Dixit profiled in Finance & Development

|Peter Boettke|

The brilliant Avnish Dixit is profiled in the IMF publication, Finance & Development.  I think all students should read his book with Nalebuff, Thinking Strategically.  In Dixit's hands, economics often becomes quite illuminating and entertaining.  In the profile a former student has this to say about his teaching and research style:

“What makes him special,” says former student Kala Krishna, now an economics professor at Penn State, “is that more than anyone else I know, he sees economics as an inescapable part of life: from books, movies, negotiating with a taxi driver—everything has economic content. He truly loves economics, and you can see how much he is enjoying himself doing it.”

Dixit is a significant theorist as his work on investment under uncertainty, as well as numerous other papers, demonstrates.  I actually think "Austrian" types have under engaged Dixit in the area of capital and investment and that his ideas on irreversible investment has many important connections to Austrian ideas about heterogeneous and multi-specific capital goods, and the problems of what has now been called "recalculation" of economic investment activity.

But Dixit also has contributed greatly to political economy, both with his The Making of Economic Policy: A Transaction-Cost Politics Perspective and even more critical his Lawlessness and Economics.

My favorite line in the profile is from Dixit himself, where he is quoted as saying:

“Of all the lessons I have learnt during a quarter-century of research,” writes Dixit, “the one I have found most valuable is always to work as if one were still twenty-three. From such a young perspective, I find it difficult to give advice to anyone.”

Dixit, who likes popular science and engineering books, says he pretends to have a perpetually youthful mind so as not to be confined by his field and the “distilled wisdom of a middle-aged has-been.”

Research may seem frustrating and daunting to outsiders, but he delights in it. “For me, it is the mental equivalent of free-climbing a new rock face, using only hands and feet for the ascent, or even free solo climbing, without any ropes, pitons, or harnesses to protect one if one falls.”

That example of what Richard Feynman called "The Pleasure of Finding Things Out." And while this definitely isn't the distilled wisdom of a middle-aged has been, but the example of a life-long learner who allow his/her natural curiosity to fuel their quest for understanding.

HT: Tyler Cowen

Comments

[leo]

Thanks for this post.

I have been reading up on Dixit and other scholars in the "irreversibility" literature. One of those other scholars is none other than Ben Bernanke himself, who wrote about irreversibility and uncertainty as far back as 1983. I totally agree with you that "Austrian" types have under engaged these scholars with regard to capital theory. My question is - why?

[Charles N. Steele]

To Leo: IMO too often modern Austrians have abandoned serious study of capital theory. When Dixit, Caballero, Harberger, etc. begin to realize its importance and start tackling it with mainstream tools, Austrians are off doing other stuff (usually much less important stuff, IMO).

[David Andersson]

Ok, so I'm going to read the Making of Economic Policy. It's been on my bookshelf for a couple of years, but I had forgotten about its existence until five minutes ago. Thanks.