Articles from the Institute Letter

Additional articles from new and past issues of the Institute Letter will continue to be posted over time and as they become available.

By Dani Rodrik

Barbara Smaller/The New Yorker Collection

When economists skip over real-world complications, it’s as if physicists spoke of a world without gravity.

When the 2013 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel (colloquially known as the “Economics Nobel”) was awarded to Eugene Fama and Robert Shiller, along with Lars Peter Hansen, many were puzzled by the selection. Fama and Shiller are both distinguished and highly regarded scholars, so it was not their qualifications that raised eyebrows. What seemed odd was that the committee had picked them together.

After all, the two economists seem to hold diametrically opposed views on how financial markets work. Fama, the University of Chicago economist, is the father of the “efficient market hypothesis,” the theory that asset prices reflect all publicly available information, with the implication that it is impossible to beat the market consistently. Shiller, the Yale economist, meanwhile, has spent much of his career demonstrating financial markets work poorly: they overshoot, are subject to “bubbles” (sustained rises in asset prices that cannot be explained by fundamentals), and are often driven by “behavioral” rather than rational forces. Could both these scholars be right? Was the Nobel committee simply hedging its bets?

While one cannot read the jury’s mind, its selection highlighted a central feature of economics—and a key difference between it and the natural sciences. Economics deals with human behavior, which depends on social and institutional context. That context in turn is the creation of human behavior, purposeful or not. This implies that propositions in economic science are typically context-specific, rather than universal. The best, and most useful, economic theories are those that draw clear causal links from a specific set of contextual assumptions to predicted outcomes.


By Juan Maldacena

Two papers written by Albert Einstein and Members at the Institute in 1935 on quantum mechanics and black holes initially seemed to be completely disconnected but recent research by Juan Maldacena suggests that they are closely connected.

Can the weird quantum mechanical property of entanglement give rise to wormholes connecting far away regions in space?

In 1935, Albert Einstein and collaborators wrote two papers at the Institute for Advanced Study. One was on quantum mechanics [1] and the other was on black holes [2]. The paper on quantum mechanics is very famous and influential. It pointed out a feature of quantum mechanics that deeply troubled Einstein. The paper on black holes pointed out an interesting aspect of a black hole solution with no matter, where the solution looks like a wormhole connecting regions of spacetime that are far away. Though these papers seemed to be on two completely disconnected subjects, recent research has suggested that they are closely connected.

Einstein’s theory of general relativity tells us that spacetime is dynamical. Spacetime is similar to a rubber sheet that can be deformed by the presence of matter. A very drastic deformation of spacetime is the formation of a black hole. When there is a large amount of matter concentrated in a small enough region of space, this can collapse in an irreversible fashion. For example, if we filled a sphere the size of the solar system with air, it would collapse into a black hole. When a black hole forms, we can define an imaginary surface called “the horizon”; it separates the region of spacetime that can send signals to the exterior from the region that cannot. If an astronaut crosses the horizon, she can never come back out. She does not feel anything special as she crosses the horizon. However, once she crosses, she will be inevitably crushed by the force of gravity into a region called “the singularity” (Figure 1a).


An IAS teatime conversation in 1935 introduces an ongoing debate over quantum physics.

"Einstein Attacks Quantum Theory” read the New York Times headline of May 4, 1935. The article continued:

Professor Albert Einstein will attack science’s important theory of quantum mechanics, a theory of which he was a sort of grandfather. He concludes that while it is “correct” it is not “complete.” With two colleagues at the Institute for Advanced Study here, the noted scientist is about to report to the American Physical Society what is wrong with the theory of quantum mechanics. The quantum theory with which science predicts with some success inter-atomic happenings does not meet the requirements for a satisfactory physical theory, Professor Einstein will report in a joint paper with Dr. Boris Podolsky and Dr. N. Rosen.

Two years after he joined the Institute’s Faculty, Einstein coauthored the referenced paper “Can Quantum-Mechanical Description of Physical Reality be Considered Complete?” with Podolsky and Rosen, generally referred to as EPR. Einstein had recruited Podolsky and Rosen as Members of the Institute in 1934. In a letter dated November 10, 1933, to Abraham Flexner, the Institute’s founding Director, Einstein described Podolsky as “one of the most brilliant of the younger men who has worked and published with [Paul] Dirac.”

Charles Simonyi

The IAS Questionnaire: Charles Simonyi, Chairman of the Institute's Board of Trustees, reveals what makes him curious, the most surprising thing he's learned, and the question he would most like answered.

The Hungarian-born computer software pioneer, philanthropist, and Chairman of Intentional Software Corporation and the Institute’s Board of Trustees has twice visited the International Space Station, amounting to a total of twenty-eight days in space. His father, Károlyi Simonyi, was a physicist and electrical engineer whose book A Cultural History of Physics (AK Peters, 2012) was first published in Hungarian in 1979

What makes you curious? Immanuel Kant talked about the “moral law within”; I sense that curiosity is also within us like the moral law.
Whom do you most admire and why? J. S. Bach: creator of sublime beauty who worked very hard. Michael Faraday: an intuitive, self-taught genius.

This original painting was created by Robbert Dijkgraaf, Director of the Institute and Leon Levy Professor, to commemorate the celebration in Freeman Dyson’s honor, “Dreams of Earth and Sky.” The title is taken from a book written in 1895 by Konstantin Tsiolkovsky, a Russian schoolteacher who worked out the mathematics of interplanetary rocketry in the nineteenth century. “The Earth is the cradle of the mind,” Tsiolkovsky wrote, “but we cannot live forever in a cradle.”

In 2013, Freeman Dyson celebrated his ninetieth birthday and also marked his sixtieth year as a Professor at the Institute for Advanced Study, the longest tenure of any Faculty member in the Institute’s history. When Dyson first arrived as a Member in 1948, the Institute was less than twenty years old. “Dreams of Earth and Sky,” a conference and celebration conceived by Dyson’s colleagues in the School of Natural Sciences and held September 27–28, provided a perspective on his work and impact across the sciences and humanities. The program featured a range of talks on mathematics, physics, astronomy, and public affairs that reflect both the diversity of Dyson’s interests and his ability to open new dialogues.

The son of composer Sir George Dyson and Mildred Atkey, Dyson was born in Crowthorne, England, on December 15, 1923. He worked as a civilian scientist for the Royal Air Force in World War II, and graduated from Cambridge University in 1945 with a B.A. degree in mathematics. He went on to Cornell University as a graduate student in 1947 and worked with Hans Bethe and Richard Feynman. One of Dyson’s most notable contributions to science was the unification of the three versions of quantum electrodynamics invented by Feynman, Julian Schwinger, and Sin-Itiro Tomonaga. Dyson then worked on nuclear reactors, solid state physics, ferromagnetism, astrophysics, and biology, looking for problems where mathematics could be usefully applied. Author of numerous articles and books about science for the general public, he has also been heavily invested in human issues, from arms control and space travel to climate studies. Dyson once remarked that he was “obsessed with the future.” His keen observations and sense of wonder, which have inspired generations here at the Institute and beyond, are powerful testaments to the freedom provided by the Institute to follow one’s future, wherever it may lead.