![]() “We’ve got a lot of smart people in the department, but he stood out,” Stein said.įarhi had such an “enormous work ethic” that the areas in which he left his mark are “overwhelming,” Stein said. Stein said Farhi was touted as a star when the department hired him, growing into the “leading macroeconomist of his generation.” ![]() “He was a man of action, for whom research only made sense when put in the service of the progress of all.” “Farhi was not only a man of ideas,” the palace said. In a statement upon his death, the Elyseé, France’s presidential palace, said Farhi “could have one day won the Nobel Prize.” He won the 2009 Bernacer Prize for the best European economist under the age of 40, the 2011 Malinvaud Prize from the French Economic Association, and was named one of the top 25 Economists under 45 by the International Monetary Fund in 2014. He recently agreed to serve on a commission of economic experts to French President Emmanuel Macron. He earned tenure in 2010, three years faster than most faculty.įarhi retained ties to his native France, serving on the Council of Economic Analysis to French Prime Minister François Fillon from 2010 to 2012 and as a fellow at the Toulouse School of Economics. ![]() from MIT in 2006.įarhi joined the Harvard faculty as an assistant professor the same year. He graduated from a highly prestigious program training the next generation of French technocrats in France in 2005, as well earning a Ph.D. He ultimately chose to attend the École normale supérieure, another top graduate school. He won the Concours général, the top academic competition in France, in the subject at age 16, and placed first on the national entry exam to one of the country’s top engineering schools. Just last month, Farhi worked to help governments recover their economies during the coronavirus pandemic.įarhi died unexpectedly on July 23 at the age of 41.īorn in 1978 in Paris, Farhi nearly brought his talents to a different field - physics. He instead struck his friends and colleagues with his kindness, humility, and unflinching dedication to public service. The tragedy is that he did not live long enough to test the prediction.Hailed by the French government and several of his peers as one of the best economists of his generation, Harvard economics professor Emmanuel Farhi never let his talent go to his head. The dominance of the dollar would be challenged, said Mr Farhi in 2019, though “you have to take the long view here and think about the next decades, not the next five years”. But as alternatives became available, Treasuries would become much more vulnerable to self-fulfilling crises. For now, investors doubting the safety of American government bonds had few other places to park their cash. One solution would be for other issuers of safe assets, such as the European Union or China, to emerge-though in a paper with Matteo Maggiori of Harvard, Mr Farhi warned that the transition could be messy. Speaking to the Richmond Federal Reserve in 2019, he noted America’s shrinking share of the global economy and worried that its role was becoming too much to bear. But if it tried to keep up with investors’ demand for safety, its ability to repay its debts might one day be called into question. If it produced too few safe assets then, with interest rates unable to adjust fully, global aggregate demand would stay depressed. Mr Farhi saw America’s role as the world’s banker as unsustainable. The result was that interest rates for households and firms were, in effect, too high-and, in turn, their consumption and investment too low. Interest rates fell but, having fallen to around zero, could not decline further. The result was a severe global shortage of safe assets. And, after the debt crisis of 2010-12, investors realised that sovereign bonds in the euro zone were wobbly. But these were soon revealed to be far from safe. Demand for havens had led to an appetite for pseudo-safe assets, such as packaged subprime loans. That paper spawned more research on how the world was stuck in a “safety trap”. As a result, its current-account deficit had bulged, and its assets accounted for a bigger slice of global portfolios. America’s economic and political might made it well-placed to service this savings glut. They argued that the global demand for safe assets had outpaced supply over recent decades. ![]() Mr Farhi’s most-cited work was on safe assets, written in 2008 with Ricardo Caballero of the Massachusetts Institute of Technology and Pierre-Olivier Gourinchas of the University of California, Berkeley. ![]()
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