Prof. Kristin Forbes

August 2001, MIT Sloan faculty/staff page

Kristin Forbes is not much older than the MBA students she teaches — even younger than some. But in her third year of teaching, she has their respect.

In May students selected Forbes, along with Professor Rebecca Henderson, as co-teacher of the year. Forbes, assistant professor of management, considers the honor hard-won.

“For the first few weeks of a class, I know students push me harder than they push older professors,” she says. “They ask more questions. But if I answer the questions well, I earn their respect.”

Earn their respect she has, distilling complex international macroeconomics for students enrolled in the two macro courses she teaches.

Says one student: “Kristin is a remarkable instructor and a caring professor who can really explain and relate complicated macro material in a way that is logical and sensible to all of us.”

Homing in on income inequality

In her young career as an economist, Forbes hasn't been swayed by a challenge, either from intellectually aggressive students or controversial research topics.

As a PhD candidate in the MIT Economics Department, she wrote part of her thesis on the relationship between economic growth and income inequality — a politically charged topic at the heart of global economic aid strategies.

After poring through economic indicators, Forbes found the numbers contradict the prevailing position among economists and experts at the World Bank that reducing inequality will simultaneously bolster growth.

A numbers person, Forbes quickly learned the complex interrelation of economics, politics, and social policy. Three years later she still receives email decrying her research as undermining well-meaning policies.

Chance to make a difference

The thesis had innocent origins — it was an economic, not a political statement, she maintains — but for Forbes, economics represents a chance to make a difference.

A New Hampshire native with a BA in economics from Williams College, she began her career on Wall Street as an analyst with Morgan Stanley. A year passed and she found the opportunity to shape economic policy an appealing, life-changing notion.

She joined the World Bank as a researcher and earned her stripes studying the roots of the East Asian economic boom.

The Asian boom turned to bust in 1997, when Forbes was a PhD candidate at MIT, and she relished the chance to study the demise of an economic ascent that her peers at the World Bank once championed.

The rapid rise and unexpected fall of Asian economies is still very much part of her research. She recently co-edited a book on international financial contagion, which some assert contributed to the Asian crisis. She also continues to study the connection between inequality and economic growth.

Both topics put her work at the center of political and social policy-making, a realm where economic and social principles sometimes compete.

“It's frustrating,” she says, “because often what's best for the economy does hurt people and leads to tough social consequences. That's when economics might not provide the full answer.”

A year in Washington

Forbes this fall will join the U.S. Treasury as a deputy assistant secretary in the International Affairs Division.

She'll return to MIT Sloan next year — her teaching enriched by the experience — but for a year she'll have a chance to fulfill the dream that drove her from Wall Street to the World Bank.

“Working at the World Bank seemed so exciting,” she recalls. “I felt as if you could make so much of a difference. Rather than financing a deal for a big company, which could probably obtain the money elsewhere, you could actually affect how a country runs itself and improve the economic environment in which thousands of people work and live.”

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