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Chicago Booth in the News, Winter 2012, Vol. 1

(Covering December 3, 2011 to January 3, 2012)

Here are highlights of the latest Chicago Booth news coverage. The digest below represents only a portion of recent coverage.

Section 1: News coverage of Chicago Booth.

  • FINANCIAL TIMES. “Booth has established itself as a center of entrepreneurship,” according to an article devoted entirely to Chicago Booth published December 12. Sixty-five companies started by Booth graduates in the past 15 years have raised about $230 million in funding and created roughly 1,000 jobs, the article said. “A lot of students come here to do entrepreneurship because … our New Venture Challenge teams raise real money,” said Professor Steven Kaplan. Matt Maloney, MBA ’10 was featured in the article. He is co-founder and CEO of Grubhub.com., which raised more than $84 million in funding in the past year. 
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  • THE TIMES OF INDIA. Booth’s new scholarship for MBA students from India was reported November 24. The scholarship, for students in the full-time program whose primary home is India when they apply for admission, is the result of a $1 million gift from the Tobaccowala Foundation of India, the article said. This news was reported earlier by the Financial Times.
  • THE WALL STREET JOURNAL. Employers looking worldwide for new MBA recruits in finance focus on Booth, Wharton and London Business School, according to survey results published December 7. The survey from QS Quacquarelli Symonds Ltd., a business education research company, surveyed 2,000 companies that recruit internationally.
  • THE WALL STREET JOURNAL. Booth was one of the schools featured in an article headlined “B-School Students Fuel Up For Exam Week,” published December 9. “University of Chicago Booth School of Business students are relieving stress with pickup ice hockey games,” the article said. “The games will be played at a nearby outdoor ice rink three to four times a week during finals,” said John Tough, a second-year student who participates. 
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  • CNC TELEVISION (China). Booth’s Annual Business Forecast and Economic Outlook Luncheon in Chicago made news December 5. Excerpts from forecasts by Professors Randall Kroszner and Austan Goolsbee were broadcast on this network and can be heard in English at the link below. 
    Watch video
  • XINHUA NEWS (China). The official Chinese government news agency covered Booth’s business forecast lunch (see item above). Professor Erik Hurst, a speaker at the event, was quoted in an article headlined “Recent drop in U.S. unemployment a mixed bag, say economists,” published December 11. There has been a decrease in the labor force participation rate of unskilled American men since the early 1980s, he said, which is directly related to the gradual decline of the U.S. manufacturing industry that has typically employed them. This decrease along with the still-high unemployment rate are what concerns Professor Hurst about the U.S. economy, according to the article. 
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Section 2: News coverage quoting Chicago Booth faculty.

 

  • THE WALL STREET JOURNAL. Professor John Cochrane published an op-ed titled “The Fed’s Mission Impossible,” December 29. The Federal Reserve’s capital proposals for banks “don’t go nearly far enough,” he wrote. “Putting less than one investor dollar at risk for every 10 borrowed dollars seems laughably low when we’re guaranteeing the debts. With a 50-50 chance of a banking tsunami coming across the Atlantic from Europe, you wonder why the Fed is allowing any dividends at all,” Professor Cochrane wrote. 
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  • BLOOMBERG NEWS. Professor Steven Kaplan published an op-ed titled “Romney Honed the Right Skills in Private Equity,” December 14. The skills Mitt Romney’s acquired as co-founder of Bain Capital are “both relevant and valuable in the White House,” Professor Kaplan wrote. “Private equity firms in general, and Bain Capital run by Romney in particular, have delivered strong results for their customers.” A Washington Post blog said this was one of the top op-eds of the week. 
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  • BLOOMBERG NEWS. Professor John Cochrane published an op-ed titled “How Bad Ideas Worsen Europe’s Debt Meltdown,” December 21. “Bailouts are the real threat to the euro,” he wrote. “The European Central Bank has been buying Greek, Italian, Portuguese and Spanish debt. It has been lending money to banks that, in turn, buy the debt. When the debt finally defaults, either the rest of Europe will have to raise trillions of euros in fresh taxes to replenish the central bank, or the euro will inflate away.” 
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  • FINANCIAL TIMES. Professor Raghuram Rajan published an op-ed headlined “Europe’s pain must be widely shared,” December 6. “Any proposed resolution to the European crisis over the next few days will have to be economically viable as well as politically palatable to both the rescuers and the rescued if it is to restore confidence to the sovereign bond markets,” he wrote. “This means paying attention not just to the plan’s technical details, but also to how it is presented.” 
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  • BLOOMBERG NEWS. An op-ed written by Professor Nicholas Polson titled “An Asset-Pricing Model for the Contagion Age,” was published December 7, co-authored with James Scott of the University of Texas at Austin. “Our asset-pricing model incorporates three volatility effects: cross-sectional clustering across countries (or markets), longitudinal clustering across time and directional clustering,” they wrote. “These aren’t part of traditional models.” 
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  • THE NEW YORK TIMES. Professor Richard Thaler wrote a portion of a column featuring blue-sky thinking on economic issues for 2012. He discussed health care spending and suggested that employers make it easier for employees to eat well while at work and easier to get some exercise during the workday. The column was published December 31. 
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  • THE NEW YORK TIMES. Professor Steven Kaplan was quoted in a front page article about income inequality headlined “Top Earners Not So Lofty in the Days of Recession.” The share of income received by the top 1 percent dropped to 17 percent in 2009 from 23 percent in 2007, the article said. “It’s very interesting that this has become such a big topic now when the numbers are back to where they were in the 1990s,” Professor Kaplan said. “People didn’t seem to be complaining about it then.” The article was published December 12. 
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  • THE NEW YORK TIMES. Professor Raghuram Rajan was quoted in an article headlined “Leaders Look to I.M.F., Again, as Euro Crisis Lingers,” published December 3. “Europe is rich enough,” he said. “It is not in net deficit, when you balance out all of the trade deficits and surpluses. What Europe needs right now is money that is willing to absorb losses – and the I.M.F. is not going to provide the money that absorbs losses.” Professor Rajan was chief economist at the I.M.F. from 2003 to 2006. 
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  • CNBC ASIA. Professor Steven Davis was guest host on the Squawk Box Asia program December 14. The recent volatility in financial markets is due in part to public policy uncertainty, he said. Professor Davis discussed his current research on the topic. 
    Watch video
  • THE TELEGRAPH (London). Research by Professor Marianne Bertrand was featured in an article headlined “Boys raised by traditional families ‘do better at school,’” published January 3. The newspaper called Professor Bertrand’s work “a major study.” She found that boys are more likely to perform well at school and avoid suspension than those brought up by single mothers. 
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The Guardian, another London newspaper, published a story about Professor Bertrand’s research December 29. 
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  • FOX BUSINESS NEWS. Professor Austan Goolsbee said the biggest concern to the U.S. economy right now is the situation in Europe. During an interview broadcast December 15, he also discussed how the latest economic data might impact President Obama’s re-election efforts. Professor Goolsbee was chairman of the President’s Council of Economic Advisers in 2010 and 2011. 
    Watch video
  • THE NEW YORK TIMES. Professor Steven Kaplan was quoted in an article looking at whether investment banks seeking underwriting roles in I.P.O.’s should be allowed to invest client money in prospective corporate clients ahead of a potential deal. “I’m sure it doesn’t hurt when you’re doing the I.P.O. bake-off to be an investor,” said Professor Kaplan, acknowledging that such investments might represent a perceived conflict. “A mutual fund of a bank is only going to make the investment if they think it’s a good investment, he said. Investment managers are typically paid based on the performance of their funds, not on the take of the firm’s investment banking business, Professor Kaplan noted in the December 19 article. 
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  • THE WALL STREET JOURNAL. Research by Professor Steven Davis was featured in an op-ed by Stanford Professor John Taylor titled “Want Growth? Try Stable Tax Policy,” published December 21. Professor Davis and his co-authors presented a paper showing the increase in policy uncertainty is one of the factors slowing economic growth. During 2011, 84 tax provisions were expiring, 10 times as many as expired in 1999, the op-ed said. 
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  • THE BOSTON GLOBE. Professor Anil Kashyap was quoted in an article about nomination of Harvard Professor Jeremy Stein to be a Federal Reserve governor. “He is one of the most brilliant economists of his generation,” Professor Kashyap said. He is a fast learner with “an uncanny ability to simplify complicated arguments.” Professor Kashyap has collaborated with Stein on research for 20 years, according to the article published December 27. 
  • BLOOMBERG TELEVISION. Professor Randall Kroszner discussed bank capital and liquidity requirements during an interview broadcast December 20. The Federal Reserve is taking steps to make sure banks have sufficient amounts of high-quality capital, he said. 
    Watch video
  • THE WASHINGTON POST. Professor Steven Kaplan was quoted in an article about Mitt Romney’s role in the private equity industry, including co-founding Bain Capital. Private equity has on the whole been good for American business, Professor Kaplan said in the December 21 article. “The basic evidence on private equity is they make the companies (which they purchase) more efficient.” 
  • CNBC-TV18 (India). Professor Raghuram Rajan discussed the Indian economy, its currency and its inflation outlook during an interview broadcast December 15. It is difficult for the Reserve Bank of India to bring interest rates down when inflation numbers are still high, he said. 
    Watch video
  • FINANCIAL TIMES. Professor Anil Kashyap was cited in article about securities fraud charges filed against six former top executives at Fannie Mae and Freddie Mac by the Securities and Exchange Commission. Last year, Professor Kashyap told the Financial Crisis Inquiry Commission that it “could do a big service” by forcing the companies to restate their exposure to risky loans based on a uniform definition. “The way they disclose is just unbelievably convoluted,” Professor Kashyap said in the December 16 article. 
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  • RUSSIA 24 TELEVISION (Moscow). Professor Randall Kroszner discussed the economic outlook and actions by the U.S. Federal Reserve Board during an interview that aired several times on this network December 13. He was a Fed governor from 2006 to 2009. Professor Kroszner’s remarks were translated into Russian during the 11-minute interview which is linked below. 
    Watch video
  • BBC TELEVISION. Professor Raghuram Rajan was featured during a one-hour documentary “The Party’s Over: How the West Went Bust,” broadcast December 4 on BBC2.
  • CHICAGO TRIBUNE. Professor Randall Kroszner was quoted in an article ahead to the 2012 economy. The big picture resembles “a sideways slide,” he said. “It’s growth, but not strong enough to spur job growth.” The article was published January 1. 
    Read article
     
  • CNBC. Professor Randall Kroszner discussed the European financial crisis during an appearance on the Kudlow Report December 5. Professor Kroszner said he isn’t sure Europe has the enforcement mechanism in place to limit deficits to 3 percent of GDP, as has been called for. 
    Watch video
     
  • THE ECONOMIC TIMES (India). A feature interview with Professor Richard Thaler was published December 23, titled “If choices are structured right, people can be nudged to do the right thing.” He was interviewed during a trip to Mumbai and New Delhi where he met with members of India’s Planning Commission and with corporate executives. 
    Read article
  • BLOOMBERG NEWS. Professor Randall Kroszner was quoted in an article about Federal Reserve action imposing tougher risk management standards on banks. “The motivation is to try and reduce fragility of the system and reduce interconnectedness,” he said. “But if the rules are not properly implemented or the definitions don’t properly capture the relevant risks, then you could actually increase interconnections rather than decrease it.” The article was published December 20. 
    Read article
     
  • REUTERS. Professor Raghuram Rajan was quoted in an article headlined “Worries grow over IMF loans to Europe,” published December 10. “The problem with some of these countries now is you’re getting to a point where (debt) is large enough that defaulting on the IMF is attractive enough if you want to reduce your debt,” he said. Professor Rajan earlier served as IMF chief economist. 
    Read article
  • CNBC. Professor Austan Goolsbee was guest host of the Squawk Box program December 2. We have to grow our way out of the economic problems facing the U.S., he said. “That’s the only way to do it.” 
    Watch video
  • FINANCIAL TIMES. Professor John Huizinga was quoted in an article headlined “Persistent risk is a fairly safe forecast,” published December 11. During the next 15 months, it is likely that either the U.S., the U.K. or Japan would run into a sovereign debt problem, he said. The reporter attended Booth’s annual business forecast and economic outlook conference in London where Professor Huizinga spoke. 
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  • ASSOCIATED PRESS. Professor Raghuram Rajan was quoted in an article headlined “Why S&P wields so much power in European crisis,” published December 6. Standard & Poor’s, the credit rating agency, is essentially warning Europe to fix its debt problem – or else, the article said. Professor Rajan cautioned against reading too much into the S&P’s motives. “It’s not their job to fix Europe’s fiscal situation,” he said. “Their job is of an observer who tells the investing public what any changes mean for the credit quality of European bonds.” 
  • THE NEW YORKER. A proposal by Professor Luigi Zingales to aid distressed housing markets was cited in an article headlined “Living By Default.” Professor Zingales and Law School Professor Eric Posner suggest that, in exchange for writing down mortgages in hard-hit areas, lenders would take an ownership stake in a house, getting a percentage of the capital gain when it is eventually sold. The article was published December 19. 
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  • THE WASHINGTON POST. Professor Austan Goolsbee was quoted in an article headlined “Is the euro zone’s flaw fatal?” published December 2. Southern Europe is tied to a more expensive currency than would otherwise be the case, the article said. “There’s no obvious way for Southern Europe to grow, and if they can’t grow, they can’t balance their budgets, no matter how much austerity they engage in,” he said. 
  • FINANCIAL TIMES. Research by Professor Christopher Hsee was featured in an article discussing distinction bias, the tendency to view two options as more dissimilar when evaluating them simultaneously, rather than separately. Professor Hsee found that consumers who visit a shop selling both Braun and Krups coffee makers would often evaluate one brand more favorably than consumers visiting a store stocking just that brand, the article said. 
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  • ASIAN NEWS INTERNATIONAL. Research by Professor Ann McGill was featured in an article headlined “Seeing brands as people can influence our social behaviors,” published December 3. Professor McGill found that thinking about brands as people can make a person either take on the brand’s characteristics or display the opposite characteristics, depending on how they feel about the brand, according to the article. The research studied an effect called behavioral priming.
  • CNBC.COM. Professor Austan Goolsbee was quoted in an article headlined “Small-Business Hiring is Showing Signs of Life,” published December 2. “Keep an eye on small business formation; if you start seeing that, that will be a great sign,” Professor Goolsbee said. “That will be getting us back to what used to be a normal recovery.” 
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  • THE GATED CITY (a book). Research by Associate Professor Hoyt Bleakley was cited in this recently-published book by Ryan Avent. Professor Bleakley’s research looked at why population rates stayed high in certain U.S. cities even though the initial reason for their existence ceased to be relevant over a century ago.
  • THE ATLANTIC. Research by Professors Canice Prendergast and Lars Stole was featured in an article headlined “The Behavioral Economist’s Guide to Buying Presents,” published December 14. Their research found that gifts are used to demonstrate our “certainty” about potential mates. The more familiar we are about a person, the more easily we can try and pick something specific to their tastes. “An individual who can show that he understands the preferences of his partners is likely to be a more desirable partner than one who has no idea what his partner wants or believes in,” Professors Prendergast and Stole found. 
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Section 3: Chicago Booth students and alumni in the news.

  • FORBES. Jeff Bishop, a current student in the Weekend M.B.A. Program, was named one of the top 30 leaders under age 30 in the energy field, according to an article published December 19. He has worked on wind projects in Morocco, Spain, Botswana and the U.S. with Horizon Wind Energy, now EDPR where he is vice president of business development, the article said. 
    Read article
  • CNBC. Patrick Doyle, MBA ’88 was named “Best CEO of 2011” by CNBC. Doyle, president and CEO of Domino’s Pizza, reduced the company’s debt by $200 million since the end of 2007 and its stock was up 110 percent during 2011, CNBC reported. “We are listening to our customers,” he said during an interview broadcast December 15. 
  • THE ECONOMIST. Sari Kaganoff, a current student in the Evening MBA Program, was featured in an article headlined “Of MBAs and motherhood,” published December 12. She is co-chair of the Mothers@Booth student group. The group helps students meet alumni who can give advice on managing “the juggle” after graduation, the article said. 
    Read article
  • CRAIN’S CHICAGO BUSINESS. Mu Sigma, a Northbrook, Ill.-based company founded by Dhiraj Rajaram, MBA ’03, received $108 million in new capital from investors, according to an article published December 28. The company says it is profitable and will use the investment to expand its services, the article reported. Mu Sigma employs 1,500 people, mostly in Bangalore, India. The new funding was led by General Atlantic, a Greenwich, Conn.-based private-equity fund, and included Silicon Valley venture fund Sequoia Capital. Sequoia put $25 million into Mu Sigma in June. 
    Read article
    The Wall Street Journal ran a similar story December 29. 
    Read article
  • CRAIN’S CHICAGO BUSINESS. Five Booth alumni were included on a list of the top 40 Chicagoans under age 40. They are Matt Maloney, MBA ’10, CEO of GrubHub.com; Dhiraj Rajaram, MBA ’03, CEO of Mu Sigma; Bryan Johnson, MBA ’07, CEO of Braintree; Kevin Willer, MBA ’10, CEO of the Chicago Entrepreneurial Center; and Jason Harinstein, MBA ’03, of Groupon. The list was published December 5. 
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  • FOX BUSINESS. A Q&A interview with Avi Stopper, MBA ’06 was posted December 14. He launched his company, CaptainU, using many of the lessons learned as a student at Booth, the article said. “Our business really embodies the spirit of the school: to be rational and rigorous about how we do things,” he said. “We are constantly testing new ideas through scientific methods and it’s always a work in progress.” CaptainU won Booth’s New Venture Challenge in 2009. 
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  • CRAIN’S CHICAGO BUSINESS. InContext Solutions, a company co-founded by Robert Gillespie, MBA ’11 received $1.5 million in addition venture funding from Hyde Park Angels and chipmaker Advanced Micro Devices, according to a December 6 article. The Chicago-based startup will use the money to expand, hiring additional sales and technology workers, Gillespie said. InContext Solutions, which makes 3-D “virtualization” software for consumer-product maker, tied for second place in Booth’s New Venture Challenge in 2009. 
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  • YAHOO! NEWS. Swingbyte, a company founded by Evening MBA students Alex Pedenko, Brian Payne and Nathan Wojtkiewicz received a $100,000 promotion services contract from Clique Studios, according to an article posted December 20. Swingbyte tied for third in Booth’s 2011 New Venture Challenge. The company developed a mobile golf swing analysis platform for golfers of all skill levels. 
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  • BUSINESS TIMES (Kuala Lumpur, Malaysia). Suria Suppiah, MBA ’07 was profiled in article about how Booth’s Executive MBA Program in Singapore helped advance his career. “The EMBA gives you the courage to make the decision when it is time to make the decision,” he said in the article published December 19. Suppiah is vice president of investments at Khazanah Nasional Berhad in Malaysia. 
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