joy to the (macro) world

My post introduces you to the 21 job market candidates in macroeconomics, whose papers I had the privilege to comment on their writing this fall. Below is my summary of their papers and links to their papers. Here is Macro_Candidates document with the full list. Enjoy their research. I did!

Hang out with us macro economists on #EconTwitter and you will see a curious ritual. Someone criticizes macro and BOOM … it’s batten down the hatches, circle the wagons, fire up the torpedoes, etc. Today’s post is NOT about the macro wars and NOT about the macro economist reactions. That conversation is bogged down. And I am in a good mood.

So let’s talk about the future. I want to share the research from 21 of our newest economists who are currently on the job market. Earlier this fall, I commented on their papers, across a wide range of macro topics. It’s the economics in their papers that stands out; our newest colleagues are the most cutting edge among us. In addition, these new scholars care about communicating their research well. They each asked me for feedback on their writing and then put in the effort to improve. Now we all can see their economic insights more clearly. Better communication—engaging, listening, thinking, responding—is valuable for EVERYONE.

I have grouped their research under five big-picture questions:

  • How do differences across people affect the economy?
  • How do differences across businesses affect the economy?
  • How can we ensure that markets are dynamic and robust?
  • How do individual decisions add up to market-level outcomes?
  • How can we better understand our dynamic economy ?
  • How can we improve economic policy and raise overall well-being?

Each researcher here addresses at least one of these important questions. Read paper by paper the progress at the frontier of economics may seem glacial. Taken as a whole, it is quite exciting.  My goal is to provide a window into their scholarship. You can find much more in their papers. If the page count is daunting, their introductions give an overview of their contributions, technical approaches, and findings. I hope you enjoy their research, as much as I did. To give each the focus that they deserve, I will write this post in installments over the next week. Here we go.

PART ONE … Differences in our world matter 

across people … 

Economists have long pondered how differences across people affect the economy. Yet to study our complex world, macro models sometimes compress us into a single ‘representative agent.’  No one believes that we all make the same decisions, but it is an attempt—such as it is—to tie our understanding of the economy back to individuals.

These four new research papers widen the lens and help us to understand how specific differences across people shape their decisions and the economy.

Who Benefits from Innovations in Financial Technology? by Roxana Mihet

Mihet shows that the explosion of financial technologies for individual investors, such as e-trading platforms and online information about stock returns, does not guarantee broad increases in household wealth. Instead, the sophisticated investors who already have relatively high levels of wealth are most likely to benefit from many of the new technologies. She creates a theoretical model of asset managers and investors to show which types of new technologies can reinforce existing disparities in wealth. Empirically she finds that new technologies since the early 2000s that lowered the cost of information about asset managers and assets returns have contributed to increases in wealth inequality.

Liquidity Constraints and Healthcare Expenditure by Sümeyye Yildiz 

Yildiz explores how being unable to spend as much as needed—referred to as liquidity constraints—today, as well as expected constraints in the future affect healthcare spending.  Specifically, differences in wealth and income interact to create differences in out-of-pocket medical expenditures.  She studies both medical and food expenses. In her model and empirical analysis, Yildiz shows that many low-wealth households cannot spend as much as they need on healthcare. In addition, this spending increases more if a low-wealth household has relatively high income. In contrast, among high-wealth households, most can spend as much as they need today, but those with relatively high income are more likely to expect constraints in the future. As a result, they lower their medical expenses today. Finally, Yildiz shows that food expenditures vary less with income across the wealth distribution and are higher among those with higher income. 

Risky Business: The Choice of Entrepreneurial Risk under Incomplete Market by Baxter Robinson

Baxter unpacks an important barrier to starting a business—would-be entrepreneurs are unable to protect themselves against future declines their income or business failures. No market currently exists for individuals to buy such insurance. As a result, banks limit their lending to new entrepreneurs, so wealthy individuals are more likely to become entrepreneurs. They are also more likely to start high-risk, high-return businesses. Wealth begets more wealth. Baxter models the choice to become an entrepreneur and how risky a business to start. He uses survey data to ground the predictions of his model in reality. He shows that providing insurance for entrepreneurs would increase the number of business start-ups, raise their overall rate of return, and boost productivity in the overall economy.

Less is More Expensive: Income Differences in Buying Bulk by Mallick Hossain

Hossain examines a factor that increases the costs for low-income households when buying necessities, like groceries. Low-income households are less likely to buy items in bulk than high-income households. By buying less at one time, their total cost for the same amount of groceries is higher.  Non-financial factors create barriers to bulk buying, as well as financial ones. As one of three examples in his paper, he finds that the rate of bulk buying across low- and high-income households is more similar in states where grocery stores are required to display unit costs along with the sales price. Unit costs make it easier for consumers to compare the total costs of buying in small or a large quantities. Using individuals’ purchases from grocery stores, Hossain finds that low-income households would lower their total grocery bills substantially if they bought in bulk as often as high-income households. 

across businesses … 

These next three papers explore differences across businesses. For example, together they show how local market shares or the macroeconomic environment can affect economic outcomes.

Multinationals, Monopsony and Local Development: Evidence from the United Fruit Company by  Diana Van Patten (with Estéban Mendez-Chacón)

Van Patten addresses a question that has received renewed attention among  economists and policymakers. How does a large employer in a labor market affect the outcomes of local workers? Economists refer to this form of employer-employee power as a monopsony. She studies the effect of the United Fruit Company, a large multinational corporation, on workers in the areas of Costa Rica where the company operated. Van Patton uses the geographic boundaries of the government land concessions to the company. Importantly, the government set these boundaries from 1889 to 1984 mostly in an arbitrary way. That quasi-random variation allows her to estimate the effects of the monoposony. Van Patten finds that the company substantially raised the living standard of workers in its labor markets. She argues that key mechanisms for this positive outcome are workers moving to the company and the company’s training its workers.

Downward Rigidity in the Wage for New Hires by Jonathan Hazell (with Bledi Taska)

Hazell studies the costliest part of recessions: the sharp rise in the unemployment rate. A long-standing explanation is that businesses are unable reduce wages of their workers. As a result, layoffs are their main way they can adjust to a fall in demand. Hazell uses detailed data on job vacancies from Burning Glass Technologies—a large online site for job postings. He documents changes in wages for new hires for the the same job. Wage offers for new hires reveal the market wage across changes in economic conditions. Hazell shows that wages do not fall in recessions but rise notably in expansions. Pairing data with a wage bargaining model, he finds that the unemployment rate is twice as sensitive to negative shocks to the economy as positive ones.

Employment Decline during the Great Recession: The Role of Firm Size Distribution by Wenjian Xu

Xu explores how concentration in local labor markets—as in the case of a monoposony—exacerbates job losses in a recession. Using experiences in the Great Recession, he shows empirically that communities in which a single firm dominated an industry lost more jobs than communities with less concentration. To explain this dynamic, Xu builds a model of the economy in which firms differ in their share of the labor market.  He argues that when relatively large firms are hit with a reduction in demand, smaller nearby firms are unable to offset the negative effects.  He rules out empirically other explanations in the Great Recession: hard hit industries, like durable goods manufacturing, or highly levered firms in the same area do not explain the unemployment patterns. In addition, displaced workers that switch from concentrated industries to less concentrated ones did not undo local employment losses. Xu shows that concentration in local labor markets leaves communities more vulnerable to negative economic shocks in a recession.

PART TWO … Learning from financial markets

The global financial crisis in 2008 and its ugly aftermath demand that economists understand the inner workings and macroeconomic effects of financial markets better. Conventional wisdom that markets are largely efficient and will ‘compete away’ mistaken views took a drubbing in the crisis.  These three papers dive into details of financial markets. They use their models to explain real-world events and offer ways to make financial markets more sound.

Securitization and House Price Growth by Genevieve Nelson

Nelson studies the large increase in house prices and mortgage credit in the early to mid 2000s. The source of the bubble remains contested among economists. She argues that innovations in mortgage securitization increased credit supply and amplified the effects of other changes in demand and supply.  Nelson models decisions of commercial banks that lend to households and shadow banks that securitize those mortgages. The shadow banks allow commercial backs to move mortgages off their balance sheet and they are subject to less regulatory oversight.  Innovations that made securitization more profitable—even as mortgage rates fell—allowed shadow banks to expand their balance sheets and issue more securities. In a simulation of her model, Nelson finds that innovation in securitization can account for more than two thirds of the rise in house prices and about one third of the increase in non-conforming mortgages credit.

Fortifying Banks by Alison Oldham Luedtke (with Eric Young)

Luedtke explores the characteristics of bank-to-bank lending networks that can protect against cascading failures in a financial crisis. Such cascades caused extensive damage and threatened the entire financial system in 2008. Her goal is to identify how to fortify a network of banks with targeted government guarantees.  Her model allows for various size and scope of lending between banks. Luedtke shows that networks in which banks are highly interconnected—in their lending and borrowing—and are not concentrated around a few large banks are easier to stabilize. In those cases, the government can guarantee the loans at a relatively smaller number of banks and still contain financial contagion. An analysis of inter-bank lending in 1867 shows that costs of containing a crisis are in line with her theoretical model. Finally, Luedtke argues it is more cost effective to fortify banking networks before a crisis than to bail out ‘too-big-to-fail’ banks in a crisis.

Yield Curve Volatility and Macroeconomic Risk by Anne Lundgaard Hansen

Hansen studies what the yield curve—interest rates at different maturity dates—for U.S. Treasury bonds tell us about macroeconomic risks. She unpacks the changes in the yield curve that forecasters often use to predict recessions.  To do so, Hansen introduces time-varying volatility and variance risk premia in term structure model of interest rates. She then uses her flexible model to characterize how the yield curve relates to inflation and unemployment since the 1970s. She shows that the degree to which macroeconomic fluctuations have affected interest rates has differed over time.  In an application of her model, she shows that macroeconomic shocks do not explain the yield curve inversion in 2019—when long-term yields were lower than short-term yields. The most recent inversion of the yield curve is not warning us of a recession.

PART THREE … Individual decisions add up to market outcomes

For decades, macroeconomists have tried to build their models up from the decisions of individuals—referred to as micro foundations.  A challenge arises because in the economy the sum is often greater than its parts. Moreover, to study the world, our models must leave out many of the details. Choosing which details include in our models depend on the question we are trying to answer. In addition, our best models need to reflect the on-the-ground outcomes. These three papers bring empirical evidence to advance our understanding of how individual decisions affect market outcomes.

Networks of Monetary Flow at Native Resolutions by Carolina Mattsson

Mattsson studies how money flows through the economy. She documents the overall network as well as the individual transactions, which she refers to as money’s native resolution.  In doing so, Mattsson estimates the velocity of money—the rate at which the same money is used to make purchases. This velocity parameter is at the core of macroeconomic models of money. She models network flows using a large data set of mobile money transactions in East Africa. She finds that the duration between cash-in and payment-out differs by purchase activities. The mobile money system exhibits considerable variety in the velocity of money. Macroeconomic models with a single value for velocity will not capture pattern in real-world flows of money. 

House Price Expectations and Consumption— A Survey-based Experiment by Wei Qian

Qian uses a new approach to address a long-standing question in economics: when house prices rise, how much does consumer spending increase? Indeed, unrealistic expectations about house price growth may have contributed to the boom and bust in the housing markets during the Great Recession. To identify causal effects, she uses a survey experiment on expectations about house price growth. Specifically, Qian varies randomly whether individuals receive professional forecast of house prices. Individuals who received the forecasts had systematically different expectations than those who did not. She finds that higher house price expectations led to plans for higher spending. In addition, she provides evidence that the channel is a belief that higher household wealth will make it easier to borrow in the future. If households expect it be easier to borrow then they need to save less today. 

Information Campaign on Water Quality and Marriage Market: The Case of Arsenic Exposure in Rural Bangladesh by Prachi Singh (with Shyamal Chowdhury)

Singh explores how marriage markets in Bangladesh are affected by public information campaigns about local water contamination. Her work exemplifies how international the field of economics has become and how markets take many forms. Drinking water contaminated with arsenic has a range of negative health effects from skin lesions to cancer. Singh shows how individuals of marrying age react to information about effects and sites of contamination. She compares marriage markets in areas with arsenic contamination to areas without it. She finds that men and women in contaminated areas marry at a younger ages—presumably to marry before signs of their worse health are evident. Likewise, the amount of money paid by the bride’s family to the groom’s falls substantially in areas with contamination.

PART FOUR … Think big about dynamics of our economy

For hundreds of years, economists have studied fluctuations in overall demand.  Recession cause considerable hardship and expansions bring us back toward our full potential. The 20-trillion-dollar economy of the United States is a challenge to understand and, even more so, to support well with economic policy. The four papers here explore how polices to stabilize the economy affect participants in the economy differently and how their reactions then affect the economy. This research shows how economists are looking ‘under the hood’ of aggregate income and paying attention to the distribution of economic outcomes.

Redistributive Fiscal Policy and Marginal Propensities to Consume by Mariano Spector

Spector sheds light on a central debate about how to best stabilize the economy during a recession. Over the past several decades, economists and policymakers relied heavily on monetary policy to smooth out these ups and down in demand. In the Great Recession, monetary policies were not enough and the federal government stepped in with fiscal stimulus. To get the most bang for the buck, we need to send stimulus to households, businesses, and local governments that will spend a lot quickly. Spector builds a cutting-edge macro model that allows consumers to have different propensities to spend out of government transfers. His findings underscore why we need to think about who will spend most rapidly. Spector shows that those who largely save the transfers, build wealth, and then spend more over the long term. An important insight from his analysis is that policy efforts to fight recessions may also widen the differences in wealth and economic well being across households.

Investment Dynamics and Cyclical Redistribution by Nathan Zorzi 

Zorzi explores a phenomena common in recessions: a sharp decline in spending on consumer durables, like autos, and residential investment, like new home construction. The inverse pattern occurs in expansions. These big purchases are less time sensitive than spending on necessities, like groceries, and are done sporadically. As a result, they can often be delayed until the economy improves. He uses a macroeconomic model—an extension of an important, new technique—in which individuals differ in whether they work in a one of these sectors or not. Zorzi demonstrates how negative economic shocks lead to larger income losses for durable-goods workers than other workers. On the flip side in expansions the incomes of those same workers rise more. He also shows that the propensity to spend on durables out of income increases with more income. Taken together, those working in durables goods sectors reduce their own spending on durable goods less in recessions than they increase it in expansions. This behavior dampens recessions and amplifies expansions. In his work, Zorzi brings attention to the feedback loop from aggregate shocks to individual shocks back to aggregate shocks.

Rational Inattention, Menu Costs, and Multi-Product Firms: Micro Evidence and Aggregate Implications by Choongryul Yang

Yang studies how differences across firms in the number products they sell affect their pricing decisions. The degree to and frequency at which firms change their prices due economic conditions has wide-ranging implications. It is costly for firms to gather information about the economy and then change their prices. Thus they tend to do so infrequently. This pattern, in turn, affects how much monetary policy can change overall output. With survey data from New Zealand, Yang documents that multiple-goods producers gather more information about economic conditions. As a result, they change their prices more often than single-goods producers.  His macroeconomic models show how these different dynamics affect the the economy. Yang demonstrates how specifics at the firm-level shape the effectiveness of monetary policy.

Compositional Nature of Firm Growth and Aggregate Fluctuations by Vladimir Smirnyagin

Smirnyagin examines a key source of a dynamic economy: the start and rapid expansion of new businesses. Empirically, he shows with data from both the United Kingdom and the United States that more rapidly-growing businesses are started in an expansion than in a recession. This finding is important because new, rapidly-growing businesses contribute disproportionately to job creation and investment.  These firms are hit hard in recessions, further weakening the economy. Smirnyagin documents that the ability to borrow more easily in an expansion is a likely reason why new managers are able expand their businesses more rapidly. With a model reflecting these empirical facts, he finds that changes in financial conditions can explain a large fraction of the variation in business expansion across booms and busts.  Finally, Smirnyagin shows how government policies that lower start up costs for businesses can bolster the overall economy, but only if the government targets businesses with high growth potential.

PART FIVE: Improve economic policy

All the research … pages and pages, reams of data, complex models, and dueling results … expands our understanding of our world, our decisions, and our opportunities. Providing better advice to economic policy makers is one important outcome of this research. These last four papers make us think hard about economic policies, especially effects that may be unintended and not intuitive.

The Minimum Wage and Occupational Mobility by Andrew Yizhou Liu

Liu explores how minimum wage policies affect workers; a question of heated debate among economists and policy makers alike. Many researchers have studied how these policies may change the employment of lower-wage workers and wages paid even above the minimum. Liu pursues another angle: the ability of workers to move from one occupation to another. Technology, trade, and shifting demand mean that workers, and economy as a whole, often benefit from them switching to new jobs and new careers. He finds that minimum wages make those transitions harder. Empirically, he shows that minimum wages lead employers to post fewer new jobs and wage differences across occupations narrow. As a result, workers have less opportunity and less incentive to change occupations. With his model, Liu estimates that an increase in the minimum wage could decrease the economy’s output, even if total employment is unchanged. His research—true of any research on economic policies—does not tell politicians what to do; it does add evidence on the economic costs and benefits to those policy deliberations.

Industry Impacts of Unconventional Monetary Policy by Eiji Goto

Goto turns our attention to how monetary policies—used to stabilize the overall economy—tend to affect some market participants more than others. His topic is especially important now, because the Federal Reserve and central banks around the world used new policy tools during the Great Recession and its slow recovery. From quantitative easing (buying assets to lower interest rates) to forward guidance (communicating of future actions) to negative interest rates, these so-called “unconventional policies” deserve careful study. Goto focuses on the effect of unconventional policy on industry-level output in the United States, the United Kingdom, and Japan. He finds that these new tools increased output differently across industries in a country. The patterns are broadly similar in all three countries. Goto also shows that the differences in industry responses from the new tools are similar to the prior ones.

Marriage and Income Risk in the United Kingdom by Johanna Tiedemann

Tiedemann studies how individuals by marrying and combining their two incomes can reduce the financial strain from ups and downs in the own income. Single individuals, in contrast, must find a way to smooth out such income changes on their own. In some cases, however, the income risk in a couple could increase, not decrease, by marrying. She shows empirically that couples with differing socioeconomic backgrounds, for example, different levels of education, do not, on average, benefit from combining their incomes. The income risk and potential financial strain of these married couples would be higher than if each stayed single. Tiedemann’s findings speak to household finances, as well as broader economic outcomes. Policies that encourage marriage could, unintentionally, lower the well-being of some individuals. More broadly, challenges to family formation and an inability to deal with unexpected changes in income can have negative implications for the overall economy.

Uncertain Policy Implementation with Public Information by Mat Knudson

Knudson studies another dimension of the policy process—the incentives that politicians face when they choose policies to propose and to implement. A timely topic as a range of presidential hopefuls pitch new policies and the current administration implement their’s. Knowing the effect of information, especially whether it is public or private, can affect behavior is unintended ways. He argue that the public vetting of proposals, by think tanks, researchers, or advocacy groups, shapes voters’ views about the competence of the politician. In fact, simply having a proposal deemed to be good, can improve the politician’s reputation and electoral chances.  This result can make it less likely that a politician wants to implement her good policy. She risks the bump to her reputation, if the public vetting was wrong and the policy fails. In contrast, a politician whose proposal was panned is more likely to implement his policy. If his policy succeeds, it could undo the damage from the vetting and increase his chances of being re-elected.  Public vetting, in Knudson’s model, has the perverse effect that policies judged to be of lower quality are more likely to be implemented than those of high quality.

 

we need to talk MORE …

This post is for job market candidates. You need to spend more time editing your abstract and introduction. It will be worth more than your fourth robustness check. Promise.

I have commented on TEN macro job market papers this month. Seven to go (three more spots open). Amazing research on important macro topics. As job market candidates, YOU  are the most tech-up, cutting-edge economists. YEAH future is bright.

Sadly, it is clear that economics departments and dissertation committees are NOT teaching their doctoral students how to communicate their research. I had an excellent advisor who taught me the structure of economics research papers. He expected good writing and I wanted to write well. Writing takes time, effort, and resources. The Board hires a professional writing coach to run a week-long course for all economists. We also have an in-house editing team. Good economics does not speak for itself. You must.

EVERY job market paper I read lacked a well-structured, well-written introduction and abstract. Many of these papers are from top schools and from native English speakers.

Here I extend and tailor my earlier post on communication for job market candidates. Please share and know you are not alone. Writing is hard.

MOST IMPORTANT ADVICE:

Be PROUD of your research. Tell us about YOUR research.

 

Zen for Job Market Candidates:

  • “The quality of your job market paper is orthogonal to the quality of your person.” ~John DiNardo #RIP
  • “You only need one job. The first offer you get is the best job. Re-evaluate only if you get a second offer.” ~Matthew Shapiro (best and my only chair)

Title:

  • Should signal the main finding in your paper.
  • Aim for compelling not cute.
  • Get feedback from others.

Structure of Introduction (in order):

THIS IS A VERY IMPORTANT PART OF YOUR PAPER

1) Motivation (1 paragraph)

  • Must be about the economics.
  • NEVER start with literature or new technique (unless econometrics).
  • Be specific and motivate YOUR research question.

2) Research question (1 paragraph)

  • Lead with YOUR question.
  • THEN set YOUR question within most relevant literature.
  • My favorite is an actual question: “My paper answers the question …”
  • Popular and acceptable: “My paper [studies/quantifies/evaluates/etc] …”

3) Main contribution (2-3 paragraphs, one for each contribution)

  • YOUR main contribution:
    • MUST be about new economic knowledge.
    • Lead with YOUR work, then how it extends the literature.
  • New model, new data, new method, etc.:
    • Can be second or third contribution.
    • Tools are important, not most important.
  • Each paragraph begins with a sentence stating one of YOUR contributions.
  • THEN follow with three or four sentences setting YOUR contribution in literature.
  • Most important should be first (preferred) or last (sometimes most logical).
  • YOUR contributions are very important. Make them clear, compelling, and correct.

4) Method (1-2 paragraphs, one for each method)

  • Each paragraph begins with a sentence or two summarizing one of YOUR methods.
  • Lead with YOUR most important model, identification, or empirical method.
  • THEN follow with a few sentences that sets YOUR method in literature.
  • Save technical points, model assumptions for the model section.

5) Findings (2 to 3 paragraphs, one for each main finding)

  • Each paragraph begins with a sentence or two summarizing one of YOUR findings.
  • Most important should be first (preferred) or last (sometimes most logical).
  • THEN follow with three or four sentences setting YOUR finding in literature.
  • YOUR findings are very important. Make them clear, compelling, and correct.

5) Robustness Check  (optional 1 paragraph)

  • Choose robustness check that best supports YOUR most important finding.

6) Roadmap of paper (1 paragraph)

  • One sentence for each section of YOUR paper.
  • Be specific to YOUR paper, if possible.

PS My structure is NOT only structure that works well. See other excellent writing advice here. Your chair may disagree. LISTEN to people who decide on your PhD. Look at best papers in general-interest journals from best researchers in your field. Innovate on economics, not on structure of YOUR paper.

PPS set YOUR research in context of prior research. We stand on the shoulders of giants. Even so, do NOT bury YOUR contribution after two sentences (or two paragraphs, yikes!) on others’ contribution. Do not share YOUR research in the order you did it.

Structure of Abstract (in order):

ALSO VERY IMPORTANT PART OF YOUR PAPER

  • Write AFTER you are happy with YOUR introduction.
  • Same structure as introduction, but sentences not paragraphs.
  • Use main points from YOUR introduction. Focus on YOUR work

Did YOU see a pattern? Yes, YOUR job market paper is about YOU!

 

Tables and Charts

  • Font size must not cause eye strain.
  • ABSOLUTELY NO acronyms ANYWHERE in tables and charts.
  • ABSOLUTELY NO equation symbols or variables names without WORDS too.
  • Must convey takeaway within 10 seconds, without main text.
  • Try to make charts for YOUR main findings. Here are examples.
  • Label EVERY axis. Label EVERY column header.
  • Use as few decimal places as possible.
  • Must be clear what line goes with what label, including when print black and white.

 

Other Random Economist Tips (not in any order):

  • Your paper is ALWAYS about YOUR work. Lead with YOU and then others.
  • Get feedback on YOUR abstract and introduction:
    • Ask classmate (different field)
    • Professor (in addition to chair)
    • Follow-up nicely until they do.
  • Let READER decide what is “important,” “obvious,” “surprising,” etc.
  • Do NOT annoy reader by being grandiose. NO bait and switch.
  • NO causal words for NON-causal estimates.
  • NO shame in non-causal results. We can’t run experiments (thank goodness) for many questions in economics. Solid empirical work MATTERS.
  • Do NOT trash prior research or call out its limitations or mistakes. TONE matters. Tell us what YOUR paper ADDS. They added too or you wouldn’t cite them.
  • Do NOT have stand-alone literature review section (unless adviser demands).
    • Integrate literature throughout your paper to set YOUR work in context.
    • Describe YOUR contributions, methods, and results before related literature.
  • NO acronyms.
    •  MPC is widely known in economics. I still use “spending propensity” or “spent $0.X0 out of every additional dollar within two weeks of receipt.”
  • ABSOLUTELY NO acronyms for terms:
    • YOU create. (Avoid creating new terms.)
    • Terms created in last 25 years.
  • NO economic jargon in introduction and abstract until explain in people words.
    • Know people words for economic jargon that YOU use.
    • MUST explain what is source of  “endogenous,” or “endogeneity”.
  • Use jargon (and use it correctly) in the body of the paper.
    • Show that YOU know YOUR technical stuff.
    • Still useful to explain most important point in generalist economist words.
    • Macro folks be careful here, we are less beloved.
  • Latex folks: Do NOT embed hyperlinks to your references.
    • Many read from PDF. Annoying to accidentally click and land far away.
    • Do NOT annoy reader and do NOT waste their time.
    • Who cares when the old farts got finally their paper published? Obsessed will simply check references for their name.
    • If you (still) want these links, make back buttons. Tips here, here, and here.
  • Cite papers most related to YOUR paper. YOU are not writing a survey.
    • Use standard citations in text: (Author-Name, Paper-Year).
    • Cite most recent version of papers.
    • Check results YOU cite remain in their latest version.
  • Make sure YOUR tone is NEUTRAL and stick to the facts.
  • Use “my paper” not “this paper.” After citing others, “this” is ambiguous.
  • Save policy implications for conclusion.

 

Other Random Anyone Tips:

  • Say what YOU need to say and no more. Delete extra sentences.
  • Keep sentences short. Make one point.
  • Break long sentences or ones with more than one point in multiple sentences.
  • Avoid “There are/is.” Re-write and shorten sentence. For example, change “There are problems.” to “Problems exist.”
  • Be sparing with adverbs and adjectives.
  • Avoid clauses at beginning of sentence. Start “my paper” “I model” “I find.”
  • NO acronyms. Acronyms exclude new people.
  • Read first sentence of every paragraph. Together they should tell YOUR paper.

 

All the best on the job market!!

 

 

let’s talk …

Communication is FUNDAMENTAL to good research.

Communication in writing, visualizing, and speaking deserves as much effort as your analysis. The ‘there’ there, such as, getting your model to converge and using the best identification possible is necessary but not sufficient for a kick-ass paper.

PS: For money/macro folks, I will amp up the need.  We’ve got forward guidance now (wow, poor words can eff things up) and abstract technical advice isn’t accepted by policy makers or citizens (amen, we economists aren’t primary ones on the receiving end).

Good ideas do not rise to the top on their own, nor do bad ones automatically fall.

I wrote this post for doctoral candidates in economics, finishing up their job market papers. Your papers are going to get you a job (remember you only need one, so take a deep breath and stay OFF ‘that’ website). Equally important, you will meet many researchers on the job market who you will see time and again. They are important to your intellectual long run, even if you never work down the hall.

My post starts with general advice on 1) communication, 2) writing, and on 3) charts and tables. I then turn to specific advice for job market candidates. My tips are ones that ‘I think’ are most important. My list is not exhaustive.  You need to be writing and editing and editing and editing (and sleeping and taking care of yourself), not reading blogs.

GENERAL COMMUNICATION

  • Know your audience. Respect them by talking WITH them in a way THEY can understand. When your audience changes, you must change your approach.
  • Simple is hard but simple is better. Say what you need to say and no more.
  • Tell us the punchline not your slog to it. Do NOT share your thought process (don’t want to be in your head) or down the yellow brick road to your results.

GENERAL WRITING

  • Your abstract and introduction are the most important parts of your paper. If you put readers to sleep or piss them off, you’ve done yourself a disservice.
  • A good structure for an introduction (a modified modified version of Keith Head’s):
    • Motivation. The motivation must appeal to a general audience. Why the eff should I read your paper? And no, a delta on a prior paper, ain’t gonna cut it.
    • Research Question. EVERY paper must clearly state the research question it will ANSWER. “This paper answers the question … ” is a great sentence.
    • Contribution. What are you adding to our body of knowledge? Be wary of tossing “first” around casually. We stand on shoulders of those who came before. Don’t piss them off or they may throw you, Yertle-the-Turtle style.
    • Methods. How did you do it? What are the amazing things that you did to get your amazing results. Don’t go overboard but assure us you know your shit.
    • Results. What did you find? Most important results go first. Do not ‘build suspense’ with intermediate findings.
    • Robustness. Pointless reality, in my opinion, in our papers now. Even so, make clear that you have stress tested your main results.
  • Your abstract and introduction must be able to stand alone and convey the message of your paper. Have multiple people, including some family and friends who are not economists, read them. Avoid the offensive and the inscrutable.

GENERAL CHARTS AND TABLES

  • Charts and tables must be able to stand alone. Some people will read them and nothing other than your abstract and introduction.
  • Have a “money chart” that makes your main finding pop. Most people think well in pictures and you want to be memorable (in a good way).
  • Print your paper in black and white. Charts must not require on a color printer.

JOB MARKET COMMUNICATION

  • Your audience will NOT all be experts in your field. At some interviews, they may not even all be economists. Guess, what? They have a say on whether you’ll be a future colleague. Talk to everyone in the room not just that person you cited.
  • Be kind to the ‘old people,’ that is, anyone more than three years out of grad school. Do NOT be obnoxious about it, by calling attention to what we don’t know. You’ll learn a ton from us too.
  • PRACTICE out loud over and over again. Timing matters. Get to YOUR RESULTS. Move briskly through literature and only cover papers relevant to YOUR paper.

JOB MARKET WRITING

  • Did you need to say everything you said and did you miss anything? Check that each paragraph has a topic sentence (ideally the first). If you string all of these together: is the flow choppy, any super-hero leaps, or repeats? Fix it.
  • Compact, strong writing is a godsend. I love reading cool research papers from the next generation, but even my heart sinks when I print out 20 job market papers averaging 70+ pages. Efficient writing takes effort and it’s worth it.
  • Do not be wishy washy. If you do not believe in your research NO ONE will. Don’t get ahead of your skis, but don’t apologize for what you couldn’t do. Every data set is flawed. Every identification strategy hinges on some suspension of disbelief. Finally, your first paper, happily, will not be your best one. Be proud.

JOB MARKET CHARTS AND TABLES

  • Charts and tables must be able to stand alone. I repeat: Some people will read them and nothing other than your abstract and introduction. More likely on job market (many papers to read) than at journals (if not, shame on your lazy referee).
  • Invest time in making your charts compelling. And for the love of god, no canned Stata or R charts. In addition, don’t make me get out my magnifying glass.
  • Tables should be not be a sea of numbers. Use scaling, like thousands of employees or billions of dollars. Show point estimates that matter and not every kitchen-sink covariate. False precision is annoying. Don’t annoy people.

 

Happy writing!

I can’t wait to read your interesting papers. We have so much to learn from you.

 

 

Alice in Wonderland

One year ago today, Alice Wu’s research about sexism at an online economics forum made the news.  I was home in Indiana on vacation when I noticed my Twitter feed getting agitated. And yes, I got sucked in too. Down the rabbit hole of EJMR, yikes. Fast forward one year. It is impressive what that moment meant. The American Economics Association now has a professional code of conduct and new standing committee on Equity, Diversity, and Professional Conduct. The Committee on the Status of Women in Economics devoted an entire newsletter to sexual harassment. Prominent, welcome steps but none were easy or fully satisfying. What struck me most is how Alice Wu forced so many conversations among economists, ones that had long been avoided. Or rather had started decades ago in economics and got stuck because we did not take collective responsibility (as in, everyone, as in, YOU too).

These conversations about how we economists treat each other (and ourselves) are messy and time consuming. They make Mas Colell, Whinston, and Green’s textbook look like a breeze by comparison. (Actually, true for most of us. Selection biases aren’t just other people’s identification problems.) We are economists and Wu’s research may not feel like economics. I disagree. I restarted my macromom blog, spent time online and offline, trying to make sure we didn’t miss our moment to have a big conversation about why diversity matters for the economics. Big conversations start small and, guess what, they involve other people talking back, disagreeing, changing direction, being confused, sharing, cheering, awkward silence, etc. Not always comfortable but we all can do this, and largely with respect and curiosity. Below are some snippets said to me over the past year followed by my internal reaction:

“Why did my words disappoint?” Why are my emotions so hard to explain?

“What do you think AEA should do about job market info, exactly?” Why are you asking me? I am not in charge of anything. Yeah, you are asking someone!!

“Do you have a personal experience to add, here is mine and some others …” [sound of my heartbreaking for her and her and her … and us all.] But, wow so much bravery to call attention and push for something better.

“Women spend time on things that don’t matter for promotion.” Maybe those women are on to something? … like, what matters for the economics?

“You should not have shared your positive experience. It undermined her sharing a negative one.”My words (and actions) disappoint too. Saying sorry is a step, though avoiding the misstep is even better. Ruefully yours.

“In my view, virtually everyone has deeply hurt others, one way or another.” thanks and, yes, economists should write Hallmark cards.

And so many more. What did I learn this year? One person cannot do much, but a collection of ‘one persons’ can do a hell of a lot. I have been repeatedly inspired by the generosity, ingenuity, and unflagging energy of others in getting us organized in the past year. The next steps won’t be easy, as I said in my last post. Economics can be a more diverse, more inclusive profession, but that work can’t be outsourced to committees or a few ‘obsessed’ souls. If it matters, it must matter to all of us, and we all have to carve out time for conversations and action.

Thanks to Alice Wu for kicking us down this rabbit hole.

next steps, these won’t be easy

Whew! this macromom has been busy and not writing here recently. Never fear, the survey is out (do watch the video, and use the data) and my research is humming along  (eight coauthors really can span sets) and I’ve got a few hours before my kids get back home today.

#icymi I want to share some recent developments on diversity in economics. AND to talk about the (tough) next steps ahead of us.

“The AEA Executive Committee recently adopted the AEA Code of Professional Conduct as revised by the Ad Hoc Committee to Consider a Code based on more than 200 comments received from the AEA membership. “

The American Economics Association now has a professional code of conduct. If you are an economist, read it and LIVE IT:

The American Economic Association holds that principles of professional conduct should guide economists in academia, government, nonprofit organizations, and the private sector.

The AEA’s founding purpose of “the encouragement of economic research” requires intellectual and professional integrity. Integrity demands honesty, care, and transparency in conducting and presenting research; disinterested assessment of ideas; acknowledgement of limits of expertise; and disclosure of real and perceived conflicts of interest.

The AEA encourages the “perfect freedom of economic discussion.” This goal requires an environment where all can freely participate and where each idea is considered on its own merits. Economists have a professional obligation to conduct civil and respectful discourse in all forums, including those that allow confidential or anonymous participation.

The AEA seeks to create a professional environment with equal opportunity and fair treatment for all economists, regardless of age, sex, gender identity and expression, race, ethnicity, national origin, religion, sexual orientation, disability, health condition, marital status, parental status, genetic information, political affiliation, professional status, or personal connections.

Economists have both an individual responsibility for their own conduct, and a collective responsibility to promote professional conduct. 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 all backgrounds, including particularly those that have been historically underrepresented.

The AEA strives to promote these principles through its activities.

See my earlier blog posts (here and here) on the proposed code of conduct. Happy to see a few of my suggestion made it into the final draft, though it is largely in the original (very good) form. Kudos to the 200 economists out of 20,000 AEA members who sent in suggestions. (Seriously, to the rest of you, I love you but come on … public goods don’t create themselves.) See the final report in April from this ad hoc committee (#5 made me smile, “fair treatment” is essential, and “equal” is not always “fair”). Thank you to the committee: John Campbell, Marianne Bertrand, Pascaline Dupas, Benjamin Edelman, and Matthew D. Shapiro.

From this effort, the AEA has formed two new ad hoc committees: 1) on Professional Climate in Economics see their report in April and  2) on Economists’ Career Concerns …and a new standing committee on Equity, Diversity, and Professional Conduct. Thanks to everyone involved. I am doing my small part (and you can too). I spoke at the Women in Economics conference in St. Louis, noted in the report. I am happy to add my two cents on these topics but it makes me a bit uneasy … I have not unlocked the secret to success. I worry A LOT that I am giving bad advice. I want to believe that economics is getting better, more inclusive and welcoming to diverse viewpoints but reality smacks me in the face from time to time.

So next steps. I am in favor of surveys of economists, since I know how much economists LOVE data … but these are not going to be the objective data that we want. He said / she said accounts do not fit well in the representative agent framework and I have seen subjective data criticized more than once. plus HOW MUCH EVIDENCE DO WE NEED TO DETERMINE A PROBLEM? The end of this latest CSWEP newsletter account from Jennifer Bennett Shinall, broke my heart:

“But to my knowledge, the one party who did not get punished was my harasser. He remains out there, unscathed due to the loopholes in our current system, free to harass other victims.”

Remind me again, why I am encouraging young women to enter the economics profession? How much “data” do you all need? And then read the anonymous accounts in that newsletter. AAARGH. You all know how hard economics is. The data, the identification, the communication. And then you’ve got jerks who think of you as boobs or as competition to knock off the platform. Ah, yes, but I should keep an open mind.

I want to close this post with an excellent point from Abigail Wozniak. She nailed the next steps, in my opinion. As a profession we have some very difficult conversations ahead of us. No amount of data can spare us. Read this discussion (with the Arrested Development cast) and find yourself.

“TAMBOR And I have, and am continuing to do. And I profusely have apologized. Ms. Walter is indeed a walking acting lesson. And on “Transparent,” you know, I had a temper and I yelled at people and I hurt people’s feelings. And that’s unconscionable, and I’m working on it and I’m going to put that behind me, and I love acting.

BATEMAN Again, not to belittle it or excuse it or anything, but in the entertainment industry it is incredibly common to have people who are, in quotes, “difficult.” And when you’re in a privileged position to hire people, or have an influence in who does get hired, you make phone calls. And you say, “Hey, so I’ve heard X about person Y, tell me about that.” And what you learn is context. And you learn about character and you learn about work habits, work ethics, and you start to understand. Because it’s a very amorphous process, this sort of [expletive] that we do, you know, making up fake life. It’s a weird thing, and it is a breeding ground for atypical behavior and certain people have certain processes.

SHAWKAT But that doesn’t mean it’s acceptable. And the point is that things are changing, and people need to respect each other differently.

WALTER [THROUGH TEARS] Let me just say one thing that I just realized in this conversation. I have to let go of being angry at him. He never crossed the line on our show, with any, you know, sexual whatever. Verbally, yes, he harassed me, but he did apologize. I have to let it go. [Turns to Tambor.] And I have to give you a chance to, you know, for us to be friends again.”

Personally, I alternate between Walter (still dealing with the anger in my earlier post) and Shawkat (trying to convince macro men they are hurting others, regardless their intentions). I have also been Bateman on occasion, making excuses for others and the profession. And I cannot tell you HOW MANY Batemans I have spoken to. It’s me, being too sensitive. Me, not understanding how our field works. Me. needing to cut some jerk slack. Me, not appreciating how rough it was thirty years ago. Okay. But what about them? I would MUCH rather be doing economics. I do not like personal conflict, and frankly there are much bigger problems out in the world. And it hurts to see my ‘economics heroes’ being so callous. Even so, we have to have these discussions, or else the code of conduct will be a hollow victory. And nothing will change.

PS. Let’s not make this too hard. We all have had the experience of going all in on a conclusion to then realize its not the right one. Thanks for Beatrice Cherrier for this Paul Samuelson revelation. Look “Ruefully, yours” is not the optimal outcome but it’s way better than digging your heels and being an idiot. Don’t be stupid.

 

 

from the comments … mine on the AEA’s code of conduct

This afternoon I submitted my comments on the AEA’s proposed code of conduct and interim report. You have until March 15th to do the same here.  I thought I would go ahead and share my comments below. Maybe this will spur other ideas for you to submit to the AEA … or you are welcome to reply with “what Claudia said” if you like.

Please, please take time to submit your comments.

___________________________________________

Thank you to everyone who got us to this point of submitting comments on specific proposals. I had expressed pessimism on my blog last summer and am encouraged by the response of the economics community so far. Even so, for the code and other proposals to lead to meaningful change, we will need sustained, broad-based efforts.

Comments on the code:

  • I agree with spirit of the first three paragraphs of the code, setting it squarely within the mission of the American Economic Association. Some have argued that the AEA is not in a position to push back against behavior on a private website or that civil discourse can be sacrificed. It is important for the code to clearly rebut those arguments.
  • I am concerned that the “equal treatment” and “equal opportunity” section will be used to defend the status quo. For example, Antecol, Bedard, and Stearns (2018) found that gender-neutral tenure clock adjustments benefited men over women. It would also be helpful in this section to state clearly that economics is currently far from this goal. In addition, the listing of “protected groups” could be counterproductive. Some may argue for additional groups like gender identity or political party affiliation. An alternate approach would be to simply state the goal: economic arguments should be evaluated respectfully on their scientific merits and not on the personal characteristics or affiliations of the economist.
  • The code ‘nailed the landing’ with its final paragraph. It is essential that we accept both individual and collective responsibility as professional economists. The silent bystanders need to speak up when they see problematic behavior.

Comments on the report:

  • The intention to make sure that AEA journals follow the code is a good one. It might be useful to run experiments at one of the journals or with a portion of the ASSA sessions. Empirical evidence on what works and what doesn’t would likely increase buy-in from economists and could establish best practices for other journals and conferences.
  • It is important that the leadership of the AEA is more representative of its members, including liberal arts colleges, government, and private sector economists, not just a handful of research universities.
  • A survey of the AEA membership is a good first step to assessing the status quo and the room for improvement. Please utilize experts in survey methodology as well as those with experience running surveys of economists and diversity efforts. A well-designed survey could be used both to survey members in general and to establish a baseline in specific environments that run experiments. Cognitive interviews and pre-testing can insure that the questions are working as expected before fielding the survey. Administrative, objective data is important to collect but so are more subjective, qualitative data. Please make sure the survey is run through the AEA and not pushed down to one of the diversity subcommittees. It is important to make sure response rates are high across various sub-populations of economists. One idea to raise participation would be to make it mandatory for registration at the ASSA meetings or for submitting to an AEA journal.
  • An assessment of seminar culture is important and should be done scientifically. The effect of the climate on participants is important, not just the outward interactions. The design of the study needs to be aware of the Hawthorne effect and confirmation bias of the data collectors. Please engage experts in communication outside of economics.
  • The steps to address bias are a good starting point. Please utilize resources like Diversifying Economic Quality and existing research. To encourage and support further research in reducing bias, the AEA could set aside publication space in one of its journals and/or have a standing session at the ASSA on bias.
  • Addressing and replacing EJMR is going to take concerted efforts in education and in providing alternate outlets for sharing information. An anonymous, online message board is not good for the economics profession. Personnel information is sensitive and sharing it without authorization runs afoul of most employers’ human resource policies. Accusations of intellectual dishonesty should be taken seriously not turned into sport. Finally libelous speech, harassment, and stalking on a website and in personal interactions is a very serious concern. Telling those affected to ignore the comments or to have a thicker skin is not a solution. Punishments for continued bad behavior need to be spelled out. Experts in mediation and legal treatment of harassment should help in crafting the new policies.

___________________________________________

PS To keep my comments under the 750 word limit, I had to trim back some. For example, I had written in my intro: “Also after many years of turning a blind eye to bad behavior in the economic profession, an apology from the AEA to those who have put up with the crap and to the ‘missing economists’ who have left the profession would be welcome.” On reflection, ‘we are sorry’ is not enough … we have to do better. Recently I have been encouraging other women to enter economics and I simply want better for the next generation.

metaphors for economics

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.

economists learning to code, together

UPDATE: The AEA has posted its report and draft of the professional code of conduct. Open for comments until March 15.

honesty and integrity in our work, civil and respectful dialogues in any forum, responsibility for own and collective conduct …

Friday night as I heard John Campbell describe plans for a new professional code of conduct for economists, my mind was a jumble of thoughts and emotions. Above all, was a weary hallelujah. This is the clearest high-profile recognition I have heard that economics has a problem here. I also took comfort in being wrong: back in September on this blog, I had staked out an expectation of being disappointed by the AEA’s response to Alice Wu’s findings. In my defense, it doesn’t take a DSGE model to tell you how hard it is for economists to set their sights on a new equilibrium.  This outcome was not a given; it took many voices (see, weary above). The AEA received a petition with over 1,000 economist signatures, an #EJMinfo hashtag was set up by two concerned economists, and countless discussions followed. I know many of those voices personally and my PhD advisor was on the code’s committee, so I sat there feeling immensely grateful.

Of course, not every thought I had was positive. At the start of the business meeting, I shot off a grumpy tweet: “true, lots of women here … but none at the head table, not encouraging.” I am sure AEA President Al Roth was trying to lighten the mood by referring to the “largest crowd ever” in the room, but frankly I wasn’t in the mood for jokes.  One surprise (to me) by having spoken up about the culture in economics is how people now come to me with their painful experiences. It SUCKS, hurts, makes me angry, and tests my love of economics. Roth’s joke made me think how we could have filled the Grand Ballroom (it wasn’t really a big crowd) with all the “lost economists” … the men and women who got hurt by our culture and walked away or who never felt invited in. Of course, if they had been assembled, we would have heard an apology, right? I did not hear an apology.

Setting aside, what a mess my internal wiring is … the code of conduct and the next steps outlined by Peter Rousseau at the business meeting will take a lot of work, from everyone. More diversity among the AEA officers (did you know an economist from a liberal arts college has never been elected?), a survey of the professional climate in economics (reminder: data are endogenous), AEA promoting best practices to end harassment and supporting victims (it’s about time), a new Job Wiki run by the AEA (thanks #EJMinfo for showing it can be done non-anonymously), and a moderated online forum for economists (thanks EJMR for showing how asymmetric info is in the profession and how much we need moderators). Inspiring words from a new AEA committee are not enough, ask CSWEP (founded in 1971) how hard it is to move the dial on presence of women in economics (no progress in last 20 years).

I’ll close with some backward induction. Look up again at the new goals for professional conduct … go to that new equilibrium in your mind and then solve backward to today. Think of all the tough conversations, sticking points (even defining terms will be hard), and tears between where we are now and where we want to go. I know. My Twitter is littered with my clumsy (but patient) attempts on this topic, like this two-day convo on seminar culture or this on diversity in macro panels. And I am not going to stop. I also got a head start on the tears (cried Friday night back in my room) … but I LOVE the idea from this code that we are in it together. Each of us taking collective responsibility for economics is a tall order but essential for real progress.

It will be glorious. Let’s get to it.  #ASSA2018  #thankyou

Addendum: I wrote this post from notes I took at the AEA Business Meeting. Here is related news coverage in the WSJ and Bloomberg. Look for the AEA to publish its proposals for member comment soon. And please, when they do, take time to send them your comments. I will.

time demands in economics

I keep telling myself I am done with these diversity blog posts. I am beyond busy in my new job (managing is hard) and presenting, let alone doing research, takes a major wrinkle in time. That’s all before I get to being a mom. Navigating my kids’ schedules (daughter made basketball team, yeah, destroyed my after-school logistics, boo), dealing with discipline issues (ability to sit still and be quiet are not traits I passed on to my son), and listening to my kids takes so much time.

I am tempted to free ride on others who have the time and energy and expertise to write about diversity in economics. And are allowed to do press calls. That’s why I was so stoked to see Claudia Goldin writing for the New York Times last week … but as I read, I got frustrated:

“Fighting to eradicate discriminatory employment practices is absolutely needed, of course. I’ve spent many years studying this subject, and my research shows that unequal treatment in hiring and in the work setting is real and may be reflected in unequal pay.Yet it is also true that the time demands of many jobs can explain much of the pay difference, a finding that has sobering implications.“

The “time demands of many jobs can explain” … that’s the careful, neutral language I am accustomed to seeing (and using) as an economist. I AM TIRED OF IT. especially from economists. Why do the “time demands” of being woman in economics (in addition to my work) include having your  vacation interrupted with utter TRASH talk of anonymous economists in the New York Times and Twitter feed; trying to mentor aspiring female economists on how to navigate around the trash or calling out the trash (I have tweeted, written tricky emails, had informal convos, etc.); and answering inquiries from senior economists (ones who I look to for wisdom) asking me on how to deal with sexism in the discipline. Then after all that, women’s contribution to economics is devalued and dismissed. %#@* that.

Breathe. And back to the calmer Claudia … Goldin discusses job characteristics associated with a larger gap in earnings between men and women.

“Certain job characteristics have a big impact on the gender earnings gap. I have looked closely at these issues, including the extent to which workers are:

■ Subject to strict deadlines and time pressure

■ Expected to be in direct contact with other workers or clients

■ Instructed to develop cooperative working relationships

■ Assigned to work on highly specific projects

■ Unable to independently determine their tasks and goals

Occupations with a lower level of these characteristics (like jobs in science and technology) show smaller gaps, corrected for hours of work. Occupations with a higher level (like those in finance and law) have greater gaps. Men’s earnings tend to surge when there are fewer substitutes for a given worker, when the job must be done in teams and when clients demand specific lawyers, accountants, consultants and financial advisers. Such differences can account for about half the gender earnings gap.”

In my opinion, these characteristics are a starting, not a stopping, point. Too many look at this list and say “ah-hah, it’s not discrimination, it’s the market.” But time demands are not an exogenous shock. Many employers can alter the time demands or support employees in meeting them. At the Board, the 100-hours of back-up child care per year was an amazing benefit when my kids were little. It’s a law of nature that your toddler will throw up in the early morning of your forecast presentation. I had the comfort of knowing that a back-up caregiver was only a phone call away. More importantly, at work, I knew that family came first and I had colleagues who would step in (and I the same) in an emergency and not downgrade my contribution as an economist for it.

Some jobs are harder to restructure, but can we at least stop punishing women who go after those demanding jobs?  Almost every year the Board sends a staff economist to the Council of Economic Advisers. In my first few years at the Board, my family had lunch with a Board economist couple and the topic of the CEA detail came up. I thought this sounded awesome (a project in my undergrad macro course was compiling binders and reports like we were at CEA) but back at home, when I expressed my enthusiasm, I got an earful. “CEA is not a job for women with young children.” True, CEA was a big time demand. Many, many hours (on par with grad school) and the most intensively I have ever worked. Even when I wasn’t on my computer or phone, I was tired. HEY, BUT WE ARE ALL DOING CONSTRAINED OPTIMIZATION. I was willing to pay the costs (both for myself and my kids) for a year, because I saw the benefits as higher. I did not get divorced so I could work at CEA, but by the time I was experienced enough as an economist to be offered the detail, I was a co-parent, not a wife and mom. I wonder how that is captured in Goldin’s regressions?

And speaking of omitted variables and tricky inference … look back at that list of job characteristics and think about how all the harassment of women (and minorities) fits in. It’s hard to “develop cooperative working relationships” when someone is making lewd, aggressive comments or touching you or openly devaluing people like you. Also in the list note the “unable to independently determine” task and goals. Abuse of power is a problem and fuels a lot of the harassment. I get it that men and women may find each other attractive and social mores differed in the past, but there are enough fish in the sea for econ professors to keep views on the physical appearance of their own grad students or female co-workers to themselves.

I was frustrated with the tone in Goldin’s piece (and that’s my flaw not hers) but I wholeheartedly agree with her closing …

Equality on this court requires a level playing field at home and in the market. There are many battles ahead. Unfortunately, they need to be fought at several levels.

Finally, I have no claim to superior insight on this topic or how to ‘fight the good fight.’ I mess up plenty and have rankled both women and men with my personal musings on diversity in economics. And too often, I give a pass to someone’s oafishness because I greatly value his or her economics. Dick Thaler, looking at you, 🙂 But seriously, I appreciate people with all our quirks and differing opinions … and I don’t want to shut down conversation with accusations or public shaming, but we have to be more mindful of our effect on others. And the culture of economics. Good economics is never an excuse for bad behavior. Or put in econo-speak by the great John DiNardo: “How you do on the job market is orthogonal to your value as a human being.” We have to work hard at both.