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!"

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?

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.  

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.

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.  

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