March 4, 2013

Nobel Prize Winner in Economics To Present Lecture On U.S. Housing Bubble and Collapse

Vernon L. Smith, recipient of the Nobel Prize in economic sciences in 2002, will present a public lecture, “Balance Sheet Crises: Causes and Consequences,” Wednesday, March 20, 7 p.m., in the Annenberg Presidential Conference Center on the Texas A&M campus. Smith is a Visiting Scholar of the Texas A&M University Institute for Advanced Studies (TIAS).

Vernon L. Smith

Vernon L. Smith

No tickets are required for admission to the free public lecture, the second in the TIAS Eminent Scholar Lecture Series.

The lecture will address the most recent calamity—the housing bubble and collapse (1997-2012)—and its consequences. According to Smith, “Bubbles are commonplace in history, but severe episodes in the U.S. economy are rare and their collapse not anticipated by economic and policy experts. Collapses can lead to a balance sheet crisis in which households spiral into negative net equity as home values fall against fixed mortgage indebtedness. Various recovery scenarios can be identified, none of them painless.”

Smith holds joint appointments with the Argyros School of Business and Economics and the School of Law at Chapman University, where he is also a scholar in Chapman’s new Economic Science Institute. He was awarded the Nobel Prize in economic sciences in 2002 for his groundbreaking work in experimental economics. He established laboratory experiments as a tool in empirical analysis, especially in the study of alternative market mechanisms. Smith is also a member of the National Academy of Sciences.

As a TIAS Visiting Scholar, Smith will work closely with noted researchers Timothy Gronberg, professor and head of the Department of Economics, and Jane Sell, professor and head of the Department of Sociology, in the College of Liberal Arts. He will also work with Professor Arnold Vedlitz in the Bush School of Government and Public Service’s Institute for Science, Technology and Public Policy.

Smith, who received his doctorate in economics from Harvard University, is the founding president of the Economic Science Association (ESA). The ESA has a membership of over 400 researchers with interests in experimental economics, and includes faculty from nearly every top economics department in the country. He has authored or co-authored more than 300 articles and books on a diverse set of topics, including capital theory, finance, natural resource economics and experimental economics. Smith has been an important contributor to public policy discussions of energy liberalization in the United States and around the world. He is a fellow in the American Academy of Arts and Sciences and the Econometric Society and a distinguished fellow of the American Economic Association.

For more information about the Texas A&M University Institute for Advanced Study, the 2012-13 TIAS Faculty Fellows or the TIAS Eminent Lecture Series, visit


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