Robert F. Engle, Class of 1964, Doctor of Laws
With the last elective of your senior year you chose, at the urging of friends, to take Economics 101. I hope you bought them a round of drinks with part of your earnings from the Nobel Prize you won in 2003. After graduating with highest honors in physics, you switched for good during graduate school to the sweet science of economics, and not only the field but the world is better for it. Graduate students at M.I.T. elected you Outstanding Teacher of the Year. They, and your students later at U.C. San Diego and N.Y.U., have gone on to make their own remarkable discoveries throughout economics. Your own books and more than one hundred scholarly articles expanded our understanding of how large asset markets behave over time. Your greatest stroke of genius came in devising a superior system for assessing the risk of volatility in stock and bond markets. It goes by the beautiful name of “autoregressive conditional heteroskedasticity” (Why doesn’t everyone want to be an economist?) and it accounts in a mathematically elegant manner for the fact that volatility in such markets changes over time. This insight, which caught the eye of the Nobel Committee, is now used widely to set asset prices and assess portfolio risk. It has enabled investors to place money into complex markets with deeper confidence, greatly expanding the wealth that those markets have created and that has become available to the world. Thus we all are better off for your having so successfully resisted the senior year slump.
I hereby declare you recipient of the honorary degree Doctor of Laws, entitled to all the rights, honors, and privileges appertaining thereto.
June 3, 2007