The Theorist: MIT's Ivan Werning, 33, Uses Theoretical Models to Find the Best Economic Policies on Such Thorny Matters as Estate Taxes and Unemployment Insurance

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EMPIRICAL ECONOMICS IS fine for exploring things that have already happened. For example, you can look at the history of energy prices and determine how much of an increase forces consumers to reduce the heating of their homes. But Ivan Werning is drawn to a different side of economics--the theoretical. Because he's fascinated by public policy, he considers things that haven't yet occurred.

"It's good to understand things that are already happening," he says, "but it's only going to inform you about the policies that exist. I think the idea is to test different policies to determine what would be the best policy." Werning, the son of a mathematician, was born and educated in Argentina, where he witnessed the devastating impact of economic …