Marc Melitz Named Professor of Economics

Cambridge, Mass. - September 15, 2009 - Marc Melitz, an economist who specializes in international trade theory and has worked on the development of trade models that account for differences in productivity between firms, has been named professor of economics in the Faculty of Arts and Sciences at Harvard University, effective July 1, 2009.

Melitz was formerly associate professor of economics and international affairs at Princeton University. Prior to being on the faculty at Princeton, Melitz was John and Ruth Hazel Associate Professor of Economics at Harvard from 2005 to 2006. Melitz joined the Harvard faculty in 2000 as assistant professor of economics, and was named associate professor in 2004.

“Professor Melitz is an outstanding and accomplished scholar who has already proven with his namesake model that he has much to contribute to the field of international trade,” says Stephen Kosslyn, dean of social science in FAS. “I am delighted that he will return to the Harvard faculty to continue his scholarly inquiry and teaching as a member of the Department of Economics.”

The Melitz model considers differences in productivity among firms, and helps to explain variations in export and foreign direct investment patterns. The model is now widely used in the field of international trade, and was first published in an article by Melitz in the journal Econometrica.

In this work, Melitz showed how only a subset of more productive firms choose to export to other countries, while firms with intermediate productivity serve the domestic market. The least productive firms cannot compete and exit. In this way, international trade generates a shift in output from low productivity firms to high productivity firms. The model has become a cornerstone of trade theory, and has implications for investment patterns and trade policies.

Melitz’s subsequent scholarly work has built upon the Melitz model. In a paper in the American Economic Review co-authored with Elhanan Helpman and Stephen Yeaple, Melitz extended the model to account for foreign direct investment. In a joint paper with Fabio Ghironi published in the Quarterly Journal of Economics, he embedded the model into a macroeconomic model examining the movement of international relative prices and exchange rates across countries.

Melitz received his M.A. in 1997 and Ph.D. in 2000, both in economics, from the University of Michigan. In 1992, he received an M.S.B.A. in Operations Research from the University of Maryland School of Business and Management. He received his B.A. in mathematics from Haverford College in 1989.

Melitz is associate editor of the Journal of International Economics and Economic Journal, a foreign editor for the Review of Economic Studies, and is a research fellow at the Center for Economic Policy Research and a faculty research fellow with the National Bureau of Economic Research. He was elected fellow of the Econometric Society in 2008, and was an Alfred P. Sloan Research Fellow from 2005 through 2009. His research has been funded by the National Science Foundation, the Weatherhead Center for International Affairs, and the Alfred P. Sloan Foundation.


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