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Chicago Booth in the News, Spring 2011, Vol. 3

(Covering April 16 to April 29, 2011)

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 (London). An article headlined “Chicago Booth increases MBA scholarships to the ex-military,” was published April 26. All military veterans studying at the Harper Center campus who qualify for the Yellow Ribbon program will receive $10,000 a year in scholarship support from Booth beginning in September 2011, the article said. The U.S. Department of Veterans Affairs will contribute an additional $10,000 per year. Previously only nine veterans a year received the scholarships at Booth. “We are delighted to offer this additional support to veterans because they bring a unique depth and maturity to the MBA experience, enriching Chicago Booth and their classmates,” said Kurt Ahlm, associate dean for student recruitment and admissions. Read more
  • mbaMISSION.COM. A long Q&A interview with Kurt Ahlm, Booth’s associate dean for student recruitment and admissions, was posted April 25. “Being in a Chicago Booth classroom in a very special experience,” he said. “The commitment to teaching is embedded deep in our culture, and it is something we not only take pride in but it is something we are recognized for.” When asked if Booth is trying to increase enrollment of certain groups of students, Ahlm responded, “No. At Booth we do not employ any quotas in our review process. We simply look to enroll a diverse, smart group of students who fit well with the values and culture of Booth.” Read more
  • 21ST CENTURY BUSINESS HERALD (Beijing). Chicago Booth is expanding its outreach to employers in Asia in an effort to help the growing number of students and alumni who have targeted their job search to that part of the world, according to an article published April 15. As companies in China and India grow, there will be an increased need for management talent which will help ensure a steady flow of students to Booth from those areas, Dean Kumar said during an interview with this newspaper during his recent trip to China. A similar article appeared in China Business News April 19 based on a separate interview with Dean Kumar.
  • THE JAKARTA POST (Indonesia). Worldwide Booth Night made news April 20 when Scot Marciel, U.S. ambassador to Indonesia spoke at the Jakarta location for the global alumni networking event. Many Americans still have prejudice toward Muslims, he said, while Indonesia often regards the U.S. as having a double standard in dealing with the Muslim world. But progress is being made in the U.S. to increase understanding between the two countries, Marciel told the Booth audience.

Section 2: News coverage quoting Chicago Booth faculty.

  • THE WALL STREET JOURNAL. Professor Anil Kashyap published an op-ed titled “Let Tepco Go Bankrupt, If It Must,” April 19. “A utility is not systemically important enough to warrant a bailout,” he wrote, referring to Tokyo Electric Power Co., owner of Fukushima Daiichi power plant. “Media reports suggest that Tokyo is considering rescuing Tepco to calm financial markets,” Professor Kashyap wrote. “But this would be the worst option. Instead, Tepco should be allowed to face bankruptcy if necessary.” Professor Kashyap co-wrote the article with Takeo Hoshi and Ulrike Schaede, professors at the University of California San Diego School of International Relations and Pacific Studies. Read more
  • THE NEW YORK TIMES. Professor Richard Thaler wrote the Economic View column headlined “Show Us the Data. (It’s Ours, After All.),” published April 23. “Companies are accumulating vast amounts of information about your likes and dislikes,” he wrote. “The more they know, the more money they can make. Here is a guiding principle: If a business collects data on consumers electronically, it should provide them with a version of that data that is easy to download and export to another Web site. Think of it this way: you have lent the company your data, and you’d like a copy for your own use.” Read more
    An interview with Professor Thaler can be heard at 8:42 in this New York Times podcast: Listen to interview
  • THE WALL STREET JOURNAL. Professor John Cochrane published an op-ed titled “Why the 2025 Budget Matters Today,” April 28. “Governments with no plausible plan to meet their obligations risk a run by investors,” he wrote. “It’s happened abroad, and it can happen here … The path to higher economic growth and higher tax revenue is to lower tax rates, broaden the tax base by eliminating deductions and breaks, simplify the obscenely complex tax code, and remove growth-suffocating regulation.” Read more
  • THE NEW YORK TIMES. Professor Robert Fogel’s new book was featured in an article headlined “Technology Advances; Humans Supersize,” published April 26. Research for the book was “one of the most ambitious projects undertaken in economic history,” the Times said. “For nearly three decades, the Nobel Prize-winning economist Robert W. Fogel and a small clutch of colleagues have assiduously researched what the size and shape of the human body say about economic and social changes throughout history, and vice versa,” the article began. “Their research has spawned not only a new branch of historical study but also a provocative theory that technology has sped human evolution in an unprecedented way during the past century.” The new book summing up the work is titled “The Changing Body: Health, Nutrition, and Human Development in the Western World Since 1700.” Read more
  • THE WALL STREET JOURNAL. Research by Professor Jesse Shapiro was featured in an article headlined “How Gasoline Price Hikes Affect Buying Choices,” published April 25. He found that while rising gasoline prices cause more people to put regular in their tank instead of premium, consumers are less willing to switch to a cheaper brand of orange juice. “If anything, the direction of our estimates suggests that higher gasoline prices tend to increase the demand for higher-quality orange juice brands,” according to the study. Read more
  • THE WALL STREET JOURNAL. Research by Professor Steven Kaplan was featured in an article headlined “Why the Rich Envy the Super-Rich,” published April 27. CEOs earn less than they did in 2000 and much less than hedge fund managers, private-equity chief, investment bankers and others, the research found. “Income inequality, particularly at the top end, increased substantially from 1980 to 2000,” Professor Kaplan said. “CEO’s get a bad rap. They make a lot of money relative to you and me, but they don’t make a lot of money relative to these other folks.” Read more
  • CNBC TELEVISION. Professor Randall Kroszner did a live interview the morning of Fed Chairman Ben Bernanke’s press conference April 27. He told the interviewer if he could ask a question to Bernanke it would be: “What are the key indicators you are going to look at to determine when you’re going to start tightening monetary policy.” Professor Kroszner also said he would ask “How do you see the unwinding occurring?” The interview was broadcast on the Squawk Box program.
  • NPR MORNING EDITION. Professor Randall Kroszner discussed what happened during Fed Chairman Ben Bernanke’s news conference during a broadcast that aired April 28. The most newsworthy thing to come out of the news conference, Professor Kroszner said, was Bernanke’s definition of the “extended period” language used by the Fed to describe how long it will keep interest rates at current levels. Bernanke said “extended period” probably means through a couple of upcoming meetings of the rate-setting Federal Open Market Committee. “That’s a useful signal to the market,” Professor Kroszner said. Listen to broadcast
  • THE WALL STREET JOURNAL. Professor Nicholas Epley was quoted in an article about taxpayers who overpay their income tax during the year in exchange for receiving a large refund the next year. Even though money is fungible in theory, it isn’t in practice, the article said. “To most people, a $3,000 check feels very different from $3,000 dribbled out in paychecks over a year,” Professor Epley said. The article, headlined “Refund Madness: It’s in the Air,” was published April 16. Read more
  • FINANCIAL TIMES (London). Professor Raghuram Rajan was quoted in an article about actions taken by the Federal Reserve Board. He was a skeptic about the Fed’s $600 billion round of asset purchases called QE2, but says all the Fed can do is prepare for a slow rise in interest rates, according to the article. “The problem with monetary policy is that you’re imprisoned by the way you’ve talked about it and the expectations that you’re created,” Professor Rajan said in the article published April 19.
    Read more
  • THE WALL STREET JOURNAL. Professor Anil Kashyap was quoted in an article headlined “Economists, Readers Offer Questions for Bernanke,” published April 27. If he could have attended Fed Chairman Ben Bernanke’s news conference, here is what Professor Kashyap would have asked: “It seems as if QE2 has been almost too successful, in that talk of deflation has disappeared. Does this validate the approach you outlined in your 2003 speech to the Japan Society of Monetary Economics?” The article noted that Professor Kashyap is an expert on Japan’s economy and a long-time critic of the Bank of Japan. Read more
  • XINHUA NEWS AGENCY (China). Dean Kumar was featured in an article headlined “Dean of University of Chicago Booth School of Business: Tackle Price Hikes with Operations Management,” published April 12. As the price of raw materials rises, companies will increasingly look for ways to become more efficient rather than simply rely on passing on the higher costs to customers, he said during an interview in Beijing with this official Chinese government news service. As China’s economy continues to expand, the need for educated managers will grow, Dean Kumar said. He was interviewed during his recent trip to China.
  • FOX BUSINESS TELEVISION. Professor Randall Kroszner discussed Federal Reserve policies during a live interview April 21. Fed policies have built the foundation for a private-sector, self-sustaining recovery, he said, adding that corporate earnings and profits will likely continue.
  • LA STAMPA (Turin, Italy). Professor Luigi Zingales was named lead independent director of Telecom Italia, according to an article published April 14.
  • FAST COMPANY. Research by Professor Steven Kaplan on CEO pay was featured in an article headlined “CEOs Feel Poor When Compared To America’s Truly Wealthy,” published April 26. The pay inequity he found in in the research conducted before the latest economic crash is still true today, Professor Kaplan said. “The top 25 hedge fund managers combined appear to have earned more than all 500 S&P CEOs combined (both realized and ex ante),” Professor Kaplan wrote in his original paper. Read more
  • THE ECONOMIST TIMES (India). Professor Raghuram Rajan discussed the global economy and banking reforms in India during a long Q&A interview published April 13. The article noted that he is an economic advisor to Indian Prime Minister Manmohan Singh and a former chief economist for the International Monetary Fund.Read more
  • KIPLINGERS. Research by Professor Eugene Fama was featured in an article headlined “How to Find Attractive Value Stocks,” in the May issue. Value stocks have, over time, thrashed growth stocks, the article said. Professor Fama’s research that differentiates between growth and value by using price-to-book-value ratios finds that over the past 81 years, large-cap growth stocks have returned an average of about 9 percent annualized gains, compared with 11 percent of value stocks. For small caps, the difference is even greater. Read more
  • WBEZ RADIO (Chicago). Professor Randall Kroszner was featured in a segment titled “A Fed Governor Looks Back on a Wild Ride,” broadcast April 25. During an interview, he reflected on his years as a governor of the Federal Reserve System from 2006 to 2009. Listen to interview
  • WBEZ RADIO (Chicago). Professor Pradeep Chintagunta was featured in a segment on the growing popularity of QR codes in advertising. Quick response bar codes that can be scanned with smart phones have potential as an advertising tool, he said. “If this is associated with some kind of promotional offer, like a discount, then it’s more likely that customers will feel inclined to scan it.” The segment aired April 21.
    Listen to broadcast
  • NATURE. Clinical Professor Ellen Rudnick was quoted in an article about scientists and researchers who turn to venture capital firms to help take their discoveries from the lab to the marketplace. “It’s not just about money, it’s about chemistry,” she said. “You want somebody there whom you trust and who really understands your business. You have to think of them as a marriage partner.” The article was published April 20. Read more
  • SCIENCE MAGAZINE. Research by Assistant Professor Jane Risen was named an “Editor’s Choice” selection in the April 22 issue. She found that being in a warm room can make the idea of global warming seem more likely. Professor Risen and co-author Clayton Critcher from the Haas School of Business at University of California Berkeley found that when people feel warmer – either because they are out in the hot sun or because they are in an overheated room – they believe in global warming more. Read more

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

  • USA TODAY. David Lieb and Jacob Mintz founded Bump Technologies while students at Chicago Booth and their Bump app for the iPhone and Android phones has become “wildly popular,” according to a feature article published April 19. The app has been downloaded 30 million times and the company has banked $20 million from venture capital firms, the article said. Their company tied for first place in Booth’s New Venture Challenge in 2009. Read more
  • THE NEW YORK TIMES. Michael Klingensmith, MBA’ 76, was featured in an article headlined “A Native Son Revitalizes His Paper,” published April 17. He is publisher of The Star-Tribune in Minneapolis. Previously he was “one of three powerful executives who controlled Time Inc., the biggest magazine publisher in the world,” the article said. Read more
  • THE TELEGRAPH (London). Bart Becht, MBA ’82, was profiled in an article headlined “Bart Becht: profile of a ‘marketing guy’ who cleaned up,” published April 14. “Reckitt Benckiser’s long-term shareholders certainly owe Bart Becht a pat on the back as he prepares to relinquish the chief executive’s seat,” the article said. Since he became CEO in 1999, shareholder returns have skyrocketed and “the holy grail at Reckitt, operating profit margins, have increased from 11.7 per cent in 1999 to 26.4 percent now.” Read more
  • CRAIN’S CHICAGO BUSINESS. Levoi Brown, a 2011 graduate of the Executive MBA Program, was profiled in the People column April 18. He is senior vice president and director of commercial real estate at Urban Partnership Bank in Chicago, successor to ShoreBank, which failed last August. His plan is to hire a lending team and create loan products to serve neighborhoods battered by foreclosures and job losses while keeping the bank from creating a pile of bad loans like its predecessor, the article said. “Now’s the opportune time” to lend, Brown said. Read more