ECONOMICS ALUMNI NEWSLETTER
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SPRING 2023<br />
VOL. 1<br />
ISSUE 1<br />
www.herbert.miami.edu/<br />
Alumni Newsletter
Message<br />
from the<br />
Chair<br />
Greetings to all 'Canes, near and far! Welcome to<br />
our inaugural newsletter.<br />
Inside these pages, you will find the highlights of<br />
what turned out to be a very exciting 2022-23<br />
academic year for the Economics Department.<br />
To begin, Professor Noah Williams and I joined the<br />
department on July 1, 2022. We would like to<br />
thank Dean John Quelch and everyone involved in<br />
that effort. Both Noah and I are thrilled to be here<br />
and, together with our colleagues, we look<br />
forward to making the University of Miami an<br />
internationally recognized center for economic<br />
research, instruction, and policy evaluation.<br />
We are grateful to the Pilar and John Henry<br />
family for their generous gift that will fund<br />
this event for many years to come. Our<br />
speaker this year was Federal Reserve<br />
Governor Christopher Waller who delivered a<br />
speech on the timely topic of Central Bank<br />
Digital Currencies. Is the governor in favor of<br />
the initiative or not and why? See the answer<br />
below!<br />
You can read about these events and more in<br />
the pages that follow. If you have anything to<br />
share, we would love to hear from you! Please<br />
feel free to reach out to me if you or your<br />
organization need speakers for your events, or<br />
if you’d just like to learn more about the<br />
department and its mission.<br />
Thank you!<br />
A big effort this year was devoted to recruiting<br />
new faculty and staff. I am very happy to<br />
welcome Daniela Valdivia as our new office<br />
manager and Professor Stefania Albanesi of the<br />
University of Pittsburgh. Our recruiting<br />
committee is still working hard to fill two more<br />
faculty positions, including the Jeffrey L. Bewkes<br />
Family Endowed Chair. We expect to report more<br />
good news on the hiring front soon. We will keep<br />
you posted!<br />
An important goal of our department is to<br />
promote public discussion and debate over<br />
important economic phenomena and policy issues<br />
that affect us all. To this end, we are very pleased<br />
to announce a new annual speaker’s series that<br />
will feature prominent economists and<br />
policymakers discussing current economic issues<br />
and trends.<br />
Go 'Canes!<br />
Dr. David Andolfatto<br />
Chair & Professor, Department of Economics
The Citibank Challenge<br />
In February, the Economics Department hosted<br />
the Citibank Challenge—a competition that<br />
invited teams of our students to present an<br />
evaluation of U.S. economic policy during and<br />
after the Covid-19 pandemic. Six teams submitted<br />
entries from which three finalists made<br />
presentations.<br />
The judges included David Andolfatto, chair of<br />
the economics department, Dr. Miguel Iraola,<br />
faculty member and program director for the<br />
economics department, and Nick Van Stedum, a<br />
corporate banker and UM recruiter at Citibank.<br />
Also, in attendance were Blessing Utomi a<br />
corporate recruiter at Citibank, David Spigelman,<br />
the faculty advisor for the Econ Club, Patty Ruiz,<br />
the president of the Econ Club, as well as other<br />
members of the executive board of the Econ<br />
Club.<br />
All three teams presented their cases brilliantly,<br />
placing the judges in a difficult position. In the<br />
end, the best presentation was awarded to<br />
Antonio Pacheco and Kyle Pearson, both juniors in<br />
finance. We are happy to report, however, that<br />
every team came out a winner!
Jay Henry, Matias Henry, Pilar Henry, Christopher Waller, Allan Herbert<br />
The Henry Family Endowed<br />
Speaker Series in Economics<br />
The Department of Economics is very pleased to announce a new annual<br />
speaker series made possible through a generous gift from Pilar and John<br />
Henry. The series will showcase nationally and internationally recognized<br />
economists, who will deliver seminars related to their research and<br />
current trends. The intent of the award is to foster intellectual dialogue<br />
among the University of Miami community.<br />
The series kicked off on April 19, 2023, with Federal Reserve Governor<br />
Christopher J. Waller, whose talk was entitled “Demystifying Central Bank<br />
Digital Currency.” The topic was timely since there has been much<br />
discussion recently on whether the Federal Reserve is on the cusp of<br />
introducing a Central Bank Digital Currency (CBDC). Fears along this<br />
dimension were evidently precipitated by the Federal Reserve announcing<br />
a launch date for its new faster payment service, FedNow. As Governor<br />
Waller explained, FedNow is not a CBDC—it is simply a platform designed<br />
to make payments clear and settle more rapidly via the current payment<br />
system, which operates primarily through banks.<br />
This still leaves the question of what exactly a CBDC is or might entail.<br />
Governor Waller suggested we think of CBDC as a fully-insured checking<br />
account with the Fed—our nation’s central bank—instead of a regular<br />
bank. This description certainly had the effect of removing much of the<br />
mystery! On the issue of whether the government might have too much<br />
information on private transactions, he explained how this concern could<br />
be addressed with a “synthetic” version of CBDC that operates through<br />
private banks instead of the Fed. At the end of the day, however, the<br />
Governor seemed skeptical that a CBDC for the United States is something<br />
worth pursuing. A link to Governor Waller’s presentation is available here:<br />
https://spaces.hightail.com/space/HirLgnmGSO
Jude Alexander Bokor, Dr. Michael Connolly, Justice John Curiel<br />
On March 20th, Randall T. Fitzgerald,<br />
President, Miami Law Federalist Society<br />
organized a meeting to “debate, discuss<br />
and decide” the issue of “Executive<br />
Privilege and the Crisis of Corruption in<br />
Latin America.” The event took place on<br />
March 20th in the Alma Jennings Student<br />
Lounge at the Miami Law School.<br />
The panelists included:<br />
Judge Alexander Bokor, Florida 3rd<br />
District Court of Appeal,<br />
Justice John Couriel, Florida Supreme<br />
Court, and<br />
Professor Michael Connolly Department of<br />
Economics, MHBS<br />
Couriel reviewed the case of Siemens which self-reported<br />
bribery, previously legal from a German point of view, to<br />
comply with the 1999 Convention on Anti-bribery. A<br />
noted expert on Brazil, Couriel stated that the<br />
Odebrecht case has improved the transparency of<br />
government contracting in Latin America and the<br />
Caribbean, suggesting greater accountability in the<br />
future.<br />
Connolly said that “The longevity in office of some<br />
autocrats as in Cuba, required: firstly, an advanced<br />
technology of political repression including the military<br />
and ‘security forces’, and secondly, otherwise<br />
considerable economic liberty - that serves as a safetyvalve<br />
- tolerating a lively informal market conducted in<br />
dollars and euros.”<br />
The discussion and questions were lively:<br />
Bokor noted that “In many cases, the<br />
judicial system has been subordinated to<br />
the executive, hindering the application<br />
of ‘the rule of law’.” A packed supreme<br />
court often suspended a constitution<br />
limiting the terms served by the<br />
incumbent executive.
Introducing our new faculty member Stefania<br />
Albanesi!<br />
We are delighted to welcome Professor Stefania Albanesi to the<br />
Economics Department at the Miami Herbert Business School<br />
beginning this fall!<br />
Stefania is presently a Professor of Economics at the University of<br />
Pittsburgh. She is also a fellow at the Center for Economic and Policy<br />
Research, and a Research Associate at the National Bureau of<br />
Economic Research. Prior to joining the University of Pittsburgh, she<br />
was a research economist at the Federal Reserve Bank of New York<br />
and subsequently held academic positions at Columbia and Duke. She<br />
received her Ph.D. from Northwestern University in 2001. Stefania is a<br />
native of Milan, Italy and received her B.A. in Economics from Bocconi<br />
University in 1996.<br />
Stefania’s research interests are in macroeconomics, public economics, and labor economics.<br />
Her current research concentrates on understanding the determinants of household<br />
borrowing and default behavior, and on quantifying the impact of changing trends in female<br />
participation on aggregate business cycles.<br />
“Hiring Professor Albanesi continues our positive momentum at the Miami Herbert Business<br />
School, and the Department of Economics in particular, where she will be the third full<br />
professor to join us in the past year. Her commitment to understanding important social<br />
questions and her devotion to training students will benefit all of us in the University<br />
community.” – Ann Olazabal, Dean, MHBS.<br />
“We’re happy to welcome a scholar of Stefania Albanesi’s caliber to the Department of<br />
Economics. She’ll be a great addition the department, and our students will benefit from the<br />
depth of her knowledge and experience across many areas in economics, and particularly her<br />
skill in merging theory and data to understand pressing issues in the labor market and<br />
household finance.” – David Andolfatto, Chair, Economics Department, MHBS.
Kay van Berlo:<br />
BA in Economics and Sportscar Racing Driver<br />
Kay van Berlo is a remarkable student who will earn a BA in Economics in the Spring 2023. In addition to<br />
his brilliant academic career, he is an elite sports car racing driver. Kay is an example of perseverance,<br />
commitment, and mental strength. He is doing an excellent job making his academic responsibilities<br />
compatible with his demanding racing schedule.<br />
Kay started karting when he was eight years old. After having a successful karting experience racing<br />
European and World championships, he advanced to racing sportscars in 2018. Kay has participated in<br />
several endurance series such as the European Le Mans Series (winner of the 4 Hours of Monza LMP3 in<br />
2018 holding the record of youngest ELMS race winner at 17 years of age, and winner of the Imola LMP3<br />
in 2022), Asian Le Mans Series (winner, Fuji LMP3 in 2018),<br />
24 Hours of Nürburgring, Road to Le Mans (winner, LMP3 in<br />
2018), the IMSA Endurance Cup (winner, LMP3 in 2022), and<br />
Sahlen 6 Hours of Watkins Glen (winner, LMP3 2022).<br />
He has also taken part in selected races in the Porsche<br />
Carrera Cup Benelux (winner, Zandvoort in 2019),<br />
completed a full season in the Porsche Carrera Cup<br />
Germany, and the Rolex 24 Hours of Daytona (winner in<br />
2022). After 13 wins in the Porsche Carrera Cup North<br />
America series in 2021 and 2022, Kay has been named a<br />
Porsche North America Selected Driver and is now<br />
competing in the full-time Imsa WeatherTech Sportscar<br />
Championship. As a result of his successful driving career,<br />
Kay has earned the opportunity to represent North<br />
America in the Porsche Junior Global Shootout in both<br />
2021 and 2022.<br />
The Department of Economics at MHBS is very honored of<br />
having Kay van Berlo pursuing a BA in Economics. We<br />
want to recognize his effort and congratulate him for his<br />
outstanding academic and racing achievements.
Our department is excited to introduce some of the innovative research projects that our faculty<br />
members have been conducting. This newsletter includes projects that have been presented by our<br />
faculty members David Kelly, and Alex Horenstein.<br />
Professor David Kelly on<br />
David L Kelly and Renato Molina<br />
Forthcoming: Journal of the Association of Environmental and Resource Economists<br />
Link to paper: http://moya.bus.miami.edu/~dkelly/papers/Adaptation_final.pdf<br />
What are the effects of climate adaptation infrastructure investments (sea walls, pumping stations,<br />
elevating roads, drainage systems, and other infrastructure) on surrounding property values? This is a<br />
question that many property owners in the Miami-Dade region would like to know! Professors David<br />
Kelly and Renato Molina highlight their findings below.<br />
Renato Molina and I evaluate the effect of climate adaptation infrastructure investments on property<br />
transaction prices using data on over four hundred thousand property transactions and 162<br />
infrastructure projects in the Miami-Dade County, an area that is highly vulnerable to flooding and sea<br />
level rise due to climate change. Exploiting the timing and sitting of different adaptation projects in<br />
Miami-Dade, we find that property values near the projects increase by about 5% more than surrounding<br />
areas after the projects are completed. Because property values increase near the projects after<br />
completion, we can rule out other factors that affect property values everywhere in Miami, such as the<br />
trend towards remote work.<br />
These gains are concentrated in areas close to the project, and for projects that are visually<br />
identifiable. Our results suggest an aggregate mean benefit net of adaptation cost of about $680,000<br />
per project, and almost $300 million in aggregate net benefits for all projects in our sample. Most<br />
projects generated positive net benefits, indicating that most adaptation efforts are being placed in<br />
areas that pass a pecuniary benefit-cost test.<br />
Contrary to some news reports expressing skepticism of Miami’s ability to adapt to climate change, our<br />
results show that policies to city and the county to make Miami more resilient to climate change are<br />
working, as evidenced by higher demand for protected properties. The research also shows, however,<br />
that a tradeoff exists between affordable housing and making Miami more resilient, and that the city<br />
and county should consider the effect of adaptation infrastructure on the supply of affordable<br />
housing.
Konrad Grabiszewski and I are pioneering a what we<br />
think is groundbreaking approach to experimental<br />
research called mobile experiments. Our idea is<br />
motivated by the fact that there are over 5 billion<br />
mobile phone users worldwide and that smartphones<br />
have become essential for many daily activities.<br />
From this, we saw a potential for mobile devices to<br />
serve as experimental labs. And so, we decided to<br />
develop a new way for researchers to study human<br />
behavior on an unprecedented global scale by<br />
collecting data from users asked to play strategic<br />
games in laboratory settings via their smartphones.<br />
The widescale use of mobile devices offers several<br />
advantages for experimental research. One important<br />
advantage is that mobile experiments can potentially<br />
reach billions of people, mitigating the problem of<br />
small sample size. At the same time, it eliminates<br />
the need for travel and face-to-face interactions.<br />
Not only does this save on expense, but it promotes<br />
sustainable research practices.<br />
Our first mobile experiment, called Blues and Reds<br />
(www.bluesandreds.com), has been downloaded in<br />
over 140 countries, with players completing over<br />
75,000 games.<br />
The data from this experiment has been used in<br />
four research projects focused on understanding<br />
decision-making. In one project, we discovered<br />
that people often fail to find the correct solution<br />
to a problem not because they do not know how<br />
to solve it, but because they don't understand the<br />
problem itself.<br />
This finding has practical implications. For<br />
example, it suggests that policymakers should<br />
focus on improving communication and education<br />
to ensure the public fully understands the<br />
problems being addressed by policies being<br />
proposed by legislators. This suggests that more<br />
effort should be devoted to simplifying complex<br />
issues, using relatable examples, and employing<br />
various communication channels to reach diverse<br />
audiences. Businesses should also prioritize clear<br />
communication within their organizations, so<br />
employees understand the goals, objectives, and<br />
challenges they face. As Einstein famously said,<br />
“If I had an hour to solve a problem, I'd spend 55<br />
minutes thinking about the problem and 5 minutes<br />
thinking about solutions.” Our findings from Blues<br />
and Reds supports this idea.<br />
Currently, we are working on three more mobile<br />
experiments. One is complete and is called<br />
Strategize It! (www.strategizeit.org), another is<br />
about to be launched and is called Escapismo<br />
(www.escapismo.org), and the third one is a<br />
financial trading laboratory that is in production.<br />
Mobile experiments have the potential to<br />
revolutionize research and our understanding of<br />
human behavior in various fields, such as<br />
psychology, economics, healthcare, and<br />
education. As scientists, we're excited to embrace<br />
and shape this new chapter of experimental<br />
research by leveraging the widespread use of<br />
smartphones and the power of mobile apps.
Allan Herbert, Economics Ph.D. student with Dr. Elisah Lewis, Associate Director of Accreditation and Assessment at Miami<br />
Herbert Business School. She was honored with the 2023 Parsuraman Family Power of the U Staff Award for Service<br />
Excellence, for her work obtaining the Triple Crown in Accreditation.<br />
Miami Herbert has earned accreditation from the Southern Association of Colleges and Schools<br />
Commission on Colleges (SACSCOC); Association to Advance Collegiate Schools of Business (AACSB), the<br />
world’s leading accrediting body that ensures quality and continuous improvement; EQUIS, which<br />
recognizes business schools that are trying to make an impact beyond their domestic frontier; The<br />
Association of MBAs (AMBA); and the Education Quality Accreditation Agency (EQUAA), whose mission is<br />
to increase the academic quality of programs, institutes, careers, faculties and universities, and other<br />
educational units in Latin America and the world. The School holds a “triple crown” accreditation<br />
status (AACSB, EQUIS, AMBA accreditation)—a feat achieved by less than 1 percent of the world’s<br />
business schools. In the United States, Miami Herbert is one of only three business schools with this<br />
coveted designation.<br />
The Triple Crown of Accreditation
Economics Department Members<br />
David Andolfatto Hugo Faria Michael Connolly Rong Hai Daniel Hicks<br />
Professor Lecturer Professor Asst. Professor Lecturer<br />
Department Chair<br />
Alex Horenstein Ayca Kaya David Kelly Luis Locay Maria Jesus, Lorca Susino<br />
Associate Professor Associate Professor Professor Associate Professor Lecturer<br />
Staminir Morfov Augustine C.W. Nelson Christopher Frank Parmeter Esteban Petruzzello Miguel Angel Iraola Guzman<br />
Lecturer Lecturer Associate Professor Asst. Professor Prof. Asst. Professor Prof. Practice<br />
Practice<br />
Undergraduate Dir. in Economics<br />
Philip Robins Manuel Santos David F Spigelman Noah Williams Ian Wright<br />
Professor Emeritus Professor Lecturer Professor Asst. Professor<br />
Stefania Albanesi<br />
Professor<br />
Daniela Valdivia<br />
Office Manager