Wednesday, January 11, 2017

NC State online MBA stays in US News top 20

More great rankings news!  For the third year in a row the NC State online MBA has placed in the US News and World Report top 20.  The program placed 18th, tied with Mississippi State and South Florida.

The US News rankings are based on faculty credentials and training, student services and technology, student engagement, peer evaluations, and admissions selectivity.  I am especially proud of how well we scored on the student engagement dimension.

I was fortunate enough this fall to have my first opportunity to teach the online core economics course.  It was one of the best teaching experiences I have ever had.  More people come to your office hours online than they do in day or evening instruction.  Accessibility matters, a lot!

Thursday, December 8, 2016

What trade deficits really mean

Harvard's Greg Mankiw explains in this NYT Upshot column what happens when a country runs a trade deficit.  When imports are greater than exports, this results in lower GDP.   But is this something we should really be concerned about?

Mankiw points out that the trade deficit is accompanied by a foreign investment surplus.  When businesses overseas sell more to us than we sell to them, they have to do something with the funds they accumulate.  In practice that means they either end up buying US assets or make physical investments in the US, e.g., Siemens opening facilities here.  And guess what?  The investment foreign companies make in the US is considerably larger than the investments US firms make overseas.  In other words, there are many more cases like Siemens than like Carrier.  

Viewed differently, US consumers are able to have a higher standard of living by being able to import goods from overseas.  Investors overseas are able to invest in a relatively "vibrant and safe" economy.  So why would you want to mess with this?

Wednesday, December 7, 2016

Deadweight loss during the holidays

Great video on the economics of giving by Marginal Revolutions's Tyler Cowan and Alex Taborrok.

Pop quiz: Suppose you have $20 in your budget for a gift to Aunt Mabel.  How do you make sure that Mabel gets at least $20 worth of enjoyment?  Easy answer: give her $20 in cash or Amazon gift card.

But do we really want to spend the holidays trading $20 bills with each other?  The video brings up other motives for gift giving, but I am not sure making charitable contributions in Mabel's name is the answer.  She might rather have the $20.

Friday, December 2, 2016

Saving jobs at what cost

I have been searching for the words to express how exasperated I am with United Technologies' decision to keep 700 or so jobs in its Carrier plant in Indianapolis.  Kudos to Larry Summers, today in WP, who totally nails it.  In a market system based on stable regulations and enforced laws, everyone plays under the same rules.  Who you are does not matter.  In a system based on ad hoc deals, all bets are off and companies will redouble their efforts to make friends in high places in government.  

Money quote:
Most companies will prefer the good to the bad will of the U.S. president and his leadership team. Should that reality be levered to get them to locate where the president wants, to make contributions to the president’s reelection campaign, to hire people the president wants to see hired, to do the kinds of research the president wants carried out, or to lend money to those that the president wants to see assisted?
Some of the worst abuses of power are not those that leaders inflict on their people. They are the acts that the people demand from their leaders. I fear in a way that is more fundamental than a bad tax policy or tariff we have started down the road of changing the operating assumptions of our capitalism. I hope I am wrong, but I expect that as a consequence we are going to be not only poorer but less free.

Tuesday, November 29, 2016

Economists weigh in on Fidel

Two blog posts from well-known economists:

1) Tyler Cowan's forecast for the Cuban economy after Fidel is not very rosy.  Cuba has a foreign debt challenge and can no longer count on cheap oil from Venezuela.  Sugar prices have increased this year but remain depressed.  The best case scenario, Cowan argues, is that Cuba catches up with the Dominican Republic in a few decades.

2) George Borjas spent the first 11 years of his life in Cuba, leaving with his mother after his family's business had been confiscated.  He shares his remembrances about life under Fidel in the early 1960s in this blog post.  Borjas reaction to the news of Fidel's death: "Good riddance!"

Sunday, November 27, 2016

Machine Intelligence

Twenty years ago the internet was supposed to "change everything" and defy conventional economic analysis.  Nope.  Did not happen.  The internet lowered the cost of search, information, and communication.  New products spawned by the internet were characterized by massive fixed costs and negligible variable costs.  Key insights about the internet continue to follow from basic economics.

Now the hype is about machine intelligence.  Three faculty members at the Rotman School of Management at the University of Toronto have a short article on the HBR website where they argue that the economics of machine intelligence can be summed up as "lower costs of prediction."  This means that firms will have lower costs associated with demand forecasting and inventory management, leading to wider adoption of these practices.

As prediction becomes cheaper, there will be an impact on other inputs into the production process, depending on whether they are substitutes or complements for prediction.  For instance economists who make predictions may be displaced by machines.  The authors think that judgment skills will become more important, serving as a complement to cheaper predictions.  I am not sure what they mean by judgment skills, but presumably they are referring to cognitive processes where humans will continue to have an advantage over machines.

Machine intelligence will soon be coming to higher education.  Some business schools are already experimenting with using tools based on machine intelligence to drill newly admitted students on basic skills in math and statistics.  Will a machine-based socratic dialogue be next?

Tuesday, November 22, 2016

Immigrants making America great

If you want to understand why America has been the world leader for so many years in technology, you might want to pay some attention to the key role played by immigrants.  This report from the American Enterprise Institute (right-leaning DC think tank sure to supply many appointees to the Trump administration) shows that

  1. Fifteen of the top 25 tech companies were founded by first or second generation immigrants
  2. A fifth of the Inc. 500 firms are headed by immigrants
Legitimate disagreements can be had concerning illegal immigration and the number and mix of legal immigrants to the US.  As these discussions play out, everyone needs to be well aware of the vital role immigrant entrepreneurs play so that we avoid decisions that keep the father of the next Steve Jobs in Syria.  

Wednesday, November 9, 2016

Economists find recipe for charter school success

The evidence on the effectiveness of charter schools is mixed at best.  But a recent study by  economists from MIT and other schools (that was featured in NYT recently) shows that one type of charter school has been consistently successful -- schools that set high expectations for students and high levels of support for teachers and students.

The research team followed charters in the Boston public schools.  Lotteries determine who gets into charters, so there is a real experimental design to the research.  Those fortunate to get into charters learn more in school and are more likely to go to college.  Most of the charter students come from low income families and are learning at the same level as those in public schools from upper and middle income families.

One researcher noted that the impact of the charter environment was far greater than variables such as class size and new buildings.  Another, who used to be a union organizer, said the gains from these charters were the largest she had ever seen in her career.

Yesterday Massachusetts voted on a referendum to significantly expand charter schools.  It lost 62 to 38 percent.

Friday, November 4, 2016

NC State MBA rated in Global Top 100 by the Economist magazine

More kudos for the NC State Jenkins MBA!  The program was ranked #89 in the world by the Economist magazine in its annual Which MBA? rankings.  This is the first time our program has appeared in a global top 100.  NC State placed #24 among public universities in the US.  This will certainly help raise its reputation, especially among prospective students overseas.

Globally NC State stood out in the following areas:

  • #10: % of graduates with jobs within three months of graduation.  
  • #12: faculty quality
  • #14: salary growth (post-MBA divided by pre-MBA salary)
Highly half of the top 100 programs were in the US, with most of the rest in Europe.  The top five programs were Chicago, Northwestern, Virginia, Harvard and Stanford.  

Wednesday, November 2, 2016

NC State MBAs excel at case competitions

In two recent case competitions, teams representing the NC State Jenkins MBA team have excelled.  At the National Black MBA Conference in New Orleans, 34 top-tier schools competed.  NC State's team placed second, just behind the University of Michigan.  Other schools that competed include Boston University, Cornell, Emory, Georgetown, MIT, Ohio State, Penn State, Purdue, Rice, Rutgers,  Southern Cal, Texas A&M, UCLA, UNC-CH, and Vanderbilt.  

Kudos to David Satterfield, Rudhawarsh Loganathan, Chandan Dash, Malcolm Scott, Aarathi Sree Srinivasan, and Vishnu Kotipalli for representing the program so well.  Rudhawarsh also was one of six contestants recognized as one of the best presenters in the first round.  Also at National Black, Jelyse Dawson finished fourth (out of 300) in the Innovation Whiteboard Challenge.  

Kevin Weisner's team finished in first place in the US division of the Novo Nordisk Innovation in Action Case Competition.  Kevin goes to Denmark in two weeks to compete against a Danish team for the global championship.  

NC State is hosting its first case competition starting tomorrow, the NC State Grand Business Challenge sponsored by Merck.  There will be nine other schools competing