An interview in the Times of India, on Who Gets What and Why

A matching market is like marriage — both sides have to choose each other: Alvin Roth
Subodh Varma,TNN | Jul 5, 2015,

Refugee resettlement as a matching problem

There are a lot of displaced people in the world today, both outside their country of origin and within. The conflict in Syria is a big contributor. The poverty in Africa is another. Here's a recent NY Times story, about a UN report, whose headline summarizes the story well:
60 Million People Fleeing Chaotic Lands, U.N. Says

The international refugee accords place most responsibility for resettlement on the "country of first asylum."  If you were smuggling yourself out of Africa, or Syria, you'd have good reason, therefore, to try to get to Sweden before declaring yourself a refugee, but it's a lot easier to get to Turkey or Greece or Italy.  However some classes of refugee can seek resettlement elsewhere, and the U.S. takes a small number of these (around 70,000/year).

American policy is to try to settle refugees across the country, the idea being that this might ease assimilation, and avoid overburdening particular cities and towns. But, of course, once refugees get to the U.S., they are completely free to move around. So there's a matching problem of refugees and cities.

The case of Somali refugees makes this clear: although they've been resettled around the country, many of them quickly move to join the growing community in and around Lewiston, Maine. (Here's a nice story dated 2007...
Letter From Maine: New in Town--Somali refugees began arriving in Lewiston, Maine (pop. 36,000) six years ago. Word spread that Lewiston had good schools, a low crime rate and cheap housing — and the Somalis began arriving in droves.

And here's a Wikipedia page: History of the Somalis in Maine

The point of all this is that people aren't passive, you can't keep them where they are sent if they don't want to stay there (even if moving means giving up various kinds of refugee assistance).

Hillel Rapoport of the Paris School of Economics has been thinking of this in a European context, in which one of the questions is to which countries should refugees be resettled?  How a tradable refugee-admission quota system could help solve the EU’s migration crisis.  Even in Europe, I'm not sure how well refugees can be resettled in the countries to which they are assigned, but the barriers to moving are probably substantially higher than for moves in the U.S.

The EU is thinking about moving refugees, maybe in directions they want to go (although this isn't clear): see e.g. this recent story. EU leaders agree to relocate 40,000 migrants. "EU leaders holding late-night talks in Brussels have agreed to relocate tens of thousands of migrants who have arrived in Italy and Greece." But it's hard, and they aren't really reaching agreement: In Testy Debate, E.U. Leaders Fail to Agree on Quotas to Spread Migrants Across Bloc

So, we have a matching problem here. How to resettle refugees to places that they are willing to stay in, while meeting the other goals that we'd like to achieve?

It's not a bad question to ponder on the 4th of July, for a nation made up of immigrants, many of whom escaped from somewhere to come to the USA.

Podcast interview about Who Gets What and Why

Here's Episode 196 – Alvin Roth from Smartpeoplepodcast.com. The interview starts at around one and a half minutes from the beginning of the audio file.

Arrow Lecture in Jerusalem by Drew Fudenberg - Learning and Equilibrium in Games (video)

Drew begins his general-audience lecture by saying "I can't imagine anyone I would rather give a talk for than Ken Arrow." He then continues with a brief history of game theory.

The Amsterdam court rules on school choice

Hessel Oosterbeek sends the following update on the school choice court case seeking to allow the exchange of school places that were allocated by a deferred acceptance algorithm with multiple tie breaking.  He writes: 

"Attached is a link to the decision of the judge in Amsterdam. Important considerations for the judge are that: i) trading would harm students who have a higher position on the waiting lists, and ii) allowing trade this year makes the system unusable in the future. The judge also writes that the rules were clear.

Overall it reads that the judge is well informed."

Google Translate allows you to make reasonable sense of the judge's decision in English...
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Here is a blog post, also in Dutch, but Google Translate does a good enough job so that you can see that this is a pretty detailed discussion of various algorithms, strategy-proofness, the judge's decision, etc. It seems that the public discussion is going on at a pretty high level: 
Schoolstrijd in Amsterdam
Waarom ruilen niet mag, ook niet als beide partijen er beter van worden
(School Fight in Amsterdam

Why should not change, even if both parties are better off)

Video conversation about Who Gets What on Yahoo! Finance

Below is a link to a Yahoo! Finance video interview (about 5 minutes), made when I was in NYC for the launch of  Who Gets What and Why the first week in June. Unlike most of the interviews I've done, this one has video footage added, so instead of always looking at me and the interviewer, there are scenes of things that we're talking about--the stock exchange, an Amazon warehouse, etc..

Nobel Prize-winning economist on the elusive factors that make markets work

Scott Kominers on market design (and a conference in August)

INTERVIEWS

Prof. Scott Duke Kominers: ‘There are many new areas of market design worth exploring’

BY  EDITORIAL STAFFON JUNE 18, 2015

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Prof. Scott Duke Kominers is a Junior Fellow at the Harvard Society of Fellows, a Research Scientist at the Harvard Program for Evolutionary Dynamics, and an Associate of the Harvard Center for Research on Computation and Society. He also will be a General Co-Chair at AMMA 2015, The Third Conference on Auctions, Market Mechanisms and Their Applications. We talked with him about the upcoming conference and about the most interesting potential areas in market design and the challenges this field will face in the near future.

AMMA 2015 will be held August 8-9, 2015 in Chicago. What will the main focus of the conference be?

AMMA focuses on the theory and practice of market design, at the intersection of economics, computer science, operations research, and applied math.

What are, in your opinion, interesting potential areas researchers in the field of market design should take into account?

Prof. Scott Duke Kominers, General Co-Chair at AMMA 2015

Market design has already proven useful in addressing real-life problems in settings like school choice, entry-level labor markets, kidney exchange, and auction design. Financial market design has flourished recently, as has the design of intellectual property markets. Personally, I am especially excited about “generalized matching,” which blends together ideas from matching and auction theory to show how markets with complex contract structure can be cleared using relatively simple mechanisms. I think there’s a lot of potential for generalized matching mechanisms to be useful in new real-world applications. In addition, there are many new areas of market design worth exploring: market designers are starting to think about the structure of healthcare marketplaces and adoption services. And of course, online platforms are everywhere. Furthermore, a popular press book on market design has just been published: http://www.hmhbooks.com/whogetswhat/index.html.

What challenges do you expect market design will face in the near future?

I think one of the greatest challenges going forward is about translation: we need to find good ways of teaching what we know about marketplace design to policymakers, entrepreneurs, and other practitioners. In some cases, there is work to be done in understanding how to simplify our mechanisms in ways that would make them more accessible to their users. Meanwhile, on the research side, market design has traditionally mixed powerful theory with empirical analysis, experiments, and computational methods. As we build more and more technical facility with our existing tools, and as we add new approaches to our toolkits, it is increasingly challenging – but also increasingly important – to make sure that we let real-world structure guide our methodological choices in applied work.

Changes in repugnance over time

Bloomberg news has some animated graphics showing the change over time in repugnance--as measured by laws at the state level--for six issues that were or are controversial in America: interracial marriage, prohibition, women’s suffrage, abortion, same-sex marriage, and recreational marijuana.

This Is How Fast America Changes Its Mind, By Alex Tribou and Keith Collins

All of those have now had Federal rulings, except for recreational marijuana, which as of this writing has been legalized only in Colorado, Washington, Oregon and Alaska.  Stay tuned...

Financial support for organ donors in New Zealand? A new bill proposed...

New Zealand's parliament will debate a bill to increase the financial support offered to organ donors.

Member’s Bill will boost financial support for organ donors Thursday, 25 June 2015, 2:43 pm Press Release: New Zealand National Party

Chris Bishop

National List MP based in the Hutt Valley

25 June 2015

Member’s Bill will boost financial support for organ donors

Chris Bishop, National List MP based in the Hutt Valley, is delighted the Financial Assistance For Live Organ Donors Bill, a Member’s Bill in his name, has been drawn from the ballot and will be debated by Parliament.

The purpose of the Bill is to increase the financial assistance provided to people who, for altruistic reasons, donate kidney or liver tissue for transplantation purposes.

The Bill will increase the support for donors from the equivalent of the sickness benefit to the equivalent of 80 per cent of the donor’s pre-operation earnings – the same formula applied to income support for ACC recipients. The Bill also provides for the payment of childcare assistance for those who require it during their convalescence.

“I was inspired to pick up this Member’s Bill, which was originally put forward by Hon Michael Woodhouse, after talking to Sharon van der Gulik at one of my first meetings as a candidate in the election last year,” Mr Bishop says. “She had been living with renal failure for more than two years and needed 15 hours of dialysis a week – before her son donated one of his kidneys to her.

“At the public meeting, Mrs van der Gulik spoke of the financial hardship that her son faced in the six weeks he spent recovering from the procedure. She argued he deserved more. I agree.

“If this Bill passes into law, greater support will be available to people like Mrs van der Gulik’s son.

“Organ donation rates in New Zealand are improving, but are still too low. It’s important they increase - live kidney donation is the least expensive form of treatment for end-stage renal failure, and significantly improves life expectancy.

“This Bill is a small but important and helpful step to increasing the number of people who donate organs.

“Wider work to increase the number of donors is being led by the Minister of Health. Budget 2014 allocated $4 million over four years to set up a National Renal Transplant Service to increase the number of live kidney donor transplantations. The funding covers donor liaison co-ordinators and continuation of the New Zealand Kidney Exchange programme. Last year's funding increase builds on the $4 million invested in Budget 2012 to raise awareness and encourage more people to donate organs,” says Mr Bishop.

Elias, Lacetera and Macis on the repugnance of paying for organs or prostitution: a survey experiment

Markets and Morals: An Experimental Survey Study
Julio J. Elias , Nicola Lacetera , Mario Macis

PLOS One. Published: June 1, 2015DOI: 10.1371/journal.pone.0127069

Abstract: Most societies prohibit some market transactions based on moral concerns, even when the exchanges would benefit the parties involved and would not create negative externalities. A prominent example is given by payments for human organs for transplantation, banned virtually everywhere despite long waiting lists and many deaths of patients who cannot find a donor. Recent research, however, has shown that individuals significantly increase their stated support for a regulated market for human organs when provided with information about the organ shortage and the potential beneficial effects a price mechanism. In this study we focused on payments for human organs and on another “repugnant” transaction, indoor prostitution, to address two questions: (A) Does providing general information on the welfare properties of prices and markets modify attitudes toward repugnant trades? (B) Does additional knowledge on the benefits of a price mechanism in a specific context affect attitudes toward price-based transactions in another context? By answering these questions, we can assess whether eliciting a market-oriented approach may lead to a relaxation of moral opposition to markets, and whether there is a cross-effect of information, in particular for morally controversial activities that, although different, share a reference to the “commercialization” of the human body. Relying on an online survey experiment with 5,324 U.S. residents, we found no effect of general information about market efficiency, consistent with morally controversial markets being accepted only when they are seen as a solution to a specific problem. We also found some cross-effects of information about a transaction on the acceptance of the other; however, the responses were mediated by the gender and (to a lesser extent) religiosity of the respondent—in particular, women exposed to information about legalizing prostitution reduced their stated support for regulated organ payments. We relate these findings to prior research and discuss implications for public policy.

Ransom as a repugnant transaction--the U.S. relaxes its position

The U.S. is revisiting laws and policies against paying ransom to pirates, terrorists and other hostage takers.

In New Hostage Policy, U.S. Will Not Prosecute Families for Paying Ransom

"After a six-month review that included discussions with families of people held overseas, the White House said the government will continue its longstanding policy of not making concessions to hostage-takers.

But it will no longer threaten families who decide to pay ransoms. The government may communicate with hostage-takers and intermediaries, and it may help families who are trying to pay ransom, the White House said."
**********

Obama Announces New Hostage Response, but No U.S. Ransoms

"The president reasserted the main plank of U.S. policy that, unlike some allies, the government would not make concessions or pay ransom to hostage takers, saying this would enrich the militants and encourage further abductions.

However, he set out a more cooperative policy in which the government would work with the families, and said a special presidential envoy would be appointed to coordinate the efforts of law enforcement and diplomats.

Government officials would now be allowed to communicate and negotiate with hostage takers.

The new approach was drawn up over six months after complaints by families that their initiatives to free relatives had been discouraged and sometimes blocked by officials who threatened legal action if they raised a ransom privately.

He said - as did a separate statement from the Justice Department - that such threats should never happen again, and that no American had been prosecuted for paying a ransom.

The new approach, set out in a presidential directive, allowed "communication with hostage takers by our government, the families of hostages or third parties who help these families," Obama said."
**********

Kidnapped Missionary Was Freed as U.S. Tested Hostage Policy Shift - Family

"The family of a U.S missionary kidnapped in Nigeria earlier this year said on Thursday it paid a ransom to secure her release in March while receiving around-the-clock guidance from federal agents under a newly changed hostage-response policy."

An ancient repugnance crumbles: Same sex marriage is a right, in all 50 of the United States

Here's the NY Times headline: Same-Sex Marriage Is a Right, Supreme Court Rules, 5-4

"Justice Anthony M. Kennedy wrote the majority opinion in the 5 to 4 decision. He was joined by the court’s four more liberal justices."

We're all a little more equal today.

But the close vote means that understanding repugnant transactions--transactions that some people would like to engage in, and others wish to prevent--is important.
**********

Here's a graphic graphic from the Times, on the one-step-forward-two-steps-back progress of this latest civil right:
Gay Marriage State by State: From a Few States to the Whole Nation

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Justice and Liberty are celebrating again...

School choice in Amsterdam goes to court over tie-breaking

Hessel Oosterbeek sends me this article in Dutch about the very current controversy playing out in Amsterdam over this year's school choice results:

Het beest in de Amsterdamse ouder is los,
which Google Translate renders as
The beast in Amsterdam's parent is loose

Some background to the current controversy can be found in a paper by Oosterbeek and his coauthors which was influential in the Amsterdam school choice design (which used student-proposing deferred acceptance with multiple tie-breaking):

"The performance of school assignment mechanisms in practice," by Monique de Haan, Pieter A. Gautier, Hessel Oosterbeek, and Bas van der Klaauw.

Abstract: "Theory points to a potential trade-off between two main school assignment mechanisms; Boston and Deferred Acceptance (DA). While DA is strategyproof and gives a stable matching, Boston might outperform DA in terms of ex-ante efficiency. We quantify the (dis)advantages of the mechanisms by using information about actual choices under Boston complemented with survey data eliciting students’ school preferences. We find that under Boston around 8% of the students apply to another school than their most-preferred school. We compare allocations resulting from Boston with DA with single tie-breaking (one central lottery; DA-STB) and multiple tie-breaking (separate lottery per school; DA-MTB). DA-STB places more students in their top-n schools, for any n, than Boston and results in higher average welfare. We find a trade-off between DA-STB and DA-MTB. DA-STB places more students in their single most-preferred school than DA-MTB, but fewer in their top-n, for n ≥ 2. Finally, students from disadvantaged backgrounds benefit most from a switch from Boston to any of the DA mechanisms"

The city of Amsterdam adopted multiple tie-breaking, with the consequence that some post-assignment trades now seem possible between students.  And this is where the beast in Amsterdam's parents (some of whom are lawyers) has been loosed. Here's Google Translate again, on the news story:

"Moreover, there is a side effect that parents can not stomach: a class can sit next to each other two children who are both disappointed in the school they were assigned, whereas if they would swap, both overjoyed to be made ​​with a spot on their favorite school. A child who is placed in a school where he really did not want it (tenth place on his preference list), through an exchange would nevertheless may still end up at No. 1. And yet you can not. There is, every year it again what in Amsterdam that the beast in the parent disconnect when it comes to the choice of school of the child.
...
"A father of a girl who wants to be very happy in music and dance, with a spot on the Geert Groot School, turned to Sprenkeling for an exchange. To facilitate this exchange, harnessed the lawyer with 32 other parents a lawsuit against the dome of high schools Osvo. The aim is to consider the new placement system this year as a test. Only next year should really not be exchanged. "

I understand from Hessel that a judge is expected to rule soon on whether families may exchange school places...

Unravelling of magnet school enrollment in Cincinnati: 16 days in a tent

Here's a story about a devoted dad in Cincinnati who slept outside of a school for 16 days, along with many other parents, to preserve his place in line for a kindergarten enrollment...

Waiting For Kindergarten
I slept outside for 16 days to enroll my son in Fairview-Clifton Elementary School

And some history:
"When there are more kids than spots in a popular school, how do you decide which kids get in?

CPS has tried to answer this question several times. In the 1990s, families enrolled in magnet programs via Super Saturday. CPS kept the enrollment locations (CPS schools) secret until the early morning on the last Saturday in January. After announcing the locations, lines formed quickly and schools accepted kids on a first-come, first-serve basis. Parents enlisted family and friends to patrol the city in cars so that the closest car could dash to the signup once revealed. Cars were manned in pairs, so that the passenger could get out and get in line without hunting for a parking spot. They communicated via pagers, walkie-talkies, and cellphones if they were lucky. There was more than a few fender benders in the process. Some families tried to guess the system, staking out schools for signs of “activity”, like building lights and cars.

Super Saturday ended sometime around 2000. For several years, parents enrolled their kids by taking a tour of the school and submitting a waiting list application up to 12 months before the first day of school. Your spot was not guaranteed however, and students were accepted partially on the basis of race and gender. Parents usually knew their result by December. Interestingly, this method was simple, straightforward and did not require waiting in line. However, due to demand from parents who wanted more control over their kids’ futures, as well as court decisions that outlawed the demographic basis of enrollment, CPS went to a first-come, first-serve enrollment around 2007. That first year, parents camped out in line for 24 hours.

To address the inherent unfairness in a totally first-come, first-serve enrollment method, CPS went to a hybrid system. Since 2011, 30% of open spots went to winners of a lottery system, with the rest still allocated via line. Families were eligible for the lottery only if their neighborhood school was underperforming."



HT: Pete Troyan

Peter Passell interviews me at the Milken Institute on Who Gets What — and Why: The New Economics of Matchmaking and Market Design

I had a busy day in Los Angeles Tuesday, which combined some academic meetings with some media events related to my new book.

Here's a video of an interview/conversation about the book, with Peter Passell,


****************

Earlier in the day, I had a conversation on the air with Larry Mantel on his radio show Airtalk, at
NPR affilliate in Los Angeles: KPCC (you can hearthe talk at the link)

Incidentally, here's a radio talk I taped when I was in Boston but just aired, on NPR's affilliate for the Cape and the Islands: Listen here to the conversation with WCAI's Mindy Todd about Who Gets What and Why.

The repugnance of paying for your raw materials: journalists and news stories

The New York Times has an op-ed by Kelly McBride (described as a "media ethicist"): When It’s O.K. to Pay for a Story

"JOURNALISTS frown on paying sources. This decades-old principle stems from the belief that the tawdry practice corrupts the authenticity of information: If I pay you to tell me your story, you may distort its details to up the value.

"So last week, WikiLeaks disturbed many journalists with an initiative to crowd-source a $100,000 “bounty” on the text of the Trans-Pacific Partnership trade deal.
...
"Setting a bounty on the treaty text turns journalistic mores on their head. In traditional newsrooms, the idea of offering a cash incentive for the leaking of confidential documents is anathema. But WikiLeaks, like other media disrupters, leaves us no choice but to reconsider this prohibition. If journalism organizations refuse to do so, they relegate themselves either to secondhand reporting on documents obtained by those outside journalism or to being left behind.
...
"In practice, there has long been a gray zone in the media industry. British tabloid newspapers have a long history of “checkbook journalism,” while some American TV news shows have often paid large sums for certain material..."

Talking about markets on Think Radio, and Radio New Zealand

Here's an NPR radio show, in which I was interviewed about Who Gets What and Why

Most economists study commodity markets, in which buyers and sellers find common ground in the price of goods. This hour, we’ll talk to Nobel Prize-winning economist Alvin E. Roth about matching markets ­­— like employment and college admission — in which money is only one factor in making a connection. Roth’s new book is Who Gets What — and Why: The New Economics of Matchmaking and Market Design (Houghton Mifflin Harcourt).

[Download MP3]
Their webpage is here, where you can listen to the conversation.

The webpage also has this picture, which must be what I look like on radio:)

***************

And here you can hear what I sound like on Radio New Zealand:

Nobel Prize winner, Alvin Roth: "Who Gets What and Why"

Updated at 11:18 am on 22 June 2015

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Originally aired on Nine To Noon, Monday 22 June 2015

Professor Alvin Roth won the Nobel Prize for economics partly for his work helping match willing donors with those who need kidney transplants.

He has spent his career looking at markets of all kinds and how ‘buyer’ and ‘seller’ come together. In his new book, Who Gets What and Why, he argues we are surrounded by matching markets. From applying for a job, to asking someone out on a date, matching plays a crucial but invisible role in our lives.

Professor Roth says matching is why apps like uber and airbnb are so successful, but while he is an advocate of market forces, as he tells Kathryn Ryan, there must also be rules.

• Play
• Download:Ogg  |  MP3
• Audio duration:( 25′ :44″ )

Photo: Steve Castillo

Book talk video "Who Gets What and Why" at Noblis

Here's a video of a talk I gave last week when I was in the DC area, about my new book Who Gets What and Why, at Noblis. It's about 40 minutes including questions and answers. (I start off by talking about how economics is like gossip...)

Who Gets What and Why at the Milken Institute in Santa Monica, June 23

This should be fun--I'll be interviewed Tuesday by Peter Passell, whose columns I used to read in the NY Times, about my new book  .( A bit more on Peter Passell at the end of this post...)

Who Gets What — and Why: The New Economics of Matchmaking and Market Design

Alvin Roth, McCaw professor of economics at Stanford University and Nobel laureate
Moderated by Peter Passell, editor of the Milken Institute Review

June 23, 2015

6:30pm - 8:00pm

Santa Monica

CAPITAL MARKETS, HEALTH, U.S. ECONOMY

Markets are about more than money. Price isn’t the crucial factor in matching aspirants with career opportunities, students with schools or bodily organs with transplant patients, yet these examples involve markets nonetheless. Alvin Roth, a Nobel laureate in economics and the author of “Who Gets What — and Why: The New Economics of Matchmaking and Market Design,” has created markets meant to lift the barriers that hinder the goals of individuals and society at large. Roth is an authority on the application of exchange dynamics to real-world problems, inventively adapting the tools of game theory and market design.

At this Milken Institute Forum, Roth will demonstrate that markets are ubiquitous, if even we don’t commonly recognize them, and how skillfully we navigate them can determine the most important events in our lives. Even the freest markets have rules, and Roth will delve into how unseen conditions drive outcomes. Those conditions can be modified to better serve the participants, he explains. From marriage to parking spaces, if the “buyers” and “sellers” can be matched more effectively, everyone wins.

“Alvin Roth guides us through the jungle of modern life, pointing to the many markets that are hidden in plain view all around us,” says behavioral economist and “Predictably Irrational” author Dan Ariely. “He teaches us how markets work—and fail—and how we can build better ones.”

ABOUT THE AUTHOR

Alvin Roth is the McCaw professor of economics at Stanford University and co-recipient of the 2012 Nobel Prize in economics. Roth is one of the world’s leading experts in the fields of market design, game theory, and matching markets. He has designed several of those markets, including the system that increases the number of kidney transplants by better matching donors to patients, the exchange that places medical students in residencies and the New York City and Boston school choice systems.

ABOUT THE MODERATOR

Peter Passell is editor of the Milken Institute Review, the Institute's economic quarterly. A senior fellow, Passell was previously an economics columnist for the New York Times, a member of the Times' editorial board and an assistant professor at Columbia University's Graduate Department of Economics. Passell has written for publications including the Washington Post, the New Republic, the Nation, American Economic Review and the Journal of Political Economy. Passell received his Ph.D. in economics from Yale University.

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"Who Gets What — and Why: The New Economics of Matchmaking and Market Design" will be for sale after the Forum, and Roth will be available to sign copies. This event is open to the public, although registration is required. Reserved seating is available for Milken Institute Associates. If you are not currently a member of the Associates and would like to join or receive more information, click here. Parking is not available at the Institute. Free parking for 90 minutes is available in Public Parking Lot No. 1 on Fourth Street, adjacent to our building. This Forum is part of our effort to present multiple perspectives on current business and public policy issues. Videotaping, recording or photographing this event is prohibited without the prior approval of the Milken Institute. *********** A funny thing about this interview is that I recall reading Peter Passell's 'Economic Scene' column in the NY Times when he seemed to be one of the few economic journalists who was an actual economist. Here's the last of those columns he wrote for the Times, which still reads very well today. Economic Scene; Rich nation, poor nation. Is anyone even looking for a cure? By Peter Passell Published: August 13, 1998

Conference in honor of Sergiu Hart, June 21-24 in Jerusalem

Happy birthday Sergiu!

The conference website is here: http://www.ratio.huji.ac.il/conference_Hart