Students Take Centre Stage at 2025 Irish Young Economist of the Year National Awards
More than 300 second-level students aged 12-18 from various schools in Ireland participated in the event, showcasing their curiosity and critical thinking skills in economics. The event, which took place on 8th May and is now in its twelfth year, aims to promote an understanding and enjoyment of economics among young people. This year's entries covered a wide array of topics such as climate change, inflation, AI, housing, global trade, sport, gender equality, and more, demonstrating the relevance of economics in analyzing modern societal complexities. Seamus Coffey, of the Irish Economic Association, introduces the YEOTY Awards 2025 The national award was presented by Seamus Coffey, President of the Irish Economic Association, to Mir Hasibullah Zia and Daniel Dillon, from Wexford CBS, for their project titled "The Dependency Trap: How Ireland's Reliance on Multinationals Deepens Economic Imbalances", which focused on the impact of Foreign Direct Investment (FDI) in Ireland. Their project stood out for its clear presentation, in-depth analysis, and incorporation of the UN Sustainable Development Goals (SDGs). YEOTY National Award Winners (Senior Category) Daniel Dillon (l) and Mir Hasibullah Zia (r) / Mir Hasibullah Zia (l) receiving the award from Seamus Coffey (r) The overall winner in the junior category was Iris Xinhe Li, from Rathdown School, for her project "Earth or Space: Which Economy will Launch us into the Future?". Additional prizes were awarded depending on age, county and topic area. The Central Bank of Ireland Award, for projects with a focus on the Irish economy and monetary policy was awarded to Swasti Sahoo, from Adamstown Community College for her project titled "The Paradox of Green Growth Can Capitalism Survive Without Infinite Resource Exploitation". The entries were reviewed by a judging panel made up of Central Bank economists. Jack Chambers, Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation, commended the students on their projects during a remote address, acknowledging their critical thinking and contribution to policy discussions. Jack Chambers, Irish Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation addresses the YEOTY Awards 2025 Dr. Rachel Farrell, Chair of YEOTY, highlighted the exceptional standard of entries this year and praised the program for empowering students to explore important societal issues through evidence-based economic thinking. YEOTY is supported by various national partners, including universities, associations and government departments. The program plays a crucial role in enhancing data literacy and economic awareness among young people. With participation from schools across Ireland, this year's awards underscore the growing strength of economics education in the country. Congratulations were extended to all participants, recognizing the bright future of economics in Ireland lies in the hands of the talented and passionate students who took part in the event. Image Credits: Paul Moore Photography / YEOTY
Students took the spotlight at the 2025 Young Economist of the Year (YEOTY) National Awards, held at the Knocknarea Arena, Atlantic Technological University (ATU) in Sligo.
Economic Development, Innovation and Growth (JEL O)
Macroeconomics and Monetary Economics (JEL E)
Agricultural and Environmental Economics (JEL Q)
Public Economics & Economic Policy (JEL H)
Urban, Rural and Transportation Economics (JEL R)
Econometrics, Statistics and Quantitative Methods (JEL C)
How to be an Effective Peer Reviewer in Economics
Initial considerations before accepting a peer-review assignment Before accepting a peer-review assignment, consider whether you are a good match to review the submitted manuscript. Do you know the journal and the kinds of articles it usually publishes? Are you familiar with the literature and methods of the paper? Can you complete the review by the assigned deadline, or do you need to request additional time? It's also essential to disclose any potential conflicts of interest, such as personal or professional relationships with the author, that could impact your objectivity. If you must decline the invitation, it is always helpful to suggest colleagues who would be a better fit. Evaluating the paper: Key aspects Your job as a reviewer is to provide a clear and decisive recommendation to the editor. To do this, start by evaluating whether the paper aligns with the journal’s aims and scope. Assess the paper’s contribution and whether it is sufficiently important to merit publication in that particular outlet. Since journal standards vary widely, it’s essential to understand the guidelines of the one you're reviewing for. Next, examine the content of the paper itself. Does it have a clear conceptual framework and development of hypotheses? Gauge whether the data is described in enough depth and if the empirical specification is appropriate, current, and well-grounded in prior literature. Are there additional robustness checks that should be done to make the analysis more convincing? You should also determine whether the writing requires substantive revision to improve clarity and coherence. Editors often suggest professional proofreaders to help refine language and style, and you may want to suggest that option too. Be specific Recommending a “revise and resubmit” implicitly conveys to the editor that the paper makes a meaningful contribution, but it is not publishable in its current form. However, with successful revisions, it may be acceptable for publication. In this regard, your comments should provide the authors with a well-defined path for meeting that standard. If you suspect the paper's results are incorrect, then you should provide specific, objective reasons for your concerns instead of communicating general skepticism. Vague comments are less helpful for the author and will leave them guessing on how to address your feedback. For example, instead of simply noting that the paper has a problem with censored data, it would be more constructive to suggest trying a Tobit model. For more complex issues, offering additional references or methods can help guide the author towards a solution. Focus on the main goal: Improve the paper Your criticisms should always be constructive, even when recommending rejection. In such cases, it is a good idea to highlight one or two strengths of the manuscript and offer a few sincere suggestions for how the authors can overcome the paper’s shortcomings. It is not your job as a reviewer to tear the paper apart or impress the editor with your own knowledge. Your goal is to put forth a genuine effort to help the authors improve their paper. Think carefully about whether your comments will strengthen the analysis, or merely “make work” for the authors. Recognize and avoid bias In economics, double-blind peer review is common, but it is often easy for reviewers to identify authors by searching for an unpublished draft online. You should avoid doing this, as knowledge of the authors' identities, particularly their institutional affiliation, seniority, or nationality, can introduce implicit bias into your evaluation. Research suggests that female authors are held to a higher standard, and that papers written by women may undergo a longer review process (Lundberg and Stearns, 2019). In the event that you have an idea about who the author might be, being conscious of such potential biases can help ensure a fair process for all. Be the reviewer you wish to encounter Being kind and professional are essential aspects of the review process. Research in economics requires a significant amount of time and effort, with some working many years on a single paper. Being unnecessarily harsh serves no greater purpose but many people behave this way because it reflects their own experiences as an author. Remember that all papers have weaknesses and limitations, but your role as a reviewer is to help the authors strengthen their work and, in doing so, contribute to the advancement of knowledge in the field. References Lundberg, S., & Stearns, J. (2019). Women in economics: Stalled progress. Journal of Economic Perspectives, 33(1), 3-22. Image Credits: Wendolin Jacober / Pexels / Getty Images
Publishing journal articles in economics can be slow and challenging, and effective peer review plays a critical role in shaping the efficiency and fairness of the process. Despite its importance, many researchers receive little guidance on how to be a constructive peer reviewer. In this article, I provide advice on how to approach peer review thoughtfully and professionally, with the goal of improving the experience for both authors and reviewers.
Antonin Bergeaud awarded 2025 Best Young (French) Economist Prize
The Best Young Economist Prize is awarded each year by Le Cercle des économistes, a French economics think tank, in association with Le Monde, a major French newspaper, to a French economist under the age of 41 who combines recognized expertise and active participation in public debate. As economies face increasingly profound shocks - climate, technological, geopolitical, demographic - a new generation of economists is delving into understanding them better. In the 26th edition of the Prize, the jury recognised Antonin Bergeaud, a 35-year-old associate professor in the economics department at HEC Paris, as exemplary of this movement. A specialist in long-term growth and innovation economics, Bergeaud explores a crucial question in his research: under what conditions can innovation still foster shared, sustainable, and equitable growth? In his academic work and in his essay "The Bright Future of Growth" (co-authored with Gilbert Cette and Rémy Lecat), Antonin Bergeaud investigates the drivers of growth since the 20th century to shed light on current obstacles. His approach combines analyzing productivity differences between companies, studying technological diffusion, and the rise of artificial intelligence as a transformative - even disruptive - factor in the labor market. With the promise of a "post-world" order based on digital technologies yet to translate into productivity figures, Bergeaud's research questions a well-known paradox among economists: how can we explain the fact that we are surrounded by innovation - but less and less productive? Moreover, how to combat the slowdown of growth without widening inequalities? These questions will resonate with the theme of the 2025 Aix-en-Provence Economic Meetings, titled "Facing the Shock of Realities", where Antonin Bergeaud will lead a session. The three economists nominated alongside Antonin Bergeaud also reflect the desire to rethink economics in light of contemporary disruptions. Adrien Bilal, a professor at Stanford, stands out as one of the most innovative researchers on the macroeconomic impacts of climate change. Lauriane Mouysset, a researcher at CNRS, intertwines economics, ecology, and philosophy to build a biodiversity economy that rejects reducing nature to monetary value. Mathieu Parenti, a professor at the Paris School of Economics, develops valuable expertise on environmental and fiscal externalities in open economies. As instability becomes the norm and shocks multiply, economic research has never been more crucial to give meaning, direction, and method to collective action. By highlighting these directions of study, the 2025 Best Young Economist Prize outlines a concrete vision for the field of economics, rooted in the world's changes and intent on informing public decisions. Image Credit: Olivier Vigerie / Les Cercle des économistes
Antonin Bergeaud has been awarded the 2025 Best Young Economist Prize for his research focusing on major economic, technological, and ecological disruptions.
Global Economy Prize 2025 Winners Announced
The prestigious award, which aims to inspire solutions to global economic challenges, will be presented in the categories of politics, business, and economics. This year's honorees under the theme 'Courage for Change' include Gabrielius Landsbergis for politics, Hélène Huby for business, and Prof. Dr. Monika Schnitzer for economics. In the politics category, Gabrielius Landsbergis, the Former Minister of Foreign Affairs of Lithuania, is lauded for his far-sighted foreign policy strategies, particularly regarding Russia's invasion of Ukraine. Landsbergis' proactive approach and insightful analysis have helped position Lithuania as a respected voice within NATO. Hélène Huby, Co-Founder and CEO of The Exploration Company in Munich, has been recognized in the business category for her expertise in the aviation industry and her entrepreneurial spirit in democratizing space exploration through European solutions. Huby's pioneering efforts in developing sustainable and affordable transportation to space stations and the moon have set her apart as a leader in the European space industry. Professor Dr. Monika Schnitzer, Chairwoman of the German Council of Economic Experts and a Professor at LMU Munich, has been honored in the economics category for her groundbreaking work in empirical microeconomics. Schnitzer's innovative research methods and ability to translate complex economic concepts into practical policy recommendations have earned her acclaim as an exceptional policy advisor. Her talent for communicating economic theories in an accessible manner has also made her a highly regarded educator among students. The winners will be presented with the Global Economy Prize at an award ceremony during Kiel Week on June 23, 2025, in Kiel. The selection process for the award involved proposals from the IfW Kiel network, with final nominees chosen by a jury comprising prominent figures from the Kiel Institute for the World Economy, the City of Kiel, and the Schleswig-Holstein Chamber of Industry and Commerce. Through their outstanding contributions to their respective fields, Landsbergis, Huby, and Schnitzer have demonstrated exemplary leadership in their fields, and a commitment to fostering positive change in a global economic landscape. Image Credits: IFW Kiel / IFW Kiel
The 2025 winners of the Global Economy Prize have been announced by the Kiel Institute for the World Economy, in collaboration with the City of Kiel and the Schleswig-Holstein Chamber of Industry and Commerce.
Winners Announced of IsDB Prize for Impactful Achievement in Islamic Economics
The first prize was awarded to Medikids, with its innovative waqf* initiative addressing management challenges in Indonesia. The project leverages Medikid's dental clinics for children and families to generate sustainable funding, which in turn finances a scholarship for healthcare professionals and supports social welfare initiatives. The committee decided to withhold second place. The Blue Filter initiative, which created a prototype to purify water by removing harmful pollutants, received the third-place prize. These awards will be presented at the IsDB Group Annual Meetings in Algiers, Algeria, between 19 and 22 May, 2025. IsDB Group Chairman Dr. Muhammad Al Jasser praised the winners for their contributions to Islamic economics, emphasizing the importance of translating principles into actionable initiatives for economic development. The selection committee highlighted the sustainable and effective nature of both winning projects, recognizing their alignment with IsDB's strategic goals. The IsDB Prize, established in 1998, initially focused on Islamic economics, banking, and finance. It expanded in 2020 to include categories of Development Achievement and Knowledge Contribution. The 2025 cycle emphasizes successful projects in IsDB member countries and Muslim communities globally. *waqf is a type of charitable endowment in islamic law. Image Credit: Islamic Development Bank
The Islamic Development Bank (IsDB) in Jeddah, Saudi Arabia, has announced the winners of the 2025 IsDB Prize for Impactful Achievement in Islamic Economics.
The Path to Tenure - In Discussion with Victoria Vanasco
CN: You received tenure in 2023 at CREI, having worked there for around five years previously as a Junior Researcher. When did you decide that a tenured position was a career goal? VV: Most research positions are of the tenure-track form, but this is not a promise of tenure, and typically if you do not get tenure by a given date you have to leave. For most people working in Academia, tenure is a career goal, as without it we have to leave the institution where we are (and sometimes the city or country), when our tenure is denied. Ideally, you get tenure at a place you like. I was lucky to get tenure at a place I REALLY like. The question was then ¨when to go up for tenure¨, and when professional activities started demanding a lot of my time (referee reports, participation in scientific committees, conference organization, seminar invitations, etc), I felt it was time. "Fate was involved in the decision, as I did not get some jobs I would have found very attractive." Victoria Vanasco CN: You grew up in Argentina, before looking abroad to continue your academic journey. Was this a tough step to make? VV: It was hard to decide whether I wanted to pursue the PhD abroad vs look for a good job locally. Fate was involved in the decision, as I did not get some jobs I would have found very attractive. I decided to take it step by step. First, what do I need to do now to apply for a PhD in a year? A Masters in Economics, so I started with that. In the meantime, I got a job as a Junior Professional Associate at the World Bank in the Buenos Aires office. This position lasted only two years, as the World Bank encourages juniors to pursue their academic endeavours. That really helped. By the time I was done with my Masters and with my two years at the World Bank I was excited about pursuing a PhD. It was also hard to leave Argentina, but once again, step by step. I could always come back if I did not like it. I liked it so much, I never came back. CN: What factors influenced your decision to continue your career in Spain, rather than the USA or Argentina, where you also have professional experience? VV: In academia, at least in economics, for most of us, our job offers determine where we will live. My husband and I are both in academia, we work on related topics, and Barcelona was a place where we were both happy to live and where both of us have fulfilling job opportunities. CN: Having progressed from an undergraduate to postgraduate, and through researcher and assistant professor positions, which stage(s) of your education and career stand out in your memory as the most challenging? VV: Academia is tough, and I was lucky enough to have only one really challenging moment in my career, which was the third year of the PhD. I was good at taking classes and exams, and then that was over, and I had to do research. How did you do research? I knew I liked theory, but how do you write a model? How do you choose an interesting question that you can actually answer? It was a lonely process: in my office, lots of frustration and staring at a white empty board. But then it happened, who knows how. In the middle of my fourth year I was already excited about what I was doing, somewhat knew what I was doing, and it has been exciting since then (disclaimer: doing research is always challenging, a strange mixture of frustration and excitement). CN: ...And which stage was the most enjoyable? VV: The most enjoyable was probably my job market, where I could present my research to a lot of people who were actually interested! I learned how nice it was to discuss the things you thought about in your office with the profession. It was really nice to know other people also found the problems I addressed interesting. Nothing is as intense as the job market in terms of visibility, but since then, the part I enjoy the most is being in my office alone thinking about the questions I care about, and then discussing my research with other researchers in the field (seminar, conferences, etc) CN: Between 2013 and 2021 you were awarded no less than 7 prizes and 7 scholarships. To what extent do you think these recognitions of your skill have helped you advance your career? VV: Wow, when you put it like that … I was not aware of this! I was extremely lucky to have my first job at the Stanford Graduate School of Business, where I was an Assistant Professor. This of course made a great impact in my career through two channels. First, it increased my visibility in the profession, and that is important when you are a young researcher (for example, it increases the chances of receiving awards). Second, and most importantly, I was able to spend the first four years of my career surrounded by the best academics working in my field, and I learned immensely from them. "My advice would be to pursue creative research, not prizes." Victoria Vanasco CN: …so how strongly would you advise students and young people just starting out in their career to pursue prizes? VV: I never pursued prizes, and I do not think that is something you can do. Also, prizes do not really change much in your career; you feel good when receiving them, but in the end, in our profession, you are judged by the quality of the research you do. So my advice would be to pursue creative research, not prizes. CN: In recent years, there has been a lot of discussion about the pressure on young academics to secure funding for their research, and by extension the insecurity around many junior academic positions. Did you experience this pressure? And what would your advice be to young scholars who are facing this? VV: I never had to struggle for funding, mainly because I have never been at institutions that struggle for funding. Here in Europe grant applications are a central part of our academic life, so we learn how to apply to them, and some work and some don’t. Also, as I work on applied theory, all I need is pen and paper, so research funding is not a determinant of the research I can do (while it is for other types of research or fields of study). CN: Thank you for your time! Victoria Vanasco - Short Biography (from CREI webpage): Victoria Vanasco is a Researcher at the Centre de Recerca en Economia International (CREi). Before joining CREi, she was an Assistant Professor of Finance at the Stanford Graduate School of Business. She earned her PhD in Economics from UC Berkeley in 2014, and she has a Masters in Finance and a B.A. in Economics from Universidad Torcuato Di Tella, in Argentina, where she is from. Before earning her PhD, she spent two years as a Junior Professional Associate at the World Bank. Her research has been published in top peer-reviewed journals, such as the Journal of Finance, Review of Financial Studies and the Journal of Financial Economics. Among other awards and grants, Victoria is the recipient of the 2018 Junior Prize in Monetary Economics and Finance awarded by Banque de France and Toulouse School of Economics, and of an ERC-Starting Grant for the period 2021-2026 for her project “INFOMAK: Information, Markets, and the Macroeconomy”. She is also a Research Fellow at CEPR, an Affiliated Professor at the Barcelona School of Economics (BSE) and at Universitat Pompeu Fabra (UPF), an Associate Editor at the Review of Financial Studies and the Journal of Financial Intermediation, and a member of the Editorial Board at The Review of Economic Studies. She also serves in the governing bodies of the European Finance Association, the European Economic Association, the Spanish Finance Association, and the Finance Theory Group Her research focuses on topics related to information asymmetries and their impact on financial markets and the real economy. She studies factors that lead to information and belief heterogeneity, and how these factors impact the incentives of market players to screen and monitor assets, with a focus on understanding how regulatory policies can increase liquidity and discipline in markets. Image Credit: CREI / Aksonsat Uanthoeng from Pexels
Victoria Vanasco is a Senior Researcher at CREI (Centre de Recerca en Economia Internacional) in Barcelona, Spain, as well as Adjunct Professor at Universitat Pompeu Fabra (UPF) and and Affiliated Professor at Barcelona School of Economics. As a newly tenured economist, she talks to Christopher Nash, Managing Director of INOMICS, about her career path. For readers currently working in academia with an ambition to achieve tenure, her experience offers valuable insight.
Reza Daniels announced as new Dean of the Faculty of Economic Management Sciences at Stellenbosch University
With extensive experience in leadership roles and a background in development economics, applied econometrics and environmental economics, Daniels is set to bring valuable expertise to his new position. He has a strong research background and has been involved in significant studies such as the National Income Dynamics Study. Additionally, Daniels has a track record of contributions to academia and beyond, having studied at the University of Auckland and the University of Michigan, before receiving his PhD from the University of Cape Town. He served in various roles in the public and private sectors, as well as for international development banks. His appointment has been welcomed by the university's leadership, Stellenbosch University Rector and Vice Chancellor Prof. Deresh Ramjugernath, who was quoted as saying: "I'm delighted to welcome Prof Reza Daniels to SU as the new Dean of the EMS Faculty. He joins us with a wealth of experience and an inspiring track record in higher education leadership, research and social impact." Ramjugernath added that Daniels has the potential to make a meaningful impact on both the institution and South Africa as a whole. Daniels expressed his excitement about joining the faculty at Stellenbosch University and his commitment to realizing the university's vision for the future, including further developing Stellenbosch as a knowledge hub in Africa, and producing economic and social impact. Image Credit: Reza Daniels
Prof. Reza Daniels has been appointed as the new Dean of the Faculty of Economic Management Sciences at Stellenbosch University in South Africa. His appointment comes after Prof Ingrid Woolard stepped down as Dean last year, with Daniels now set to lead the Faculty of EMS from November 1, 2025.
Introducing a Handbook for Academic Advisors in a University Economics Department
Examples of academic advising from the UK and Europe A common theme across European and UK universities is a proactive approach to academic advising for student success, though delivery varies due to cultural and institutional differences. In Europe, institutions like Tubingen and Mannheim (Germany) offer students specialised advisory support that is tailored to the academic structures of their respective institution. In addition, many European universities provide walk-in or scheduled appointments with specialised study advisors to ensure timely support. At Tubingen School of Business and Economics, academic counsellors guide students on course selection, exam preparation and career planning. Mannheim’s economics department follows a similar structure, focusing on key programme requirements for academic success. In the Netherlands, the Utrecht School of Economics employs ‘study advisors’ to assist with, for example, study planning and academic skills development. While German and Dutch universities often follow structured advisory methods, UK universities emphasise personalised one-to-one support through assigned advisors (Jennings, 2021). In the UK, universities like Oxford Brookes, Bath and Warwick, assign each student an academic advisor for academic progress and personal development support. Academic support can include guidance on module selection, academic performance and progression, while non-academic support involves referrals to student services, like the wellbeing team. Many universities encourage regular advisor meetings to ensure continued support throughout the academic year – the University of Manchester is one such example. Common challenges Despite differing approaches between cultures, countries and each institution, academic interventions are often required in all systems to enhance student experience. The frequency and nature of these interventions can present challenges to the academic advisor on the best way to address students’ needs. Many academics recognise advising as a core job requirement. But high student-to-staff ratios in some departments can exacerbate capacity and workload issues as academics struggle to balance advising, teaching and administrative responsibilities (Mikluscak, 2010). This can have a knock-on effect of limiting staff engagement in the academic advising role and university level online training (Rogerson et al, 2024). Indeed, access to professional development and training is a major challenge often faced by academic advisors. This can be particularly acute if universities face funding and resource constraints. What’s more, generic training can be insufficient and fail to provide discipline-specific advising skills. However, supporting academic advisors is crucial for ensuring a robust academic experience, especially for underprepared and struggling students. To address these challenges, the University of Exeter’s economics department reformed its academic advising process to streamline workload and provide specialised support for colleagues. Standardising academic advising As discussed, high workloads can be a challenge but effectively managing these can help academic staff to cultivate strong advisor-student relationships (McIntosh et al, 2022). To help in this regard, within the University of Exeter economics department, we have provided tailored support to streamline the academic advising role for colleagues. A central part of this includes an academic advisor (AA) handbook for staff. Figure 1: Different example topics in the AA handbook Figure 1 shows some of the key sections in the handbook. For example, it includes a clear AA role descriptor and detailed guidelines on related responsibilities. Guidance on providing consistent answers to students’ frequently asked questions (FAQs) is also provided. In addition, the handbook offers email templates for all regular advisor check-ins, like ‘before assessments’, and ‘after examination results are released’. Our goal in developing this resource was to provide colleagues with a point of reference for all queries related to the AA role. We set out to ensure consistency with the departmental process and to increase the overall quality of our academic and pastoral care for students. We shared this handbook with colleagues in physical and online format and host this in departmental shared documents and signpost new (and old) colleagues to the resource regularly. The handbook is updated yearly with any institutional policy changes, and the FAQ section is revised based on new and regular student queries. Evaluation and feedback To assess the impact of our staff-support initiative, we asked colleagues to provide us with feedback on their use of the handbook. One colleague referred to it as “a clear, thorough, and useful handbook. A necessary companion for anyone acting in the role of tutor”. Another stated that “the FAQ section has been immensely useful for answering students' questions”. The following word cloud shows key sentiments about the handbook. Figure 2: Colleague feedback on AA handbook over two years In addition, there were also some suggestions for future improvements, such as “more subcategories for typical questions, for ease of reference”. Conclusion The role of the academic advisor is becoming increasingly important in universities, particularly in response to rising student mental health concerns. The introduction of the AA handbook at the University of Exeter’ economics department has proven to be impactful and helps to fill existing gaps around support and resources for staff. The handbook has enhanced consistency and efficiency of the academic advisor role and reduced staff confusion through streamlining flows of information. Given the diverse student communities within UK universities and the call to enhance the quality and consistency of academic and pastoral support, similar structured staff-facing approaches could be applied in other institutions to improve the overall student experience.
Introduction Academic advising refers to the process where appointed members of staff provide academic guidance, information signposting and other relevant non-academic forms of support to students to help promote their success and improve their overall higher education experience (Medernach, 2018). Its role has long been recognised as crucial for supporting students, especially those from under-represented minorities (Smith et al, 2009; Young-Jones et al, 2013). While practices across the UK and Europe appear similar in their foundations, the diverse nature of student cohorts suggests some different institutional priorities. At the university of Exeter, taking into account these different approaches, we introduced a handbook for academic advisors in the Economics Department. Here we share our experience.
Why I Didn’t Use AI for my PhD Application
However, as a member of INOMICS’ editorial board, I found that AI tools back then lacked the ability to write a thorough, in-depth, and engaging article about economics topics such as how corruption can affect economic growth or the pros and cons of focusing on “mesoeconomics”. We decided to not use AI tools in our article-writing or editing process. Similarly, I decided not to use AI tools at all when I was applying for PhD programs. That’s not to say that I think these models can’t ever be helpful – I’ve found that AI LLM models are very helpful for one thing in particular: generating ideas. However, I’m serious about becoming a PhD economist, and was determined to submit the very best of my own writing for my applications. Further, there’s always a concern that using AI tools would be considered a form of plagiarism. I think not using AI tools at all for my application was the right choice, and I think it’ll be the right choice for you, too. What’s more, even if AI models become incredibly capable “economists” on their own, I think eschewing them will still be the right choice for your application process. Without further ado, let’s explore the reasons why. First: hallucination adds extra work, and relying on AI delays you from building your own expertise AI models are known to hallucinate. That means, when using them for an important purpose, checking the AI’s output for accuracy is critically important – but that adds work that I didn’t feel was worth it for my application. I felt that the effort I’d have needed to spend studying each aspect of the AI model’s output (to ensure it was accurate) would have been inefficient. Instead, I spent time reading the economics literature myself, seeing what interested me, and reading about how other economists in the space structured their research. This was very helpful, especially as I began to outline my own phd research proposal. Think of it this way: if you want to be a successful PhD student, you’ll need to understand a large portion of the literature in your subfield anyway. You may as well get started during the application process! This will greatly help you with any research proposal you must write, and with any conversations (or admissions interviews!) you have with potential supervisors. Rather than take an AI model’s potentially erroneous output and start from there, I searched Google Scholar and RePEc myself. I read the literature to see if there was a gap that my ideas could fill. I put together a methodology that I knew was sound, using econometric methods that I was confident I understood. I also found public datasets that I knew were accessible and relevant, to ensure that realistically usable data was available – and to show that on my application. Finally, I wrote my own ideas for future research, and studied the research interests of the faculty at the institutions I was applying to. Sometimes, doing something the “hard way” really is the best in the long run. After all, there are no free lunches. Second: personal essays require a personal touch Some schools require specific essay questions or have topics they want you to broach in your personal statement. For this reason, it’s highly advisable to double-check each institution’s expectations for your personal statement (if they do, this is usually found or referenced in the school’s online portal where you upload the statement). I had to write several different personal statements, as each school had slightly different needs. Clearly, these statements require a personal touch. If you outsource the work to a machine, you’re preventing the admissions committee from hearing your voice, and from reading your story as you would tell it. This clashes with the entire point of a personal statement: in your application, you must show the admissions committee who you are and why you wish to study for an economics PhD. This may sound like a “fluffy” or silly concern, but the truth is that admissions committees get many applications from very qualified students. Sometimes, deciding who to give an offer to can come down to less measurable factors, such as how well the committee can picture you succeeding at their institution or fitting into their faculty’s research interests. A good personal statement will help you convince them that you’re a good candidate and pursuing a PhD for the right reasons. Apart from this, many admissions officers can, or at least claim that they can, identify work written by an AI. Whether it is an overuse of stock phrases, an inconsistent register, or a “genericness” in the style or argumentation, ultimately if an admissions officer or potential supervisor suspects that a submission is AI written, at best they will treat your application with scepticism, or at worst discard it. Overall, you ought to give the admissions team as much of a sense of who you are as you can. Express your personality, show them your enthusiasm. AI simply can’t do that as well as you. Third: AI output is not your work, and this limits your growth Different people may feel differently about whether or not, or to what extent, using AI tools constitutes plagiarism. Whichever camp you personally fall into, though, the following statement is true: an AI model produces output that you did not write yourself. And this is a problem if you aim to be the best economist you can be. This is related to the first point about the hallucination problem, but goes deeper. AI tools offer a cognitive shortcut. However, if you’re always taking a shortcut, even if only to kick off ideas and begin your work, you’re robbing yourself of the ability to learn how to start a research process well, which can make future research tasks harder for you. I know this would likely be true for me, because I’d noticed this tendency in myself long before the advent of popular AI models. Allow me to explain. When learning math in grad school, I often felt very confident that I understood the teacher’s example as they worked it in class. Yet, as soon as they stepped away from the chalkboard and asked me to solve a similar problem on my own, my mind would often blank. Suddenly, recalling the right steps to take – and understanding exactly what they meant – was much harder. I think this is a relatable experience for many, and I believe that over-relying on AI tools is just the same as relying on a teacher to begin solving a math problem for you. It seems innocuous when you still have the aid of the teacher. A limit or integral — or the beginning of an econometric theorem — all seem very straightforward when your teacher sets them up for you. But when the aid is removed, suddenly, our brains may panic because they haven’t actually learned how to properly get started. Remember, your brain is an expert in finding shortcuts, and that sometimes means you don’t learn as well as you think you did! Aside from this, research has shown that if you over-rely on AI tools you may – even subconsciously – become worse at detecting hallucinations, and stop thinking as much about serious issues like plagiarism. As Zhai, Wibowo, and Li put it in a 2023 paper1: “Despite the undeniable advantages of AI dialogue systems in streamlining research processes and enhancing academic efficiency, our analysis reveals a concerning trend: the potential erosion of critical cognitive skills due to ethical challenges such as misinformation, algorithmic biases, plagiarism, privacy breaches, and transparency issues.” Thus, I’m confident that over-relying on AI tools to begin – say – your research proposal literature review also limits your growth as an economist, even if you don’t realize it. If you don’t take the time to actually read and process the papers in economics yourself, you are missing out on a great deal of knowledge. Even simple meta-knowledge about what exists in the body of economics literature can be important for your career. It’s potentially embarrassing to not know of a famous or seminal paper in economics, and it certainly wouldn’t look good if you aren’t aware of the literature in your own niche subfield. Fourth: AI can’t output work up to the same quality as you or I can Truthfully, the thought of using AI on my PhD application never seriously crossed my mind. That’s because, through my time writing and editing for INOMICS, I’ve continually tested new AI models to see how good they are at writing thoughtful economics articles. I have yet to find an AI model that can write a helpful, informative, and analytic article the way that Hanna Sakhno, Dr. Sahar Milani, Dr. Tom McKenzie, Dr. Gómez-Pineda, or I can. AI models have yet to demonstrate the ability to go beyond presenting common discourse about a topic and teach the reader something new, or present things in a new light. And I know that if AI models aren’t up to my standards for what we post on the INOMICS website, it will not be up to an admissions committee’s standards for a PhD application essay or research proposal, either. I’m confident that someone seriously interested in pursuing an economics PhD is much brighter than even our most advanced LLMs or neural networks today. Perhaps that will change one day in the future – but even if it does, doing the work yourself will develop you into a much better economist than relying on AI output ever would. Conclusion I learned a lot throughout the process of applying for my economics PhD. I gained a solid preliminary understanding of my topic area that will help me immensely when I begin to write my first publishable paper. Further, after combing through the literature myself, I’m confident that the research I want to pursue would be advancing the field in a way that hasn’t been done before, which is exciting. I don’t think AI had a place in that process. And, at the end of the day, my hard work landed me a very generous offer of admission at an excellent university that I’m excited about. So, my fellow economist hopefuls, take it from me: don’t rely on AI models to write your applications for you. You owe it to yourself to do the hard work. After all, there are no free lunches in economics or in life. References: 1: Zhai, C., Wibowo, S. & Li, L.D. The effects of over-reliance on AI dialogue systems on students' cognitive abilities: a systematic review. Smart Learn. Environ. 11, 28 (2024). https://doi.org/10.1186/s40561-024-00316-7 A note on AI usage at INOMICS Here at INOMICS, we’re not against using new technology. On the contrary: on our website, you’ll find helpful AI tools – such as a feature that generates questions (and answers) for our Economics Terms A-Z articles, or an AI Summary button for our article pages. But, when it comes to producing articles and resources, quality and accuracy are our highest priority. So while we sometimes use AI tools to help us brainstorm ideas, suggest phrasing, translate existing text, or generate interesting header images for articles (like the one on this page!), when we have experimented using AI to produce longer articles, we have always found the results to be lacking, not to mention sharing many of the concerns expressed in this article. As such we do not (yet) publish Advice articles, Blog posts or economics terms/lessons that were partially or wholly written using AI. Image Credit: INOMICS, using Canva Magic Studio AI Image Generator
AI tools have become widespread since news of ChatGPT-3.5 prompted me, in early 2023, to make an OpenAI account. I remember sitting in a coffee shop, sipping on a latte, and holding a half-dozen “conversations” with the newly released model. I asked it a series of math questions. I asked it about politics and about poetry. I asked it to write me a short story. I even asked it questions about niche topics like Settlers of Catan to see if it “understood” strategy in the context of a game. And, of course, I asked it about economics.
Stefanie Stantcheva named Clark Medalist 2025
Stantcheva is a Professor of Political Economy at Harvard University, and an NBER Research Fellow. Stantcheva was awarded the John Bates Clark Medal for her work on how tax policy influences innovation, uncovering that tax policies significantly impact innovators' behaviors. Her studies, such as "Taxation and Innovation in the 20th Century," conducted with co-authors, reveal high elasticities in innovation in response to changes in tax policies. Another key contribution is her work on optimal tax policy, as demonstrated in "Optimal Taxation and Human Capital Policies over the Life Cycle," where she proposes income-contingent education loans as a means to incentivize human capital investment. She has utilized a variety of tools to explore the interplay between government taxation and private behavior, including mechanism design to analyze optimal tax policy in dynamic scenarios, empirical studies on the impact of taxes and subsidies on innovators' decisions, and surveys and experiments to examine public perceptions of redistribution and tax policies. Moreover, Stantcheva has pioneered the use of surveys and experiments to gauge public understanding and preferences on various policy issues, including tax policy, redistribution, and climate change. Through her innovative methodologies, she has shed light on the factors influencing support for redistribution and views on tax policies. Stantcheva's comprehensive body of work has provided valuable insights for informing policy debates on tax system design, offering fresh perspectives on traditional public finance questions. Her groundbreaking research has not only advanced the understanding of optimal tax policies but has also deepened our knowledge of how individuals perceive key policy issues. The John Bates Clark Medal is awarded annually by the American Economic Association to an economist under the age of forty, employed at a US institution, who is judged to have made the most significant contribution to economic thought and knowledge. Stantcheva joins a prestigious group of previous winners, including many economists who have subsequently won the Nobel Prize such as Esther Duflo (Clark Medalist in 2010), David Card (1995), Paul Krugman (1991), Joseph Stiglitz (1979), and Milton Friedmann (1951). Professor Stantcheva was featured in a January 2025 article on INOMICS about influential voices and rising stars among female economists. Image Credit: American Economic Association
Stefanie Stantcheva, an accomplished economist, has been named the Clark Medalist for 2025 for her significant contributions to the field of public economics.
John N. Friedman appointed Inaugural Dean of Brown University's Watson School of International and Public Affairs
The school, set to launch on July 1, 2025, will focus on critical issues such as social mobility, education, policymaking, and other pressing matters. The new school will incorporate various research centers and initiatives, to approach global issues from diverse perspectives. Supported by a generous gift from Mary and Jerome Vascellaro, the Vascellaro Family Dean of International and Public Affairs position will ensure the school's prominence in preparing future leaders in global policymaking. Friedman, a distinguished economist and public affairs scholar, has been a faculty member at Brown since 2015. He earned his Bachelor's degree and PhD from Harvard, and has worked as special advisor to the President on the National Economic Council from 2013 to 2014 and was an assistant professor of public policy at Harvard University’s Kennedy School from 2009 to 2014. He is also a co-editor of the American Economic Review. With his background in economic research and public service, Friedman's leadership will be expected to enhance the school's profile and impact at a time when nuanced scholarship is crucial. The establishment of the Watson School follows years of planning to enhance Brown's expertise in international affairs, providing opportunities for undergraduate and graduate students to engage in policy-related activities. Friedman's appointment aims to foster a collaborative community of scholars and practitioners, advancing the mission to address the complex challenges of today's world. Image Credit: Azurae Cruz / Brown University
John N. Friedman has been named as the inaugural dean of Brown University's Thomas J. Watson Jr. School of International and Public Affairs.
Maxi Günnewig wins the Philipp Sandner Award in Digital Finance
Günnewig was awarded 10,000 euros for his work on smart banks, which explores the integration of banks with blockchain-based smart contracts in future financial systems. His research aims to prevent bank runs and costly government interventions by leveraging technology to eliminate financial fragility and prevent future crises. The award was presented at the Crypto Assets Conference on 26 March 2025. The international award honors young researchers focusing on blockchain, digital assets, machine learning, artificial intelligence, payment systems, and financial platforms. Günnewig expressed his gratitude and pride in receiving the award, which is named after Professor Philipp Sandner, a former professor at the Frankfurt School and founding director of the Frankfurt School Blockchain Centre (FSBC) who passed away in January 2024. The selection process includes a review by a scientific committee and final selection by a jury comprising professionals from business, science, and public administration. Image Credit: Frankfurt School of Finance and Management
Maxi Günnewig, a postdoctoral researcher at the University of Bonn, has won the Philipp Sandner Award in Digital Finance Research from the Frankfurt School of Finance & Management and WM Gruppe.
Frankfurt School of Finance & Management
The Logic Underpinning the Basic Solow-Swan Model The logic underlying the model is straightforward. In the Solow-Swan economy, individuals have savings rates that yield an economy-wide average level of saving, s. Money not saved in each period is consumed. Meanwhile, savings are used to fuel investment I that grows the capital stock. There is a natural depreciation of the capital stock, denoted by ẟ, over time. For the purposes of the model, there is no foreign economy to trade with, so the Solow-Swan economy is a closed economy (or “in autarky”). With the model, it’s possible to assume the population and level of technology are growing, and possible to assume they are not. These facts come together to determine economic growth, Y. The exact specifics of this relationship depend on the functional form of the specific production function chosen. Generally, the more savings an economy has, the more capital stock and therefore economic output it can support. However, with more capital stock comes more depreciation. In per capita terms, there is a limit to how much growth the economy can sustain given its savings rate. The model predicts that the economy will trend towards a “steady-state” where the savings rate and the rate of depreciation offset one another such that the per capita amount of capital remains unchanged. In other words, while the overall economy can be growing in size, the population, depreciation, and (per capita) capital stock grow alongside it such that all individuals have a consistent amount of income in perpetuity. Figure 1 shows the basic Solow-Swan model graphically. Figure 1: the Solow-Swan model This graph depicts the general train of logic discussed above. The economy produces goods (here, capital k) according to a production function. This production grants individuals their income. Some part of people’s income is saved, and overall savings are depicted by the green curve sf(k). Depreciation and the “law of motion” (defined below) are hinted at by the “minimum I(t)” line. This line shows how much investment the economy needs in order to prevent the total capital stock from diminishing due to depreciation. Since investment is fueled by savings, the economy must choose an amount of savings that is above or equal to the minimum investment line. Otherwise, the economy shrinks in the next period as depreciation outpaces production.<o:p></o:p> The next sections dive into the mathematical formulation of the Solow-Swan model, which is critically important – and frequently tested in economics courses. It will describe in math symbols what the above discussed in words, then dive deeper into the model’s behavior. The Math Behind Solow-Swan To start building the model mathematically, some core assumptions must be made: Time is discrete (e.g., = 1, 2,..., but t ≠ 1.5) and continues infinitely. The economy is composed of households that are identical. Importantly, this means all households have the same savings rate s. We assume this is a constant.<o:p></o:p> Assume that every person in the economy is a worker and makes up a part of the total labor force L.<o:p></o:p> The economy is also composed of individual firms that compete in competitive markets and take all prices as given. Because of this, prices can be normalized to 1.<o:p></o:p> The economy produces only one good, which is the capital used in production. This is sufficient for the economy to function normally.<o:p></o:p> There are constant returns to scale.<o:p></o:p> There are positive and diminishing marginal returns to the factors of production.<o:p></o:p> There is no growth in either the population or the level of technology.<o:p></o:p> Many of these assumptions can be removed, and advanced courses will explore the implications of removing them. First we need to represent competitive, optimized firms, which are actors in the economy (together with individuals). In both the Solow-Swan model, as in real life, firms can solve an optimization problem.. depending on the functional form of the production function. This is: max.L≥0,K≥0 Y = (1)F(K,L,A) - wL - rK<o:p></o:p> where Y is output, F(K,L,A) is the production function F (for example, this could be Cobb-Douglas) with factors K, L, and A (representing capital, labor, and technology), w is the wage rate paid to labor L, and r is the interest rate of capital K (this can also be thought of as a rental rate, as if firms “rent” the capital from households). The term “(1)” represents the price of the final output, which we assume firms can’t choose (since they’re perfectly competitive) and which is therefore normalized to 1.<o:p></o:p> Note that the term “maxL≥0,K≥0”shows this is a maximization problem where choices of both labor and capital cannot be negative. Firms solve this optimization problem by taking the partial derivative with respect to L and K, the two factors they must utilize. This shows that firms employ labor and capital up to the point where the marginal productivity of each is equal to their cost: 𝝏FL(K,L,A) = w 𝝏FK(K,L,A) = r As a side note, keep in mind that since a functional form for the production function was not defined, we cannot find the exact form of the partial derivatives above. Often, economics classes won’t choose a production function (because it isn’t necessary when discussing theory), instead referring to some unknown production function F(K,L,A). If we decided to use a basic Cobb-Douglas function, these first-order conditions would become: 𝝏FL(K,L,A) = 𝛼AL𝛼-1K𝛽= w 𝝏FK(K,L,A) = 𝛽AL𝛼K𝛽-1= r Since firms employ labor and capital up to the point where the cost of utilizing them is equal to their marginal productivity, and since prices are set by the competitive market and not by firms, this means that firms are making zero profits in equilibrium – in other words, this economy exhibits perfect competition. Therefore, when studying the Solow-Swan model, we can ignore the question of who owns which firms. Mathematically Reaching the Steady-State Equilibrium Above, we defined how individual firms behave in this economy. Now, it’s time to find out how firms’ output causes the economy to grow over time in the Solow-Swan model. This requires defining several equations that state many of the same ideas we reached logically before. In the following, (t) denotes time. First, Y(t) = C(t) + I(t), since income (Y) is either spent (C, which stands for consumption) or saved (which is equivalent to investment I by the savings-investment identity). Since the economy is closed, there is no foreign trade (net exports NX = 0), and we assume there is no government spending (G = 0). Combining this fact with the equation we just defined yields: I(t) = S(t) = Y(t) - C(t) Where S(t) is savings across the economy. We assumed that individual households save a constant fraction s of their income Y, which means that the above can be transformed again and then rearranged to yield: S(t) = sY(t) = Y(t) - C(t); rearranging, C(t) = Y(t) - sY(t) or, equivalently C(t) = (1 - s)Y(t) This shows that consumption is a function of income minus savings. Next, we examine the growth of the capital stock. Logically, the amount of capital K in the next period is equal to the amount of capital the economy has now, minus capital that depreciates during this time period, plus new capital made in this period (as a result of investment I(t)). Putting this logic into math terms, we get: K(t+1) = K(t) - ẟK(t) + I(t), which simplifies to K(t+1) = (1 - ẟ)K(t) + I(t) where ẟ represents depreciation (capital that is worn out and ruined from being used). We can replace I(t) in this equation to show how the Solow model achieves its steady-state equilibrium. Our next step is to recognize that I(t) = S(t) = sY(t) as above, and replace it in this equation: K(t+1) = (1 - ẟ)K(t) + I(t) = (1 - ẟ)K(t) + sY(t) Rearranging, and replacing Y(t) with the (unknown) production function: K(t+1) = sF(K,L,A) + (1 - ẟ)K(t) This last equation describes the Solow-Swan model’s equilibrium state! It shows that the evolution of capital stock in the economy is a function of the savings rate plus the amount of capital left over from each previous period. This is known as the “law of motion” in the Solow-Swan model. Interpreting The Steady-State Equilibrium This isn’t just an ordinary static equilibrium. Since the model defines growth over time, the law of motion describes the economy’s equilibrium growth trajectory over the entire course of the future. As we stated before, in the long run the economy grows such that each successive generation of people has the same income in per capita terms as the previous generations, even though the economy is growing in absolute terms. To examine the model further, we transform these equations into their per capita equivalents. To do this, we divide each variable by the population, which in our case is labor L (because we assumed that all households are composed of workers). Economists denote these per capita variables with a lowercase letter. For example, we divide the evolution of capital stock K(t+1) by L to yield (K(t+1))/L, and redefine this as simply k(t+1). Economists will also divide the general form of the production function by labor to yield F(K/L,L/L,A/L) = f(k,1,A/L). When we apply this method to the entire law of motion equation, it yields: k(t+1) = sf(k,1,A/L) + (1 - ẟ)k(t) This may seem silly or redundant since we’ve just changed some letters to lowercase and divided everything by the same factor. But, this step helps economists to state clearly in mathematical terms what’s happening – we’ve shifted our analysis from looking at economy-wide statistics to simply looking at each person’s slice of the total economic pie. This helps to reveal an important truth about the model, because in the Solow-Swan model, the growth of the total economic pie can be very different than growth in individuals’ well-being. Now that the model is in per capita terms, we can define the steady-state level of capital stock per capita that solves the law of motion equation as k*. This is the point where each subsequent year’s per capita capital stock is the same as the year before it – the amount of capital stock (and therefore income) dedicated to each individual is unchanging. Or, in mathematical terms, k* solves the following equation: k* = sf(k*,1,A/L) + (1 - ẟ)k* At the steady state, while the overall amounts of capital, labor and output can be changing, the per capita amounts are not! Inserting a production function and solving for k* yields: k* = s / ẟ This relation shows that the steady-state level of capital is equal to the ratio of savings to depreciation. In other words, it shows that the relative size of the savings rate compared to the depreciation rate determines how much k the economy can support in perpetuity. If we allow for population and technology growth in the model, the law of motion becomes: k(t+1) = sf(k,1,A/L) - (n + g + ẟ)k(t) And the solution in terms of k* becomes: k* = s / (n + g + ẟ) where n is the population growth rate and g is the technology growth rate. In essence, this equation has the same meaning. It additionally accounts for the fact that output must grow along with the population, and must keep pace with technology growth (so that individuals aren’t using outdated equipment). Graphing and Convergence Figure 2: the Solow-Swan Model in per capita terms Figure 2 shows the Solow-Swan model graphically in per capita terms. The following discussion is in per capita terms as well. In the graph, sf(k) represents the savings rate, f(k) shows overall productivity (and therefore income), and ẟk shows depreciation of the capital stock. The Solow-Swan model’s law of motion means that the economy trends toward k* over time. The graph helps visualize this truth. Notice how k* appears at the point where the curves for capital production per capita (determined by savings times output, sf(k)), and depreciation ẟk meet. Given s, if the economy were producing at a point k1 > k*, the graph clearly shows that depreciation would outpace the production of new capital – because where k1 > k*, the line ẟk is greater than the curve sf(k). This means that each subsequent period would have a slight decrease in the amount of capital per capita, until depreciation and the production of new capital balance each other out. This happens precisely where the two lines intersect – at k*. If the economy produces capital at a point k2 < k*, meanwhile, the economy’s production of capital stock per capita outpaces depreciation – shown where the line ẟk is below the curve sf(k). In this range, the amount of depreciation increases as the amount of capital per capita rises, until the two forces balance each other at k*. This convergence occurs (mathematically speaking) due to the fact that depreciation increases linearly while production increases with diminishing returns. But, k* in Figure 2 looks a little small. How can we tell when the economy has reached the best possible steady-state k*? Savings and the Golden Rule That question brings us to one last aspect of the Solow-Swan model: how the savings rate s affects the economy, and how to find the best savings rate. Take a look at how s affects the law of motion: K(t+1) = (1 - ẟ)K(t) + sY(t) Clearly, the stock of capital – and therefore economic growth – increases as s increases. Increasing s would increase sY(t) and thus K(t+1) (and the per capita level of savings sf(k)), leading to a higher k*. But, if individuals save too much, they won’t have enough money left over for consumption! Recall the consumption equation we defined earlier: C(t) = Y(t) - sY(t) or, equivalently, C(t) = (1 - s)Y(t) Logically, consumption C(t) decreases as s increases. Therefore, economic agents face the important choice of how much to save so that they can consume enough while still contributing to economic growth for future generations. Graphically, it’s easy to see that if s increases, the per capita level of capital k* that exists in the steady state will increase, because the function sf(k) will increase. This is shown in Figure 3, where savings increased from s0 to s1: Figure 3: Solow-Swan model after an increase in s Still, if s increases too much, current generations will suffer as their consumption plummets. The Golden Rule, then, is the rate of savings that maximizes the steady-state level of consumption per capita k* for all generations. It’s called the “Golden Rule” because each generation does to others what they would have wanted done to themselves – they save enough to make sure everyone else can consume the optimal amount in perpetuity. Mathematically, this can be found by maximizing the per capita consumption equation with respect to k: maxkc(t) = y(t) - sy(t) Because we want to solve in terms of k, we manipulate this into an equivalent expression. We know that sy(t) = ẟk in the steady state, and per capita output y(t) is equal to f(k), so we can transform the equation as follows: maxk c(t) = f(k) - ẟk Taking the derivative with respect to k, setting equal to 0, and solving then yields: f’(k) = ẟ The amount of k that solves this first order condition is referred to as k*gold. Keep in mind that the specific form of the derivative f’(k) depends on the chosen production function. Astute readers will notice that f’(k) is the marginal productivity of capital, so this finding is equivalent to stating that MPK = ẟ. It’s easy to “eyeball” this point on the graph. Consumption is equal to the vertical difference between f(k) and ẟk in the graph (because savings is the area under the curve sf(k), and consumption is what’s left of income f(k) after subtracting savings). k*gold is the k* that maximizes consumption – or in other words, it’s where this vertical difference is largest. The Solow-Swan Model and South Korea’s “Miracle” Growth The Solow-Swan model can be used to describe growth in many cases in history. For example, it’s well-known that South Korea was a poor nation before the 1960s, and later experienced rapid growth and development that made it one of the world’s most developed nations. This is often referred to as a “growth miracle”. One of the main reasons for the transformation is that South Korea’s government began to focus on “export-driven industrialization” in the early 1960s. At this time, the government encouraged investment into export industries to increase trade with foreign nations, and also invested heavily into education to develop a skilled workforce. This raised per capita income, which rapidly led to further innovation and industrialization that fueled growth. Today, South Korea has one of the largest GDPs in the world, in both nominal and PPP-adjusted terms. We can explain this growth using the Solow-Swan model. Before the 1960s when per capita income was near subsistence level, there was very little saving – perhaps putting the South Korean economy on a savings and growth path just like s0f(k) in Figure 3. Once government policies spurred industrialization and invested in education, both per capita productivity and savings grew. This would have increased South Korea’s k* as savings increased (just like the shift from s0f(k) to s1f(k) in Figure 3). But there’s more – it would also have caused f(k) to increase, which would cause the optimal balanced growth path k* that the economy could sustain to be greater than before. Whew! The Solow-Swan model contains an incredible depth of nuance – and advanced courses will dive much deeper. Still, if you’ve made it this far, congratulate yourself with a well-earned break! Good to Know Versions of the Solow-Swan model were independently developed by Robert Solow and Trevor Swan, building off of an earlier Harrod-Domar model. The Solow-Swan model was credited to both economists and came to fruition in 1956. One of its benefits is that it connects to microeconomics via the behavior of individual households and the production function, which itself can be thought of as a summation of the productivity of individual firms.
The Solow-Swan model is an economic growth model that uses a production function (often Cobb-Douglas) to determine the long-term growth path of an economy. It further shows how the economy trends towards a steady state level of capital per capita, depending on the savings rate, and allows us to determine what the best possible savings rate would be. This cornerstone growth model is often taught in introductory macroeconomics courses, re-taught in-depth for advanced courses, and used as the basis of many other models of the economy, so it helps to get familiar with it.
Cagé and Yanagizawa-Drott awarded 2025 Yrjö Jahnsson Award
Cagé's and Yanagizawa-Drott's work, spanning France, the USA, and Africa, emphasizes the powerful influence of media, including social media, on shaping political beliefs and actions. They warn against the risks associated with controlled media and stress the importance of media independence for a robust democracy. The prestigious award, established in 1993 by the Finnish Yrjö Jahnsson Foundation, recognizes European economists under 45 who have made significant contributions to theoretical and applied research essential to the economics field in Europe. The Award Committee, chaired by Kalina Manova and including members Esther Duflo, Nicola Fuchs-Schündeln, Ari Hyytinen, and Marco Ottaviani, selected Cagé and Yanagizawa-Drott for their groundbreaking work in the political and media spheres. Their research highlights the critical need for a free and independent media landscape to uphold democratic principles and safeguard against the potentially detrimental effects of media manipulation. Image Credits: Science Po / David Yanagizawa-Drott
Julia Cagé (Professor of Economics, Science Po) and David Yanagizawa-Drott (Professor of Economics, University of Zurich) have been honored with the 2025 Yrjö Jahnsson Award for their impactful research on political economy and media.
Dr. Dirk Schumacher takes over role of Chief Economist at KfW Group (Germany)
KfW is one of the world’s leading promotional banks. On behalf of the Federal Republic of Germany and its constituent states, it finances projects and investments that support economic, social and environmental living conditions across the globe. KfW CEO Stefan Wintels praised Schumacher's appointment, noting his experience in the context of the German and wider European economy. “Having worked for a wide range of different banks as well as the European Central Bank, Dr Schumacher will bring many years of broad experience of economic analysis” Schumacher's career includes roles at Commerzbank, Goldman Sachs, and most recently, Natixis, where he led the European Macro Research Team. He will take over the Economics Department at KfW Research, succeeding Dr Fritzi Köhler-Geib, who left the bank in November 2024. Photo credit: KfW-Bildarchiv / Alexander Kempf
Dr Dirk Schumacher today takes over the role of Chief Economist at KfW Group.
Princeton Economics Appoints Four New Faculty Members: Jäger, Carry, Dano and Sandomirskiy
Professor Simon Jäger joins from MIT to focus on labor markets and inequality. Formerly head of the IZA Institute of Labor Economics in Germany, and advisor to the German government, his recent research delves into workers' beliefs about wages impacting job search and negotiation. Jäger expressed his enthusiasm for joining Princeton, stating, "The Department and the Section have an extraordinary legacy in advancing labor economics and industrial relations research, and it is both humbling and inspiring to join this remarkable community and shape it going forward." Pauline Carry joins from the University of Chicago, having previously earned her PhD at Institut Polytechnique de Paris. Now she has been appointed as an Assistant Professor at Princeton Economics. She focuses on labor economics and macroeconomics, most recently examining the effects of working time regulations on employment allocation. Expressing her excitement about her new role, Carry articulated, "Princeton is such a special place for economics; I am very excited to be a part of this group. I look forward to learning from colleagues and students, and contributing to the vibrant scholarly community here." Kevin Dano was most recently a postdoctoral research associate at Princeton, and has now been appointed as an Assistant Professor. He specializes in econometrics, panel data, and networks, introducing new methods in dynamic discrete choice models and network settings. Reflecting on his new position, Dano expressed his gratitude, saying, "I am thrilled to officially join Princeton Economics. Looking ahead, I'm excited to continue growing as a scholar in this fantastic community." Lastly, Fedor Sandomirskiy has been promoted to Assistant Professor, having previously worked in the department as a research scholar and lecturer. He is a microeconomic theorist who studies information economics and economic design, blending microeconomic insights with algorithmic game theory. His research explores information acquisition and mechanisms to improve outcomes in strategic interactions. Clearly looking forward to his new role at Princeton, Sandomirskiy was quoted as saying: "Princeton has long existed in my mind as something between legend and textbook—a place that shaped modern research in so many fields and gave birth to game theory. I never dreamed I could become part of it." Each new faculty member brings a unique expertise and research focus to Princeton's Economics Department, taking up their duties with the Spring Term underway from March 2025. Image Credits: Princeton University
Princeton University's Economics Department has been busy hiring in recent months. Now four prominent new faculty members join for the Spring 2025 semester: Simon Jäger, Pauline Carry, Kevin Dano and Fedor Sandomirskiy.
(Oxford) Diploma : Macroeconomics/Behavioural Economics
Key details: 48 hours of lectures on macroeconomics Several workbooks on macroeconomics Hundreds of discussions on macroeconomics Regular updates via Educational Announcements Behavioural Economics The Instructor has macroeconomics textbooks on Amazon Five reasons to TAKE THIS COURSE right now: 1. You cannot lose - 30 day refund if you really really don't like the course BUT if you DO like it: a. updated lectures b. case studies based on very very current news items c. detailed responses to messages d. I constantly attempt to have a 'class atmosphere' e.g. throwing questions open to all e. regular Announcements that are not disguised sales ploys f. regular FREE access to numerous other courses offered by me 2. I am a lecturer/teacher in Economics by trade i.e. I teach full-time for a living. I have been Principal, Director of Studies and Head of Economics. (Oxford, UK) I have lectured in University, adult evening classes and also run over 50 seminars in the UK 3. I am/have been an Examiner for FIVE different examination boards 4. I have 100+ books on Amazon - many of them about business/economics 5. The success of my students has been featured on the BBC, Daily Telegraph, The Times and I have been featured on TV in 2 countries. MOTIVATION I make courses on Udemy primarily because I enjoy the process of causing learning. Many of my courses are to improve lives. One of the Economics courses is to raise money for charity. (100% of revenue goes to the charity) Fundamentally this course here, is about helping you. About the course Using ONLY aggregate demand and aggregate supply, this course explains the basics of macro economic policy. The lectures are fully supported by notes - often repeated to ensure learning - that may be copied and used for other studies. If you wish to understand more as to why governments cut/raise taxes, cut/raise government expenditure, how this impacts on inflation, unemployment and growth - then this is the course for you. Topics: Gross Domestic Product (GDP): Measures the total value of all goods and services produced over a specific time period within a nation's borders. Unemployment Rate: Indicates the percentage of the labour force that is jobless and actively seeking employment. Inflation: Describes the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling. Monetary Policy: Involves the management of a nation's money supply and interest rates by its central bank to control inflation and stabilize currency. Fiscal Policy: Refers to the use of government spending and taxation to influence the economy. Interest Rates: The cost of borrowing money or the return for investing, which are critical in monetary policy and personal finance. Balance of Payments: A record of all economic transactions between residents of a country and the rest of the world in a given period. Exchange Rates: The value of one currency for the purpose of conversion to another, impacting international trade and investments. Economic Growth: The increase in the inflation-adjusted market value of the goods and services produced by an economy over time. Business Cycles: The upward and downward movements of GDP and other economic indicators over time, encompassing periods of expansion and contraction. Supply and Demand: The fundamental economic model of price determination in a market, showing how prices vary based on a balance between product availability and consumer desire. Aggregate Demand and Supply: The total demand for goods and services and total supply of goods and services within an economy at a given overall price level and in a given time period. Budget Deficits and Surplus: A budget deficit occurs when expenses exceed revenue, and a surplus occurs when revenue is higher than expenses. Public Debt: The total amount of money owed by the government to creditors, which can influence a country's fiscal policy and economic health. Trade Policies: Regulations and tariffs that a country applies to its imports and exports, affecting its balance of trade. Labour Markets: The supply and demand for labour, in which employees provide the supply and employers the demand. Capital Markets: Where savings and investments are channelled between suppliers who have capital and those who are in need of capital. Economic Indicators: Statistics that provide information about the overall health of the economy, such as GDP, unemployment rate, and inflation rate. Recessions: A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters. Stagflation: A situation in which the inflation rate is high, the economic growth rate slows, and unemployment remains steadily high, presenting a dilemma for economic policy. The course is pitched at a beginner level and thus is IDEAL for anyone just starting an economics course or simply wants to understand macro-economic policy. The initial lectures are short - egg-timer size! - and, if you look at other egg-timer courses, you will know that if you have any questions then they will be answered very quickly. PLUS the course also includes Behavioural Economics. Behavioral economics melds psychology with economics, exploring why people sometimes make irrational decisions, and how their behaviour does not always follow the predictions of economic models. It challenges traditional assumptions of rational choice, investigating heuristics, biases, and framing effects that influence consumption, investment, and other economic activities. Who this course is for: Everyone interested in the world economies Anyone commencing a course in macro-economics 1st year Degree students Anyone who has an interest in understanding the basics of economic policy Non-specialists in Economics Beginners in Economics
Mastering Markets and Minds: An Interactive Journey Through Macroeconomics and Behavioural Economics. By Chris Sivewright / Oxford School of Learning.
Morris Davis appointed to Council of Economic Advisors as Chief Housing Economist
In his new role, Davis will provide guidance to president Trump on policies aimed at reducing housing costs and expanding housing availability. His expertise will be crucial in advising on strategies to increase housing supply and alleviate regulations that drive up housing costs. Davis expressed his honor in serving the country and his dedication to making housing affordable for all, adding: "My goal is to help the president make housing affordable for everyone." New Chairman Steve Miran told Rutgers Business School, where Davis has been employed since 2014, that “Morris will play a pivotal role as we work to build more homes and make housing affordable again for American families, helping to usher in President Trump’s economic Golden Age.” The Dean of Rutgers Business School, Lei Lei, in turn praised Davis and his role so far in influencing public policy: "Morris is a proven leader with innovative ideas that can positively affect real estate productivity and public policy today." Davis received his PhD in Economics from the University of Pennsylvania. He is noted for a much cited 2012 paper, which argued against subsidies for major US mortgage entities Fannie Mae and Freddie Mac and for a cut in mortgage interest deductions. The latter is an approach that has also been proposed by president Trump. Davis further advocates, for example in a 2019 paper, for consideration of the current market when making policy changes that affect the cost of borrowing. The Council of Economic Advisers, consisting of approximately 45 members, has been funded by Congress since 1946 to offer research supporting the president in formulating economic policies. Davis's appointment will last until December 2025. Image Credit: Rutgers Business School
Morris Davis, a professor at Rutgers Business School specializing in real estate, has been appointed to the White House Council of Economic Advisers as the chief housing economist. The news follows the high profile appointment last week of Stephen Miran as head of the CEA.
Roberto Serrano awarded the 2024 King of Spain Economics Prize
The award, established in 1986 by the José Celma Prieto Foundation, aims to honor individuals who contribute to economic knowledge and societal well-being. The ceremony, held at the Bank of Spain, was attended by economic and academic figures. Serrano, a Spanish-born economist currently teaching at Brown University in the U.S., received recognition for his academic and research achievements. King Felipe highlighted Serrano as a role model and emphasized the importance of rigorous research and knowledge dissemination in society. Serrano, who has published extensively on game theory and economics, has overcome challenges due to a visual impairment, becoming a respected figure in the academic world. His dedication to research and teaching has earned him accolades such as being named among "The Best 300 Professors" by Princeton Review. Image Credit: Casa de S.M. el Rey
King Felipe VI of Spain has presented the "King of Spain Economics Award 2024" to economist Roberto Serrano for his outstanding scientific and professional work in the field of economics.
Winta Beyene receives Marie Skłodowska-Curie Fellowship for work on Household Finance and Financial Resilience
Her project, titled The Credit Safety Net and the Costs of Credit Supply Shocks, delves into how households navigate unexpected income shocks, particularly those related to health, under varying levels of credit availability. Beyene's research sheds light on the impact of credit constraints on financial strategies like selling assets or adjusting homeownership and employment, aiming to propose policy solutions that can bolster social safety nets and shield financially vulnerable households. The European Commission, through its Horizon Europe program, sponsors the Marie Skłodowska-Curie Fellowship, providing funding, international networking opportunities, and professional growth for exceptional postdoctoral researchers. With this recognition, Beyene is set to advance her investigations in financial stability and the well-being of households. The Leibniz Institute for Financial Research SAFE ("Sustainable Architecture for Finance in Europe"), based in Frankfurt am Main, Germany, is dedicated to interdisciplinary research on financial markets and their participants in Europe as well as to research-based, independent policy advice. The institute focuses on the cooperation of researchers from the fields of finance, economics, law, and political science. Dr. Winta Beyene received her PhD from the SFI Swiss Finance Institute and the University of Zürich, having previously studied at the University of St. Gallen. Image Credit: SAFE Frankfurt
Winta Beyene, a Postdoctoral Researcher specializing in banking and finance at SAFE (Germany), has been granted a prestigious Marie Skłodowska-Curie Fellowship for her work on household finance and financial resilience.