rethinking diversity in economics

I have been blogging and tweeting a lot about diversity in economics, but I have not explained why I am so interested in this topic. And no, it’s not because I am woman in economics and feel shortchanged. I have a great job and two wonderful kids. Sure I’ve heard some crap along the way, but who hasn’t? What motivates me is a concern about the quality of advice we give as economists and how that affects individuals and communities.

I arrived at the Board in the summer of 2007 and started forecasting in 2008. Can you imagine what my first year was like as I learned how to forecast consumer spending? I was barely keeping my head above water, and only with many colleagues helping me. I remember the night in January 2008 when I was in the office late slowly preparing my first forecast meeting presentation … Miles Kimball had sent me an email about some hopelessly overdue research … and then a Board colleague stopped by to check on me. He reminded me that everyone wanted me to succeed, and our staff work is very much a team effort. Reassuring but I still felt like an imposter and that feeling only got worse as the largest recession since the Great Depression took hold.

Fast forward three years to 2011, when we had gotten past the financial crisis and coffee no longer ran out in our cafeteria before 9am and the stress of the work was less acute. The recovery was moving along but not as expected … that was the hardest time at work for me. (Yes, I added a broken heart to a forecast evolution chart.)


One thing nagged at me in particular in 2011 … what if we are wrong? Maybe the economy doesn’t always recover? Maybe we aren’t doing enough? I was surrounded my smart, hard-working colleagues at the Fed and I was closely following the related academic research. But if we, economists collectively, are so smart how did we miss the signs of the financial crisis? The no-doc loans, the house prices can’t fall mentality, the subprime is “contained”, and on and one … If we couldn’t put the pieces together correctly then, what were we missing in the recovery?

Thinking I might find some lessons in the past, I spent some free time talking to people, reading archives, etc. Much of my reflections here are on the Fed, but I think these issues exist through out the economics profession. Granted mine is not a systematic or an expert evaluation. I have mainly been interested in a bigger picture of why not the specifics of what we learned about financial contracts or monetary policy tools.

So what does any of this have to do with diversity in economics? A lot, I think. The financial crisis, Great Recession, and recovery were times when the standard economics playbook was often incomplete or in some cases just plain wrong. A common retort is that some model from way back when foresaw the specific case of financial frictions or even the general case for stimulus. But I don’t buy it. It’s how we use our knowledge … giving advice and making decisions … not the sum total of everything ever written down that matters. If the same person who wrote the “financial accelerator model” could also utter the words subprime “seems likely to be contained” in 2007 then the economics profession was out of its league. I come back again and again to how hard it is for us to think beyond our economist assumptions.

Of course, there were economists who recognized the imbalances in housing markets before the crisis. For one example, see remarks by Josh Gallin and Andreas Lehnert, staff economists, at the June 2005 FOMC meeting (pg 4-11). But it’s much easier to find examples of the economic consensus shutting down or discounting such concerns. At that same meeting (pg 46), I was shocked (but not surprised) to see Greenspan say “Shall we break for coffee?” right after Susan Bies delivered a prescient summary of risks building in mortgage markets. 2005 was fairly late in the game, maybe it would not have mattered much then? However, as early 2000, before the big run up in mortgage debt, there was a call for the Fed to do more about predatory lending practices. Some non-exhaustive bits on this: a push from the Federal Trade Commission in September 2000, Board staff work (lawyers) on a regulatory proposal at the end of 2000, but no real traction as seen in a speech by Ned Gramlich in 2001 containing lots of economist assumptions. And that was even from an economist policy maker who was one of the most aware of the problems.

My point is not to argue that economists are always wrong or that our models are worthless. Quite the contrary. Quantifying issues, modeling historical statistical patterns, thinking hard (and dispassionately) about causal factors is a very important set of skills. Likewise, I was told that the Council of Economic Advisers’ key role in policy making to shoot down bad ideas … a great story from Ken Arrow and I saw it in my rotation there too. Economists think differently than many others and that’s great until it’s not. Being unusually good at counterfactual thinking, trade offs, comparative advantage, and other non-intuitive bits of logic, as well as a love of numbers, are useful attributes of economists BUT only as part of a larger team. For example, we tend to have blind spots at times from our assumptions about efficiency, credibility, rationality, and markets, in a way that a non-economist would not.  And yet, economist are known for going it alone. Sigh.

Groupthink … the lack of meaningful diversity … in economics has real consequences for real people. We give advice to Congress on how hundreds of billions of dollars in stimulus are spent. We make decisions at the Fed on interest rates. And in many capacities, we have input on financial markets, regulation, and business practices. This add up to profound effects on many, many lives. And yet, our closed-system culture puts great emphasis on top five publications (an internal status marker) and the credibility of our economic institutions (making sure economists remain central to policy). I doubt that hiring more women and minority economists alone will remedy our grouthink, but it should help. And I hope that making diversity a priority in our own ranks will help us finally see the benefits of working more closely with and listening to others.

PS The title of my post is a bit of play on the title of an upcoming conference on “Rethinking Macroeconomic Policy.” It’s an esteemed group of speakers, each of which has waaaay more perspective and expertise than I do on economic policy in the past decade. I am sure it will be a thoughtful discussion and I am happy that they are live streaming it so others like me can listen in. I hope that the topic of diversity in economics comes up or that I hear another view on why we culturally got it so wrong and how we can improve the economics profession.

PPS This post … as with all of my macromom posts … reflects my own personal views and should not be ascribed to anyone else in the Federal System or to my role as a staff economist there.

#ILookLikeAnEconomist and so do you …

I was recently asked by someone who organizes a macro outlook conference for names of women and ‘non-white’ men who would be knowledgeable and good presenters. (I think the idea was to avoid a sea of panels with only white, male economists … not uncommon in macro.) The only hard part of his request was finding time to work on the list! Let me stress that I do not group economists in my mind by the color of their skin, gender orientation, or any other personal characteristics. I wrote up a list of suggestions as in groups requested, but their fields of expertise and the examples of their work that I included is more how I think of my economist colleagues. This is not an exhaustive list, I was trying to span the set of topics that might come up at a macro outlook conference. There are nearly 400 PhD economists on staff at the Board, and, of course, plenty of the white men at the Board would also be excellent additions to any macro outlook conference. And while I am proud of improvements in diversity over time at the Board, we also have a ways to go.

I did not intend to make a list solely of economists at the Federal Reserve Board in DC. We do have a mix of policy and research responsibilities that makes us focused on real-world issues. See Beverly Hirtle’s answer on how Fed economists differ from those in academia. We also get a lot of practice on writing and speaking. Even so, diversity takes many forms and you do not want a program full of Fed types. In fact, I went to an awesome conference this week on labor market disparities and it’s awesomeness stemmed from the wide-ranging participation (especially the audience).

Does diversity matter for the economics? Clearly we all want the sharpest, most dedicated economists on the task. But don’t you worry about our pipelines when we start to look or alike or come from the similar backgrounds? I do. A critical mass not a strict equality is often all we need to make the profession welcoming to a would-be sharp economist. Not once have I walked in a forecast meeting at the Board and felt that I stick out as a woman. But that’s not true everywhere I go. Even a few years ago at the NBER Summer Institute, I walked into a room and was one of few women sitting at the table as a presenter. I noticed. When I was at CEA, I got to present the US forecast at the OECD. When I looked around a HUGE table, I was the only woman presenting a country forecast and few were even in the room. By that point, I had done tons of macro forecasting and I knew that I had something to contribute. Who, we as economists choose to represent us and to tell us about the economy, does send a message. Choose your panels and speakers wisely. I want to make sure we are sending a message that supports diversity and makes our economics stronger.

Update: I knew in writing this that I did not know as well how to even set up the race/ethnicity grouping. (Note, gender is not simple either.) I went with the idea of non-white but I would encourage you to visit the Committee on the Status of Minority Groups in the Economics Profession for a more systematic approach. More broadly, I struggle to explain why diversity matters and yes, it should take many many forms but I don’t think it’s a stretch for us to be very concerned about groupthink in economics.

Update 2: The list below is not comprehensive … but maybe some are interested in the overall stats. By my calculations from the webpage, there are 394 economists on the Board staff, of which ~107 are women = ~27%. In macro specialty the split is ~55 women / 218 total = ~25%. Note the “~” takes into account that I don’t know the gender identification. See the Committee on the Status of Women in the Economics Profession’s annual report for some comparisons in the economics profession.

Some Women Economists at the Board:

Stephanie Aaronson, Assistant Director – labor markets, general macro “Labor Force Participation: Recent Developments and Future Prospects”

Kimberly Bayard, Group Manager – IO, measurement, industrial production “Industrial Production and Capacity Utilization: Recent Bulletin Articles and Other References”

Stephanie Curcuru, Assistant Director – international capital flows, market risk measures: “The Return on U.S. Direct Investment at Home and Abroad”

Deepa Datta, Principal Economist– oil markets, international finance “Oil, equities, and the zero lower bound”

Wendy Dunn, Principal Economist – general macro, measurement “The Effect of Sales-Tax Holidays on Consumer Spending”

Burcu Dyygan-Bump, Assistant Director – monetary policy “The Demand for Short-Term, Safe Assets and Financial Stability: Some Evidence and Implications for Central Bank Policies”

Rochelle Edge, Associate Director – Financial stability, DSGE Who is in charge of financial stability, why, and what they can do and “How Useful Are Estimated DSGE Model Forecasts for Central Bankers?”

Laura Feiveson, Senior Economist – consumption, state and local government finance “Does State Fiscal Relief during Recessions Increase Employment? Evidence from the American Recovery and Reinvestment Act”

Sarena Goodman, Senior Economist – student loans, college access, Survey of Consumer Finances “Where Credit is Due: The Relationship between Family Background and Credit Health”

Joanne Hsu, Senior Economist – financial literacy, consumer credit, Survey of Consumer Finances “Minimum Wages and Consumer Credit: Impacts on Access to Credit and Traditional and High-Cost Borrowing”

Jane Ihrig, Associate Director – monetary policy, asset pricing  “Rewriting Monetary Policy 101: What’s the Fed’s Preferred Post-Crisis Approach to Raising Interest Rates?”

Felicia Ionescu, Principal Economist – student loans, human capital “College or the Stock Market, or College and the Stock Market?”

Kathleen Johnson, Assistant Director – household credit markets, measurement “Auto Sales and Credit Supply”

Elizabeth Klee, Assistant Director – monetary policy implementation “Take it to the Limit: The Debt Ceiling and Treasury Yields”

Raven Molloy, Chief – housing markets, urban “Understanding declining fluidity in the U.S. labor market”

Karen Pence, Assistant Director – consumer finance, real estate “How Much Are Car Purchases Driven by Home Equity Withdrawal? Evidence from Household Surveys”

Ekaterina Peneva, Principal Economist – inflation “Inflation Perceptions and Inflation Expectations”

Brigitte Roth Tran, Economist – weather effects “Blame it on the Rain Weather Shocks and Retail Sales”

Claudia Sahm, Chief – consumer spending, general macro “Another Look at Residual Seasonality in GDP”

Kamila Sommer, Senior Economist – housing markets “Implications of U.S. Tax Policy for House Prices, Rents, and Homeownership”

Stacey Tevlin, Associate Director – business investment, general macro “Perspectives on the Recent Weakness in Investment”

Maria Tito, Economist – IO, international trade “Unraveling the Oil Conundrum: Productivity Improvements and Cost Declines in the U.S. Shale Oil Industry” and “Import Penetration and Domestic Innovation: A View into Dynamic Gains from Trade”

Alison Weingarden, Economist – Labor markets, layoffs, regional disparities “Labor Market Outcomes in Metropolitan and Non-Metropolitan Areas: Signs of Growing Disparities” and “The Timing of Mass Layoff Episodes: Evidence from U.S. Microdata”

Min Wei, Deputy Associate Director – Treasury markets, risk premium “Macroeconomic Sources of Recent Interest Rate Fluctuations”

Gretchen Weinbach, Senior Associate Director – monetary policy, banking and monetary transmission “How Have the Fed’s Three Rate Hikes Passed Through to Selected Short-term Interest Rates?”

Rebecca Zarutskie, Chief – bank regulation, lending “Firm Leverage, Labor Market Size, and Employee Pay”

Some ‘Non-White’ Men Economists at the Board:

Aditya Aladangady, Senior Economist – consumer spending, houshold balance sheets “Housing Wealth and Consumption: Evidence from Geographically-linked Microdata”

Jose Berrospide, Chief – financial stability, bank capital The Real Effects of Credit Line Drawdowns

Neil Bhutta, Principal Economist – mortgage lending, consumer finance “The Effect of Interest Rates on Home Buying: Evidence from a Discontinuity in Mortgage Insurance Premiums”

Andrew Chang, Senior Economist – investment “Is Economics Research Replicable? Sixty Published Papers from Thirteen Journals Say “Often Not

Andrew Chen, Economist – asset pricing “Has the inflation risk premium fallen? Is it now negative?”

Brahima Coulibaly, Chief – monetary and exchange rate policies, global capital flows ” Emerging Market Capital Flows and U.S. Monetary Policy”

Illenin Kondo, Senior Economist – international trade, financial crisis in open economies “Foreign Competition and Domestic Jobs: Evidence from the U.S. Trade Adjustment Assistance”

David Lopez-Salido, Associate Director – monetary policy, general macro “Understanding the New Normal: The Role of Demographics”

Alvaro Mezza, Senior Economist – student loans, consumer finance “Student Loans and Homeownership”

Marius Rodriguez, Principal Economist – financial derivatives, CMBS pricing “Drivers of Inflation Compensation: Evidence from Inflation Swaps in Advanced Economies”

Gustavo Suarez, Chief – short-term credit markets, financial crises “Why isn’t Investment More Sensitive to Interest Rates: Evidence from Surveys”

Ivan Vidangos, Principal Economist – labor markets, public finance “Racial Gaps in Labor Market Outcomes in the Last Four Decades and over the Business Cycle”

Missaka Warusawitharana, Group Manager – corporate finance, asset pricing “Mapping Heat in the U.S. Financial System”

out of the weeds …


sharing a concern is the first step. it’s natural to disagree on the next and some may want to step back. fine, even macro folks get that the Representative Agent is a simplification, not a reality.

my last post was more feeling than fact. but I study economic beliefs (ab, c) enough to not apologize for being subjective. even so, it’s hard to explain why I was disappointed by Blanchard or hurt by silly comments. not sure but I don’t feel the need to justify myself or ask you to agree.

I’m more focused what might make things a little better. I got many kind comments in the past week even a thank-you note in the mail! I will never turn down happy but I wrote my post from a good place. I capped off ten years of policy work last Friday, am starting as a section chief on Monday, plus lots of good life stuff.

so why then such a gloomy post? I think our words and culture matter for the quality of our work … and it’s going to take a real effort to move us out of this bad equilibrium. pretty sure each of my quotables in my last post could give me back something much worse said to them. and those are men. I cringe when I hear the stories from senior women in econ (okay and from some junior women) and from people of color. come on folks, this is not okay and it’s hurting the economics. caring should not be an occupational hazard.

on the happy flip side, words matter so we can all do something. I was fortunate to have heard many positives, from folks who believed in teaching and encouraging me. and were funny and good hearted. often the support came in the form of a “you can do better” and was wrapped in lots (and lots) of editing. so many ways to build up an economist and the new ones need it most.

but it’s more than words, in my opinion. a culture of bullying and aggression doesn’t just happen. we can all be jerks but when bad behavior and excess stress are tolerated (and in some cases celebrated), this culture spreads like a weed. if we’re not careful our weeds will choke out the good stuff.

PS I was unpacking some boxes recently and came across this letter … made me smile, Joan Robinson. as I said, lots of ways to encourage the next generation.

if the shoe fits …

I applaud Alice Wu’s research but I didn’t need machine learning or EJMR to tell me that economics has a problem with diversity. I had read earlier research ranging from Amanda Bayer and Cecilia Rouse to Heather Sarsons not to mention years of CSWEP annual reports. Sadly, I didn’t even need to read. Just being an economist is enough to understand the toll that our profession’s aggressive, status-obsessed culture can take.

Here’s my (exhausting but non-exhaustive) submission for ‘text analysis’:

  • 2007 – start of first interview at one of my flyouts

Him: “Our assistant thought your last name was so funny for a candidate.” Me: “How so?” Him: “You know, SAHM: Stay At Home Mom. hahaha” Me: “Oh.”

tl;dr seriously, this is how you recruit new colleagues? I often mourn my lost sense of humor but lots of folks aren’t (trying to be) funny.

  • 2008 – identical, reject referee reports on my JMP, at two field journals despite adding references to some of his papers after first reject

“… footnote 19 just dismisses inconvenient findings without taking them seriously. I do not bother discussing why the arguments on page 3 are invalid, since they are purely polemical …

The correlations of risk measures with other behavior is a nice feature of the study, but I have so many doubts about the modeling of risk aversion that I do not want to comment on the veracity of that work.”

tl;dr he doesn’t use surveys and didn’t read my paper to do his review.

  • 2008 – said to me, or rather to the person I was trying to explain a forecast detail to by his supervisor …

“Don’t listen to her. She doesn’t know what she is talking about.”

tl;dr led to crappy answer in the boardroom (bad form for me to correct a colleague there, so I was silent) the work suffered not just my self esteem.

  • 2011 – while prepping a research conversation with Bernanke was told:

“The Chairman doesn’t want to hear about your research. He wants to hear about research headed to a flagship journal.”

tl;dr thanks for taking the joy out of one of the coolest projects I got to do as a junior staffer and reminding me how little my work is valued.

  • 2016 – EJMR comment in response to my blog post asking why so few women economists blog …

“Thanks Claudia for the pointer, but your research sucks. You have never published in any semi decent journal without your advisor, so your opinions on economics research do not matter. That’s why no one of importance reads your blog, and not because of your gender.”

tl;dr don’t let anyone tell you that EJMR is a bunch of non economist trolls. this is the stupid status crap that shows up everywhere in econ.

  • 2017 – email correspondence about my tweeting on Wu’s research

“sorry if I ruffled your feathers … ”

tl;dr sigh, this is not about me and I’m not a bird … not one word of my concern about status games in economics has sunk in.

That should be enough to explain why I have wasted so much time on this topic on Twitter in recent weeks and why I found Olivier Blanchard‘s post disappointing. Read Amanda Bayer’s interview instead. Then look back at my points above. All but one (I can’t verify the EJMR source) came from an economist who outranked me and was not anonymous. Let’s talk about punching down. Not one of my examples objectified me as a woman or was of the lame ‘she works well with others’ variety. I intentionally shared ones that underscore how the economics suffers. Maybe I got a few of these because I am woman but I know plenty of male economists with examples like these too. The aggression and status quo bias so clear on EJMR did not start or stop there.

I love being an economist and am thankful for the work that I have gotten to do. For every negative comment, I have gotten many positive ones, but I have found that the negatives weigh more.  I am not going to regale you with the details but just being an economist did take a toll on me. And I worry that to survive and succeed I have internalized a lot of bad, aggressive behavior. To check myself, I try to thank people when they help me and I point out when they’re being too hard on themselves. You never know what crap they are hearing from others (including their own inner critic). Oh, and I am adamant that economics is a team effort and not the playground of a few big names.

So let’s start a (ten years overdue) conversation about how an anonymous online website should not be the primary source of info on the job market. We have to do better. I don’t know the answer but I helped with an #econlife Twitter panel this week on being an economist and a parent. Other ideas? Then if anonymity is so bad let’s take a look at our publishing process too.  But if you think stamping out anonymity is all we economists need. Well, as Bernanke likes to say “good luck with that.” The AEA has to step up its efforts, big time … and address the aggression, status seeking, and exclusion that got us here. Hope springs eternal with me, but to be honest, I expect to be disappointed.