"We have been attacked for some time by Harvard," says one MIT economist. "It's kind of an explosive situation."

"It's upset a lot of people--it changes a cooperative atmosphere into a competitive one," says another.

"When you've got two teams in the same town, there's always a big rivalry," says a third. "But you have a sense these days the competition has become more heated."

Competition between two top departments in any discipline is one of the oldest features of academic. But the longstanding rivalry between Harvard's Economics Department and its counter part two subway stops away has recently escalated into a Jively and bard-fought cold war.

Like all Harvard departments. Economics has a regular list of competitors in faculty recruitment--Stanford. Yale, and the University of Chicago foremost among them. But the proximity of the two Cambridge institution with and the regularity with which their economists see each other at work and social occasions heightens the visibility and intensity of their rivalry. "They pond is smaller--news travels faster around here," says Zvi Griliches, chairman of Harvard's Economics Department.

The chief area of contention between the departments is faculty recruitment Over the years, both universities have regularly jostled for professors from other institutions, and on several occasions, each department has tried to hire away junior faculty members from the other

But in recent years, MIT professors charge, Harvard has launched an attack on it much higher scale. In its latest foray into MIT, Harvard snapped up the department's brightest young star, Lawrence J. Summers, who will join the Faculty after a one-year stint on the staff of the Council of Economic Advisors. "He was hired away at the last minute," complains MIT Department Chairman E. Cary Brown. "We were counting on him to fill a very serious need here."

I think we tried everything short of involving the Vatican to keep Larry," says ex-colleague Ruddier Dombusch.

MIT economists bristle even more, however, at Harvard's unusual efforts over the past two years to hire two established and prominent macroeconomists tenured at MIT; Dombusch and Stanley Fischer. Both eventually resisted Harvard's offers, but MIT economists are still shaken from the tussle.

"You have to understand that a department is a family," says Brown. "If one or two key people leave, the quality and charm and all the nice things about a department are substantially reduced, and things can just wither away."

To explain the wound he thinks Harvard's offers have inflicted on his department, Brown says. "If a person of major importance to other people in a department is seriously worrying about moving, it tends to preoccupy other people who are concerned about it. Our GNP doesn't fall by half, but things do become complicated."

Griliches counters that Harvard's efforts to lure away Dornbusch and Fischer have only been fair play. Explaining in the cant of his trade, he says. "It depends on your views of the virtues of competition." He adds that "the alternative would be to enter into a collusion agreement with MIT: If there is an opening at one place, no one at the other place will be eligible. Harvard and MIT would be monopolists deciding to divide the market. Maybe that would be to their benefit but would it benefit the profession?"

Griliches speaks from the target end of the recruiter's telescope as well: one of Harvard's most promising junior faculty members, macroeconomist Olivier Blanchard, is currently weighing an offer to jump ship for a tenured post at MIT. That offer is the first time MIT has wooed a Harvard economist in at least five years, professors say.

"I'll feel bad if Olivier goes to MIT," says Griliches, "but people really ought to be free to choose what they think is best for them. Ultimately, both institutions will be stronger that way."

Brown answers this argument in the same jargon. "Think about it," he says: "You're dealing with an inelastically supplied commodity with a sharply rising demand. There's not much excuse for that sort of thing in the intellectual community."