Metaphors for monetary policy are one of my econ pet peeves. Whether the Fed is “steering a ship in a dense fog” or “a bus driver in the Alps” or “the intrepid crew of the R.M.S. Carpathia” … I am always left wondering how this imagery helps anyone. And why so many about transportation? But these metaphors (or maybe they’re analogies?) are soooo prevalent that, if nothing else, they must make sense to the economists who use them.
And that insight gave me a ‘fun’ idea: use monetary policy as a metaphor to discuss the draft of the AEA’s code of professional conduct. I’ve been struggling with my comments on the draft and thought an econ framework might help. Plus, on metaphors, maybe if you can’t beat ’em, join ’em.
I will comment on the draft code in three sections, each shown in block quotes below. I very much agree with the spirit of the code’s opening:
“The American Economic Association holds that principles of professional conduct should guide economists in academia, government, and the private sector.
The AEA’s founding purpose of “the encouragement of economic research” requires intellectual and professional integrity. These demand honesty and transparency in conducting and presenting research, disinterested assessment of ideas, and disclosure of conflicts of interest.
The AEA encourages the “perfect freedom of economic discussion.” This goal requires considering each idea on its own merits and an environment where all can freely participate. Economists have a professional obligation to conduct civil and respectful dialogue in all venues including seminars, conferences, and social media. This obligation applies even when participating anonymously.”
Defining the longer-run goals of the AEA (“encouragement of economic research”) as well as a communication policy (of “respectful dialogue in all venues”) … also reminds me of topics that have engaged monetary policymakers in recent years.
See for example this speech by then-Fed Chair, now AEA President-Elect Ben Bernanke: “Communication and Monetary Policy.” Along with a ‘driving a car’ comparison, Bernanke talks about the FOMC longer-run policy goals first issued in January 2012. The transcripts of the 2012 FOMC meetings came out this month, so I have been reading the discussion of the policy statement (here at page 42 and here at page 115, latter with a Garmin metaphor). This goals statement for monetary policy was MANY years in the making and is now reviewed annually. Getting the AEA’s goals and communication right is not a one-shot operation either. I appreciate the accompanying committee report to the code and we are going to need to talk a lot more as a profession what this code of conduct means.
I also want to flag some cautionary remarks from then-Governor Tarullo on broad statements of goals. When there is a lot of disagreement (and I think both monetary policy and economics profession meet that criteria), we can “artfully craft a text with enough left unsaid or ambiguous that all sides can credibly argue that it reflects … their favored position.” The fact that Kirk of EJMR fame, Ben Bernanke, and I would probably agree on this part of the AEA’s code may be a sign of how weak it is … and how little the code will change behavior.
The next section of the draft code, aiming at “equal opportunity” and “equal treatment,” strikes me as the most problematic:
“The AEA seeks to create a professional environment with equal opportunity and equal treatment for all economists, regardless of age, gender, race, ethnicity, national origin, religion, sexual orientation, disability, health condition, marital status, parental status, genetic information, professional status, or personal connections.”
It’s not hard to applaud “equal opportunity” but we all know that this is a tall, tall order to achieve. And we need some metrics on what equal opportunity would look like in economics. That said, it’s the “equal treatment” language that stopped me. I can’t think of a single monetary policy rule that would say equal interest rates regardless of economic conditions. The whole reason we have this code to discuss today is because economics had gotten soooo far from professionalism. A nasty econ website, bias in research credit, a huge petition, and even textbook disparities … give me a break, we don’t need to just to be all “equal treatment” after years of “unequal outcomes.” And while more economists are FINALLY coming around to the idea the economics profession has a problem, many smart and serious economists continue to explain away these concerns. If an undergrad putting her career on the line before it even starts, doesn’t get you to wake up … then what possibly would? I suppose always ‘do-the-same-as-last-time’ (equal treatment in all conditions), could be a monetary policy but that sure ain’t going to stabilize the business cycle.
I am being a little unfair … that paragraph in the code could be read as a new longer-run equilibrium for economics, but I worry that it 1) says nothing about the transition path and 2) doesn’t take a stand on how far away we are from “equal opportunity and equal treatment” today. I would put both items high on the list of questions to ask on the new survey of the profession proposed in the committee report.
In addition, though without a monetary policy tie in, the list of attributes for equal treatment worry me. Listing out specific groups for “equal treatment” strikes me as problematic for many reasons. The baseline should be for everyone to have access to a respectful and open professional environment. And it’s not even clear that “equal treatment” is a way to promote better economic research. For example, this study found that tenure-clock extensions to new parents, regardless of gender, ended up helping economist fathers more than economist mothers. Human biology is not so interested in “equal treatment” and we are working under those constraints too (note: contrary to popular opinion, economists are people). I don’t have a vision for how to improve this part of the code but I do think it’s the weakest point in the current draft.
Moving on to the final part of the code … and it is a strong finish:
“Economists have both an individual responsibility for their conduct, and a collective responsibility to promote responsible conduct in the economics profession. These responsibilities include developing institutional arrangements and a professional environment that promote free expression concerning economics. These responsibilities also include supporting participation and advancement in the economics profession by individuals from diverse backgrounds.
The AEA strives to promote these principles through its activities.”
I love! love! love! the call for “collective responsibility.” The fact that the hard work of improving gender representation in economics often falls to women or the racial/ethnic representation to under-represented minorities DRIVES ME BONKERS. If our diversity and culture are important (and I think it is for the economics), then we all need to be contributing to the effort. The discussion of institutional arrangements in the code is also welcome. Keeping with my monetary policy metaphors, this Macro Musings podcast on Fed independence may have some parallel lessons. The economics profession as a whole could benefit from thinking more about how we fit within a larger policy and academic ecosystem.
In summary, the AEA’s professional code is a great way to broaden the conversation about improving economics. I worry when it gets bogged down in what differentiates us (gender identity, race/ethnicity, doctoral program, etc.) … but I see many places reminding us of our common ground and common responsibilities. We are all here because we love economics and see it it as a powerful tool to understand and improve the world. Of course, we don’t all agree on how to use those tools or even which tools are useful. That’s life … but so is striving for something better. It’s worth taking a long view. Economics, as with other social sciences, is still young … and so is the Fed (just hit its 100th b-day in 2013) … not surprising that both are still evolving.
PS if you have comments on the AEA draft code of conduct, please submit them by March 15 here. My post is way over their 750-word limit for comments, so I’d welcome thoughts on what points I make are worth passing on.
PPS as with all macromom posts, this represents my views and not those of my employer or any colleagues. All the monetary policy discussed here was (made public in the past and) used simply as metaphors for the code of conduct.