While the world of economics may sound complex and incomprehensible to some, students of all disciplines can find something to learn from today’s talk, hosted by the E. J. Ourso College of Business Department of Economics.
Cornell University economist Robert Frank will be delivering a free lecture in the Business Education Complex Auditorium at 2:30 p.m. today.
Professor Areendam Chanda invited Frank to the University because he is one of the authors of the Principles of Economics textbook, which all ECON 2010 students use. The class is a prerequisite course for all business majors.
“Robert Frank is like a messenger for economics in many ways,” Chanda said.
Frank’s talk will be based on his latest book, “Success and Luck: Good Fortune and the Myth of Meritocracy.” It explains his philosophy of how luck and success are intertwined, with one leading to the other.
Frank’s studies have concentrated on wealth and social theory, and he believes that recognizing chance as a factor in economic growth can ultimately decrease pay gaps.
The Cornell professor is one of the faces of economics to the world at large, and not just to economics students, according to Chanda. Frank’s research has made important contributions to microeconomics in how income equality, consumption and status is regarded in society, he said.
Frank’s argument is that self-made people attribute their success to hard work, rather than a combination of hard work and luck. This attitude makes them less likely to give back once they’ve achieved success.
The economist is in favor of progressive consumption taxes to reduce income inequality. The difference between a household’s taxable income and annual savings would be the consumption spending, which would be taxed, rather than personal income.
“He was the one who first brought this idea that the world is increasingly becoming a place where only the best people get a lot of money,” Chanda said. “If you’re ten percent worse than the best, it doesn’t mean you get ten percent less — you get 50 percent less.”
Applying the principles of economics can help people make more informed decisions in other aspects of life, Chanda said.
Chanda teaches HNRS 2011 and undergrad and graduate courses on economic growth. He has been a professor at the University for 12 years.