Promoting diversity in economic thinking and profession..

Janet Yellen speaks on the topic of promoting diversity in economic profession which will reflect in economic thinking too. Most of the time the profession just has a one sided view over most things. There is one dominant view espoused by some economist/school and others just follow it. Then the school changes and people switch to the other school..

Yellen says all efforts should be made to promote diversity. She recollects her experience at Fed:

In trying to raise awareness of diversity in the economics profession, I am aided by the fact that economists are well acquainted with the concept of diversity from their work. When conducting a survey, economists understand that the results will be more meaningful when the diversity of the sample approaches the diversity of the population being studied. In finance, we know that diversity is fundamentally important in spreading risk. History shows that economies develop and become more stable through diversification. Often, in the things economists study and the methods we use, diversity is a good thing.

To cite another example, research by economists and other social scientists supports the view that considering a diversity of perspectives and ideas leads to better decisions in an organization. I believe decisions by the Federal Reserve Board and the Federal Open Market Committee are better because of the range of views and perspectives brought to the table by my fellow policymakers, and I have encouraged this approach to decisionmaking at all levels and throughout the Fed System.

One way to promote diversity of ideas is to promote diversity among the people we rely on for those ideas, including more than 300 Ph.D. economists who serve at the Board and more than 400 serving at the Fed’s 12 Reserve Banks. At the Board, our Office of Diversity and Inclusion coordinates this effort, but everyone involved in the recruiting, hiring, management, and promotion of economists is engaged in it as well. When I was Vice Chair, I knew that promoting diversity among Fed economists was a priority for Chairman Bernanke, and it continues to be a priority for me.

In 1977, when I joined the Board staff, I was one of relatively few women economists here. Since then, there have been significant gains in diversity at the Board and throughout the System. The Federal Reserve is committed to achieving further progress, and to better understanding the challenges to improving diversity throughout the economics profession. As an employer, the Fed is very serious about meeting its obligation to provide equal opportunity, and I also believe that diversity makes the Fed more effective in carrying out its mission, for reasons such as the one I mentioned a moment ago.

I hope she is following the developments at NY Fed. How different will be at Fed Washington?

The real trouble with all these places is that most econs are from just selected universities in US. How can there be any diversity in such cases? It is a joke when such places say we are diversified equal opportunity employers. Equal opportunity for whom? Just US ivy league students? How is that any diversity?

Infact most of the policymakers in the world come from similarly educated places. US education is what matters.  Even in most of these ivy league places there is just one standard viewpoint. Alternative schools are hardly taught. As a result, all just have very similar set of policies and ideas. They decide what is right and wrong for all the economies. Just do as we say. In this way, it is also fault of other countries to blindly take the US viewpoint. The different country schools of thought which existed have all died really. One can study economics in India without studying anything about Indian economy!!

Further Yellen says:

These are not idle questions. All of you know that there has been a fair amount of public debate in recent years about the health of the economics profession, prompted in part by the failure of many economists to comprehend the dire threats and foresee the damage of the financial crisis. When the public asks whether economists did all they could have to understand those threats, in part they are asking whether our profession did enough over the years to test ideas and assumptions that turned out in some cases to have been mistaken or misplaced. And part of that question is this one: Did the economics profession recruit and promote the individuals best able to bring the energy, the fresh insights, and the renewal that every field and every body of knowledge needs to remain healthy?

When this question is asked again someday, when economics is tested by future challenges, I hope that our profession will be able to say that we have done all we could to attract the best people and the best ideas. That, I believe, is the very worthy goal of this conference, and I look forward to seeing it advanced by today’s discussions and by the continuing commitment demonstrated by the AEA to diversity.

She is highly hopeful if she thinks econs will do a better job next time. This time is different thinking will continue for a long long time.


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