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Booth in the News

Chicago Booth in the News, Winter 2011, Vol. 1

(Covering December 1, 2010 to January 3, 2011)

Here are highlights of the latest Chicago Booth news coverage. The digest below represents only a portion of recent coverage. To receive a copy of an article cited please reply to this e-mail or call

Section 1: News coverage of Chicago Booth.

  • BLOOMBERG BUSINESSWEEK. Booth graduates tied for first in accounting and ranked first in analytical skills in a new ranking of business school specialty categories published December 13. The ranking, based on a survey of corporate recruiters, puts Booth second in finance. Recruiters were asked which schools produce the strongest graduates in a variety of fields. In a related ranking, the recruiters ranked Booth second in category of "most innovative curriculum." All of the specialty rankings can be seen in this table.
  • BLOOMBERG BUSINESSWEEK. Booth was one of the schools featured in a story about alumni giving at leading business schools. During 2010, 14.6 percent of Booth alumni made donations to the school, according to a table accompanying the article. This compares with 23 percent at MIT Sloan, 27 percent at Harvard, 41 percent at Stanford and 67 percent at Tuck, the table shows. The article was posted December 9. The full table can be seen here. Here is an article accompanying the table.
  • ENJEUX LES ECHOS (Paris). A feature article about how faculty at Booth and the University's Economics Department responded to the financial crisis was published December 3 by this leading French magazine. Titled "The Chicago thinkers tested by the crisis," the article quoted Booth professors John Cochrane, Harry Davis, Randall Kroszner, Raghuram Rajan and Robert Topel. The reporter spent several days on campus doing interviews for the story, which can be seen in French here.
  • BUSINESS TIMES (Singapore). Predictions made at Booth's annual Business Forecast Luncheon in Singapore were featured in an article headlined "Eurozone not out of the woods yet," published December 15. The risk of insolvency spreading in the eurozone is still in the air, despite the best efforts of the European Central Bank, according to the article.

Section 2: News coverage quoting Chicago Booth faculty.

  • THE WALL STREET JOURNAL. An op-ed written by Professor John Cochrane headlined "'Contagion' and Other Euro Myths," was published December 2. "Over the weekend, European finance ministers and the International Monetary Fund announced a 90-billion-euro fund to bail out Ireland," he wrote. "They also promised that no sovereign bondholder would lose a cent, at least through 2013. The amount of fuzzy thinking behind this decision is even bigger than the heap of euros now being shoveled upon Dublin. The bailout is being justified on grounds of containing 'contagion.' This is nonsense." Read More
  • THE NEW YORK TIMES. An op-ed written by Professor Richard Thaler headlined "It's Time to Rethink the Charity Deduction," was published December 18. "In light of our prolonged economic doldrums, a decision to cut taxes for now is both popular and justifiable," he wrote. "But, eventually, Congress will have to face up to the fact that to deal with the long-run deficit problem we have to raise tax revenue as well as cut spending." Read More
  • THE NEW YORK TIMES. Professor Raghuram Rajan participated in an online debate "Should Megabanks Be Broken Apart?" published on the newspaper's website December 7. "A blanket ban on institutional size would merely eliminate good as well as bad large banks," he wrote. "…Regulators should increase the costs of becoming large so that only the most efficient survive." Read More
  • SYDNEY MORNING HERALD (Australia). An op-ed written by Professor Raghuram Rajan headlined "Micro-loan, macro-care," was published December 14. "The benefits of micro-finance are in danger of being overhyped," he wrote. "There are not that many successful micro-businesses that the poor can start solely with the help of loans, because skills and management abilities are also often necessary. Nevertheless, the benefits are real: while there is little evidence micro-finance sets substantial numbers of poor people on the path to riches, it does help them save, smooth consumption, handle emergencies and expand existing businesses." Read More
  • BLOOMBERG BUSINESSWEEK. An op-ed written by Professor Luigi Zingales headlined "China Needs a U.S. Lesson," was published December 6. "The lack of freedom in China is the main cause of imbalances in the world," he wrote. "It is well-known that the Chinese trade surplus, or the excess of its exports over its imports, is the counterpart of too much saving, which leads to unfair advantages and possibly deflationary pressure on a global scale … The U.S. government should stop bashing China for it currency policy, while the Federal Reserve engages in massive quantitative easing. It's hypocritical and leaves the Chinese with an easy way to respond. Instead, the U.S. should regain the high ground and lecture them on what's best in America: freedom." Read More
  • FINANCIAL TIMES. Professor Canice Prendergast was featured in an article about executive pay headlined "Are they only in it for the money?," published December 1. "There is a danger at the recruitment stage that if you reward people well you will recruit people who like the money, rather than the job itself," he said. "Performance pay can lead people to concentrate only on what can be seen to be achieved." Read More
  • THE NEW YORK TIMES. Professor Randall Kroszner was quoted in an article about the four new voting members of the Federal Open Market Committee and how their addition could influence the Fed's decisions. "It's true that voting members get more attention in the press," Professor Kroszner said, "but whether people are voting or nonvoting members, everyone has an equal voice at the table and an equal part in the discussions." The Fed is "a consensus-based organization." Professor Kroszner was a Fed governor was 2006 to 2009 and a voting member of the FOMC. Read More
  • CNBC TELEVISION. Professor Randall Kroszner discussed the state of the economy and the implications of QE2 during an appearance on Squawk Box December 2. By the second quarter of 2011, there could be some wind-down of the Federal Reserve's quantitative easing if the employment data are strong at the time, he predicted. Professor Kroszner did a separate interview with CNBC Asia on December 12.
  • BLOOMBERG BUSINESSWEEK. Professor Raghuram Rajan's latest book, "Fault Lines," was named "best crisis book by an economist," in an article published December 20. "The University of Chicago economist predicted the crisis two years before it hit," the article said. "Like Cassandra, he was mocked. We can only hope policy makers will heed him now." Read More
  • FINANCIAL TIMES. Research by Professor Jean-Pierre Dube on the impact of digital video recorders (DVRs) on shopping behavior was featured in an article published December 20. Owning a DVR does not influence the demand for advertised products despite its ad-skipping feature, his research found. Professor Dube discussed the study during a live interview on KGO Radio, San Francisco, December 13. FOX CHICAGO NEWS posted an article about the research December 13.
  • REUTERS. An entire article based on research by Associate Professor Amir Sufi headlined "It takes two to tango in the subprime mess," was published December 5. "Without a hint in its academic title ('The Political Economy of the Subprime Mortgage Credit Expansion'), it has a lot to do with the confluence on Pennsylvania Avenue in Washington of two powerful forces that helped to drive the expansion too far," the article said. His research provides "suggestive evidence" that two interest groups influenced government policy as mortgage credit to subprime borrowers was expanded enough in 2002-2006 to be "responsible for the subsequent mortgage default crisis."
  • PBS TELEVISION. Professor Raghuram Rajan discussed the U.S. economy during a five minute interview on "The Nightly Business Report" broadcast December 27. He said the Federal Reserve Board's strategy of low interest rates and buying government bonds is not the right approach to bring down unemployment now. "I think it was the right one at the beginning of the recession," Professor Rajan said. "But right now the problem is many of the job losses are in areas like construction, which aren't going to come back. What we really need to think about is how to get people who used to be in that industry back into the work force. And the kinds of things we need to think about are worker retraining, re-skilling." Read More
  • THE NEW YORK TIMES. Research by Professor Marianne Bertrand was featured in an article headlined "M.B.A.'s Have Biggest 'Mommy Penalty,' Doctors the Smallest." The research, which studied Booth graduates from 1990 to 2006, found that women M.B.A.'s who have taken off 18 months from their career to raise children suffered a severe income penalty, leaving them earning 41 percent less on average than male M.B.A.'s, the December 6 article said. Professor Bertrand's research was conducted jointly with two Harvard faculty members. Read More
  • THE NEW YORK TIMES. Professor Steven Kaplan was quoted in an article headlined "Carlyle Buys Stake in Claren Road," published December 6. Carlyle isn't the only big private equity firm flush with cash and looking to expand, according to the article. "There is an economy of scale in having different asset classes and going to potential investors with a number of products," Professor Kaplan said. "The flip side is you've got to maintain the performance." Read More
  • CHICAGO TRIBUNE. Professor Erik Hurst discussed his prediction for housing prices in an article published December 10. Nominal home prices, or home prices not adjusted for inflation, will remain relatively stable in 2011, he said. "Some months they're going to decline a little bit, and some months they're going to go up a little bit," he said. "Are we going to see anything like what we saw in 2008 and 2009? No. Are we going to have months where prices are going to dip? Yes." Read More
  • REUTERS. Professor Raghuram Rajan was the subject of a feature article headlined "Raghuram Rajan on what makes a successful capitalist society," published December 7. "Capitalist economies work well when everybody has access to the basic conditions they need to compete: access to education, access to health care, and access to finance," he said. "In economies where access is not widespread, you have deeper problems." A video interview with Professor Rajan accompanied the story. Read More
  • CHICAGO TRIBUNE. Clinical Professor James Schrager was quoted in an article about the break up of Fortune Brands into three companies. "It's a classic smart move," he said. "There's a very simple corporate strategy: Focus equals power." While it was trendy for companies to acquire disparate businesses in the 1970s, most were divesting by the late 1980s, Professor Schrager said in the article published December 8. Read More
  • SAN FRANCISCO CHRONICLE. Clinical Associate Professor Ira Weiss was quoted in an article headlined "Morale, client worries led Groupon to spurn Google," published December 7. Groupon's rejection of Google's $6 billion buyout attempt created a great deal of buzz in early December. "You can set up your own daily deal website in an hour," Professor Weiss said. "They happen to have a lead on it, but if I were them I would have sold for that price." Read More
  • LIVE MINT.COM (India). A Q&A interview with Professor Steven Kaplan, headlined "There's been a bias against VC in the U.S.," was published December 20.
  • CNN INTERNATIONAL. Professional Raghuram Rajan discussed President Obama's proposal to extend unemployment benefits and tax cuts during an interview December 7. He appeared on the "Quest Means Business" program from London.
  • BLOOMBERG TELEVISION. Professor Randall Kroszner defended the quantitative easing program of the Federal Reserve during a live interview from Seoul December 6. "It was the right move to buy insurance against deflation," he said.
  • BLOOMBERG TELEVISION. Professor John Huizinga gave his outlook for the U.S. economy during an interview in London December 3. Professor Huizinga was in London to speak at Booth's annual business forecast lunch.
  • FOREIGN POLICY MAGAZINE. Professor Richard Thaler was featured as one of the "100 Global Thinkers of 2010," in the December issue. He was cited "for bringing behavioral economics out of the ivory tower." Professor Raghuram Rajan was also among the 100, for his "spirited debate over the roots of the global financial meltdown." Read More
  • CHANNEL NEWS ASIA. Professor Anil Kashyap was quoted in an article about China's economy. Although China's yuan has appreciated just over 2 percent against the U.S. dollar since June 19, experts believe it won't let the currency strengthen at a much quicker pace. "I think it is a mistake because it is in their own interests to rebalance their own economy and they ought to be doing it for that reason," Professor Kashyap said. He made his remarks in Singapore where he spoke at Booth's annual business forecast luncheon. Read More
  • BBC TELEVISION. Professor Richard Thaler discussed his latest book, "Nudge: Improving Decisions About Health, Wealth, and Happiness," during an appearance on the popular Newsnight program December 3. He explained how the ideas in the book are being applied to UK government regulation policy. The host said the book should be on everyone's Christmas list.
  • STRAITS TIME (Singapore). A Q&A interview with Professor Raghuram Rajan headlined "Spotting world economy's fault lines," was published November 30. "What I've been trying to push – and it's harder than it seems – is the notion that the U.S. has a structural problem," he said. "Again and again over the last several years, the U.S. has got it wrong … What it needs to do is fix its (structural problem) – as well as the mortgage problem, bank capital problem, and reduce uncertainty in corporations so that they will go out and invest more." The article noted that Professor Rajan's latest book, "Fault Lines: How Hidden Fractures Still Threaten The World Economy," was named the Financial Times/Goldman Sachs Book of the Year for 2010.
  • WBEZ RADIO (Chicago). Professor Steven Kaplan was featured in a story about Chicago's efforts to become an entrepreneurial center. "I've had in my office a couple of East Coast venture capital firms saying we now view Chicago as a place to look for businesses," he said. "That hasn't happened in my memory." Also featured in the story was Ashish Rangnekar, MBA '11, co-founder of Watermelon Express. Read More
  • KIPLINGER'S PERSONAL FINANCE. Research by Professor George Wu on negotiation was featured in an article headlined "Master the Modern Art of Haggling," published in the January issue of this magazine. A trap we fall into is not bidding far enough below the maximum we're willing to pay. Professor Wu discovered in a study that even when we think we've bargained for the best possible deal, we probably paid too much. Read More
  • THE ECONOMIST. Some of the ideas contained in "Nudge," Professor Richard Thaler's latest book, have caught the attention of Britain's Conservative health secretary, according to an article published November 30. The secretary wants to use behavioral economics to help improve that country's public health. The central idea behind Nudge is that people can be coaxed rather than forced into better decisions by often quite subtle changes in the way they are framed, according to the article. Read More
  • SIFY.COM. New research by Professor Ann McGill was featured in an article headlined "Risks with human characteristics make 'powerful' consumers 'feel lucky,'" posted December 27. The study showed that people who feel powerful are more likely to believe they can beat cancer if it's described in human terms. Read More
  • CHICAGO TRIBUNE. "Fault Lines," the latest book written by Professor Raghuram Rajan, was named one of four business books "to get your economic juices flowing." In the book, Professor Rajan "proposes that the economic downturn was a result of the current global economic system, which is too dependent on the overspent American consumer," according to the article published December 10. Read More
  • REUTERS. Emeritus Professor Marvin Zonis was quoted in an article about South Africa's ascension to the BRIC group of major emerging economies -- Brazil, Russia, India and China. China recently asked South Africa to join the group. "This is something that China sees in its own interest with its aim of understanding the future of Africa and becoming an even bigger presence there," Professor Zonis said. "It is really smart on the part of China to do this and it is also really good for South Africa. It legitimizes South Africa as a future global power and as an investable country." The story was published December 29. Read More
  • MORTGAGE NEWS DAILY. Separate research by Associate Professor Amir Sufi and Assistant Professor Amit Seru was featured in an article headlined "Does Having 'Skin in the Game' Matter in the Mortgage Business?," published December 13. Professor Sufi found that the ease of securitizing subprime mortgages resulted in a big expansion of mortgage credit to zip codes with a higher percentage of households with poor credit scores but no corresponding evidence of increased income. Professor Seru's research found that mortgages with borrowers with FICO credit scores just above a 620 threshold are much more likely to be securitized than mortgages just below 620, but default rates are higher for securitized mortgages with FICO scores just above 620 than for those just below. This suggests originators are less diligent screening loans they expect to securitize, the article said. Read More
  • CORREIO BRAZILIENSE (Brasilia, Brazil). Clinical Professor Michael Gibbs was featured in a Q&A interview published December 12. He gave advice on how professionals can leverage their experience during the current economic climate in Brazil, the benefits of having an advanced degree, and what Brazil can learn from India and China.
  • THE ECONOMIST. Adjunct Professor Travis Bradford was quoted in an article about renewable energy headlined "Solar cells are getting cheaper as subsidies subside." American utilities are signing up for renewable energy mainly because regulators insist on it, the article said. But solar's improving economics are making this imposition less onerous. Professor Bradford said taking in account all costs of construction including financing costs, a state-of-the-art solar plant in a sunny state is broadly competitive over its life, with a new "peaker" gas-fired station, turned on only when demand is at its highest. The article was published December 9. Read More
  • HUFFINGTON POST. An op-ed written by adjunct Professor Travis Bradford titled "Just Say 'No' to (Bad) Climate Deal," was published December 7. "The Cancun climate negotiations to replace the expiring UN's Kyoto Protocol suggest that there must be a real sense of urgency around the issue of climate change, considering the bruising that took place last year in Copenhagen," he wrote. "For those who are most concerned about climate change, another failure may be the best possible outcome in Cancun." The op-ed was co-authored with Anu Bradford. http://www.huffingtonpost.com/anu-bradford/just-say-no-to-bad-climat_b_793494.html

Section 3: Chicago Booth students and alumni in the news.

  • CHICAGO TRIBUNE. Two companies started by Booth students were featured in an article headlined "Groupon's success adds luster to Chicago's startup community," published December 6. Watermelon Express, co-founded by Ashish Rangnekar, MBA '11, and GrubHub, co-founded by Matt Maloney, MBA'10, were cited as examples of other companies that have gained attention from potential investors. Watermelon Express received funding from Lightbank, a fund operated by Groupon co-founders Eric Lefkofsky and Brad Keywell, and GrubHub recently raised $11 million from a Silicon Valley firm, the article said. Read More
  • THE NEW YORK TIMES. Morgan Chia-Wen Sze, MBA '93, was featured in an article headlined "Goldman Trader Set to Create Fund," published December 16. Sze, global head of the proprietary trading desk that Goldman Sachs is shutting down, is preparing to create his own hedge fund, to be called Azentus Capital, the article said. The fund could raise up to $1.5 billion, according to a Financial Times article. Sze became a managing director at Goldman 10 years after graduating from Booth, the New York Times reported. Read More
  • CHICAGO TRIBUNE. Joe Mansueto, MBA '80, is the first billionaire Chicagoan to commit to giving away half of their wealth, according to an article published December 10. Mansueto, CEO of Morningstar, said yes to Warren Buffett's request that he take the Giving Pledge. "I think I knew for a long time that I wanted to give the bulk of what I earned away," Mansueto said. Fifty seven billionaires have committed to the Giving Pledge and agreed to give away half of their wealth, the article said.
  • CRAIN'S CHICAGO BUSINESS. Byron Trott, MBA '82, was featured in an article headlined "Byron's billionaires' club," published December 20. Trott's recently-formed BDT Capital Partners has attracted $2 billion from investors, the article said. Previously Trott was vice-chairman of investment banking for Goldman Sachs. He joined Goldman immediately after graduating from Booth.
  • BLOOMBERG BUSINESSWEEK. Glen Senk, MBA '80 was fifth on the magazine's list of the 25 highest paid CEOs with an MBA. Senk is CEO of Urban Outfitters. His total compensation during the most recent fiscal year was $29.9 million, according to Businessweek. His first job after graduating from Booth was an assistant buyer for Bloomingdale's. Read More