“The Armenian Adam Smith”: UCLA Holds Conference in Honor of Armenian Economist

LOS ANGELES–A conference titled–"Armenia: Challenges of Sustainable Development" brought together experts in economics–finance–and public policy to the University of California–Los Angeles earlier this month to discuss the achievemen’s and shortcomings of Armenia’s economy. The conference about economic growth–poverty reduction–and financial sector development in Armenia was dedicated to Professor Armen Alchian–a world-renowned Armenian-American economist and UCLA Professor.

Professor Alchian–who was born in Fresno in 1914–received his PhD in Economics from Stanford University in 1943–served in the US Army Air Force during World War II–and joined the UCLA faculty and the Rand Corporation in 1946.

Professor Alchian is widely known to his students and colleagues as the founder of the "UCLA tradition" in economics–a tradition that continues to this day. It emphasizes that individual behavior is self-seeking and "rational" and that this has many unanticipated consequences.

Above all–Alchian is noted for the impact he has had on generations of UCLA graduate students–in no small measure through his first year course in microeconomics. Among his many well-known students is William Sharpe–who received the Nobel Memorial Prize in Economic Science in 1990 for his work on finance. Professor Alchian continues to teach and has been at UCLA for 60 years.

Alchian was born in 1914 in Fresno–California–where his father had immigrated from Erzerum. His mother was one of the first native-born Armenia’s in California–a member of the pioneering Normart family of Fresno. Alchian has vivid childhood memories of General Antranig (Ozanian)–who lived with his family for several months in the 1920s–and of Mrs. Ozanian’s constant fear that the lad might hurt himself as he played with Antranig’s sword.

?Armenia: Challenges of Sustainable Development’

At the May 6 conference–Armenian Educational Foundation Chair in Modern Armenian History at UCLA–Professor Richard Hovannisian opened the day with an overview of the historical role of Armenia’s in the world economy. Turning to the Republic of Armenia–he highlighted the tradeoff Armenia has had to make since 1991 between pressures to privatize the economy and move swiftly to a full free-market system–on the one hand–and the inadequate preparation and negative social impact of these processes–on the other hand.

As for the current conference–he stated: "After sixteen semiannual conferences on Historic Armenian Cities and Provinces and–more recently–on the Armenian genocide–the present one takes us in a new direction with a hard look at the immediate challenges facing the Republic of Armenia and its citizenry."

He added that it was a pleasure to have the young organization–Armenian International Policy Research Group (AIRPG)–serve as a cosponsor and noted that several of the participants were also members of that group–which seeks to facilitate public policy discussions in Armenia and in the diaspora and to foster interaction among researchers and professionals in economics–political science–law–and government.

Professor Harold Demsetz–a long-time colleague and friend of Armen Alchian–also spoke–assessing Alchian’s important contributions to development of economic theory–his major works in the field relating to consumer rationality and behavior of the firm–and his enduring legacy as a teacher and mentor. He lauded Alchian for his "clarity–originality–willingness to break free from old approaches," Professor Alchian then was introduced to a highly appreciative audience that rose to applaud him before he reflected briefly on his life and career.

The first plenary session of the conference focused on the recent book on Armenia published by the International Monetary Fund (IMF)–"Growth and Poverty Reduction in Armenia: Achievemen’s and Challenges," and was moderated by another prominent UCLA economist–Professor Michael Intriligator who called Alchian the "Armenian Adam Smith." The presenter–IMF’s former mission chief to Armenia–Dr. Enrique Gelbard–outlined the key elemen’s of Armenia’s macroeconomic performance in recent years.

While focusing on impressive aggregate growth and low inflation numbers in Armenia–Dr. Gelbard also emphasized the need for more structural reforms–particularly those in the governance realm–for Armenia to sustain this growth momentum. This was followed by commen’s from three discussants–Professor William Ascher of Claremont McKenna College and AIPRG Advisory Board; Professor Daniel Mazmanian of the University of Southern California; and Professor Ara Khanjian of Ventura College and AIPRG.

The afternoon session was chaired by Professor Lee Ohanian of UCLA Economics Department. The first of the three presentations–made by Dr. David Grigorian of the IMF and AIPRG–touched on the issue of low tax revenue collection in Armenia and factors behind this phenomenon.

Subsequently–Dr. Federica Saliola of the World Bank and University of Rome III presented her work on business climate and firm productivity in Armenia in 2002-2005–and put that in perspective with Armenia’s regional competitors.

Finally–Nerses Yeritsyan of the Central Bank of Armenia and AIPRG discussed the achievemen’s and challenges of Armenia’s financial sector and laid out the Central Bank’s ambitious plan of reforming the sector.

At the conclusion of the conference–Professor Hovannisian made the closing remarks and the crowd gave a standing ovation to the 92 year old Armen Alchian–who listened attentively throughout the program.

Mr. and Mrs. Vahik and Alice Petrossian of the Armenian Educational Foundation hosted the participants–other visiting scholars from Armenia–Great Britain–and Canada–and the UCLA Armenian Studies faculty to a post-conference dinner reception with a number of other AEF members.

This conference was organized by the Armenian Educational Foundation Chair in Modern Armenian History at UCLA–Professor Richard Hovannisian–and the Armenian International Policy Research Group–Dr. David Grigorian–with support from the UCLA Center for Near Eastern Studies and Department of Economics.

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