The Benjamin Graham Value Investing Program Newsletter for August 2020 has now been published! Please click below to read more about the program and how it is continuing to benefit our students.
Teaching in the times of Covid
Spring 2020 came with a lot of unexpected changes for both faculty and students due to the COVID-19 Pandemic. Teaching plans were completely altered and everyone had to adapt to this new normal quickly. We are very thankful for all the faculty and their abilities to continue to bring quality education to our students during this trying time–but want to give a big congratulations to Simon Board–the winner of the Warren C. Scoville Distinguished Teaching Award for best undergraduate teaching in Spring 2020.
Simon Board won this award while teaching ECON 106T–The Economics of E-Commerce and Technology. This class analyzes the economics of e-commerce and technology. It identifies the critical features that differentiate the technology firms from traditional industries, and examine the implications for business strategy. The class discusses topics such network effects, switching costs, and platform markets. To complement the economic theory, they students also participate in case studies from various firms every week. Topics include bidding in online auctions, two-sided markets, matching markets and reputation mechanisms.
Warren C. Scoville was a faculty member for the UCLA Department of Economics for 28 years before his death in 1969. This award is given quarterly in his name to the ladder faculty member who receives the highest teaching evaluation scores from his or her course.
The Department of Economics is pleased to announce that we are extending the data training for all students admitted to the major beginning in Fall of 2020. A solid foundation of empirical techniques is fundamental in understanding and studying economic phenomena, and increasingly demanded by employers. The new class is entitled Econ 104: Data Science for Economists, and will be accompanied by a lab (Econ 104L). The course will focus on hands-on projects using real world data. It will be offered for the first time in Spring 2021 and will be taught by Professor Rojas.
The new courses will not be required for students who have already been admitted to the major prior to Fall 2020 or who complete Econ 103 by the end of Spring 2021, but going forward will be required for all students majoring in Economics or Business Economics. However, it will be open to all Economics and Business Economics students who wish to take the course.
The new course descriptions for Econ 103 and 104, our two econometrics classes, are as follows:
Econ 103. Introduction to Econometrics
Introduction to theory and practice of univariate regression analysis with emphasis on its use in economics. Introduction to method of least squares, Gauss-Markov theorem, confidence intervals and hypothesis tests in univariate regression context, and standard errors in case of heteroscedasticity and serial correlation. Emphasis on applications with real data and computer software (R programming language) to implement discussed methods.
Econ 104. Data Science for Economists
Introduction to estimation of multivariate regression, and confidence intervals and hypothesis tests in context of multivariate regression. Discussion of instrumental variables and binary choice models. Emphasis on hands-on experience on data analytics and real data applications.
Michael Powell
Many of us Bruins reminisce on the moment we decided to come to UCLA. For Dr. Michael Powell this moment occurred at the very top of Janss steps. Experiencing the beauty of campus and Los Angeles from this UCLA gem made it clear that UCLA was the school for him. From then on, Michael describes his life as a “series of good accidents”. At UCLA, Michael’s interest in economics was initially sparked by Professor Ed McDevitt. In particular, he recalls Professor McDevitt’s crystal clear and thought-provoking lectures, always delivered on the whiteboard perfectly without the aid of a single page of notes. After encouragement from Professor McDevitt, Michael decided to pursue economics as a career.
Like many fellow Bruins, Michael Powell joined UCLA as a third-year transfer student from the Bay Area. His jobs at KFC and In-N-Out throughout his years at community college allowed him to focus all his time on academics while at UCLA. Even more, Michael’s experience at these jobs led him to a research career in organizational economics. Michael describes organizational economics as the study of “why organizations look the way they do”. Between his jobs at KFC and In-N-Out, he noticed firsthand how each had a different path for career advancement and how promotion incentives impacted employee productivity and morale. Now, he studies how and why firms design career trajectories for their workers the way they do, and how it impacts their employees throughout their career.
UCLA has more exciting courses than any of us could imagine having the time to take. Whether it be graduate mathematics, astrobiology, or Scandinavian film, UCLA has an overwhelming variety of things to learn. Unless we are lucky enough to be a double (or perhaps triple) Bruin, we only have a few years to take advantage of everything UCLA has to offer. Michael’s solution and recommendation to any Bruin is course auditing. Course auditing provides the chance to learn and experience new topics, without the large time commitment and pressure of grading. While studying for his economics PhD at MIT, Michael took or audited nearly every economics class offered. Auditing gave the opportunity to take advantage of all his time at MIT, learning from renowned economists like Esther Duflo and Amy Finkelstein.
To further maximize his time at UCLA, Michael earned a Master’s degree in economics through the Departmental Scholars Program. This program offered by the economics department allows students to spend an extra year at UCLA to take graduate courses during their fourth and fifth years. Especially as a transfer student, the opportunity to spend another year in Southern California was too good to pass up. Although he would go on to take similar classes in graduate school at MIT, each professor and university brings a different point of view and focus. For a career in economics, this additional perspective is highly valuable in developing the unique skills and intuition needed to approach complex problems in school and beyond. Once Michael started doing graduate work in economics, it was “hard to imagine doing anything else”, and he would go on to earn his PhD in economics at MIT.
Now, Michael is an Associate Professor of Strategy at the Kellogg School of Management at Northwestern University. The responsibilities of the job are twofold: research and teaching. The process of publishing your first papers as a professor is challenging, as papers are often rejected from journals and subject to harsh criticism. However, for Michael this feedback helped develop the tenacity and determination needed to become a successful economist and researcher. At Kellogg, teaching highly engaged MBA students is particularly rewarding. The smaller classes and high levels of student participation provide a unique challenge but an exciting teaching job. Overall, UCLA gave Michael the tools to succeed at the highest level of academia and contribute to the advancement of economics as a researcher, teacher, and collaborator.
by Claire Nelson.
Michela Giorcelli
The Marshall Plan, sponsored by the United States between 1948 and 1952 to help Europe recover from World War II, is the largest economic and financial aid program ever experienced in the world. It transferred to European countries $130 billion (in 2010 USD), around 5 percent of US GDP in 1948, which was mainly used to provide immediate relief and to fund the reconstruction. Economic historians have long recognized the importance of the Marshall Plan in developing pro-market institutions in Western Europe. However, little is known yet about its causal effect on the recovery and development of local economies within European countries.
In the paper “Reconstruction Aid, Public Infrastructure, and Economic Development”, Professor Michela Giorcelli (UCLA) and Nicola Bianchi (Kellogg School of Management) study how the Marshall Plan affected the postwar local economic development of Italian provinces. Italy was the third largest recipient of Marshall Plan aid. It received $12 billion between 1948 and 1952, on average, 2.3 percent of its GDP for five years. Professor Giorcelli collected and digitized data on all 14,912 Marshall Plan reconstruction projects in Italy, as well as data on war damage documented by US authorities between 1947 and 1949, matched with provincial economic outcomes from the Italian Bureau of Statistics, as well as detailed data on Allied bombing during WWII, compiled by the US Air Force.
Professor Giorcelli documents that the Marshall Plan had a positive effect on local economic development. Provinces with more reconstruction funds experienced larger increases in agricultural production—between 10 percent and 20 percent for major crops. This effect started only after the completion of the first public infrastructure funded through the Marshall Plan. The fact that provinces with more bombings and greater damage were able to redesign their transportation system out of necessity might have played an important role. More efficient roads and railways might have allowed farmers to reach more distant markets more quickly, essentially increasing demand for their agricultural products. Consistent with this hypothesis, the estimated effect of reconstruction grants is positive and large for perishable crops (a threefold increase for fruit with a short shelf-life), but not statistically different from zero for products with a very long post-harvest life (8 percent decrease for tree nuts).
In addition to increased production, structural changes to the labor markets happened. In provinces with more reconstruction money, the number of agricultural workers decreased disproportionately by 21 percent. Manual labor was replaced with mechanical tools, thanks to a fourfold increase in the use of tractors. Workers who did not find postwar employment in agriculture were absorbed by the booming industrial and service sectors. In provinces with more reconstruction money, there was a larger increase in the number of active firms, especially those with fewer than ten employees. More efficient roads and railways might have decreased the barriers to entering the industrial sector.
Finally, Professor Giorcelli estimates the contribution of the Marshall Plan to Italian economic growth in the 1950s and 1960s: for every $1 additional reconstruction funds per capita that a province received (compared to others), its GDP per capita increased by $1.9 to $2. A back-of-the- envelope calculation shows that the Marshall Plan contributed 1.3 percentage points to Italy’s 5.9 percent average annual GDP growth rate during the 1950s, showing the transformational consequences of the Marshall Plan.
Starting July 1, 2020; Professor Moritz Meyer-ter-Vehn will be an Associate Editor at Econometrica. Econometrica publishes original articles in all branches of economics. Econometrica maintains a long tradition that submitted articles are refereed carefully and that detailed and thoughtful referee reports are provided to the author as an aid to scientific research, thus ensuring the high caliber of papers found in Econometrica. An international board of editors, together with the referees it has selected, has succeeded in substantially reducing editorial turnaround time, thereby encouraging submissions of the highest quality.
Congratulations!
On June 13, 2020 the Department of Economics, hosted it’s first ever Virtual Graduation Celebration for the 2020 graduates. With over 700 graduating students, this was not the most ideal way to celebrate all that they have accomplished over their time at UCLA. However, we are so proud of all our students and were happy we were able to celebrate this crowning achievement.
The program, videos and more will be accessible until June 13, 2021 https://virtualgrad.marchingorder.com/ucla/xiii
Lee Ohanian was recently featured as a top scholar on an episode of Hoover Institute’s online virtual briefing series. The briefing, “Steven J. Davis and Lee Ohanian: Unemployment, the Stock Market and our Economic Future” discusses how the current COVID-19 Pandemic is affecting the US economy.
The UCLA Department of Economics would like to congratulate Andy Atkeson and Moritz Meyer-ter-Vehn for being the co-winners of the Warren C. Scoville Distinguished Teaching Award for best undergraduate teaching in Winter 2020.
Andy Atkeson won this award while teaching ECON 173A – Introduction to Social Entrepreneurship. This course is a full-scale immersion into the world of social entrepreneurship, introducing the basics of business planning for social enterprises. Students are assigned in teams to work with participating social enterprises in Los Angeles area to implement new revenue-generating business plan for social enterprises to which they are assigned. Teams receive support from MBA student volunteers as advisers on how to work effectively together and how to resolve issues that arise with staff of assigned social enterprise.
Mortiz Meyer-ter-Vehn won this award while teaching ECON 106I – Organization of Firms. This course discusses the role of firms in traditional economic theory and modern developments in theory of firms. Topics include relationship between employer and employee, principal-agent models and moral hazard, formal versus relational contracts, successful firms as coherent systems of mutually supporting parts, property rights and asset ownership, boundaries of firms, employment versus independent contracting, internal organization of firms, role and levels of firm hierarchy.
Warren C. Scoville was a faculty member for the UCLA Department of Economics for 28 years before his death in 1969. This award is given quarterly in his name to the ladder faculty member who receives the highest teaching evaluation scores from his or her course.
