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Booth in the News; Spring 2012, Vol. 1

(Covering February 29 to March 25, 2012)

Here are highlights of the latest Chicago Booth news coverage. The digest below represents only a portion of recent coverage. Questions about this summary should be directed to Allan Friedman, executive director of communications, by reply e-mail or by calling 773-702-9232.

Section 1: News coverage of Chicago Booth.

  • U.S. NEWS & WORLD REPORT. Booth ranked second in finance and second in accounting in the magazines annual ranking of the best business schools published March 13. Our executive M.B.A. program also ranked second and our part-time M.B.A. program tied for second. Among full-time MBA programs, Booth tied for fourth. Last year we tied for fifth. The top 10 schools this year are: 1) Harvard and Stanford, tied, 3) Wharton, 4) Booth, MIT and Kellogg, tied, 7) Haas, 8) Columbia, 9) Tuck, 10) Yale. 
    Read article
  • CRAINS CHICAGO BUSINESS. Booths New Venture Challenge received a record number of applications this year, according to an article published March 3. "Would-be entrepreneurs eager to create the next big thing are flooding into the University of Chicagos business plan competition," the article said. There were 119 entries, up from 89 a year ago, according to Professor Steven Kaplan "The program has seen a surge in interest as more students come to Booth looking to start their own companies," Crains reported. 
    Read article
  • CHICAGO TRIBUNE. The Energy Policy Institute at Chicago, a joint venture of Chicago Booth and the Harris School of Public Policy, received a $1.5 million gift to launch an initiative to study the economic and policy impact of oil and alternative transportation fuels, according to an article published March 15. The gift will help EPIC do data-driven research that will lead to "sound, evidence-based energy policy decisions," said Professor Robert Topel, co-director of EPIC. The gift came from the California-based Fuel Freedom Foundation. 
    Read article
  • BLOOMBERG BUSINESSWEEK. Booth was among the top five schools where undergraduates would like to get their MBA, according to the magazines ranking of undergraduate business schools. "For the Class of 2012, four of five students intend to pursue a career immediately. Of those, half plan on getting an MBA within the next five years," BusinessWeek wrote. "For that group, the early frontrunners for their B-school tuition money are NYU-Stern, Harvard Business School, Columbia, Chicago Booth, and Stanford." The article was published March 21. 
    Read article
  • U.S. NEWS & WORLD REPORT. Booth was featured in an article headlined "M.B.A.s Are Hot Once More: Graduates are finding new opportunities in tech firms and abroad," published March 14. Booths student-led High Tech Group has seen its membership grow from 120 members to more than 200 in just one year, said Nima Merchant, associate director of employer relations. 
    Read article
  • BUSINESS TIMES (Singapore). Chicago Booth is doing a strategic assessment of its global strategy, Dean Kumar explained during an interview published March 5. "We want to make sure that the kinds of activities were doing outside the U.S. are the ones that take maximum advantage of our strengths and deliver maximum value to the markets theyre in," he said. One of his other goals is to broaden the impact and reputation of the school beyond its traditional strengths in areas such as finance, economics and accounting. For Booth students, one priority of Dean Kumars is to support those with entrepreneurial aspirations, the article said.
  • U.S. NEWS & WORLD REPORT. Booths Executive M.B.A. Program was featured in an article published March 13. When the economy slowed, EMBA programs increased their career counseling, the article said. "We have seen a desire for tailored career services," said Patty Keegan, associate dean of Booths North American Executive M.B.A. Program. 
    Read article
  • THE WASHINGTON POST. Booths weekly survey of economists made news March 8 with an article headlined "Economists overwhelmingly believe the bank bailout helped ordinary Americans." The survey was conducted by the Initiative on Global Markets. 
    Read article
    The New York Times also mentioned Booths weekly survey in a February 29 article 
    Read article 

Section 2: News coverage quoting Chicago Booth faculty.

  • CNN.COM. Professor Raghuram Rajan published an op-ed headlined "Democratic inequality," March 14. "Why did the household saving rate in the United States plummet before the Great Recession?" he wrote. "Two of my colleagues at the University of Chicago, Marianne Bertrand and Adair Morse, offer an intriguing answer: growing income inequality." Poorer households imitated the consumption patterns of richer households in their area, Professor Bertrand and Assistant Professor Morse concluded. 
    Read article
  • BLOOMBERG NEWS. Professor Anil Kashyap published an op-ed titled "Will Europe Flunk Stress Tests?" March 14. "The stakes are high," he wrote. "Another stress-test failure would undermine the fragile consensus on policy efforts to contain the crisis, feeding a run on the regions weaker banks." 
    Read article
  • THE SCOTSMAN (Edinburgh). Professor Luigi Zingales published an op-ed titled "The Greek tragedy is far from over despite current celebrations," March 20. "Greeces debt ratio remains at 120 per cent of last years GDP," he wrote. "With a projected drop in GDP of 7 per cent this year and a sustained deficit, the debt ratio would exceed 130 per cent before stabilizing at 120 per cent in 2020 … Greece has exhausted its ability to share part of the burden with the private sector. Next time, Europes taxpayers will be on the hook." 
    Read article
  • BLOOMBERG NEWS. Professor John Cochrane published an op-ed titled "Austerity or Stimulus? What We Need Is Growth," March 21. "Forget about ‘stimulating, he wrote. "Spend only on what is really needed. We could easily stop subsidies for agriculture, electric cars or building roads and bridge to nowhere right now, without fearing a recession. Rather than raise taxes further on the ‘rich, driving them underground, abroad, or away from business formation, fix the tax code, as every commission has recommended. Lower marginal rates but eliminate the maze of deductions." 
    Read article
    The Sydney (Australia) Morning Herald also published this op-ed, March 24. 
    Read article
  • BLOOMBERG NEWS. Professor Lubos Pastor published an op-ed titled "Actively Managed Funds Have Time on Their Side," March 7. "Why is the active management industry so large when its performance has been so poor?" he wrote. "Most explanations for this continued dominance suggest that investors arent very smart." 
    Read article
     
  • BLOOMBERG NEWS. Professor Amir Sufi published an op-ed titled "How Debt-Ridden Housing Holds Back U.S. Recovery," February 29. "The evidence overwhelmingly supports the view that high debt levels are the central reason that house-price declines negatively affect household spending," he wrote. 
    Read article
  • THE WALL STREET JOURNAL. Research by Professor Marianne Bertrand and Assistant Professor Adair Morse was featured in an article headlined "Are the Rich Driving Americans to Spend Too Much?" published March 19. Professors Bertrand and Morse found that rising consumption by rich households induces the non-rich to consume more. 
    Read article
    The Economist also cited the research March 17. 
    Read article
  • THE NEW YORK TIMES. Research by Associate Professor Gregor Matvos and Assistant Professor Zhiguo He was featured in an article headlined "Is Corporate Debt Worth Subsidizing?" published February 27. "Americans have always treated debt as a favorite vice," the article said. "We like to borrow and we like to cluck at borrowers. But lately the balance has tilted toward clucking. Debt is in ill repute. And that is why you should read this contrarian paper from two professors at the University of Chicago, arguing not only that borrowing is good, but that borrowing is so good that it should be heavily subsidized by the federal government." 
    Read article
  • THE WALL STREET JOURNAL. Professor John Cochrane was quoted in an article headlined "Fund Managers Look a Lot Smarter This Year, but ..." Investors are misguided if they think fund managers add – or subtract – value based on how savvy they are at picking individual stocks, he said. Rather than invest with active managers, people can assemble a portfolio of exchange-traded funds that provide exposure to the same markets factors, such as stocks with rapid earnings growth or very low prices relative to earnings, or rising dividends, Professor Cochrane said. The article was published March 5.
  • CNBC ASIA. Professor Randall Kroszner said Fed Chairman Ben Bernanke is right to be worried about a false dawn for the U.S. economy. "In early 2011, we started to see very strong job creation, more than 200,000 a month for three months, then things fell again," Professor Kroszner said during an interview in Singapore March 22. "I would agree with Chairman Bernanke that we dont want to start popping the champagne corks yet." 
    Watch video
  • THE NEW YORK TIMES. Professor Douglas Skinner was quoted in a story on the front page of the business section headlined "Flush With Cash, Apple Declares Dividend and Buyback," March 20. "They have a ridiculous amount of cash," he said. "Theres no feasible acquisition that Apple could do that would need that much cash." The companys cash reached nearly $100 billion at the end of last year, according to the article. 
    Read article
  • CHICAGO TRIBUNE. Professor Robert Topel was quoted in a front page article headlined "Pricey gas seen as good in a way," published March 24. Unseasonably warm weather in Chicago and an increase in driving could have spiked demand, which contributed to rising prices, he said. Gasoline supplies and refining capacity are committed in advance, Professor Topel said, meaning suppliers have to ration gasoline available to an area. When Chicago motorists decide en masse to go for a Sunday drive, demand outstrips supply and prices go up.
  • THE WALL STREET JOURNAL. Professor Steven Davis was quoted in an article headlined "Time Not on Side of the Jobless," published March 25. The employment-population ratio has been trending downward even before the recession, as has the rate at which workers change jobs, Professor Davis said. Both could be signs that the U.S. labor markets flexibility may be eroding, according to the article. 
    Read article
  • FOX BUSINESS. Professor Austan Goolsbee discussed rising gasoline prices during an interview broadcast March 14. "The part of the price thats going up because the economy is getting better and theres more demand, thats not all bad," he said. "The part of the price thats going up because theres instability in the politics of the Middle East, that part is all bad." 
    Watch video
  • CNBC. Professor Randall Kroszner said its too soon to pop the champagne corks yet on a recovery of the U.S. economy. During an appearance on The Kudlow Report March 1 he said not all of the signs are pointing to a strong recovery. "Were not quite sure whether the economy will sustain itself," Professor Kroszner said. 
    Watch video
  • BLOOMBERG NEWS. Research by Professor Anil Kashyap on financial stability and banking was featured in an article headlined "Bernanke Says Central Banks Should Learn More About Policy Tools," published March 23. In the research, Professor Kashyap and his co-authors explain the benefits from raising capital requirements to minimize an asset boom or bust, and warn against "piling on" regulations in an effort to stop multiple channels of financial contagion. The research was discussed in Washington at a meeting with Federal Reserve Chairman Ben Bernanke and other policy makers from the U.K. and Japan. 
    Read article
  • BLOOMBERG NEWS. Professor Steven Kaplan was quoted in an article examining President Obamas argument in favor of limiting the tax deductibility of carried interest earnings of private equity executives. Professor Kaplan said if interest werent deductible, debt would be more expensive and private equity firms couldnt pay as much for takeover targets to achieve the same after-tax returns. Still, interest deductibility is less important today than it was in the 1980s when deals often were composed of 90 percent debt, he said in the March 15 article. 
    Read article
  • EL CRONISTA (Buenos Aires). Professor John Cochrane was one of the experts quoted in an article about legislation in Argentina that would expand the central banks mandate to include promoting financial stability and economic growth, rather than simply preserving the value of the currency. Professor Cochrane said it not clear whether such a move is a good idea. The article was published March 7. 
    Read article in Spanish
  • BLOOMBERG TELEVISION. Professor Austan Goolsbee cautioned against overstating the pace of U.S economic recovery during an interview in Hong Kong broadcast March 20. 
    Watch video
  • THE NIGHTLY BUSINESS REPORT (PBS-TV). Professor Randall Kroszner said if the U.S. economy continues to grow at its current pace, the Federal Reserve should start very gradually tapering off the support is has given to financial markets. The June meeting of the Federal Open Market Committee might be the time for such a decision, he said during an interview broadcast March 13. 
    Read transcript
  • FORBES. Professor Steven Kaplan was quoted in an article headlined "How Americas Wealthiest Get Rich," published March 13. "Theres definitely a movement among my MBA students – and among MBA students in general – a little away from finance, which has been somewhat compromised by the crisis and by Dodd-Frank," Professor Kaplan said. "Were seeing big winners in technology. Finance isnt going away, but I think finance probably peaked in 2007." 
    Read article
  • U.S. NEWS & WORLD REPORT. Professor Pradeep Chintagunta was quoted in an article headlined "Why the New iPad Features Dont Really Matter," published March 7. The majority of customers may simply be drawn in by the Apple brand – and the fact that its now stamped on something new, the article said. For these customers, "the image has overcome the need for emphasizing any particular attribute," Professor Chintagunta said. 
    Read article
  • CHICAGO TRIBUNE. Adjunct Assistant Professor John Paul Rollert was quoted in an article about accusations of improper gifts accepted by the Chicago Public Schools food services director. "In a private company, the risks of that behavior are going to be borne by the company itself, whereas (at a public agency), the risks are borne by the public, the taxpayer," Professor Rollert said. "Youre indirectly enriching yourself through the expenditure of public funds." The article was published March 18. 

    Professor Rollert was also quoted in a follow-up article in the Chicago Tribune March 25. 
    Read article
  • THE ATLANTA JOURNAL-CONSTITUTION. Professor Steven Davis was quoted in a front page article about the economy and unemployment. Men with at least three years on the job who are laid off during a time of high unemployment sacrifice $122,000 in earnings over the remainder of the careers, Professor Davis said in the article published March 1. Thats more than twice the long-term losses sustained by men laid off in good times. 
    Read article
  • CALCALIST (Tel Aviv). Professor Eugene Fama was quoted in an article about investments headlined "What Does the Government Do Well?" published March 6. "The CIA, the SEC, Fannie Mae, Freddie Mac, the Post Office, etc., all are dismal failures and the source of much mischief," Professor Fama said. "Governments dont go out of business when their policies fail. Indeed, the more common response is to throw more money at failed policies." A photo of Professor Fama accompanied the article. 
    Read article in Hebrew
  • THE WALL STREET JOURNAL. Research by Professor Erik Hurst was featured in an article headlined "Do Small Businesses Deserve Their Reputation as Job Creators?" published March 19. Even among young firms, few business owners have ambitions to expand their businesses, he found. About three-quarters of entrepreneurs about to start businesses want to keep their business small. Fifty percent of entrepreneurs expected to employ four or fewer employees five years into running their business.
  • BLOOMBERG TELEVISION. Professor Raghuram discussed the European sovereign-debt crisis during an interview March 13. "The European Central Bank has bought some time for the politicians," he said. "Unfortunately, every time they buy time the politicians do not use it well." 
    Watch video
  • ABC WORLD NEWS TONIGHT. Professor Austan Goolsbee said the warmer winter in many parts of the country is resulting in lower heating costs, which feels like getting a $250 tax cut. The interview was broadcast March 13.
  • HUFFINGTON POST. Research by Assistant Professor Matthew Notowidigdo was featured in an article headlined "Bankruptcy Filing Delayed Until Tax Refund Arrives," published March 23. The research found that bankruptcy filings actually increase after Americas receive tax refunds. The issue: It costs money to file for bankruptcy and many Americans could not afford to pay the average of $1,477 in fees necessary, Professor Notowidigdo and his co-authors wrote. 
    Read article
    The Los Angeles Times also ran an article about Professor Notowidigdos research March 23. 
    Read article
  • PENSIONS & INVESTMENTS. Research by Professor Steven Kaplan on private equity performance was cited in a column headlined "Private equity buoys pension fund returns," March 21. The column was written by an official of the Private Equity Growth Capital Council in Washington, DC. 
    Read article
  • LOS ANGELES TIMES. Professor Steven Davis was quoted in an article headlined "will higher gasoline prices change the way we live?" published February 28. "The underlying economics are pretty basic," he said. "Those industries that are energy-intensive in production or in the use of fuel tend to respond negatively to higher gas and oil prices." 
    Read article
  • THE WASHINGTON POST. Professor Anil Kashyap was quoted in an article headlined "On unemployment, is Bernanke aggressive enough?" published March 20. As he tries to protect the Federal Reserves independence, Chairman Ben Bernanke must also keep an eye on how its actions would be greeted on Capitol Hill, the article said. "You have to make the case that the things you do are reasonable and wont backfire," Professor Kashyap said. 
  • CNBC TV 18 (India). Professor Raghuram Rajan discussed Indias economy during an interview broadcast March 10. He said it is premature for Indias central bank to consider significant rate cuts now. 
    Watch interview
  • NPR ALL THINGS CONSIDERED. Professor Randall Kroszner reacted to the Federal Reserves decision not to change interest rates at its March meeting. "The Fed is seeing, still, a lot of risks out there," he said in a March 13 interview. Policymakers are saying "lets continue to provide the support that weve been providing and well see how the economy evolves." 
    Listen to broadcast
  • REUTERS. Research by Professor Steven Kaplan was featured in an article headlined "Bain investors worry about returns, not Romney," published March 4. Average U.S. buyout fund returns have exceeded those of public markets in most cases since 1984, Professor Kaplans research found. 
    Read article
  • INTERNATIONAL BUSINESS TIMES. Professor John Cochrane was quoted in an article headlined "Derivative Swaps in Greek Debt Deal Could Weaken Europe Further," published March 15. "If I were looking at buying CDSs, the whole sordid [Greek] affair would make me worried," Professor Cochrane said. "There has been a clear, concerted effort by European political powers to prevent CDSs from paying out." 
    Read article
  • THE WASHINGTON POST. Research by Assistant Professor Devin Pope was featured in an article about the link between a universitys success in athletics and the number of applications it receives from prospective students. In a 2008 paper, Professor Pope found that success in football or mens basketball was shown to increase applications anywhere from 1 percent for reaching the NCAA tournament field to an average of 8 percent for winning it all, the March 15 article said. 
  • ENTREPRENEUR MAGAZINE. Research by Assistant Professor Michael Minnis was featured in an article headlined "Looking to Borrow? An Audited Financial Statement Can Help," published March 19. Professor Minnis found that companies with audited financial statements borrow at interest rates that are nearly three-quarters of a percent lower than companies that do not have audited statements. 
    Read article

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

  • CHICAGO TRIBUNE. Matt Maloney, MBA 10, was quoted in an article about GrubHub moving its headquarters to downtown Chicago. Maloney is co-founder and CEO of the company which tied for first place in Booths New Venture Challenge in 2006. "This move is one of many significant milestones weve hit during the past year," Maloney said in the March 23 article. GrubHub now has 250 employees and raised more than $80 million in venture capital.
    Read article
  • CRAINS CHICAGO BUSINESS. Bryan Johnson, MBA 07, was featured in a Q&A about Braintree Inc., the company he founded while a student at Booth. Last June, Braintree received $34 million in funding from Accel Partners. Braintree is a software company that helps clients handle credit card payments. 
    Read article
  • CRAINS CHICAGO BUSINESS. Feefighters, a company started by Sean Harper, MBA 09, has been bought by Groupon Inc., according to an article published March 23. Feefighters started at Booth and raised $1.6 million last January from several venture capital firms, the article said. 
    Read article
  • CHINA ECONOMIC REVIEW. Helen Ma, MBA 12, was featured in an article about Chinese students attending Western business schools, published March 1. "Many Chinese companies are expanding their businesses and, in the long run, they would like to hire people that have this overseas educational background and working experience," she said. Eventually she plans to return to China to work, the article said.
  • THE WALL STREET JOURNAL. Stephen Czech, MBA 98, was profiled in an article headlined "Fund Boss Starts Over (Yet Again)." The hedge fund executive "is working a stream of deals and hoping to raise as much as $1.5 billion for a new fund," the March 7 article said. Czech Asset Management is based in Old Greenwich, Conn. 
    Read article
  • THE WALL STREET JOURNAL. A Q&A interview with Benjamin Fanger, MBA 05, was published February 29. He is co-founder and partner of Shoreline Capital Management. The article was titled "Shoreline Capitals Fanger On Chinas Coming Debt Crisis." 
    Read article
  • REUTERS. Shannon Kirwin, a student in the Evening M.B.A. program and an analyst at Morningstar, was quoted in an article about the municipal bond market. Referring to Vanguards $2.8 billion California Long-term Tax-exempt Fund that returned 8.1 percent over the last three years, she said "Thanks to the funds razor-thin expense ratio, [it] doesnt need to venture into risky credits in order to compete." The article was published March 5. 
    Read article
  • MSNBC. Second year students Daniel Blanaru, John Tough and Ingrid Goerss were interviewed on The Dylan Ratigan Show February 24, broadcast from Harper Center. Each talked briefly about their career plans after graduation. 
    Watch video