Academic marketplace: Recession at Harvard

Harvard's endowment has (like most assets) taken a huge hit in the market meltdown. However, it is likely that, when the storm is over, Harvard will remain the most richly endowed university in the world. Hence you might think the present recession would be an opportunity for Harvard to seek to build, e.g. in areas in which it is not yet the best university in the world (such as some of those that the engineering institute down the river excels at, for example). This would be challenging (because a vast but presently declining endowment faces very severe liquidity constraints), but Harvard is well positioned to borrow in the bond market.

It appears that this is not the plan, however. A story in today's Crimson (FAS Freezes All Faculty Salaries, Cuts Searches) leaks an email to department chairs that is to be discussed more fully at a faculty meeting today. The story suggests that
"[other measures and] a hold on the bulk of current searches for tenure-track and tenured faculty were among the cost-cutting measures announced in a letter circulated to department chairs in the Faculty of Arts and Sciences yesterday afternoon. ... The new policy marks a considerable departure from the stance outlined by FAS Dean Michael D. Smith at a Faculty meeting in November, when he told department leaders to go ahead with all current searches if applicant pools remained as strong as anticipated."

Applicant pools will of course be unusually strong in a year when many universities are cutting back their hiring. I can already see that more daring universities may have unusual opportunities. (Economics departments should be looking particularly to hire some of the best new market designers, experimenters, and theorists....)