jefferson.
        Paris University Dauphine. He
                                              Faculty Partners Fund. As a Faculty
        previously held the Canada Re-
                                              Partner, he will receive financial support   Faculty Leaves
        search Chair in Financial Econo-
                                              for research, conference participation,
        metrics at the University of
                                              and research publications.                      Professors Richard Froyen, Tom
        Montreal and is a fellow of the
                                                Professor Koleman Strumpf’s re-            Mroz, Steven Rosefielde, and Koleman
        Econometric Society.
                                              search on the economics of gambling          Strumpf received one-semester re-
          Professor Renault is widely
                                              and illegal downloading of popular mu-       search-and-study leaves during the
        known for his research in econo-
                                              sic from the internet was featured in a      2003 -2004 academic year. Froyen spent
        metrics, with a particular focus on
                                              recent article in the UNC-CH Endeav-         time doing collaborative research at the
        financial econometrics. His work
                                              ors magazine. In addition, Strumpf’s         University of Canterbury in New
        has appeared in a number of jour-
                                              work with Professor Paul Rhode on the        Zealand; Mroz spent the year as a vis-
        nals, including the Journal of
                                              history of gambling on US presidential       iting scholar at Yale; Rosefielde spent
        Econometrics, the Journal of the
                                              elections was recently reported on CNN       several months working with colleagues
        Royal Statistical Society, Econo-
                                              and cited in the Wall Street Journal and     in Moscow; and Strumpf spent time as
        metric Theory, Econometrica, and
                                              the Economist magazine.                      a visiting scholar at the CATO Institute
        Mathematical Finance. He is
                                                Professor Geoffrey Brennan was se-         in Washington, D.C.
        founding co-editor of the Journal
                                              lected as the first Keohane Distin-             Professor David Blau was awarded a
        of Financial Econometrics and an
                                              guished Visiting Professorship at UNC        W.R. Kenan, Jr., leave. He spent the
        associate editor of several econo-
                                              (Department of Philosophy) and Duke,         year as a visiting scholar at the Insti-
        metrics journals including
                                              and appointed Adjunct Professor in the       tute Nacionale de la Statistique et des
        Econometrica and the Journal of
                                              Department of Economics at UNC-CH.           Etudes Economique in Paris, France.
                                              Brennan is an economics professor in            Professor Claudio Mezzetti was
          Professor Renault joined our
                                              the Social and Political Theory Group        awarded a W.N. Reynolds leave. He
        Department effective July 1, 2004.
                                              in the Research School of Social Sci-        was a visiting scholar at the European
        In the fall of 2004 Professor
                                              ences at Australian National University      University Institute in Florence, Italy.
        Renault taught an advanced
                                              in Canberra. He is well-known for his           Professors Patrick Conway, Paul
        graduate econometrics course and
                                              work in public finance, public choice        Rhode, Sandra Campo, Donna
        will teach a course in continuous-
                                              theory, welfare economics and eco-           Gilleskie, and John Stewart will each
        time finance in spring 2005.
                                              nomic philosophy. He will be teaching        receive a one-semester research-and-
                                              and working with faculty on both the         study leave during the 2004-2005 aca-
                                              UNC and Duke campuses to develop a           demic year.

Page 12 -- Economics at Carolina
d Staff News
    Retired Economics Professor years. Last year, after 38 years on the other elder peers struggle with the tribu-
    Graduates from Law School   faculty, he gave up teaching to commit lations of finances, insurance and other
                                                 to his law studies full time and graduate   vexing legal matters, he decided he
       After teaching an estimated 10,000        on time.                                    wanted to help. Wilde wants to focus
                       students and serv-            Wilde hopes to practice elder law —     on estate planning, reverse mortgages
                       ing as Director of        a skyrocketing profession — out of his      and the realities of giving up indepen-
                       Undergraduate             home. After watching his mother and         dent living.
                       Studies in Econom-
                       ics, James Wilde
                       graduated from the
                       UNC Law School                                Awesome Instruction!
                       May 2004.

    The following was published at http://           We are proud of the high quality of Department teaching at both the gradu-                     ate and undergraduate levels. This past year was notable in that we had one
    050904_APlocal_eldergrad.html on 5/09/04.      individual who received a University-wide award as well as four who re-
                                                   ceived Department awards for outstanding performance in the classroom.
    66-year-old to Graduate from
    UNC Chapel Hill Law School
    By The Associated Press                                    University Distinguished Teaching Award
        For Jim Wilde, Sunday’s cap-and-
                                                                      Professor David Guilkey received a 2004 Distinguished
    gown ceremony at UNC-Chapel Hill Law
                                                                   Teaching Award for Post-Baccalaureate Instruction. He and
    School won’t be the defining academic
                                                                   other recipients of University teaching awards were recog-
    moment of his life.
                                                                   nized on Sunday, February 15, 2004, during the half-time cer-
        The 66-year-old public finance expert
                                                                   emony at the UNC-Maryland men’s basketball game in the
    and former economics professor already
                                                                   Dean E. Smith Center, a fitting locale for David, who can al-
    has a doctorate from Princeton. The old-
                                                                   ways be found in the stands at home games.
    est in his class of law students, Wilde
    didn’t fight the good fight for the best
    internships, didn’t push to manage the                            Departmental Teaching Awards
    law review and didn’t work to graduate
    the top in his class. His goal? Graduat-         As in the past, voting processes organized and carried out by the Under-
    ing within the five years that the Ameri-      graduate Economics Club and the Economics Graduate Student Association
    can Bar Association requires so that he        led to the selection of the Department teaching award winners.
    can embark on a new career at a time
    when many of his contemporaries are                                Professor Ralph         Katherine Theyson
    plotting retirement.                                           Byrns won the De-         received the Depart-
        “I feel very good about what has                           partment of Econom-       ment of Economics
    happened,” Wilde said. “I feel very for-                       ics Excellence in Un-     Best Teaching Assis-
    tunate that the Law School was willing                         dergraduate Teaching      tant Award.
    to give me a chance. I feel fortunate that                     Award.
    the Law School has enough diversity
    interest to think of age diversity, too.”        Professor David Guilkey received                       Arnie Aldridge won
    Beginning in 1999, through a phased-           the Department’s Jae-Yeong Song                         the Vijay Bhagavan
    retirement plan at the University of           and Chunuk Park Award for Graduate                      Award for the best
    North Carolina at Chapel Hill, Wilde al-       Teaching.                                               Econ 10 teaching as-
    ternated a semester of law school with a                                                               sistant.
    semester of teaching economics for four

                                                                                                       Economics at Carolina -- Page 13
                                             Alumni News
          My thanks again to those of you who         to New York where she is working for the        Graduate Alumni News
      took the time to get in touch with us and       Federal Reserve Bank.
      bring us up to date on what has happened in         After a nine month hiatus, one of our           Since arriving in West Virginia where he
      your life since leaving Carolina. Hearing       recent graduates, Lara Whittaker (2003),        is now Director of the Division of Econom-
      about all the interesting things you are        is enjoying being back in school doing          ics and Finance, William Trumbull (1985)
      engaged in both in your professional life and   graduate work in public policy at the College   has been doing research on comparative eco-
      communities is truly one of the enjoyable       of William and Mary.                            nomic systems. For the last several years,
      aspects of editing the annual Newsletter.           Lauren Duquette (2001) lives in the         he has been teaching a course on the Eco-
      Please note that this edition contains          Washington, D.C., area where she works for      nomics of Cuba jointly with the faculty at
      information from both our undergraduate         the Economic Research Service of the            the University of Havana. He has also taught
      and graduate alums. I hope you will enjoy       USDA.                                           study abroad courses on the Eastern Euro-
      catching up with some of your former                Robin Anderson (2002) is currently          pean and Chinese economies. Pictures are
      classmates. The number of communications        pursuing a Ph.D. in Economics at the            available on his web page at http://
      we have received from you has slowed down       University of Washington.             
      a bit this year so I encourage all of you           In December 2003, the Board of Directors        Bruce Caldwell (1979) is nearby in
      to take a moment and update us by               of American International Group, Inc.,          Greensboro. This year, his book, Hayek’s
      phone, or email or         elected Donald P. Kanak (1975) AIG Vice         Challenge: An intellectual Biography of F.A., or web form http:/       Chairman and Co-Chief Operating Officer         Hayek, was published by the University of
      /            of AIG. He is now based in New York.            Chicago press. Bruce has also worked to
      register.htm. Of course, we always like              Dwight Wells (1998) is currently a         develop the new PhD program at the Uni-
      seeing you in person, so if you find yourself   stand-up comedian, writer, and actor in New     versity of North Carolina-Greensboro.
      in Chapel Hill please stop by the               York City and Los Angeles. However, his             After spending 22 years in government
      Department to say hello.                        heart will forever be devoted to post-Soviet    positions, Chris Klein (1980) has returned
                                                      economic policy because of Dr. Rosefielde.      to academics and is now at Middle Tennes-
      Undergraduate Alumni News                       Dwight is grateful to UNC and will make a       see State University where he joins Charlie
                                                      sizeable donation when he makes it big.         Baum (1999). Chris was formerly with the
                                                           Ann-Marie Martin O’Donnell (1987)          Federal Trade Commission in Washington
          Brett Southworth (2001) writes that         is married with three children, Megan (6),      and the Tennessee Regulatory Authority.
      he is now working at Merrill Lynch in their     Peter (3), and Katie (8 months). Her posi-      Both Chris and Charlie are involved in the
      Public Finance Health Care Department in        tion with Lowes has enabled her to put her      new PhD program at MTSU.
      New York City. He notes that working on         interest in the global market place to great        Myriam Quispe-Agnoli (1997) and
      Wall Street is very different than the Peace    use. She is glad she took international eco-    Curtis Florence (1997) are now in Atlanta.
      Corps work he did in the Islamic Republic       nomics with Pat Conway!                         Myriam is a Research Economist and Policy
      of Mauritania immediately after graduating           Lynn Cathryn Fogarty (2000) is en-         Advisor with the Federal Reserve Bank of
      from Carolina.                                  gaged to be married in August 2005. She         Atlanta and Curtis is on the faculty of the
          Chris Weber(1984) is living in Seattle,     graduated from UVA Law School in May            Rollins School of Public Health in Emory.
      Washington, where he teaches in the             2004. She is studying for her Master’s de-          Dan Kress (1995) left the World Bank
      Department of Economics and Finance at          gree at the London School of Economics          to join the Bill and Melinda Gates Founda-
      Seattle University. He was recently             before beginning work in environmental law      tion in Seattle. He is a program officer with
      promoted to Full Professor and appointed        with a Richmond, Va., firm.                     the Global Health Policy and Finance team.
      The Robert D. O’Brien Chair in the Albers            Norman M. Davis, Jr. (1964) received           After serving as Chief of Staff to the
      School of Business and Economics.               a Masters in Healthcare Administration          Minister of Public Works and Transport in
          Melodie Potts (2002) just completed a       from Duke in 1969. He worked as a hospi-        Chile, Rodrigo Pizarro (1998) entered the
      two-year stint with the Boston Consulting       tal administrator 1969-1990. He operated a      private sector and founded an NGO in envi-
      Group in Atlanta and is on the way to do        family retail business from 1990-1993.          ronmental policy of which he is now Execu-
      graduate work in public policy at the           Currently he is working as a nursing home       tive Director, Also, he is
      Kennedy School of Government via a one-         administrator.                                  working as a consultant to the Panamanian
      year detour in Australia. This year Melodie          Jason York (1998) was married to           government developing a system of envi-
      is serving as the Think Tank Coordinator        Marjorie Sack on August 30, 2003, at the        ronmental accounts.
      for the newly-formed Cape York Institute        Carolina Inn. In 2001 he completed a MBA            Rupinder Kaur Saggi (2000) and her
      for Policy and Leadership on Cape York          at William and Mary 2001. He earned the         husband, Kamal, have 20-month-old
      Peninsula. She will be working on Aboriginal    rank of Captain in USAF before leaving to       twins—a daughter, Neha, and son, Kunaal.
      policy, development and reform agendas.         join BB&T in 2002. He graduated from the            Since Mike Quinn (2002) joined the
          A recent migrant to the Big Apple is        BB&T Management Development Program             faculty at Bentley College, he and Sherry
      Kristin Wilson (2002). After working two        in 2002 and served as credit analyst until      are adjusting to the Boston winters. Last
      years in the Brookings Institute in             2003. He was promoted to Banking Officer        November, Mike took a break from the cold
      Washington, D.C., Kristin recently moved        and Commercial Banker in 2004.                  weather for the Southern meetings.

Page 14 -- Economics at Carolina
Greetings to Friends and Alumni
A Letter from the Chair
                                  The state’s budget woes have continued for yet another year, but in spite of the constraints of limited
                            funds in many areas the Department had a very good year. Much of the credit for the Department’s holding
                            its level of excellence through the past several lean state budget years goes to you alumni and friends who
                            have so kindly supported us financially. We have been able to use our sources of non-state money for things
                            as diverse as paying for the 100th Anniversary Celebration a couple of years ago, buying important software
                            for faculty and students, and sending faculty members to professional conferences where they presented
                            important research papers and were able to listen to and discuss the ideas at the forefront of knowledge in
                            their fields. These are just some of the ways we have used your contributions, both large and small, to
                            enhance the Department. We have also been much protected as a “Department of Excellence” by having three
                            Distinguished Professorships funded by gifts from supporters of the Department. These three distinguished
                            professorships provide a base of three exceptionally talented scholars always in the Department, irrespective
                            of the vagaries of state funding.
                                   Three years ago, I mentioned that Bernstein Distinguished Professor, Eric Ghysels, a highly respected
financial econometrician, had joined the equally distinguished Dr. Ron Gallant (who held the Latané Distinguished Professorship) in a
new field for the UNC Economics Department, Financial Econometrics. The field has developed well and students are starting to reach
the dissertation stage. The bad news is that Ron Gallant has now retired and is teaching at Duke, but the good news is we have been
able to replace him with Dr. Eric Renault, who also specializes in Financial Econometrics and basic Econometric Theory. Dr Renault
now holds the Latané Distinguished Professorship. Repeating from two years ago, in case you missed it, we believe we now offer (in
an alliance with the Kenan-Flagler Business School), if not the best, without doubt some of the world’s best training in Financial
Econometrics. Tell your undergraduate students with an interest in financial statistics to consider us for graduate work!
    Our enrollments and number of majors have continued to be very large relative to our faculty size. In the past academic year we did
not hire any new faculty except Eric Renault, but we have been given permission by the Dean to hire a new Macroeconomist during
the coming recruiting season. We continue to pursue outside funding for additional distinguished professorships in the Department,
knowing that state funds cannot be the full answer to our quest for greater excellence. If you are interested in discussing the possibility
of a major gift (or a smaller one) please call me at 919-843-9452 or contact Brook Alexander at the Arts and Sciences Foundation at
919-843-0345. I should remind you that any gifts to the University, including those to annual giving or the CAROLINA FIRST
CAMPAIGN, can be designated to “The Department of Economics.”
    There are other events of the past year, such as teaching awards, grants successfully competed for, and placements of students to
be proud of, but to lessen the risk of going on too long I will leave most of those positive announcements for other sections of this
newsletter. I would, however, like to draw your attention to the fact we are developing a minor in Entrepreneurship within the
Economics Department, to start next year with approximately 40 students. You can read more about that program at http:// Buck Goldstein, the University’s Entrepreneur-in-Residence has joined
the Department as a Senior Lecturer, and will be working with John Stewart on design and implementation of the new minor. His office
is in 207 Gardner Hall. The Department is also cooperating with the Philosophy and Political Science Departments at UNC and with
Duke University to create a new program in Philosophy, Politics and Economics (P, P and E) to be housed in the Philosophy Depart-
ment. Dr. Geoffrey Brennan, an economist by training, who works actively on issues that relate to economics, rationality, and political
philosophy, will be developing that program. Dr. Brennan will be an Adjunct Professor in the Economics Department.
    I will close with what has become my annual plea for financial support from you, readers who care enough about the Department to
have reached this point in my greetings note. Even in good budget times state funds alone simply are not sufficient to allow for the
level of excellence we desire and believed the state, our alumni, and our students deserve. Even as the state budget has begun to
improve, the need for outside financial support cannot be overemphasized. Please give some thought to what the Economics Depart-
ment has meant to your professional and personal success, as well as to the value of first-rate economics training at UNC for future
students, and give to the Department to the extent your financial situation allows. Both faculty and student activities can be improved
immensely with even small amounts of flexible funds. At a time in academic history when many universities are attempting to entice
faculty from other institutions to replace their own who retire, we must put together the funding to maintain excellence. This requires
keeping our best present faculty and attracting outstanding individuals to fill both vacant faculty positions and those of retiring faculty.
We are working toward raising sufficient funds to compete financially with the absolute best departments in both salary and other
costly inputs.
    As I say every year in this space, and mean in all sincerity, you and your accomplishments are an important component of the
department’s contribution to society. We in the Department try to keep up with you and your lives and careers, but it is difficult not
to miss information. Please keep us informed about yourselves and your families.
    I hope all of you will feel free to drop in at the Department anytime you are in Chapel Hill. I will try to personally welcome you
and make you feel at home. I will also be glad to take you out for a coffee or lunch, so please do stop by.
    I hope you all have a good year and that I get to see many of you during the course of the year.
                                                                                                                                John S. Akin

                                                                                                           Economics at Carolina -- Page 15
Page 16 -- Economics at Carolina

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