In Memoriam

In Memoriam: George von Furstenberg

It is with much sadness the Department of Economics announces the passing of longtime faculty member and friend, George von Furstenberg, James H. Rudy Professor Emeritus of Economics. We asked several faculty members and former Ph.D. students to share their memories of George, who passed away on December 13, 2022.

By Robert A. Becker, Professor, Department of Economics, Indiana University

I met George just before the fall 1976 semester started. I was a new hire then, but we’d not been introduced during my job market visit. George and Jeff Green were serving as staff members on the President’s Council of Economic Advisers in that period. George and Gabrielle were extremely welcoming to me and he helped me orient to life in the academy. Indeed, we discussed many topics and I instantly recognized George had a command of a substantial body of economics that was much broader than his immediate research project. His work ethic and professionalism influenced my career approach going forward.

George always seemed to have a very well-defined research project at hand. He had a knack for finding financial support – often from private foundations. His interest at that time was clearly focused on financial markets and related insurance markets. He was always incredibly helpful to his graduate students. I saw this with his joint work with Burton Malkiel and then graduate student, Harry Watson, that culminated in a 1979 Journal of Finance publication on Tobin’s Q, an important metric in valuing stock market returns. When George moved to the IMF, he asked me to supervise Harry’s thesis as he felt it would be improper to continue as the dissertation committee’s chair given his IMF commitments. However, he remained on the committee and provided excellent feedback as Harry’s project moved towards completion. I took George’s nomination of me as the committee chair to be a compliment but knew I could not manage alone and was grateful he maintained an active membership on Harry’s thesis committee.

One aspect of George’s career path was his profound desire to mix academic life and also spend time in Washington in policy research and interaction with decision makers. His ability to work across two very different research environments was impressive. More importantly, he kept his ongoing research closely tied to current policy questions in the financial markets whether domestic or international in scope. Indeed, a substantial part of his career after his IMF period was attuned to international financial economics matters. All of George’s projects yielded publications either in important journals or edited volumes.

George’s projects were constant sources for intense work periods. Once completed, he immediately changed course to a new project. There was one particular project that I remember around 1990 that was radically different from his other works. He organized a multidisciplinary workshop under the topic head: Acting Under Uncertainty. He was funded by an internal IU grant for multidisciplinary research. It involved IU faculty across several departments as well as leading scholars at other universities. My recollection is participation ran across fields in the humanities, social and natural sciences. Papers developed by the workshop’s participants were published in his edited collection, Acting Under Uncertainty: Multidisciplinary Conceptions, Kluwer Publishing, 1990. It appeared in Kluwer’s series on Theory and Decisions devoted to philosophical and methodological issues. This collection was prescient as multidiscipline debates over decision theory’s foundations and search for alternative formulations of decision criteria became an increasingly important topic that remains so to this day.

I was involved with some elements of the Uncertainty workshop, but not a core participant. However, Jim Bullard, then a graduate student, was an active member of the workshop. Jim’s first published paper on learning in rational expectations appeared in the edited volume. As Jim’s thesis proposal moved more towards pure theory and dynamical systems techniques George asked me to take over the committee chairmanship. As before, he remained an extremely active committee member. George was always concerned with getting first rate work from his doctoral students and frequently co-authored papers with them. He was no less committed in Jim’s case. Indeed, Jim’s published work on learning in rational expectations macroeconomic models initiated in the workshop carried over to a number of influential papers. Jim had a great opportunity provided by George’s willingness to have serious conversations with many scholars looking at uncertainty from different perspectives. Jim’s important contributions to rational expectations macroeconomic modeling began by his asking questions on the foundations of those models that might only be well-received at a table of researchers representing vastly different viewpoints. Jim’s first job was in the research department of the St. Louis Fed. He was hired based on his dissertation research on rational expectations learning models that began in George’s project. Jim rose through the ranks to become the bank’s President in 2008 and an important voice in the Federal Open Market Committee’s deliberations on monetary policy. He served in that capacity for fifteen years!

One of the first meetings I had when I started as the Department’s Chair in 1996 was to ask George if he’d be willing to teach an undergraduate seminar course on the North American Free Trade Agreement (NAFTA). He was fully engaged with the economic consequences of that treaty. He even learned Spanish in order to read Spanish language documents associated with NAFTA. George liked my suggestion; he had one question: Could he assign documents written in Spanish? I suggested he could use them as optional for students capable of reading them as an alternative to reading their official English translations. He added that option in the syllabus. He drove home NAFTA’ s consequences for Bloomington using field trips to help students see how a treaty can impact a local community. The class was a huge success.

George was a genuine department leader on the basis of his research and professional reputation. However, he also had a service side focused on recruiting new colleagues, Chris Waller being his most important hire. He created the first departmental governing documents with Bill Witte and contributed to the department’s first strategic plan during my first term as Department Chair. George could be aggressive in faculty meetings. However, his arguments were always well thought out. One way he did this was to read aloud several pages of a handwritten speech. I cannot think of a single vote George lost when he went so far as to read his thoughts at the faculty meeting!

I always enjoyed talking with George about economics or even domestic and foreign politics. After he retired in 2006 his office was moved to one in an alcove near mine. He also took up an important position at the National Science Foundation’s Economics Directorate as a rotator for 3 years. When in Bloomington he would work in his office. We’d have random meetings and discussions. He took great care throughout Gabrielle’s illness to make sure they shared long walks and went to social events together. He managed his own illness with courage and grace. I remember our last meeting before he moved to San Francisco to be closer to his son, Philip.

George’s major comings and goings were important features of his professional career. The department was always better when he was here.

By Willard E. Witte, Associate Professor Emeritus, Department of Economics, Indiana University

George von Furstenberg arrived in Bloomington in 1973 and retired in 2006. For most of that period he was the department’s central pillar in macroeconomics. For all those thirty-three years he was a role model as a scholar, teacher, mentor, and colleague.

George was born in 1941 into an upper-class German family whose position was maintained after World War II. As fitted his social position, from 1955-1958, his early education was at The Oratory School, a Roman Catholic boarding school for boys located in Southern England. George was, however, the fifth son in his family, and he decided that his prospects for individual success in Germany would be limited. Instead, at age 19, he chose to emigrate to the United States, a decision that led to a period of estrangement from his family.

He arrived in this country essentially penniless. Undaunted he went to work (for a time on the docks of New York City), while taking college coursework initially in night classes at City College of New York (where there was no tuition), but then at Columbia University graduating magna cum laude in 1963. This led to a fellowship for graduate study at Princeton culminating with a 1967 Ph.D. in Economics.

During the next decade and a half George moved back and forth between positions in academics and government, beginning in the former realm with an assistant professor position at Cornell. In 1971 he arrived at IU as an associate professor, with promotion to full professor following in 1973. He then shifted to the public sector with a stint as Senior Staff Economist at the President’s Council of Economic Advisers, following which he returned to IU. In 1978 he began five years at the International Monetary Fund as Chief of the Financial Studies Division. The length of this appointment required George to resign from IU. But in 1983 he was rehired, this time as a Rudy Professor. Department Chair Mike Klein announced his return with a Churchillian “George is back” email to the department. He remained on our faculty until his retirement in 2006, with a two-year absence from 2000-2002 when he was at Fordham.

George was a prolific scholar producing a continuous stream of publications stretching from the late 1960s into the second decade of this century. His early work focused on topics related to mortgage finance markets, but by the time he first arrived at IU had shifted to a broader (and more important) concern with the interaction of corporate and government finance with the overall macroeconomy. Then, circa 1990 and for the rest of his career his work shifted mostly to various aspects of international finance. Much of his later work was joint with colleagues and graduate students at IU.

I arrived at IU while George was on his hiatus at the IMF. When he returned, and for most of the following decade we shared the teaching of the graduate core sequence in macroeconomics. It was a good partnership that produced a considerable number of students who have gone on to excellent careers related to macro in academics, government, and the financial sector.

During this same period, we also did most of the department’s recruiting in macro. This meant sitting in hotel rooms at the annual post-Christmas convention of the American Economic Association interviewing long strings of potential hires. George was not one to suffer fools gladly, which could make for some uncomfortable moments. But there were also high points. Probably the best was in 1985 when the convention was in New York. Our list of candidates included a student completing his Ph.D. at Washington State University, not a program that we would normally recruit from. But his thesis advisor was a very competent economist, so we gave him a look and then a job offer, which he accepted. His name was Christopher Waller. He remained at IU for 13 years, then moved to chaired positions at Kentucky and Notre Dame, and finally to the Federal Reserve where he is now on the hot seat as a member of the Board of Governors.

Throughout his career George served as an important role model for all around him – both within and beyond the department. At his retirement reception in 2006 Moya Andrews, then Dean of Faculties, related that earlier in her career George had taught her how to efficiently conduct a meeting. He understood the importance of rules and procedure. In 1999 he and I collaborated on a complete revision of the department’s by laws.

On a more personal level, for a couple of years we regularly played tennis. The first time we played I expected that he would have a traditional game with solid ground strokes and perhaps a serve and volley aspect. That seemed to somehow fit his tall, slender build. Instead, he hit nearly every shot with a variety of spins, often slice, which I found totally perplexing. It was also very effective, and he won most of our matches.

George never lost his patrician upbring. He knew (and exercised) aspects of proper grammar that I didn’t even know existed. By the time I met him, his relationship with his family had been repaired, and most summers he spent time at the family estate in Germany. On one occasion, while he was there, I had a need to talk with him (I don’t remember why) and gave him a call at mid-morning German time. I got through to Gabrielle, his wife, and learned that George was hunting, which meant going to a shooting location toward which staff would drive game.

George was a gentleman who had unfailingly good manners. I don’t ever recall seeing him visibly angry. His love for Gabrielle was deep. Her slow decline during the period before her death in 2019 took a visible toll on George.

Bringing George back to IU was perhaps the best hiring decision by the department during my time here. His passing is a great loss to our profession and to me personally.

Russell (Russ) H. Hillberry; Ph.D. 2000; Professor, Department of Agricultural Economics; Courtesy Appointment, Department of Economics, Purdue University

George von Furstenberg was my Ph.D. advisor. He took a hands-off approach, letting me write my own thesis. But he had a profound influence on my career nonetheless. There are three important ways that he shaped my career.

In his third-year course in International Finance he taught a then-recent paper that had estimated the value of trade within Canada to be more than twenty times larger than Canada-U.S. trade, after adjusting for the effects of distance. This “home bias” in regional trade was to be my dissertation topic, and related issues have been an important part of my research ever since. I was interested in this topic, but in our first meeting I also told George that I wanted to be a Macroeconomist, not an International Trade economist. He told me that I could call myself whatever I wanted, but I should not let labels determine my research agenda. I should work on important topics that interest me. I decided that this would be my topic, and the rest is history.

A few weeks after he lectured on the paper, I turned in a sketch of a research plan that relied solely on economic theory to explain the observed home bias in trade. George told me that I would not have an impact on this literature unless I first went out and found new data. Luckily for me, the U.S. Census Bureau had just begun releasing a revamped data set that tracked U.S. commodity flows. I was one of the earliest users of this data, and that fact launched my research career. The field of international trade was transitioning from theory to empirics, and the empirical focus of my dissertation helped me to catch that wave. More generally, I learned from George that discovering and analyzing new data is one of the most reliable ways to do impactful research. It is a strategy that I continue to follow today.

Some time in the middle of my dissertation work, I had turned in a draft chapter and we met to discuss it. George handed me back the paper with the first page covered in red ink and said, “Today is the day you learn to write like a professional. You need to understand that your readers will be actively trying to misunderstand you. You have to write so clearly that it will be impossible for them to do so.” That was a long meeting. We went through the first few pages of the document one sentence at a time. After I read each sentence aloud, he would say, “Is that exactly what you mean?” or “Do you mean this, or do you mean that?” I would explain what I meant, exactly, and then we would craft a precise sentence conveying the precise thought. That day he taught me to always sweat the language. The importance of precise writing has probably been more important for my career than any other lesson he taught me.

I think it is fair to say that many graduate students of my generation were scared of George. He taught the second course of the first year Macro sequence, and that was by far the most dreaded first-year course. George was intimidating, but mainly because he demanded excellence. When you did something well, he would let you know that he was proud of you. For example, he was very happy to learn that I had downloaded my data from the internet. (This was the mid- to late-1990s, and that was then a new way to acquire data.) He was also effusive in his praise of my dissertation, once it was completed.