Newswise — Two acclaimed University of Chicago economists, Lars Peter Hansen and Kevin M. Murphy, have been appointed co-chairs of the Becker Friedman Institute for Research in Economics, succeeding Gary S. Becker, AM’53, PhD’55, who passed away in May. Hansen, formerly the research director for the Institute, will become its director.
Their appointments are effective immediately.
In his joint role, Hansen, a Nobel laureate and the David Rockefeller Distinguished Service Professor in Economics and Statistics, will guide the Institute’s scholarly direction. He also will develop programming and oversee operations.
Murphy, a MacArthur fellow, winner of the John Bates Clark Medal and the George J. Stigler Distinguished Service Professor in Economics at the University of Chicago Booth School of Business, will focus on the Institute’s outward-facing activities, including public outreach programs and development.
As co-chairs, Hansen and Murphy will work together in structuring the scholarly ambition of the Institute.
“It is a tribute to Chicago economics that two scholars as distinguished as Lars Hansen and Kevin Murphy can step into this important role,” said Provost Eric D. Isaacs. “Their commitment and joint leadership will ensure that the Becker Friedman Institute continues to grow as a home for innovative research and a destination for outstanding economists from around the world.”
'Powerful Economic Thinking'
The Becker Friedman Institute for Research in Economics was created in June 2011, joining the Milton Friedman Institute for Research in Economics and the Becker Center on Chicago Price Theory. In collaboration with Chicago Booth, the Department of Economics, the Law School, and the Harris School of Public Policy, the Becker Friedman Institute supports interdisciplinary scholarship on a wide variety of topics and attracts visiting scholars and students at all levels.
Hansen was the founding director of the Milton Friedman Institute before it merged with the Becker Center in 2011, and continued as research director of the Becker Friedman Institute for Research in Economics.
“Steering this Institute through its startup years has been a terrific experience. I am proud of what we have accomplished, and pleased to have the opportunity to continue expanding its ambitions and impact,” said Hansen. “I look forward to working closely with Kevin to amplify the Institute’s role as a catalyst for collaboration and a recognized source of powerful economic thinking.”
“The Becker Friedman Institute is dedicated to the proposition that economics is not an academic exercise; economics is an analytical tool that can provide insight into and solutions to important economic and social issues, said Murphy. “Sound economic policies need to be firmly grounded in economic analysis and informed by careful and rigorous empirical research. Scholars at the Institute follow in the footsteps Milton Friedman and Gary Becker and apply economic analysis to many of the important issues of our day, including income inequality, health, macroeconomic policy and early childhood education. We are excited about the future of the Institute and look forward to working with our colleagues to set its direction.”
Lars Peter Hansen
Hansen received the 2013 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for his pioneering work in assessing economic models, specifically in developing time series statistical methods and applying them to understand the linkages between financial markets and the macroeconomy.
Hansen’s recent work focuses on uncertainty and its relationship to long-run risks in the macroeconomy. Hansen is co-principal investigator on a research initiative with the Macro Financial Modeling Group that develops macroeconomic models with enhanced linkages to financial markets to provide better policy tools for monitoring systemic risks to the economy.
He received the 2010 BBVA Foundation Frontiers of Knowledge Award in Economics, Finance and Management in 2010, the Erwin Plein Nemmers Prize in Economics from Northwestern University in 2006, and the CME Group-MSRI Prize in Innovative Quantitative Applications in 2008. Hansen received a BS in mathematics in 1974 from Utah State University and a PhD in economics in 1978 from the University of Minnesota.
Under Hansen’s leadership, the Institute has developed active research initiatives addressing knowledge gaps and key economic issues. Topics include human capital development, inequality, the economics of health care, fiscal challenges, and linkages between financial markets and the macro-economy.
“Lars is a brilliant and creative economic scientist who understands the value of collaboration across fields within and outside economics,” said James Heckman, a Nobel laureate and the Henry Schultz Distinguished Service Professor in Economics. “He has made intellectual engagement of leading scholars with diverse points of view a cornerstone of the institute’s activities, and championed successful programs to engage and support young researchers. In its seminars and conferences, the institute lays the foundations for innovative scholarship on important economic and social questions. Under his leadership, rigorous, empirically-based and policy-relevant economic science will flourish.”
Murphy’s research focuses on the empirical analysis of inequality, unemployment and relative wages; the economics of growth and development; and the economic value of improvements in health and longevity. In 2005, Murphy became the first professor at a business school to be chosen as a MacArthur fellow, cited for “revealing economic forces shaping vital social phenomena” in his areas of interest.
At the Becker Friedman Institute for Research in Economics, Murphy serves as co-director of the Rosenfield Program in Economics, Public Policy and Law, a role he will continue to play. In addition to his position at UChicago, he works as a faculty research associate for the National Bureau of Economic Research.
More than 60 of his research papers have been published in academic journals, including the Journal of Law and Economics, the Journal of Political Economy and American Economic Review.
He is the coeditor of Measuring the Gains from Medical Research: An Economic Approach, and has coauthored Social Economics: Market Behavior in a Social Environment with the late Gary Becker. He earned his PhD in 1986 from the University of Chicago after graduating from the University of California at Los Angeles with a bachelor’s degree in economics in 1981. He joined the Chicago Booth faculty in 1984.
A fellow of the Econometric Society and an elected member of the American Academy of Arts & Sciences, Murphy was a John Bates Clark Medalist in 1997 and has received fellowships from the Earhart Foundation, the Sloan Foundation and the Friedman Fund. In 2007, Murphy and fellow Chicago Booth faculty member Robert Topel won the Kenneth J. Arrow Award for the best research paper in health economics for “The Value of Health and Longevity.”
"It is fitting that Kevin Murphy has assumed a leadership role in the Becker Friedman Institute for Research in Economics. He embodies the intellectual tradition that Milton and Gary helped to build,” said Robert H. Topel, the Isidore Brown and Gladys J. Brown Distinguished Service Professor in Urban and Labor Economics. “There is no better price theorist in the world today than Kevin. His abilities to apply economic theory and to explain its implications to non-economists are without equal. He is a perfect representative of the Institute and of the Chicago Economics tradition.”
growing institute beyond traditional boundaries
The Becker Friedman Institute for Research in Economics is named for two Nobel laureates in Economic Sciences, Gary Becker and his mentor, the late Milton Friedman—Chicago iconoclasts who became icons in the field. While they pursued very different paths, Becker and Friedman shared a fundamental belief that economics is a powerful tool to help understand human behavior. They were devoted to rigorous research grounded in both empirical data and theory, which shaped their approach to their work.
The Institute hosts visiting scholars from around the world, including three distinguished research fellows who visit Chicago for extended periods and play leadership roles in research initiatives. It also supports promising young faculty and provides advanced professional training for outstanding postdoctoral fellows. In 2013-14, the Institute hosted 32 visiting scholars of various disciplines
That same year, the Institute organized 11 research conferences, and sponsored 27 student-led events and 13 outreach events. These activities reached an estimated audience of nearly 3,400 researchers, faculty, students, alumni and economics enthusiasts.
In the future, Hansen and Murphy said the Institute will continue to move beyond traditional boundaries, and create opportunities for fruitful collaborations across disciplines. This fall, the Institute will jointly host two conferences with the Law School and Chicago Booth—one on creditors and corporate governance, and the other on normative ethics and welfare economics that brings together economists and philosophers.
In addition, the Institute has expanded its outreach to students with programs that increase their exposure to economics and expand their learning opportunities outside the classroom.
Graduate students at the University of Chicago take part in the Institute’s multi-year initiatives on key economic issues, fields and approaches. They pursue research with financial support from the Institute, present their work at the Institute’s rich array of academic conferences and take part in less formal discussion forums.
For undergraduates, the Institute offers programs that introduce advanced economic thinking and show students them how to apply it in research and practice. The Friedman Forum Lecture Series gives undergraduates first-hand access to distinguished economists who share their ideas and perspectives in informal discussions. A summer Research Experience for Undergraduates offers student working as research assistants access to software tutorials and lectures that broaden and deepen their economic knowledge and research skills.
This summer the Institute moved into the newly renovated Saieh Hall for Economics, a Gothic-influenced building that stands at the heart of the UChicago campus. Blending historic architecture with a fully updated facility, the building accommodates the instructional, research and conferencing needs of the Institute and Department of Economics. Hansen and Murphy said Saieh Hall will allow the Institute to increase the number of visiting scholars it hosts, better support Institute programming, and provide an excellent setting for scholars to meet informally to exchange ideas and build collaboration.