Economics

AP reporters Daniel Niemann, Mike Corder and Paul Wiseman highlight the work of Profs. Daron Acemoglu and Simon Johnson, who have been honored with the Nobel Prize in economic sciences for their work demonstrating “the importance of societal institutions for a country’s prosperity.” Says Johnson of how AI could impact workers: “AI could either empower people with a lot of education, make them more highly skilled, enable them to do more tasks and get more pay. Or it could be another massive wave of automation that pushes the remnants of the middle down to the bottom.”

Prof. Simon Johnson, one of the recipients of this year’s Nobel Prize in economics, joins the PBS NewsHour to discuss the inspiration for his research, the role of institutions in economies around the world and how technology could be harnessed to create better jobs for all. Johnson notes that through his work with the MIT Shaping the Future of Work Initiative, he and his colleagues hope to “get more good jobs in the United States and around the world.” He adds that in the past, “we have managed things so that technology delivered benefits for a broad cross-section of society. But that's not what we have done in the past four decades. We need a course-correction, and that's what we're going to work on.”

Boston Globe reporter Alexa Gagosz spotlights the work of Profs. Daron Acemoglu and Simon Johnson, recipients of the 2024 Nobel Prize in economics for their research examining global inequality. MIT President Sally Kornbluth called Acemoglu and Johnson, who first stepped foot on MIT’s campus in 1985 as a graduate student, “prolific and influential scholars” whose work “reflects a very MIT interest in making a positive impact in the real world.” Kornbluth added: “Their historical investigations have a great deal to teach us about how and why real societies fail or thrive. And they [have] both become familiar voices in the news, public intellectuals trying to help us all make sense of a tumultuous world.”

Profs. Daron Acemoglu and Simon Johnson PhD '89 have been awarded the 2024 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for their work explaining the gaps in prosperity between nations and advancing our understanding of inequality, reports Jeanna Smialek for The New York Times. “Reducing the huge differences in income between countries is one of our times’ greatest challenges,” said Jakob Svensson, chairman of the economics prize committee. Thanks to the economists’ “groundbreaking research,” he said, “we have a much deeper understanding of the root causes of why countries fail or succeed.” Acemoglu reacted to winning the prize, noting that: “You dream of having a good career, but this is over and on top of that.” 

Fast Company reporter Kristin Toussaint spotlights a new study by MIT researchers that examines the energy burden in the U.S., the percent of a household’s income spent on energy costs. The researchers found a disproportionate number of people in the South experiencing energy poverty. “As the climate warms, we’re going to need to use more and more energy on air-conditioning, and that’s going to increase the burden on low-income households,” explains Prof. Christopher Knittel. 

A new commentary by Prof. Jonathan Gruber and his colleagues outlines a proposal for a new long-term care at home plan, aimed at enabling seniors to stay in their homes, reports Jonathan Cohn for HuffPost. “Relative to other countries, we’re very nursing home focused, and we’re not really doing enough to keep people at home,” says Gruber. “I also just think it’s a valuable benefit to people that makes their lives better.” 

Prof. Daron Acemoglu speaks with Greg Rosalsky of NPR’s Planet Money about a recent survey that claims "almost 40% of Americans, ages 18 to 64, have used generative AI." "My concern with their numbers is that it does not distinguish fundamentally productive uses of generative AI from occasional/frivolous uses," says Acemoglu. 

Prof. Anna Stansbury speaks with Soumaya Keynes of the Financial Times podcast “The Economics Show” about her recent research on the class ceiling, which finds that an individual’s family circumstances can hold them back, even if they have earned a PhD. “We should care if people have opportunities to fulfill their talents for reasons of equity and justice. But the other is a very kind of banal economic reason, which is efficiency,” says Stansbury. “If you assume that talent for something is equally distributed, then we should care if people that are talented aren’t getting to fulfill that talent because it’s worse for overall productivity and overall outcomes.”

Prof. David Autor speaks with Washington Post reporter Cat Zakrzewski about AI automation in the workforce. Autor notes that when it comes to AI’s impact on the labor market the “concern should not be the number of jobs. We're actually running out of workers, not running out of jobs because of our demographics, but whether we have jobs that reward people's expertise and knowledge rather than jobs that displace expertise and knowledge and don't leave people with a viable, highly paid thing to do.”

Prof. David Autor speaks with Washington Post reporter Cat Zakrzewski about the anticipated impact of AI in various industries. “We are just learning how to use AI and what it's good for, and it will take a while to figure out how to use it really productively,” says Autor. 

Prof. Daron Acemoglu speaks with Bloomberg reporter Jeran Wittenstein about the current state of AI and the technology’s economic potential. “You need highly reliable information or the ability of these models to faithfully implement certain steps that previously workers were doing,” says Acemoglu of the state of current large language models. “They can do that in a few places with some human supervisory oversight” — like coding — “but in most places they cannot. That’s a reality check for where we are right now." 

Prof. Daron Acemoglu speaks with Bloomberg reporters John Lee and Katia Dmitrieva about the social and economic impacts of AI. “We don’t know where the future lies,” says Acemoglu. “There are many directions, the technology is malleable, we can make different choices.” 

Prof. Kristin Forbes speaks with Reuters reporters Ann Saphir and Howard Schneider about the Federal Reserve’s decision to lower borrowing costs. “It's not one thing that causes everyone to move,” says Forbes. “It's different people focus on different data, different indicators, different risks, and then they all end up in the same place.”

Prof. Kristin Forbes speaks with Associated Press reporter Christopher Rugaber about the Federal Reserve’s announcement declaring the end of the three-year inflation surge. “It really has been a remarkable success, how inflation went up, has come back, and is around the target,” says Forbes. “But from the viewpoint of households, it has not been so successful. Many have taken a big hit to their wages. Many of them feel like the basket of goods they buy is now much more expensive.”

Glenn Loury PhD '67 is a guest on the Boston Globe podcast “Say More” with Shirley Leung, discussing his memoir “Late Admissions: Confessions of a Black Conservative.” Now a Brown economics professor, Loury had an unusual and difficult life for an academic, saying he wrote the memoir because “I owed it to myself to tell the real story, and to rely on the generosity of the reader to see past the darkest and ugliest to the hopefully decent and honest human being grappling with his life.”