The Unassuming Economist

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This post is different from the others on this website. Most of the website has economic content  I considered noteworthy. (my curationof the content  seems to have been useful to other economists, evidenced by the fact that we’ve attracted over a million visitors and chalked up over 7 million page views in our 14-year existence). This post is different. over time, I plan to add a few posts like this one in which I will look back and take stock of some of the activities I undertook during my long (40-year) career. one activity that I invested in heavily was writing profiles of famous economists. I will discuss below  why this stock-taking is more than a navel-gazing exercise and might  be of  be of some interest to our regular readers.

I just published a profile of Gabriel Zucman, the latest winner of the John Bates Clark award, the profession’s highest honor outside of the Nobel Prize. The Imf’s quarterly magazine, Finance & Development has long had a section called Profiles in Economics, (forming the acronym pie),. These profiles are hence  called pies within the  imf’s Communication department( COM), ,where I toiled happily  from 2000 to 2008.

Why write pies?

It was unusual for an economist at the IMF to write so much for its magazine. But I was unusual. My move to the communication department (COM) was a risky one, motivated by an amateur interest in writing and journalism. I realize that working for COM is as far away from real journalism as Trump is from truth, but working in COM was the closest  I could get to scratching my journalistic itch. And scratch  I did!, I wrote  16 Pies, which I suspect is the most of any writer for Finance and Development,

Why should this be of general  interest? These profiles chart the course of the field of macroeconomics. In broad strokes, they show:

• The Evolution of the profession; When I was in graduate school in the 1980s, the field of macroeconomics was polarized into two camps, saltwater and freshwater. Saltwater economists  tended to believe in the power of free markets and were  dubious of the benefits of government policies – this economics was taught at departments that were close to lakes  such as Chicago, Car0negie-Mellon, Minnesota and my alma mater, Rochester. Saltwater economists felt a healthy dose of government intervention was needed to remedy the ills of the market – this economics was taught at school close to a river, such as Harvard and MIT. The profiles cover the main participants in this debate, and describe to lay readers how these economists chose to influence opinion in their favor through their academic work. While the polarization has since subsided somewhat, one still sees ripples of it when, for instance, the US Presidency and/or control of Congress shifts from Democrats to Republicans or vice versa.
• The Evolution of the IMF: the IMF tended to be fairly free-market oriented. But over time it has evolved towards a more balanced approach, for instance, by expressing some doubt about the benefits of financial globalization (the free movement of capital across national boundaries)and worrying that unfettered free markers breed excessive inequality.
• Evolution on thought on specific issues. A detailed read of the profiles would show how the profession’s views have evolved on specific issues, such as why some countries (say Malawi )are so much poorer than others (say Sweden). The earlier approach, also practiced at the IMF, was to compare Malawi and Sweden along a whole host of dimensions “(such as educational attainment)and urge Malawi to make simultaneous progress along all those dimensions. This approach is described in my profile of Robert barro. Thinking then moved on to a “growth diagnostics’ approach, described in my profile of Dani Rodrik, which tried to isolate one or two critical dimensions that were holding back growth in Malawi)

How did I pick the people to profile?   (I admit thispart  is navel-gazing, but I hope I have sucked you in by now)

Lookin back,  I realize that the people I profiled fit into three categories;

Category 1: ‘ graduate school icons”

Six  of them were my:  graduate school icons”– these are people whose  work I had enjoyed studying during  my graduate studies at Rochester. It was efficient to profile them as I wouldn’t have to spend hours poring over their academic work.  i had already done that! It is not surprising that I started with three freshwater icons  but I quickly crossed the aisle and profiled or interviewed three saltwater icons – I guess I was neither Dor R but an Independent.

1. 1) Martin Feldstein Since this was my first profile I was worried that something would go wrong (that Marty would regard the exercise as a waste of his time; that I would run out of questions, that my tape recorder would malfunction—none of that happened and yet the profile was almost derailed. After the text f the profile was in the bag, we went to get a picture of Marty taken to accompany the profile. The ImF’s photographer, mike Spilotro, a top professional, insisted that Marty take off his glasses for the photo. Marty was equally adamant that the glasses stay on and threatened to walk off and not permit the profile to run with an “inappropriate” photo. Luckily, Mike backed off and i had my first profile—and then 15 more! you can click on the hyperlink above—that takes you to the profile and you can see how Marty looks with his glasses on. (extra credit: can you find a picture of Marty on the web without his glasses?

2.Robert Barro – I think this is my best profile because Barro was my macro professor and on my thesis committee and I was very conversant with his work. I was happy when two of my Rochester friends said they loved the profile – I felt I must have gotten things right for such knowledgeable people to like it.

3.Rudi Dornbusch consented to this long interview at a time when he knew he did not have long to live – he died shortly after it appeared in print. This makes his answer to my last question particularly poignant. I had asked if he had anything to add. He replied: ‘no, you have squeezed it all out of me”.

• Stan Fischer—he is venersted in both saltwater and freshwater camps.
• Olivier Blanchard—this appeared in The Globalist, and, as with my profile of Barro, benefitted from proximity. Blanchard was my boss at the IMF from 2008 to 2016 and my office was a few doors away from his, and talked to me a fair bit about his ongoing work.

• Category 2: critics of the IMF

!6).Joseph Stiglitz  the most strident critic

7) Jeffrey Sachs,

8))Dani Rodrik,

9) George Akerlof(the mildest critic; he just wanted a ‘kinder, gentler IMF’  I think)

• Category 2: critics of the IMF

Four of the profiled were critics of the IMF to varying degrees – it speaks well of the IMF that they were willing to let the institution’s critics be profiled in the house journal. This of course happened in part because the  institution’s views evolved.

• Category 3:other famous economists

• The remining five were profiled for various idiosyncratic reasons, generally my admiration for the person’s work:

j10) Roubini, Nouriel (English, French and Spanish versions) March 2009. I had invited I had invited Nouriel to give a talk at the IMF , at which he predicted the start of the global Financial Crisis. After the talk became famous, it made sense to do a full profile.

11) Christopher Pissarides  — admiration for his work was the reason.

   12Svensson, Lars (English, French and Spanish) March 2023 – admiration for the  work was the reasons
   14) Assaf Razin – admiration for the  work—and the man (I had gotten to know him personally) were the reasons.

15). Marianne Bertrand — admiration for her  work –was the reason. It says something about the biases in my network that she is the only woman among the 16 people  I have profiled.

16) Fred Bergsten — admiration for the  work – was the reason. But in this case the work did not consist of writing academic articles, but starting a successful think tank, the Peterson Institute.

Label: taking stock

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From a dissertation paper by Sebastian Stephan Leue:

“The three economic drivers of globalization are the free flow of labor, goods, and capital. Together they have shaped three waves of globalization over the last 200 years. This dissertation encompasses all three waves of globalization between 1877 and 2020, and it investigates its three main economic drivers: International migration, trade, and investment. Every chapter brings forward new insights to each of the three drivers separately. Chapters 1 and 2 provide novel and causal solutions to open questions to our fundamental understanding of migration and international trade, by exploiting two natural experiments over the long run. Chapter 1 contributes to the fundamental understanding of the causal effect of income on migration in the context of economic development. Chapter 2 revisits the distance puzzle in international trade. Chapter 3 examines the role of politics in Chinese exports of critical medical goods during the COVID-19 pandemic. Finally, Chapter 4 evaluates the economic impact of the annual meeting of the World Economic Forum in Davos, Switzerland. This dissertation further aims to provide new perspectives to all three economic drivers through causal empirical research. It introduces four spatially and temporally granular datasets that provide the foundation of novel insights to the globalization nexus through quasi-experimental methods.”

From a paper by Saliu, Mojeed Olanrewaju and Akode, Thomas Ojo:

“This study examines the impact of macroeconomic fundamentals on the House Prices in twelve selected African countries, using time series data spanning from 2000 to 2020. The study employs Westerlund Error Correction Based Panel Cointegration test to examine the impact of some domestic (RINTR, RGDPGR, EXR, SP) and foreign (USRINTR, WRGDPGR, WOP) macroeconomic fundamentals on House Price Index. Findings from the study reveal that there is a long-run relationship between the House Price Index and The macroeconomic fundamentals. The research work also confirms that foreign macroeconomic fundamentals are better determinants of House Price than the domestic macroeconomic fundamentals in the selected African countries during the period under review.”

From a paper by Constantin Burgi, Shoghik Hovhannisyan, and Camilo Mondragon-Velez:

“Economic growth is often associated with welfare gains through job creation. However, the number and quality of new job opportunities created in a growing economy vary across countries and sectors, due in great part to changes in labor productivity. This paper provides estimates of country and sector-specific GDP-employment elasticities based on data from the past two decades, including an evaluation of the predictive power among alternative methodological approaches. The results show that employment elasticities of growth vary significantly across countries and sectors, but are in most cases below 1.0, implying that employment grows less than GDP due to increasing productivity. Across sectors, agriculture has mostly lower elasticity values, becoming negative for more than one-third of developing countries. In addition, increases in labor productivity are associated with reductions in informal employment. These empirical results are in line with the implications of a theoretical model about the relationship between GDP growth, job creation, and labor productivity in economies with varying levels of productivity and informality.”