Tuesday, January 31, 2006

Lazear to Chair CEA

In the Winter of 1990, I took a labor economics course at the University of Chicago taught by a Dream Team. Kevin Murphy, Bob LaLonde, Bob Topel and Ed Lazear team-taught this class. While I'm surprised that he accepted the job, it is a great selection. He is a brilliant, articulate guy who is thin enough to look good on CSPAN TV.

He is an active academic microeconomist. In fact, just this weekend I read his lead article in the Journal of Labor Economics on entrepreneurship. He neatly combined theory on who self selects to be an entrepreneur with empirics using a unique data set on which Stanford MBAs choose this occupation. He is also a "Chicago economist". Does the Bush Administration really embrace our libertarian instincts?

As a microeconomist, what issues will he focus on? Perhaps pensions? He is an expert on incentives. Maybe he could make government policy more nuanced about incentive effects in health care and other fields?

Is it surprising that the popular media has given so little attention to his hiring and Bernanke's hiring? Perhaps Keynes was right, we are dentists and dentists don't merit much attention.

January 31, 2006
White House Aide Picked

WASHINGTON, Jan. 30 (AP) — President Bush has chosen a Stanford University business professor as chairman of his Council of Economic Advisers, the White House announced Monday.

The professor, Edward P. Lazear, will succeed Ben S. Bernanke, who will lead the Federal Reserve, succeeding Alan Greenspan.

Mr. Lazear, of Portola Valley, Calif., has taught human resources, management and economics at Stanford's graduate school of business since 1992 and is senior fellow at the Hoover Institution, the conservative policy research center at Stanford.

A year ago, Mr. Bush appointed him to his tax reform advisory panel.

The White House press secretary, Scott McClellan, said Mr. Bush intended to nominate Mr. Lazear to be a member of the council. Whenever the nomination is approved by the Senate, Mr. McClellan said, the president intends to designate Mr. Lazear as chairman.