Econometrics

When Colombus left Spain in 1492, sailing West, he knew that the Earth was round and was expecting to land in Japan. Seventeen centuries earlier, around 200 BC, Eratosthenes had shown that its circumference was 40,000 km, just by a smart use of mathematics, without leaving his home town of Alexandria. Since then, we have learned much more about Earth: it is a planet, it has an inner structure, it carries life , and at every step mathematics have been a crucial tool of discovery and understanding. Nowadays, concerns about the human footprint and climate change force us to bring all this knowledge to bear on the global problems facing us. This is the last challenge for mathematics: can we control change?
This is a two-part lecture, investigating how our idea of the world has influenced the development of mathematics. In the first lecture on July 15, I will describe the situation up to the twentieth century, in the second one on July 17 I will follow up to the present time and the global challenges humanity and the planet are facing today.
 

• Lecture 1 (of 2)
• Lecture 2 (of 2)

Economists are interested in studying who matches with whom (and why) in the educational, labour, and marriage sectors. With Aloysius Siow, Xianwen Shi, and Ronald Wolthoff, we propose a toy model for this process, which is based on the assumption that production in any sector requires completion of two complementary tasks. Individuals are assumed to have both social and cognitive skills, which can be modified through education, and which determine what they choose to specialize in and with whom they choose to partner.

Our model predicts variable, endogenous, many-to-one matching. Given a fixed initial distribution of characteristics, the steady state equilibrium of this model is the solution to an (infinite dimensional) linear program, for which we develop a duality theory which exhibits a phase transition depending on the number of students who can be mentored. If this number is two or more, then a continuous distributions of skills leads to formation of a pyramid in the education market with a few gurus having unbounded wage gradients. One preprint is on the arXiv; a sequel is in progress.