Iowa State University's College of Agriculture and Life Sciences presented awards at the annual Alumni Association Honors and Awards Ceremony. Two Department of Economics alumni, Jim Frevert, 1960, and Lowell Catlett, 1980, were honored.

Jim Frevert (left), who retired from Hertz Farm Management Inc. in Nevada, Iowa in 2003, received the Floyd Andre Award that recognizes alums who have made outstanding contributions to production agriculture, agricultural business or who have significantly influenced Iowa agriculture.

Frevert joined Hertz Farm Management Inc. in 1964 after receiving his bachelor’s degree in farm operations in 1960 from Iowa State. He helped build the business’ reputation as a personalized, hands-on service with dedicated professionals. He served as president from 1988 to 2000.

Lowell Catlett (right), dean of the College of Agricultural, Consumer and Environmental Sciences at New Mexico State University, received the Henry A. Wallace Award. The award was established in 1978 to honor an Iowa State alumnus who has made an outstanding contribution to national or international agriculture in writing, teaching, research or leadership.

Catlett is known for sharing his knowledge about technology and its implications on how society lives and works. His presentations are inspiring, lively, varied and upbeat. His areas of expertise include marketing economics, futures markets and production economics. His interests include advising and teaching both undergraduate and graduate students, futures market research, futuristic planning and forecasting.

“Credit Crises, Precautionary Savings and the Liquidity Trap,” with Veronica Guerrieri, University of Chicago. Monday, November 7, 4:00 PM to 5:30 PM, 368A Heady Hall.

Veronica Guerrieri studies macroeconomics, search theory, labor and financial market frictions, dynamic contracting, and growth theory. "Coming from Europe, the malfunctioning of labor markets has always attracted my attention," she says. "My research explores frictional labor markets and other market imperfections."

Guerrieri won the “Alfred P. Sloan Research Fellowship” in 2011, the “Excellence Award in Global Economic Affairs” in 2010 from the Kiel Institute for the World Economy, the “Excellence in Refereeing Award” in 2008 from the American Economic Review, and the “Robert King Steele Faculty Fellowship” in 2007-2008 from Chicago Booth. Guerrieri is an associate editor of Theoretical Economics and a referee for the American Economic Review, B.E. Journals in Macroeconomics, Econometrica<\i>, the Economic Journal, Economic Letters, the European Economic Review, the International Economic Review, the Journal of Economic Theory,<\i>, the Journal of Political Economy, NSF, the Quarterly Journal of Economics<\i>, the Review of Economic Dynamics<\i>, and the Review of Economic Studies.

Guerrieri earned her bachelor's degree summa cum laude and master's degree in economics from Università Commerciale Luigi Bocconi in Milan in 2000 and 2001, respectively, and a PhD in economics from Massachusetts Institute of Technology in 2006. She joined Chicago Booth in 2006, and she has been a Faculty Research Fellow in the National Bureau of Economic Research since 2008. She visited the Department of Economics at MIT in the fall of 2009 and the Research Department at the Federal Reserve Bank of Minneapolis in the winter and spring of 2009.

Abstract: We study the effects of a credit crunch on consumer spending in a heterogeneous-agent incomplete-market model. Households borrow and lend facing an exogenous borrowing constraint. After an unexpected permanent tightening of the constraint, many agents are far below their target level of savings. This generates a large shock to net lending and a sharp fall in the interest rate in the short run. The drop in consumer spending can generate a drop in output under flexible prices, but the drop is larger if nominal rigidities prevent the real interest rate from adjusting downwards.

"Risk Aversion or Risk Management?: How Measures of Risk Aversion Affect Firm Entry and Firm Survival," with In Soo Cho, Iowa State University. Thursday, November 10, 3:40 PM to 5 PM, 468D Heady Hall.

Abstract: The link between measured risk aversion and the decision to become an entrepreneur is well established, but the link between risk preferences and entrepreneurial success is not. Standard theoretical models of occupational choice under uncertainty imply a positive correlation between an individual’s degree of risk aversion and the expected return from an entrepreneurial venture at the time of entry. Because the expected return is the risk neutral equivalent value, a higher expected return implies a higher survival probability, and so more risk averse entrepreneurs should survive more frequently than their less risk averse counterparts. We test that prediction using successive entry cohorts of young entrepreneurs in the National Longitudinal Survey of Youth 1979 (NLSY79). The empirical results soundly reject the prediction: the most successful entrepreneurs are the least risk averse. This surprising finding calls into question the interpretation of common measures of risk aversion as measures of taste for risk. Instead, measured risk attitudes perform as if they are indicators of entrepreneurial ability– the least risk averse are apparently those who can best assess and manage risks. Indeed, our interpretation is consistent with the work of recent experimental studies that find that the less risk averse have higher cognitive ability.