[PEN-L:32454] The Economics Biz

[michael perelman <michael@xxxxxxxxxxxxxxxxx>]

Columbia Buys Residence
To House Top Professor

Jon E. Hilsenrath,
Wall Street Journal


NEW YORK -- Columbia University has taken star wars for college
economics professors to a new level with the acquisition of an $8
million townhouse in Manhattan that will house one of its top
economists, Jeffrey Sachs.

In April, the university lured Mr. Sachs away from Harvard University,
where he earned a reputation as a confidant to leaders in developing
countries. He is now head of Columbia's Earth Institute and an adviser
to United Nations Secretary-General Kofi Annan, not to mention Bono, the
rock star and activist.

With student enrollment in economics classes booming, universities
across the nation have been engaged in a bidding war to lure star
economists, hoping that the appointments will attract the brightest
students and multimillion-dollar grants from foundations.

Before Mr. Sachs's arrival, the Earth Institute was little known outside
the world of environmental scientists. Its disparate collection of
research organizations, like the Goddard Institute for Space Studies and
the Lamont-Doherty Earth Observatory, focused mostly on issues of
geology and climate. The Institute also runs a 3.5-acre, glass-enclosed
research laboratory in Arizona known as the Biosphere.

Now, Mr. Sachs plans to use the institute to push a broad agenda focused
on what economists call sustainable development. This means the
university is keen to focus not just on the cold-hard formulas of
economics, but also on issues like disease and the environment and how
they affect poor economies.

"Jeff Sachs adds hugely to the global believability of a school. He is a
rainmaker who probably brings that much or more in consulting contracts
to Columbia and attracts top international students," says James Smith,
an economics professor at the University of North Carolina's business
school.

Recently, for example, the Earth Institute was awarded participation in
a $10 million joint grant with the World Health Organization from the
Gates Foundation to advise countries like Ghana, China and India on how
to combat infectious diseases.

University officials say the townhouse will not only serve as Mr.
Sachs's residence, for which he will pay faculty-rate rent, but the
first two floors and basement will also serve as offices and a reception
center, where the Earth Institute will host international dignitaries,
donors and scholars. The arrangement was previously reported in the New
York Observer.

For administrators at Columbia , the Earth Institute is about more than
just forging closer ties to the U.N. It is also about regaining old
glory. "Columbia's aspirations are no less than to be among the very top
universities in the world. That means having people of enormous
creativity and talent and we're prepared to compete in that world," said
Lee Bollinger, the university's president.

A half-century ago, the department was among the three top in the
country. It produced Nobel prize winners like Robert Mundell, who laid
the intellectual groundwork for the creation of the euro currency;
policy makers like Arthur Burns, the former Federal Reserve chairman;
and other luminaries, including trade theorist Jagdish Bhagwati. But the
department went through a long period of decline in the 1970s and 1980s.
That has been changing in recent years as the university has started to
pay top dollar to hire well-known economists such as Joseph Stiglitz,
the Nobel prize winner. Pay packages can be in the neighborhood of
$300,000 and appointments parceled out among different departments at
the university.

Some are puzzled by the attention being placed on the Earth Institute.
"I'm not really sure exactly what [the Earth Institute] does," says
Douglas Gale, chairman of the economics department at New York
University. "I know they take a global perspective and they are
interested in the environment and they have this bubble that people live
in for six months in Arizona. It is a strange kind of place because it
has its fingers in so many pies."


--

Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael@xxxxxxxxxxxxxxxxx