Greetings from the Department of Economics. I am happy to report that the department is thriving and poised for more exciting changes. As we start our second year at Carl H. Lindner College of Business, we are

enthusiastically active in strategically planning and expanding our mission in promoting our degree programs at the undergraduate and graduate levels, scholarship and service to the community. Above all, my colleagues and I continuously foster innovation in research, education, and regional outreach to improve the economic health of our region and the nation.

First and foremost, our faculty has been undergoing a period of intense renewal. This year we were provided the opportunity to hire several new faculty, which we have done with academic excellence in mind. We have hired Dr. Lenisa Chang (Michigan State University), Dr. John Winters (Georgia State University) and Dr. Mari Robertson (American University). They are all dedicated to teaching and scholarship, with exciting research projects, which is important as they strive to achieve their professional goals. Also, we have appointed Asawari Deshmukh (Washington University St.-Louis) as an assistant professor – educator, whose primary responsibilities will be undergraduate teaching.

Second, the main source of support for departmental activities, the Hewett-Kautz Fund has been restructured and renamed to the Kautz-Uible Fund. Over the years, the fund has grown substantially from the generosity of the Kautz and Uible families. Thus, it is only fitting that it should be named after the two families. The

fund continues to support student scholarships, student domestic and international travels, speakers programs, The Kautz Lecture and faculty research.

Third, our faculty is dedicated teachers and researchers who are committed to the academic development and success of our students. Thus, they have been involved with revamping our curriculum in preparation for the semester conversion, starting August 2012. Thus, our new curriculum spans the breadth of the economics discipline which enables our students to explore their interests within this important field of study. In addition, once again, the scholarly work of our faculty has been at its best. Our faculty regularly publishes referred papers and present scholarly papers at seminars and conferences both domestically and internationally. Many continue to serve our profession on editorial boards of journals.

Fourth, as I start my fourth year as department head, I value your support and welcome your suggestions. I thank you for helping sustain academic excellence in our department and for helping to preserve its tradition of excellence. My colleagues and I remain committed to be YOUR intellectual home and will be delighted to hear from you.

Kind regards,

Sourushe Zandvakili, Professor and Head

Au t u m n 2011 | D E PA R T M E N T O F E C O N O M I C S

InsideFrom the Department Head 1

Spring Banquet Awards 2

Faculty Updates 2

Greg Mankiw speaks to UC Foundation Board of Trustees, Faculty, Students 2

Edward C. Prescott Gives Lecture on Campus 3

Vredeveld Receives Honorary Doctorate 3

Federal Reserve Board of Governors Economist Visits Campus 3

Economics Students in Chicago 3

In Memory of Caroline Kautz 4

Norwegian Students at UC Provide Insight 4

Norwegian Adventure 5

Message from Wolfgang Mayer 6

econnews is published annually for alumni by the Department of Economics.

News items, comments and suggestions are welcome.

For information, call 513-556-2600.

Laura Dickson, Editor

From the Department Head

Sourushe Zandvakili

Attention MA in Applied Economics GradsLooking for a great way to keep in touch with your former classmates?

Want a chance to network with other program alums?

Need to better advertise to clients?

For all of these reasons and more, we created a UC MA in Applied Economics Group on the business networking site LinkedIn. We encourage all of our former students to join LinkedIn and our group. To join LinkedIn (if you are not already a member) visit www.linkedin.com. To join the Applied Economics Group once you are a LinkedIn member, visit:

www.linkedin.com/e/gis/853447

UndergradUateHewett-Kautz FellowshipRyan AzbellMichael DicksonAndrew Gullion Ross Hambrick Maurice Hexter ScholarshipAlex Zugelter Edwin L. Frank Prize in EconomicsPatrick Etter-Millard Citicorp ScholarshipChristopher Trimbach Caroline Kautz Book PrizeChristopher Randall Outstanding Student in EconomicsStephanie ChampnessRobert Behlen

gradUateVirginia and Gordon Skinner ScholarshipStanley Bartlett Jeremy Kapolka Outstanding Student in EconomicsKseniya Slynko

The Department of Economics held its annual banquet, honoring the 2011-2012 scholarship recipients, on May 18, 2011. Guest Speaker, Amanda L. Wait, alumna of the University of Cincinnati Department of Economics and associate for Hunton & Williams LLP, provided interesting insights into the use of economics in the lawsuit brought by Federal Trade Commission against Whole Foods. The case concerned the acquisition of Wild Oats by Whole Foods, and the threat of increased prices due to monopolistic power. Nate Prusinski detailed the Economics

Society’s Chicago Trip, and Kseniya Slynko and Zachary Koons gave a presentation on their experience at the Norwegian School of Economics and Business Administration.

Spring Banquet Awards

Amanda L. Wait

Dean of Carl H. Lindner College of Business; David M.

Szymanski, Stephanie Champness, Robert

Behlen, Department Head; Sourushe

Zandvakili

We would like to congratulate the following students on their academic achievement and awards.

Nick Hertlein Zachary Koons Shangxian Ma

Former Chairman of the President’s Council of Economic Advisors Brought to UC campusFormer chairman of the President’s Council of Economic Advisors (2003-2005) and professor of economics, Harvard University, Dr. Gregory Mankiw, was a guest of the department in April 2011. Mankiw spoke about the Challenges Facing Monetary and Fiscal Policy to an audience that included the UC Foundation Board of Trustees. Mankiw provided a second lecture topic, an Exploration of Optimal Stabilization Policy, for an afternoon seminar to faculty and students.

Mankiw lectures at UC Board of Trustees Luncheon.

John Winters joins us after two years as an assistant professor at Auburn University Montgomery. John earned a PhD in economics from Georgia State University and also holds a MA in economics from Georgia State and a BA in economics from Mississippi State University. John has researcher interests in urban and regional economics, labor economics, the economics of education, and applied econometrics.

facultyupdatesLenisa Chang received her PhD in economics from Michigan State University in December 2010 and joins us after visiting for a year at Miami University. Her research areas are health economics, labor and public economics.

Mari Robertson earned her PhD in economics from American University in August 2010. Her fields of interest are macroeconomics,

monetary economics, and financial economics. She is particularly interested in the impact of securitization and other forms of alternative

finance on the transmission of monetary policy.

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Congratulations to our colleague George Vredeveld Professor Vredeveld received a doctor honoris causa at Varna Free University of Bulgaria on October 4, 2011. This award is a testament to Vredeveld’s exceptional commitment to higher education and a point of pride for the department, college and university. More information can be found at http://vfu.bg/en/news/.

Edward C. Prescott, Nobel Prize Winner in economics, senior monetary advisor at the Minneapolis Federal Reserve Bank, and the W.P. Carey chair of economics and regents professor of the W.P Carey School of Business at Arizona University, presented a lecture entitled “Asia Booming, U.S. Depressed, Europe Stagnating” at the Kautz Lecture held on October 21, 2010 and attended by about 600. “Dr. Prescott has influenced the monetary and fiscal policies of many governments and laid the basis for the increased independence of many central banks, notably those in Sweden, New Zealand, and the United Kingdom,” said Sourushe Zandvakili, head of the economics department.

Prescott explained that the current outlook of the U.S. economy shows that GDP levels have ceased falling, however they have not begun to recover yet. Prescott’s opinion is that Monetary Policy does little to effect long-run growth levels; rather taxes, technological change, and productivity are the real drivers of growth. Prescott believes that to improve the current economic situation policies should be taken to reduce taxes and stimulate productivity.

Prescott argued, the recent downturn was not the result of a financial crises, citing “Flow of Funds, March 11, 2010 Release of FRB Statistics, Tables L100 and L101,” which showed little change in liabilities from 2007 to 2009, suggesting the economic downturn was not due to insufficient loan availability. Instead Prescott argued the downturn was the result of business owners rationally cutting investments and employment in fear of a higher tax policy regime occurring in 2008.

Prescott claimed the best way to fix the current economic state, would be to cut public expenditures, and pursue pro-productivity growth policies.

Prescott explained how many Asian countries like China are catching up to the United States and Western Europe in terms of GDP per capita. While some Asian countries like Honk Kong, Japan, and Singapore have already caught up with GDP per capita to almost 100 percent of U.S. levels.

Prescott said “Asia catching up is good for the West; A rich Asia is good for the West,” concluding, that it is economically beneficial to the U.S. for Asia to grow, and that an open world benefits all.

Edward C. Prescott Gives Lecture on Campus

Front row: Laura Harrison, Bill Butler, Don Harrison, Ellen Rieveschl, Jim Kautz Edward C. Prescott, Sourushe Zandvakili Back row: John Tew, Dan Kautz at the 2010 Kautz Lecture.

Edward C. Prescott with economic graduate and undergraduate students.

Neil Bhutta, economist, Division of Research & Statistics, Federal Reserve Board of Governors, was among the featured speakers for the 19 seminars/workshops hosted by the department in 2010-11. He is pictured here with seminar organizer, Olivier Parent. Bhutta’s seminar topic was Consumer Ruthlessness and Strategic Default During the 2007-2009 Housing Bust.

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In Memory of Caroline Miller Kautz

Norwegian Students Attending UC Provide InsightIn early January 2011, three exchange students from the Norwegian School of Economics walked onto the UC campus for the first time. From day one, we were very impressed with the University of Cincinnati.

Dag is 20 years old and is working on a bachelor’s degree in economics and business administration. Hamed, 25 years old, is working on a master’s of science in international business. Eline, is also 25 and working on her master’s, with a focus on strategic management. The three of us have been taking classes from a wide range of disciplines at the College of Business, such as economics, finance, management, marketing, and quantitative analysis.

After studying two quarters at UC we have found some major differences between UC classes and the classes in Norway. First, UC classes tend to be smaller and there is more interaction between students and professors. Having a good dialogue with professors has been positive to our learning experience here. In addition, grades in the USA are determined by a number of factors, whereas in Norway, grades are determined solely on the basis of performance on a final exam.

It has also been interesting to experience a quarter-based system, as we are used to the semester-based calendar. We feel that implementing the semester system at UC will bring several advantages to both students and professors. In general, classes we have taken at our university back home tend to be more in depth. The professor has more time to go into detail and cover a broader range of material. In addition, students can work on

more extensive and in-depth projects throughout the semester. We therefore believe strongly in the semester conversion at UC starting fall 2012. However for the sake of clarification, we do not mean that professors at UC do not put enough effort into delivering the subject matter. Rather, we have found our UC instructors very enthusiastic about the subjects they teach. In Hamed’s opinion, when he compares his previous educational experiences with his current experience at UC, he finds the quarter system very efficient. Hamed believes

the balance between theoretical and practical perspectives in the syllabus is the reason for this efficiency.

Our experience of Cincinnati has been just as interesting and positive as our experience of UC. A city that we had very little information about, Cincinnati surprised us with its historical background—from the John A. Roebling Suspension Bridge to the architectural style of the old buildings. We never got tired of listening to stories about different locations and events in Cincinnati.

We strongly recommend UC students, who are willing to have international experiences, to consider the Norwegian School of Economics and Business Administration, NHH, as one of their options. Likewise, we recommend NHH students take advantage of the UC-NHH exchange program to experience Cincinnati. The exchange can be further amplified and enriched if both groups travel to other parts of the countries they are visiting.

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UC department of economics

by Eline Flacke, Dag Gjersten and Hamed Namavari

Norwegian School of Economics and Business Administration (NHH) students Dag Gjersten, Hamed Namavari, and Eline Flacke.

Caroline Kautz, benefactor of the Department of Economics together with her husband, Jim Kautz, passed away on December 11, 2010. Carol adopted our department as if she graduated from UC, and was a true Bearcat at heart. Carol and Jim created the first fully endowed faculty chair in economics, The James C. and Caroline Kautz Chair in Political Economy. In addition, The Kautz-Uible Fund annually provides support to student(s) with the Caroline Kautz Book Award.

Carol was born in Allentown, PA on December 25, 1933. In 1951 she graduated from The Baldwin School and in 1955 she graduated from Vassar College. In 1957 she wed James C. Kautz and moved to his hometown, Cincinnati, Ohio. As Jim’s career progressed they moved to Manhattan

where Caroline pursued her passion for helping others through education by tutoring in the poorest neighborhoods wherever she lived. Carol and Jim set a wonderful example through their engagement in the community, a spirit of adventure and exploration in their worldly travels, and the love they had for each other.

Carol is survived by her husband, James Charles Kautz, her children Daniel Paul Kautz and Leslie Barnes Kautz, their spouses Penny Kautz and Jack Weiss, and her four grandchildren, Lucas and Matthew Kautz of Tucson and Mollie and Jacob Weiss of Los Angeles, CA.

Jim Kautz and his children, Dan and Leslie, continue to support the Department of Economics, providing much needed financial support and guidance.Caroline Miller Kautz

It was an unseasonably beautiful Norwegian day as a group of 20 odd souls from all corners of the earth circled around the Briggen World Heritage site monument — young people standing shoulder to shoulder, each leaning in to catch the tour guide’s every word. It was then that we first witnessed the caliber and character of the people we were to experience.

Thirty-seven students, representing 21 countries, participated in this graduate level seminar. Each of us came to expand our knowledge of natural resource management. We accomplished this, and experienced a rich cultural exchange as well.Academics The academic curriculum was

rigorous. Two lectures, twice a day on topics such as Norwegian petroleum management, natural gas markets, economic theory of natural resources, electricity markets, corporate responsibility, etc. Below are a few snippets from what we learned.

The Norwegian government has capitalized on its natural resources to great advantage. Norway developed the infrastructure to produce 96 percent of all electricity from hydro-power and wind in 2010, created the largest public investment fund in the world, and provides all education and health care as complimentary.

Norway, though rich in resources, is facing problems never before seen in its history. Norway has harnessed its natural resources and environs, replacing waterfalls with hydro-stations.

The public wants this development policy reversed. Thirty-percent of Norway’s youth aged 18-25 require aid from the government, a plight commonly referred to as ‘Dutch disease.’ CultureOur cultural experiences were

intertwined with macroeconomic policy discussions during meals, hikes, visits to active fish farms, a visit to corporate giant Statoil, and exploration of the Norwegian fjords by boat. We had a great time building relationships with our classmates during excursions and activities ranging from a historical tour of Briggin World Heritage site, to a summer solstice campfire, a Norwegian Bar-B-Q, and international pot lucks.

Our studies in Norway were supported by a generous award given to us by the Kautz-Uible Fund. We

were determined to both expand our horizons and to provide strong representation of UC while in Norway—in short, to earn the support provided to us. During our departure dinner, while dining high above and overlooking Bergen, Norway NHH international relations director John Andersen stated, “Both the students and the professors were impressed about the work and quality of presentations.” Continuing on, he noted that the group of students assembled was the best group in the five years the program has existed. We believe we accomplished our objective.

If you would like any further information regarding our experiences you may contact us at eric.nathan.hickman@gmail.com or mccarthy.jonathan.d@gmail.com.

2011 Norwegian Adventure by Jon McCarthy and Eric Hickman

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Econ Society Members at the Federal Reserve Bank of Chicago in Spring 2011Front Row (left to right): Hong Wing Yuen, Shangxian Ma, Samantha Sparks, Jessica Kennedy, Michael Dickson, Patrick Etter-Millard

Back Row (left to right): Chris Randall, Nate Prusinski, A.J. Arand, Ryan Azbell, Paul Stout, John Bruns, Andrew Gullion

Department of EconomicsUniversity of CincinnatiPO Box 210037Cincinnati, OH 45221-0037

Non-Profit Org.US Postage

PAIDCincinnati, OHPermit No. 133

A year has passed since I retired after 40 years of teaching, research, and administrative work at UC. I was truly surprised and moved by the well-wishes from so many of you and by the steady stream of generous contributions to the newly-created Wolfgang Mayer Graduate Enhancement Endowment Fund. I thank you whole-heartedly and can assure you that, in these times of drastically declining public support for graduate education, the impact of your gifts will be greatly needed and appreciated by the next generation of students. The fund has grown sufficiently that first scholarship awards will be made at next year’s awards banquet of the economics department.

My first year in retirement has passed quickly. While I no longer teach, I remain active within the international economics profession. Retirement has not changed my status as a member of the editorial boards of such academic journals as Economics Letters, the Review of International Economics, the Journal of International Trade and Economic Development, the Pacific Economic Review and the European Journal of Political Economy. For some of these journals I have served on their editorial boards since their founding; with Economics Letters editors I have collaborated for 32 years. A different type of professional involvement came about late this spring. The World Scientific Publishing Company has invited me to publish a collection of my most influential research papers in form of a book. In addition to selecting my most significant publications, I was asked to provide an overview of the main theoretical and

policy issues addressed in my 40 years of research, as well as a discussion of the broader implications of my work for the current state of international trade research. The book is expected to be finished by the end of 2012.

Before I retired last year, I spent a few days in Austria with a group of my former high school classmates. When they asked me about what I will miss the most in retirement and what I will miss the least, my answers were easy. I told them that I would miss my students the most and UC’s steadily rising administrative assignments the least. And so it has turned out to be. Looking back, it has been a real privilege and joy to meet and listen to such a diverse group of graduate and undergraduate students, coming from a large variety of cultures and socio-economic backgrounds. No reading of books can substitute as a learning experience of the richness and diversity of humankind. But now that I no longer see and talk to these students on a daily basis, I have to resort to reading books; lots of books, mostly on 20th century history and on how individual men and women have coped with the perils of war, dictatorship, and starvation in these tumultuous times. And instead of doing administrative work in my office, I enjoy much time outdoors: walking my two dogs, growing fragrant flowers in my yard, and picking a bountiful harvest of fresh tomatoes, raspberries, and herbs in my garden.

A message from Wolfgang Mayer

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