Professors Genberg and Swoboda pay tribute to well-respected former visiting professor.
We are sad to report that Larry Sjaastad, Professor Emeritus of Economics at the University of Chicago and distinguished former Visiting Professor at the Graduate Institute, passed away in Chicago on May 2.
Larry Sjaastad spent most of his academic career at the Department of Economics of the University of Chicago where he obtained his PhD in 1961. He joined the Chicago economics faculty in 1962 and retired from the University in 2004. If Chicago was his base, his teaching and research career extended far beyond the United States. To Latin America first, with frequent teaching stints at the Universidad de Los Andes, of Cuyo and Tucuman, of Sao Paulo and at the Catholic University of Chile. Australia was a second focus of his academic career with several visits to the University of Western Australia where he was named Adjunct Professor of economics. Third, the Graduate Institute became his European base. He first visited in 1973, and then was a one-semester regular visiting professor between 1978 and 1987, and a more occasional visitor thereafter.
Larry Sjaastad has made lasting contributions to both economic theory and economic policy. His early work focused on migration which was already the subject of his dissertation. His 1962 JPE article “Costs and Returns of Human Migration” used capital theory to analyse migration and remains a classic to this day. Sjaastad’s stewardship of the Argentinean exchange programme at the University of Chicago stimulated his interest in the development issues of Latin America. His attention thus turned to the lessons of both monetary and trade theory for policy reform in the region. His demonstration, both theoretical and applied, of “How Protection Taxes Exporters” (the title of a monograph with Kenneth Clements) has played an important, in some cases fundamental, role in Latin American economic reform. No less important to reform efforts have been his analyses of public finance, monetary policy, inflation, and debt in the context of the smaller open economies of the region. The same concerns together with the nexus between commodity prices, nominal and real exchange rates, became prominent in Sjaastad’s writings when he started visiting the University of Western Australia in the early eighties. Here again his writings exhibited a concern for policy relevance, grounded in empirical analysis and coupled with a clear and sound theoretical basis.
Larry Sjaastad’s influence on policy has been both direct and indirect. Direct through policy oriented papers and consulting for a variety of governments and government agencies, indirect through the influence of his students, many of whom have attained influential policy or academic positions. Larry’s students (and many of his colleagues) will remember him for the clarity of his teaching, his ability at getting to the core of an issue or policy problem, as well as his readiness to help and counsel them. These are also the qualities for which he will be remembered by all those who have followed his teaching at the Graduate Institute.
There was little, if any, teaching devoted to issues related to less developed economies when Larry started his regular visits to the Institute. His courses on trade and development, monetary and fiscal policy, cost-benefit analysis, all with reference to less developed countries, and some specifically to Latin America, thus filled a gaping hole in the curriculum. He opened the eyes of a whole generation of students to development issues and stimulated several dissertations in the field. He proved a trusted and liked advisor to students and a stimulating and exemplary colleague.
The two undersigned had the privilege of interacting with Larry Sjaastad long before he joined the Institute: Alexander Swoboda met him in 1966 when he was the Post-Doctoral Fellow at the Chicago economics department, Hans Genberg when he started his PhD studies there in 1969. Larry Sjaastad was a mainstay of the so-called Quadrangle Club 5 p.m. seminar, which took place several times a week at the bar of that institution (and must have kept it afloat). For the two years Professor Swoboda was at Chicago, regular participants included Harry Johnson, Al Harberger, Hiro Uzawa, Robert Mundell, and Professor Swoboda for the two years he was in Chicago. It was indeed a privilege for Professor Swoboda to participate and to witness these great minds and sharp wits argue about economics and the problems of the day informally, undisturbed by the vapors of alcohol.
Both of us also had occasion to interact with Larry outside of Chicago or the Institute. A particularly noteworthy project took place in El Salvador in 1984-85. Larry had been asked to form a group to advise the government on the unification of the country’s exchange rate system, and he invited the two of us, together with Carlos Rodriguez, to join him. The collaboration on this project was an occasion to see the many facets of Larry that we remember and miss; a first-rate innovative economist, an effective policy adviser, and a delightful colleague.
Larry is survived by two sons of a first marriage and by his wife Irene Glasner. Irene links Larry even more closely to the Institute. He met her while she was a student at HEI. We grieve with her and share her loss.
Hans Genberg & Alexander Swoboda
Irene Sjaastad’s contact address: 5555 S. Everett Ave, Apt. E-4, Chicago Ill. 60637