Emmanuel Farhi, a French economist and professor of the subject at Harvard University, has died at the age of 41. Farhi died on July 23.
Farhi’s death was described as “unexpected” by his Harvard colleague Neil Shephard. Shephard added that Farhi’s work “was very wide-ranging, including writing important papers on financial stability.” An email that was sent to Farhi’s Ph.D. students that was also shared on Facebook said that Farhi died “suddenly.” The email also said, “This is a tragedy beyond any words I can come up with.” A virtual gathering of staff and students of the economics department will take place on July 25.
Farhi Was Once an Economic Advisor to the French Prime Minister
According to Farhi’s Harvard University profile, he researched issues such as “macroeconomics, finance, international economics, and public finance.” Farhi’s profile also says that was formerly an economic advisor to the French prime minister. In 2017, Farhi announced his support for French President Emmanuel Macron.
On his resume, Farhi attained his Ph.D. in economics from the Massachusetts Institute of Technology in 2006. Farhi has been working at Harvard since 2006, working initially as an assistant professor in the school’s department of economics. Farhi became a professor in 2010 and since 2018 had been the Robert C. Waggoner Professor of Economics. In 2014, Farhi has named as one of the top economists under 45 by the International Monetary Fund.
A Friend Described Farhi as Being a ‘Gift to Humanity’
Farhi is described as a French citizen and U.S. permanent resident on his resume. Prior to working in the U.S., Farhi studied mathematics and economics at Ecole Normale Superieure in Paris. Farhi also studied at Corps des mines in his homeland.
Fellow economist Thomas Philippon paid tribute to Farhi tweeting, “I lost a friend yesterday. Economics lost one of its brightest mind. RIP Emmanuel Farhi.” Another friend, Quoc-Anh Do, called Farhi a “beautiful mind that has left our world.” The tribute described Farhi as being a “gift to humanity.”
Farhi’s ‘Safety Trap’ Phrase Was Used as a Way to Explain the Concerns Over the Economic Impact of Coronavirus
Farhi’s work was mentioned by Fulcrum Asset Management chairman Gavyn Davies’ Financial Times article, “The safe-asset shortage after Covid-19.”
Farhi is credited as warning of a “safety trap” in the bond market following the economic impact of the coronavirus pandemic. Farhi explained a “Safety Trap” in an interview at the 40th Annual Federal Reserve Bank of St. Louis Fall Conference in 2015. He said:
We chose that title, “The Safety Trap,” because it’s related to a liquidity trap. A liquidity trap is a situation where there’s a lot of demand for assets and there’s a shortage of assets in general, so much so that the price of assets goes up, which means that the interest rate goes down. But the interest rate can’t go below zero, because there’s money and bonds would be dominant of the money if the interest rate were to go negative.
In late-June 2020, Farhi published a paper along with fellow economists David Baqaee, Michael J. Mina and James Stock on “Policies for a second wave.” The paper was published by the Brookings Institute. Farhi wrote about the reopening of the world’s economy following the coronavirus quarantine from a U.S. perspective. You can read a synopsis of the paper here.