A powerhouse in its field
Low-key leaders set collaborative tone for Department of Economics

By Cathy Cockrell, Public Affairs

Economics professors Daniel McFadden and department Chair Alan Auerbach converse at a reception for George Akerlof. Peg Skorpinski photo

17 October 2001 | The Department of Economics has done it again. For the second year in a row, and the fourth in eight years, one of its own has won a Nobel Prize — suggesting something more than coincidence, good karma or dumb luck working in its favor.

What accounts for the department’s string of Nobels — for George Akerlof last week, Daniel McFadden a year ago, the late John Harsanyi (who held a joint appointment with the Haas School) in 1994, and Gerard Debreu in 1983?

At a departmental tea last Wednesday, just hours after the announcement of Akerlof’s prize, department Chair Alan Auerbach resisted sweeping claims: “We think carefully about people we hire and try to maintain a positive work environment,” he said instead.

The laconic explanation somehow fit.

Faculty and graduate students alike describe a collegial, collaborative atmosphere, in which ideas, and people, thrive. That tone, said Auerbach, is set by some of the College of Letters and Science department’s most distinguished members — like “Dan and George, who are both easygoing and aren’t status conscious and are happy to talk to students.”

“Many members of the department agree that he sort of represents the department,” faculty member Matthew Rabin said of Akerlof, who has encouraged Rabin’s work linking economics and psychology. “He believes in the intellectual character of the department, as a place that encourages creative thinking and good economics and collegiality while encouraging people to do their own thing.”

In other economics schools, “you work on your own, you may cooperate less,” said graduate student Marc Muendler, a teaching assistant to Akerlof. “Here you’re received with open arms.” Professors “seem to work together across fields, within fields,” he added.

“We really reward creativity,” noted Professor Christina Romer. The emphasis is on quality, not quantity, she said — not how many papers you produce, but “what’s important? What have we learned?”

The department’s home is in Evans Hall, in a cramped, uncongenial space short on public space.

“We hold faculty meetings in a classroom; we all sit in chairs with desks attached,” Romer said. For all that, she says, “it’s fun to go to a faculty meeting, because you like everyone; it’s kind of sweet.”

Outside of the campus, Berkeley’s economics department is better known for the “real-world emphasis” of many of its faculty.

It was this quality that the Wall Street Journal highlighted in a lengthy 1995 article, “Berkeley’s Economists Attack Policy Issues with Unusual Gusto.”

A study of economics graduate education, conducted in the early ‘90s and cited by the Journal, found that many programs underemphasized links between theory and real-world problems.

“What distinguishes most Berkeley economists,” the Journal wrote, “is a willingness to get their hands dirty.” It went on to name a stream of Berkeley economists who have held shape policy in the Beltway.

“At Berkeley,” Auerbach was quoted as saying, “a faculty member isn’t looked down on for both being active in policy making and doing scholarly research.”

The department is also a friendly environment for faculty interested in importing insights from other social sciences. Akerlof is among them, and he encourages colleagues interested in doing the same.

“The theme I associate with him is no theme,” said Rabin, last year’s recipient of a MacArthur Foundation “Genius” award. “He’s incredibly broad in the types of things he things about — psychology, anthropology, sociology… He’s a central contributor to the field, but also one of its critics, trying to force the field in new directions.”

“The rest of the profession was not sure what they thought of it,” Romer said of the behavioral economics now finding a foothold in the economics department. “But Berkeley started winning prizes and getting the good assistant profs.”