Newsletter No. 462

World's Top Economists Delivers Sun Hung Kai Properties Nobel Laureates Distinguished Lectures Prof. Edward C .Prescott Prof .Si rJame sA . Mirrlee s Prof .Edmun d S . Phelp s Prof. Alberto F . Alesina Prof .Rober tJ . Barr o Sixdistinguished economists, including three Nobel laureates, shared their insight with an audience o f over a thousand i n Hong Kong on the topic o f 'Emergence o f China in the World Economy' a t the Sun Hung Kai Properties Nobel Laureates Distinguished Lectures, Jointly organized b y the Chinese University and Sun Hung Kai Properties (SHKP), th e lectures were held on 3rd June a t the Kowloon Shangri-la. The speakers were Nobel laureates i n economic sciences Prof. Edward C . Prescott (2004), Prof. Robert A. Mundell (1999 ), and Prof. Sir James A . Mirrlees (1996), as well as world-class economists Prof. Alberto F. Alesina and Prof. Robert J. Barro from Harvard University, and Prof. Edmund S . Phelps from Columbia University. Government economist Mr. Kwok Kwok Chuen, and Dr. Victor Fung, chairman o f the L i & Fung Group, were the other panelists. The Hon. Henry Tang, Acting Chief Executive o f the HKSAR, Dr. Raymond Kwok, vice-chairman and managing director o f SHKP, and Prof. Lawrence J. Lau, vice-chancellor o f the University, presided a t the opening ceremony. The 2005 lectures were coordinated b y the newly established Institute o f Economics o f the Chinese University. Prof. Lawrence J. Lau described the forum as an excellent opportunity fo r the lay audience t o appreciate the challenges faced b y the Chinese economy i n the age o f globalization, and a useful platform fo r academics and experts i n the field t o exchange views on ways o f addressing these issues. Dr. Raymond Kwok explained that SHKP has launched the lecture series with CUHK with the aim o f broadening the perspectives o f Hong Kong people, particularly the young, offering them tools and information they need fo r meeting future challenges, and above all , guiding and inspiring the people o f Hong Kong through the examples i t offers o f rigorous scholarship i n action. • Prof. Sir James A . Mirrlees Prof. Mirrlees i s distinguished professor-at- large o f the Chinese University. He shared the Nobel Prize w i th Prof. William Vickrey o f Columbia University fo r their fundamental contributions t o the economic theory o f incentives under asymmetric information. He was knighted fo r contributions t o economic science i n 1997. Prof. Mirrlees' work laid the foundation fo r the modem analysis o f complex information and incentive problems. In his lecture 'Changing Inequality i n the Chinese Economy', Prof. Mirrlees expressed the view that though urbanization may increase inequality for a while, i t w i ll subsequently reduce it. He predicted that i n the next two decades, China should witness enormous migration from rural t o urban areas and the resulting higher urban incomes will contribute t o the lower parts o f the distribution. He also said that rural subsidies such as better schools, healthcare, infrastructure, agricultural subsidies are necessary i f inequality is to be reduced sooner. • Prof. Edmund S. Phelps Prof. Phelps is McVickar Professor o f Political Economy at Columbia University. He has served as consultant o f the Treasury Department, Senate Finance Committee, and Federal Reserve Board o f the US. His monumental contribution o f economics includes introducing imperfect information and imperfect knowledge to macroeconomics. H e pioneered the first generation o f economic models o f unemployment and inflation based on micro- foundations and was the first to stress the importance of reorganizing macroeconomic theory by revising the postulates o f the neoclassical paradigm with regard t o information and knowledge. • Prof. Robert A . Munde ll Prof. Mundell has been professor o f economics at Columbia University since 1974. His writings include over a hundred articles i n scientific journals and books. He prepared one o f the first plans fo r a common currency i n Europe and i s known as the father o f the theory o f optimum currency areas. He has also written extensively o n the history o f the international monetary system and played a significant role i n the founding o f the Euro. I n 1999, he received the Nobel Prize i n economic sciences for his analysis o f monetary and fiscal policy under different exchange rate regimes and his analysis o f optimum currency areas. His lecture 'The Renminbi and the Global Economy' covered the topics o f the rise o f China as an economic power, China's macroeconomic condition, and issues relating t o the renminbi. H e advised against floating the renminbi as a policy for achieving monetary stability, proposing inflation targeting as a relevant option. H e observed that large swings i n the dollar-renminbi exchange rate are very damaging t o China and would greatly exceed any benefits. He also believes that China should remain i n the dollar area rather than shifting t o the Euro. • Prof. Robert J. Barro Prof. Barro i s the Paul M. Warburg Professor of Economics a t Harvard University, a senior fellow o f the Hoover Institution o f Stanford University, a viewpoint columnist fo r Business Week, a frequent contributor t o the Wall Street Journal, and a research associate o f the National Bureau o f Economic Research. He has written extensively on topics i n macroeconomics, economic growth, and monetary policy. • Prof. Edward C. Prescott Prof. Prescott holds the W.P. Carey Chair i n economics at Arizona State University and i s the senior monetary adviser a t the Federal Reserve Bank of Minneapolis. He was awarded the 2004 Nobel Prize i n economic sciences jointly w i th Prof. Finn Kydland fo r their 'contributions t o dynamic macroeconomics: the time consistency o f economic policy and the driving forces behind business cycles'. In his lecture 'The Chinese Economy: Past and Future', Prof. Prescott expressed the view that opening u p and moving t o a market economy are the reasons fo r China's rapid economic growth since the late 1970s, and that i t would become a rich industrial country only i f i t decentralized its political power. • Prof. Alberto F. Alesina Born i n Italy, Prof. Alesina i s the Nathaniel Ropes Professor o f Political Economy a t Harvard University and currently chairman o f the Department of Economics. He i s a leader i n the field o f political economics and has published extensively i n all major academic journals i n economics. His scholarly work has been widely cited and been widely influential. The Sun Hung Kai Properties Nobel Laureates Distinguished Lectures are made possible by a generous donation from Sun Hung Kai Properties. It invites Nobel laureates in any of the six recognized fields (physics, chemistry, physiology and medicine, literature, peace, and economic sciences) to Hong Kong each year to deliver public lectures and meet with scholars and professionals in the education and commercial sectors. Launched in 2004, the series is intended to promote the discovery and dissemination of knowledge, professional and entrepreneurial expertise, as well as scholarly pursuits and contributions to society and humanity. 3 No. 262 19th June 2005