Monday, January 25, 2010

Sorman on the Resurgence of European Economics Departments

Guy Sorman has a good article in the City Journal comparing economics programs in the US and in Europe. He sees a revitalization of European programs, but more work would be needed in order to challenge the American leadership in the field. In his words:

The leading American universities may have the edge that Chiappori and others describe, but they are losing it,” Hellwig claims. A well-regarded scholar of monetary and financial institutions, Hellwig has decided to leave UCLA and return to Europe—not to his native Germany, however, but to Toulouse University’s department of economics in southern France. “We Europeans look at a global map,” he says, “and we see new centers of excellence emerging in Europe, though not necessarily in our countries of origin.” Toulouse is one such center, thanks to the imaginative leadership of its president, Jean Tirole (formerly of MIT). Tirole’s cultivation of financial support from local companies has enabled the public university to make an offer that competes with Hellwig’s wages at UCLA. Bonn and Mannheim Universities in Germany, Bocconi in Milan, and Pompeu Fabra in Barcelona are other rising European centers in economic research, and the Paris School of Economics could soon follow. ...

Is Hellwig an isolated case, or does he portend a more general trend? “Ten years ago,” Alesina maintains, “returning to Europe meant that you had failed in the U.S.; this is no longer the case.” Europe is awakening to a challenge, agrees Zingales. Bertrand thinks so, too, though she notes that European schools aren’t yet ready to make attractive offers to professors’ spouses as well.

American schools could find themselves financially squeezed, too, leveling the playing field somewhat with Europe. Before the current financial crisis, U.S. universities’ endowments had swollen to gigantic size, encouraging many to go on a building binge and recruit faculty with abandon. That time is over. With endowments massively diminished by the downturn, most schools have frozen faculty wages and downsized the administrative workforce, and research grants are shrinking. But while he sees
some difficult years ahead, Alesina, for one, doesn’t think that U.S. universities will lose their edge.

No comments: