• Nobel-winning economist Michael Kremer to join department faculty as University Professor

     

    Photo by Jon Chase/Harvard University

    Photo by Jon Chase/Harvard University

    Nobel Prize-winning economist Michael Kremer has been appointed University Professor at the University of Chicago and will join our department faculty.

    A pioneer in development economics who has shaped the discipline through the use of field experiments to inform economic models, policy and program development, Kremer shared the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel in 2019. He has been most recently at Harvard University, where he serves as the Gates Professor of Developing Societies in the Department of Economics.

    Kremer’s appointment at UChicago will be effective on Sept. 1. He also will hold a secondary appointment at the Harris School of Public Policy.

    “Michael is a scholar of extraordinary vision and accomplishment. His research has had an enormous influence on his field, and has been impactful in informing public policy in developing countries,” said Ka Yee C. Lee, provost and the David Lee Shillinglaw Distinguished Service Professor of Chemistry. “We are delighted to welcome Michael to the University of Chicago. The range of his research will undoubtedly lead to collaborations across divisions and schools.”

    University Professors are among those recruited at a senior level from outside the University, and are selected for internationally recognized eminence in their fields as well as for their potential for high impact across the University. Kremer will become the 23rd person to hold a University Professorship, and the 10th active faculty member holding that title.

    “The University of Chicago’s commitment to expanding research on development economics is an exceptional opportunity,” Kremer said. “The work ahead will develop new knowledge on ways to address global poverty and ultimately to do good for the world.

    Kremer was among the first economists to evaluate interventions in developing countries through randomized control trials. In 1998, he evaluated a project on deworming in Kenya. By comparing schools that had already been phased into treatment for intestinal worms with those that had not yet been phased into the program, he and his collaborators found that the program reduced student absenteeism by a quarter—and even reduced transmission of the disease to neighboring schools. Subsequent work also found that deworming had long-run impacts, leading to higher living standards 20 years later.

    “Michael’s research and its resulting policy impacts in economic development, health, education and technological innovation has been transformative at a global scale,” said Amanda Woodward, dean of the Division of the Social Sciences and the William S. Gray Distinguished Service Professor of Psychology. “We look forward to the next revolutionary phases of Michael’s work. He will be a foundational force for the future of Griffin Economics as well as for the broad community of economists at the University of Chicago.”

    Through the nonprofit organization Evidence Action and its private sector and government partners, Kremer’s work has now helped provide free deworming treatments to 280 million children. The World Health Organization recommends large-scale deworming as the most cost-effective way to improve children’s health and nutrition.

    “All of Michael’s work is grounded in theory and built around a coherent set of ideas interrogating what we can learn from economics,” said Rob Shimer, chair of the Kenneth C. Griffin Department of Economics and the Alvin H. Baum Professor in Economics. “His extraordinary contributions to the field of economics and to improving human welfare are testament to the power of his methodological innovations.”

    In addition to that research, Kremer helped develop the advance market commitment, proposing the idea of a contract that would guarantee that if firms developed vaccines for diseases affecting the developing world meeting certain technological specifications, donors would help cover the cost of purchasing the product. Such commitments have stimulated private investment in vaccine research and the distribution of vaccines for diseases in the developing world. A $1.5 billion commitment by a consortium of donors led to the development and distribution of vaccines covering the strains of pneumococcal diseases common in the developing world, saving an estimated 700,000 lives.

    “Michael’s landmark work has not only advanced the field but has had enormous real-world impact,” said Katherine Baicker, dean and the Emmett Dedmon Professor at the Harris School of Public Policy. “His work has resulted in billions of dollars being devoted towards malaria and pneumococcal vaccines focused on the strains prevalent in developing countries. Few economists have saved so many lives around the world.”

    While changes in broad-scale government programs have long provided economists with natural experiments to inform their models, Kremer and his colleagues developed an iterative strategy that engages—and in some instances, founds—NGOs to deliver social programs that implement and test economic ideas. This approach can reveal the causal forces at play in economic systems, shedding light where observational data cannot. It also offers a proving ground for developing and perfecting effective policies and programs.

    At UChicago, Kremer will lead a new Development Innovation Lab, an initiative that will sit within the Becker Friedman Institute for Economics.

    “I am excited to join the University of Chicago, with its storied tradition of pioneering economics research,” Kremer said. “The new lab will use the tools of economics to develop innovations of practical use for developing countries. By bringing together experts in different fields and working closely with nonprofit organizations, firms and governments in the developing world, we can simultaneously advance knowledge and generate solutions to development challenges which can reach hundreds of millions of people.”

    “Michael’s work simultaneously pushes out the frontier of understanding and has had enormous and lasting impacts on people’s well-being,” said Michael Greenstone, director of the Becker Friedman Institute and the Milton Friedman Distinguished Service Professor in Economics. “He is the perfect person to lead the Development Innovation Lab at BFI, and I know he will catalyze the terrific development economics here into even greater heights, with the ultimate beneficiaries being the field of economics and the world.”

    Kremer is the author of more than 120 academic articles and book chapters. He is a fellow of the American Academy of Arts and Sciences and a 1997 recipient of a MacArthur Fellowship. He has won awards for his work on health economics, agricultural economics and on Latin America.

    Kremer earned his Ph.D. in economics from Harvard University in 1992. He was a visiting assistant professor at the University of Chicago in Spring Quarter 1993. Prior to his appointment at Harvard, he was a member of the faculty at the Massachusetts Institute of Technology from 1993 to 1999.

    For more information, please see https://news.uchicago.edu/story/nobel-winning-economist-michael-kremer-join-uchicago-faculty-university-professor.

     

  • Professor Michael Kremer Discusses Poverty and Pandemics on "Big Brains"

    Big Brains Logo; White text over brain imageIn Episode 66 of the University’s “Big Brains” podcast, Kremer sat down with host and Vice President for Communications at the University of Chicago, Paul Rand. When thinking of professionals who work on the ground to address and combat poverty, “economist” is not likely a profession that comes to mind. However, Nobel Prize-winning economist, Michael Kremer, is on a mission to change that. In fact, he and two MIT scholars won the Nobel Prize in 2019 because of their experimental approach to alleviating global poverty. He explained the experimental approach, “You’re spending time in the field, talking to teachers, to students, to farmers, to nonprofit organization workers, or government workers, and that gives you a richer sense of context.”

    Prior to attending grad school, Kremer was a high school teacher in Kenya, where he later returned after learning about an idea from a connection at the International Child Support Fund Africa for how to improve schools there. Students did not have access to enough textbooks, so Kremer and his team established a randomized control trial to evaluate the impact of increasing the number of textbooks in some schools, while maintaining a control group of schools unchanged. “That allowed us to compare the schools that got textbooks from those that didn’t. And having taught high school in this area, I was initially really surprised when we saw the results. So we looked at the impact on average test scores and we didn’t really see any impact,” Kremer said.

    Rather than taking these findings at face value, Kremer and his team decided to dig deeper into what root issues were causing lack of change in test scores. Through their on-the-ground work, they discovered the problem was less likely to be lack of access to textbooks and more likely to be lack of access to curriculum that catered to student needs.

    Kremer also did a randomized control trial in Kenya examining the impact of deworming children. And, as a result of deworming, Kremer stated, “What we found was we saw that school absences went way down by about a quarter.” Twenty years later, the same students impacted by the deworming study experienced roughly a 15% increase in earnings.

    Insofar as the impacts on the field of development economics, Kremer believes that studies like these provide proof that health interventions should be preventative and free, and that it is crucial to understand the communities and people with whom you work.

    Kremer has also done work in the U.S., going back to his Kansas roots to examine the impact of providing information to farmers through mobile phones. Delivery of this information impacted farmer behavior enough to yield a large benefit-cost ratio. As a result, Kremer assisted in the establishment of an NGO, Precision Agriculture.

    One other extraordinarily relevant area Kremer is involved in is in the economics of vaccines, developing the Advanced Market Commitment model which was used for the pneumococcus vaccine. Rand expounded, “Advanced Market Commitments are essentially contracts usually offered by governments or donors that guarantee a viable market for a vaccine once it’s successfully developed” because, typically, companies only want to invest time and money in creating vaccines they can make money on. The approach was successful for the pneumococcus vaccine and, with the advent of COVID-19, Kremer recognized the same issues around incentives within the private sector.

    In the context of COVID-19, Rand explained,

    “Kremer was arguing that we needed to commit to investing in vaccine production capacity, even before we had a viable vaccine, so we could shave months off the wait for vaccines. This largely didn’t end up happening, and Kremer says we could have ended up in a situation where we were waiting even longer than we are now to vaccinate everyone. We just got lucky…  Kremer says that the lessons we learned here are vital and that in the future, like with Advanced Market Commitments, vaccine buyers should invest in manufacturing capacity early for the right to buy doses at marginal cost. But the issue of how to ramp up COVID-19 vaccine production today is still far from over. Although wealthy Western countries are expecting to be vaccinated by summer, this is not the case for developing countries. Kremer’s team is still working to think of ways to make production even more efficient.”

    As for the future, Kremer is launching the Development Innovation Lab as part of the Becker Friedman Institute. Part of the mission of this lab is to use the tools of economics to tackle practical problems.

    To access the full episode of the Big Brains podcast, and the episode’s transcript, please visit here

  • Robert A. Mundell, Former Professor of Economics at the University of Chicago and “Father of the Euro,” 1932-2021

    Robert A. Mundell, a Nobel Laureate and former Professor of Economics at the University of Chicago, died April 4, 2021 in Siena, Italy. Mundell was a Canadian economist and most recently Professor of Economics at Columbia University in New York.  

    Mundell’s research focused largely on the economic theory of international economics and he was known as the “father of the theory of optimum currency areas.” His theories contributed to the adoption of the euro as the currency of the European Union. In 1999, Mundell received the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel "for his analysis of monetary and fiscal policy under different exchange rate regimes and his analysis of optimum currency areas" (Robert A. Mundell - Facts). 

    Mundell received his Ph.D. from MIT and taught at Stanford University, as well as The Johns Hopkins University SAIS Bologna Center. He was a postdoctoral fellow at the University of Chicago in 1956 and a Professor of Economics at the University from 1966 to 1971. His disagreements with Milton Friedman on several policy issues are notable. Mundell was also the Editor of the Journal of Political Economy while at the University. In 1974, Mundell joined the faculty at Columbia University.

    To learn more about Robert A. Mundell’s research, publications, and contributions, visit his personal website

    References: 

    Robert A. Mundell – Facts. NobelPrize.org. Nobel Media AB 2021. Mon. 12 Apr 2021. <https://www.nobelprize.org/prizes/economic-sciences/1999/mundell/facts/>.

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