Chicago Booth in the News, Winter 2011, Vol. 4
(Covering February 17 to March 10, 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.
- BLOOMBERG BUSINESSWEEK. Chicago Booth is expected to hire Axel Weber, the outgoing president of the German central bank, Deutsche Bundesbank, to teach
MBA courses in central banking, according to an article published March 9. The appointment “is a coup for Booth’s new dean Sunil Kumar,” the article said.
“Not only will our MBA students benefit from hearing him in the classroom, but the entire Booth community will benefit from his out-of-classroom
involvement here at seminars, workshops, and many other opportunities we offer for students, faculty and alumni to hear from leading thinkers,” Dean Kumar
said. Although the details are still to be finalized, Weber would be a visiting professor at Booth.
- THE SUNDAY TIMES (London). Dean Kumar was featured in an article headlined “Masters of the MBA Universe.” Business schools “are scooping up big-name
deans to maintain their reputations on the global stage,” the article said, noting that Dean Kumar came to Chicago Booth on January 1 after spending 14
years as a faculty member at Stanford’s business school. Most recently he was senior associate dean in charge of Stanford’s MBA program. The article was
published February 13.
- THE WALL STREET JOURNAL. Three articles were published by the Journal based on a monetary policy conference by Booth’s Initiative on Global Markets.
The Financial Times, in its coverage, noted that “three of the world’s top monetary policymakers” spoke at the Booth event in New York. Speakers included
Janet Yellen, vice chairman of the Federal Reserve Board, Vitor Constancio, vice president of the European Central Bank and Charles Bean, deputy governor
of the Bank of England.
More info at the Financial Times.
- POETS AND QUANTS FOR EXECUTIVES. Booth’s Executive MBA Program is “the granddaddy of all Executive MBA programs,” according to an article posted March
1 on this website covering business schools. It is “a world-class program taught by some of the best business academics anywhere. The general management
curriculum at Booth, with its emphasis on strategy and leadership, is designed to refresh, expand, and strengthen students’ grounding in the fundamental
disciplines of business,” the article said. “A unique strength of the program is that it boasts three campuses on three continents” and students spend time
at each campus.
- CRAIN’S CHICAGO BUSINESS. A rotating group of six to eight Booth students spend 15 to 20 hours a week evaluating companies – a role similar to an
associate at a VC firm – for the Hyde Park Angels, according to an article published February 28. The Hyde Park Angels is a hybrid of a traditional angel
network and an institutional investor, the article said.
- DEVELOPING LEADERS MAGAZINE (United Kingdom). Booth’s executive education program in new product innovation, development, and implementation strategies
was featured in an article in the March issue headlined “The Innovators Shall Inherit the Earth.” The program, led by Professor Sanjay Dhar, “tackles the
whole product development cycle from ideation to launch,” the article said. While Booth is widely known for its strength in finance and economics, this
marketing program shows that the school clearly has other strengths, too, according to the article.
- CHICAGO TRIBUNE. Booth’s Polsky Center Midwest Energy Forum made news March 3 in an article about the Chevy Volt’s battery. Consumer Reports said its
tests showed the battery’s range at 23 to 28 miles in cold weather, compared with the 40 miles originally promised. “It turns out batteries are like
people. They love room temperature,” Bill Wallace, director of Global Battery Systems for General Motors Corp., said at the forum at Gleacher
Crain’s Chicago Business also covered the Polsky Center’s Forum and reported that Chicago Mayor-elect Rahm Emanuel made a surprise visit.
- BLOOMBERG BUSINESSWEEK. Booth was one of the schools featured in an article headlined “Latest MBA Project: Helping Cash-Strapped States,” posted
February 28. At Booth, students interested in finance and private equity have studied “impact investing,” said Clinical Professor Linda Darragh, director
of entrepreneurship programs. The term describes an investment strategy that places capital in ventures with social or environmental goals, she
Section 2: News coverage quoting Chicago Booth faculty.
- THE WALL STREET JOURNAL. Research by Professor Anil Kashyap was featured in an article headlined “Top Economists Offer Map For Better Bank Stress
Testing,” published February 25. The research paper by Professor Kashyap and several other economists argues in favor of a system-wide approach to stress
testing, believing the approach taken by the Federal Reserve during the current year’s stress tests does not adequately gauge the ability of banks to
collectively serve as credit intermediaries, the February 25 article reported. The research was released in New York at a conference by Booth’s Initiative
on Global Markets.
- FINANCIAL TIMES. A study by Professor Lubos Pastor was featured in an article headlined “Research finds a reason for active fund managers.” The
newspaper called Professor Pastor’s findings “fascinating.” Active money management is an “arms race,” he argued. Markets are not perfect. They have
inefficiencies, which passive investors cannot exploit. Therefore it is rational to devote money to active managers to go out and find those stocks that
are selling too cheap. The article was published February 18.
Institutional Investor magazine also published an article about Professor Pastor’s research February 18.
- THE NEW YORK TIMES. Professor Richard Thaler’s latest book, “Nudge: Improving Decisions About Health, Wealth and Happiness,” made it onto the best
sellers list February 6. Nudge was 9th on the list of the most popular paperback business books. The Times said sales of Nudge were “barely
distinguishable” from the 8th ranked book, “Liar’s Poker” by Michael Lewis.
- FOREIGN AFFAIRS MAGAZINE. Professor Raghuram Rajan wrote an essay titled, “Currencies Aren’t the Problem; Fix Domestic Policy not Exchange Rates,” in
the March/April issue. The Federal Reserve, under political pressure to combat unemployment, risks creating financial instability through its record
monetary stimulus, according to a summary of Professor Rajan’s article reported by Bloomberg News on February 11. “A more stable and less aggressive U.S.
monetary policy will not only lead to more stable U.S. growth; it will also reduce the volatility of capital flows coming into and out of emerging
markets,” Professor Rajan wrote. Links to the full essay.
More info at Bloomberg News.
- THE WALL STREET JOURNAL. Professor Anil Kashyap wrote an op-ed about the Bank of Japan titled “Where is the BOJ’s Accountability?” published March 9.
He called on the Bank to answer two questions. “First, does the BOJ accept the proposition that a country’s monetary policy is the key determinant of
inflation over an extended period of time, such as 13-plus years? Second, how long should an independent central bank be allowed to fail to meet its sole
objective? If the BOJ does not feel any obligation to be accountable for its record on inflation, it would not surprise us if it loses its independence.”
The op-ed was co-written with Takeo Hoshi from the University of California San Diego.
- CHICAGO TRIBUNE. Professor Emeritus Marvin Zonis wrote an op-ed titled “Mideast rulers of a certain age -- the truth about ruling for too long,”
published March 6. We know very little about the effects that aging has on rulers of the Middle East, he wrote. “But we can be sure of the very high
likelihood that their judgment is now what it used to be; that the information they are receiving is not as complete and honest as any leader should get;
and that because of those reasons, they are unable to respond as effectively as the threats to their thrones demand.”
- THE NEW YORK TIMES. Professor Steven Kaplan was quoted in an article about the resignation of the CEO, CFO and the entire board of directors at Dynegy.
“I think this is very unusual, even wild,” he said. The upheaval followed two failed attempts to sell the company amid intense shareholder opposition, the
article said. As shareholder activism mounts, Professor Kaplan said he expected to see boards under even more pressure. “Not necessarily at this extreme,
however,” he said. The article was published February 22.
- THE NEW YORK TIMES. Professor Raghuram Rajan was quoted in an article headlined “Rising Oil Prices Pose New Threat to U.S. Economy,” published February
24. Referring to the oil-producing countries, Professor Rajan said “The countries that are getting this bonus basically get an enormous benefit. But if
they can’t spend it quickly, it doesn’t add to aggregate demand.”
- BLOOMBERG TELEVISION. Professor Randall Kroszner said the Federal Reserve’s low interest rate approach to monetary policy is still correct because
“it’s hard to see a lot of inflation pressure right now.” During a live interview March 2, he noted that core inflation – without food or energy costs --
is running less than one percent, and headline inflation is less than two percent. “In the summer of 2008, oil shot up to $140 a barrel and we didn’t see a
lot of inflation,” he said. Professor Kroszner was governor of the Federal Reserve System from 2006 to 2009.
- FOX BUSINESS TELEVISION. Professor Randall Kroszner discussed inflation pressures during a live interview March 1. “The key question is: Are price
pressures on food and energy temporary or long run,” he said. “I think a lot of what we are seeing is temporary pressure.” But the economic recovery is
still fragile, he added.
- BLOOMBERG NEWS. Professor Steven Kaplan was quoted in an article about billionaire Carl Icahn’s investment in Clorox Co. “It suggests that he does
think the company is undervalued,” Professor Kaplan said in the February 15 article.
- STRAITS TIMES (Singapore). Dean Kumar discussed operations management, his academic specialty, in a full-page article headlined “Uncertain times can
drive productivity,” published March 9. “In an uncertain world, there is temptation to act rather than analyze,” he said. “People believe that, somehow,
uncertainty makes analysis redundant. I don’t subscribe to that view. In many ways, uncertainty calls for more, rather than less, careful decision-making,”
he said. Dean Kumar was interviewed during a visit to Singapore in February.
- CHICAGO TRIBUNE. Professor Randall Kroszner offered advice to Chicago mayor-elect Rahm Emanuel on ways to boost Chicago’s economy. “Each (city)
department has to provide a business plan describing what services they provide (and) why they’re important,” he said in the article published February 24.
“They have to justify their budgets, rather than have them based on history.”
- MARKETWATCH. Professor Raghuram Rajan was quoted in an article about the improving economic conditions. “Real activity is recovering, and people’s
willingness to take risk seems to have increased,” he said. “Does that mean we have come back to normalcy? Are things hunky-dory? The answer is no.” The
article was published February 21.
- CNBC TELEVISION. Professor Randall Kroszner said higher oil prices are creating “a little bit of a headwind” as the economy tries to recover. We
are on a “reasonable trajectory” toward recovery, but unemployment will likely stay elevated, he said during a live interview February 25.
- CNBC.COM. Research by Professor Steven Davis was cited in an article headlined “Jobs Go Unfilled Despite High Unemployment,” posted March 3. “Our best
estimate is maybe 20 percent of shortfall in hires per vacancy in the last couple of years can be accounted for by lower recruiting intensity by
employers,” he said. Though they may be placing ads, they don’t appear in a rush to fill vacancies, according to the article.
- THE PALM BEACH POST. Professor Luigi Zingales was quoted in an article about homeowners who default on their mortgage as a strategy even though they
can afford the payments. “When you borrow money you make a commitment to pay it back,” he said. “If you walk away because it’s in your interest to do so,
you are violating the letter and the spirit of the law.” The article was published February 26.
- HOUSING WIRE.COM. Assistant Professor Amit Seru was quoted in two articles dealing with strategic mortgage defaults. Mortgage lenders who take steps to
deter borrowers from pursuing strategic defaults are “basically asking the consumer not to exercise what is a free option for them,” Professor Seru said in
the March 1 article. In the second article, published February 23, he disagreed with those who say estimates on the number of strategic defaults are too
high. It is a growing and significant problem, he said.
Tread carefully when goin after strategic defaulters.
- CHICAGO TRIBUNE. Research by Assistant Professor Oleg Urminsky was featured in the It’s Academic column February 18. While humans are hard-wired to
consume immediately, Professor Urminsky found that one key to saving money is to psychologically connect with your future self, according to the article.
The key when imaging your future self is to focus on aspects likely to remain stable over time, he said. You might focus on values, ideals, goals and other
traits that you will likely hold as an older person.
- BLOOMBERG BUSINESSWEEK. Professor Luigi Zingales was quoted in an article headlined “How Silvio Berlusconi Has Managed to Hang On,” published February
16. “We think the evil of Italy is Berlusconi,” he said. “I think the evil of Italy is a culture that makes Berlusconi a normal politician. That is much
more difficult to change.”
- MORNINGSTAR ADVISOR. Professor John Heaton and Lubos Pastor were featured in an article about the growth of passive investing, where it stands today,
and whether investors are benefiting. They both helped develop a new family of indexes at Booth’s Center for Research in Security Prices, which will debut
this year, the article noted. The article was published February 22.
- FIDELITY ACTIVE TRADER NEWS. Professor Lubos Pastor was one of the experts quoted in an article headlined “Tips for evaluating tech stocks,” published
January 25. Tech stocks are inherently volatile, he said, following up by asking “So how can you get rid of that volatility? The answer is to build a
diversified portfolio,” he said.
Section 3: Chicago Booth students and alumni in the news.
- PITTSBURGH POST-GAZETTE. In-Soo Cho, MBA ’84 was named president and CEO of StarKist Co., according to an article published March 1. Earlier in his
career he was president of Pizza Hut Korea. StarKist’s annual sales were estimated at $650 million to $670 million early last year, according to the
- THE NEW YORK TIMES. Matthew Desch, MBA ’86 was featured in The Boss column February 27. He is CEO of the reborn Iridium Communications. “The original
Iridium, created by Motorola, ended in bankruptcy in 1999,” he wrote. “The new Iridium emerged from bankruptcy in 2000 and has been profitable and growing
fast in recent years.”
- POETS AND QUANTS FOR EXECUTIVES. Dimitri Azar, a current EMBA student in Chicago, was featured in an article headlined “Juggling a Job and a Tough
EMBA,” posted March 2 on this website. He is chairman of the Department of Ophthalmology at the University of Illinois at Chicago. “I have to say, I love
every single course I’ve taken so far in Booth’s EMBA program,” he said. “The EMBA strategy and leadership courses complete the package … (L)earning how to
manage, lead, and implement based on a formal, rigorous, and quantitative approach is far better than learning on the go.”
- TRENDS MAGAZINE (Brussels). Yaniss Aiche, a current EMBA student in London, was featured in an article about his career and his studies at Booth. He is
senior partner at Linklaters LLP in Brussels. The article was published in the February 24 edition of this leading business weekly.
- WLS-TV (Chicago). Steven Koch, MBA ’82 was named co-chair of Chicago Mayor-elect Rahm Emanuel’s transition committee, according to an article posted
February 24 on the website of this television station. Koch is vice chairman at Credit Suisse.