Archive for the ‘Economics – macro’ Category

How Israel lowered concentration in banks’ credit portfolio and cleaned up its banking system (lessons for India?)

November 27, 2018

Interesting remarks by Dr. Hedva Ber, Supervisor of Banks at Bank of Israel:

The supervisor points how from 1990-2010, Israel’s credit market was highly concentrated in hands of few companies. Since then, they have cleaned up the system taking stringent steps involving firing several key people:

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Linking Reserve Bank of New Zealand Maori heritage: A case of central bank communications gone too far?

October 1, 2018

Last week, RBNZ released this long document linking Maori heritage with the central bank and the economy:

Te Pūtea Matua is the Māori name for the Reserve Bank of New Zealand. This article presents a broad picture of Te Pūtea Matua’s heritage, role, and interdependencies both within the Bank and economy-wide.

“The Reserve Bank team want to tell our story of how we fit together, and show respect to past, present, and future New Zealanders. Understanding our origin is especially important in times of change, which we are experiencing at present – including our legislation being reviewed,” Reserve Bank Governor Adrian Orr says.

“The establishment of the Reserve Bank of New Zealand in 1934 meant the people and government of New Zealand were better able to manage the economy independent of foreign banks’ credit cycles. In that sense, and drawing on Māori mythology, the Reserve Bank became the Tāne Mahuta of New Zealand’s financial system, allowing the sun to shine in on the New Zealand economy,” Mr Orr says.

“Te Pūtea Matua’s activities include issuing currency to the public, and maintaining price and institutional stability in New Zealand’s money exchange systems. Te Pūtea Matua’s roots are in its legislation. The money exchange systems and functions are its trunk, allowing the money – the sap – to flow throughout the system. The branches are the regulated financial institutions grafted onto the trunk, for their legitimacy and access to the Bank’s money and banking system.

“These functions are inter-related and allow Te Pūtea Matua to protect, nurture, and grow New Zealand’s wider financial ecosystem for the greater benefit of all New Zealanders.”

Mr Orr says the Reserve Bank is standing in good stead for the future, but will continue to grow and adapt to its environment. “We face challenges and changes that are driven by technology, economic development, global connectedness, and broader government, public and employee expectations. This is an exciting and challenging time for the Reserve Bank,” he says.

“We aim for this document to be a living story that evolves as people add their insights and share their knowledge and perspectives.”

Phew.

Croaking Cassandra blog has torn apart this publication:

Tomorrow will mark six months since Adrian Orr became the most powerful unelected person in New Zealand, as Governor of the Reserve Bank.  Six months on we’ve had not a single serious and substantive speech on the policy areas he is responsible for, and where he exercises a huge amount of barely-trammelled power.  No speech on monetary policy, no speech on banking regulation, and nothing either on the less prominent things the Governor is responsible for –  such as, for example, insurance prudential supervision, a New Zealand insurer having failed, regulated by the Reserve Bank just before the Governor took office.  He hasn’t substantively and openly engaged with, or responded to, the damning survey results on the Bank’s performance as a financial system regulator.

Instead, we’ve heard the Governor on almost everything else.  There was infrastructure, climate change (repeatedly), the failings of capitalism, geopolitics, women in economics, and of course bank “conduct” (playing distraction from his institution’s own failings, by trying to butt into a field for which the Bank has no statutory responsibility).    There have been lots of words, but not much sign of in-depth reflection or distinctive insights, and even less sign of doing him well, and being open about, the jobs Parliament has actually given the Bank.   Throw in some considerable complacency about monetary policy and it should be a pretty disquieting picture.

Some of it is probably just the Governor’s well-known propensity to talk.  Some of it might even be an understandable (if misguided in application) desire to lift the esprit-de-corps at the Reserve Bank after the demoralising Wheeler years.  And a lot seems to be about winning the turf battles, ensuring that in the reviews of the Reserve Bank Act that the government has underway as much as possible of the Bank’s powers are kept, in effect, under the Governor’s control, and that the existing powers and functions of the Reserve Bank are all kept in the Reserve Bank.  Part of that seems to be about openly subscribing what should be a non-partisan agency to every trendy left-wing cause that is going (and which, presumably, the Governor believes in personally.) A power play in other words –  and, with a weak government that probably doesn’t care much, quite likely to succeed,  somewhat to the detriment of New Zealand.

The latest example was the release on Monday of a rather curious 36 page document called The Journey of Te Putea Matua: our Tane Mahuta.   Te Putea Matua is the Maori name the Reserve Bank of New Zealand has taken upon itself (such being the way these days with public sector agencies).  It isn’t clear who “our” is in this context, although it seems the Governor  – himself with no apparent Maori ancestry – wants us New Zealanders to identify with some Maori tree god that –  data suggest –  no one believes in, and to think of the Reserve Bank as akin to a localised tree god.  Frankly, it seems weird.  These days, most New Zealanders don’t claim allegiance to any deity, but of those of us who do most –  Christian, Muslim, or Jewish, of European, Maori or any other ancestry – choose to worship a God with rather more all-encompassing claims.

But the Governor seems dead keen on championing Maori belief systems from centuries past.    In an official document of our central bank we read

A core pillar of the evolving Māori belief system is a tale of the earth mother (Papatūānuku) and the sky father (Ranginui) who needed separating to allow the
sun to shine in. Tāne Mahuta – the god of the forest and birds – managed this task after some false starts and help from his family. The sunlight allowed life to flourish in Tāne Mahuta’s garden.

This quote appears twice in the document.

All very interesting perhaps in some cultural studies course, but what does it have to do with macroeconomic management or financial stability?  Well, according to the Governor (in a radio interview on this yesterday) before there was a Reserve Bank “darkness was on our economy”.  The Reserve Bank was the god of the forest, and let the sun shine in.  Perhaps it is just my own culture, but the imagery that sprang to mind was that of people who walked in darkness having seen a great light.   But imagine the uproar if a Governor had been using Judeo-Christian imagery in an official publication.

Looks like a case of central bank communications and linking with history gone too far…

Profile of Raj Chetty: Data evangelist

September 26, 2018

IMF’s F&D Sep-2018 issue profiles Raj Chetty.

In some cases, Chetty’s work strikes out in new and unexpected directions. In others, it confirms earlier studies by sociologists or specialists in early-childhood education. Either way, what gives it such impact is his innovative use of massive data sets, which has put him on the cutting edge of a trend that’s transforming the field.

“Big data has been revolutionary in applied microeconomics,” says Emmanuel Saez, a frequent collaborator who teaches at the University of California at Berkeley. “Raj has been in the vanguard of this movement.”

For Chetty, big data promises to bring economics closer to the certainties of the natural sciences. The hope is that economists will have a greater impact on public policy by presenting evidence that’s convincing enough to bridge the ideological divide, especially at the local government level, where partisan rancor is less intense.

“He zealously preserves his ideologically neutral stand,” says David Grusky, a Stanford sociology professor who has worked with Chetty. “He wants the data to speak, and let the chips fall where they may.”

Grusky describes Chetty as a relentless investigator who roams widely through relevant literature, regardless of the discipline, and tests every conceivable hypothesis as he works toward a conclusion. “He considers it an abject failure if there’s ever a question coming from an audience that entails an analysis he hasn’t already undertaken.”

Speaking to audiences, on campus and off, is something Chetty does frequently in his role as evangelist for big data. He cultivates contacts with journalists and makes his articles available online, along with easy-to-understand summaries, which has helped attract widespread coverage of his work in publications including the Atlantic, the Economist, and the New York Times.

“If what we’re doing is important for the world, we should make it accessible to the world,” Chetty explains.

Hmm..

Economists (and Economics) in Tech Companies

September 25, 2018

Profs Susan Athey (of Satnford who once worked for Microsoft) and Michael Luca (HBS) in this paper look at role of economists in tech sector:

As technology platforms have created new markets and new ways of acquiring information,
economists have come to play an increasingly central role in tech companies – tackling problems
such as platform design, strategy, pricing, and policy. Over the past five years, hundreds of PhD
economists have accepted positions in the technology sector. In this paper, we explore the skills
that PhD economists apply in tech companies, the companies that hire them, the types of
problems that economists are currently working on, and the areas of academic research that have
emerged in relation to these problems.

 

Does It Pay to Study Economics in Australia?

September 21, 2018

James Bishop and Rochelle Guttmann of Reserve Bank of Australia in this Bulletin article:

The Bank has increased its efforts to encourage more students to study economics at school and university. This could improve the quality of public discourse and have benefits for society as a whole. Our analysis suggests that an economics degree also confers substantial private benefit to graduates in terms of their earnings, relative to many other degrees. This arises from the development of analytical and maths skills, which command a wage premium in the labour market. However, our analysis also reveals that the probability of finding work as an economist is low, given the small number of jobs relative to qualified graduates. Nonetheless, the wide range of disciplines in which economics graduates work suggests it is a degree that is useful beyond the narrow discipline. As Heath (2017) explained, doing an economics degree appears to give one a set of skills that are currently rewarded quite well and looks set to continue in importance in the future.

Hmm..

What Keynes should have said: Central banks/government should target stock markets

September 20, 2018

Prof Roger Farmer of UCLA has this proposal:

Should Federal Reserve provide accounts to all?

August 30, 2018

JP Koning in his new piece points to a new research which suggests to open a FedAccount, a bank account for the excluded:

What if you and I could bank at the Federal Reserve? This is the premise behind a new paper by Morgan Ricks, John Crawford, and Lev Menand titled “A Public Option for Bank Accounts (or Central Banking for All).” Under the authors’ plan, the Fed would provide the public with FedAccounts, interest-paying no-fee accounts that could use the Fed’s underlying payments platform to effect free transfers to other accounts and enable point-of-sale purchases via a Fed-provided debit card. The Fed would not provide account holders with loans. 

While the authors provide a number of motivations for providing FedAccounts, a key one is financial inclusion. Around 7 percent of American households, or 9 million households, are currently unbanked, which means no individual in the household has bank-account access. Not only would the welfare of each individual who gains financial access improve, according to the authors, but society would enjoy significant positive externalities as those on the other side of the equation, say employers or businesses, could use a more efficient payments option.

The authors present central banking for all as a plan targeted at the United States rather than a universal one, and for good reason. Bank penetration is at 99 percent in the United States’ northern neighbor Canada, illustrating that banking is quite capable of filtering into most of society’s nooks and crannies.

Canada provides a natural foil for the United States because it shares many characteristics including geography, culture, and history. Why would bank penetration rates suddenly rise dramatically just a few meters north of the 49th parallel? If we can answer this question, the United States might simply copy whatever Canada is doing rather than experimenting. 

It is amazing how Canada almost has everything better compared to US in monetary matters. But its achievements are barely discussed…

 

 

How Jamaican monetary policy is moving towards an inflation targeting regime..

August 22, 2018

Bryan Winter, GOvernor of Central Bank of Jamaica gives this interesting speech,

He points how several steps and policies were needed before Jamaica could transition to an inflation targeting regime:

For several years, the central bank in Jamaica has been operating an ‘inflation targeting
lite’ policy regime. I am sure our colleagues in Chile will confirm that full-fledged inflation
targeting is not something to jump into all of a sudden unless you already have the good fortune
of a conducive economic environment. That environment is now emerging in Jamaica with the
remarkable successes of an ambitious economic reform programme that is now beginning its
sixth year.

For Jamaica to be in a position to consider adopting price stability as the central bank’s
primary objective and the use of the interest rate lever as its main policy tool, several things had
to happen first. Since high public debt and fiscal dominance will undermine the effectiveness of
any central bank, fiscal sustainability is critical to allowing the central bank the breathing space it
needs to conduct an effective monetary policy. Once fiscal operations begin to crowd in the
private sector and net export earnings increase, a sustainable current account balance becomes
possible.

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Teaching money/macro in 90 minutes

August 20, 2018

Scott Sumner attempts the impossible: teaching money/macro in 90 minutes.

A few weeks ago I gave a 90-minute talk to some high school and college students in a summer internship program at UC Irvine.  Most (but not all) had taken basic intro to economics.  I need to boil everything down to 90 minutes, including money, prices, business cycles, interest rates, the Great Recession, how the Fed screwed up in 2008, and why the Fed screwed up in 2008.  Not sure if that’s possible, but here’s the outline I prepared:

1.  The value of money (15 minutes)

2.  Money and prices  (20 minutes)

3.  Money and business cycles (25 minutes)

4.  Money and interest rates (15 minutes)

5.  Q&A (15 minutes)

He actually covers all this in 75 mins leaving 15 mins for Q&A. He says that he managed to finish about 90% of what he wanted to say, which is quite impressive given the wide variety of macro/money topics.

For those who say they cannot explain Macro in 30 lectures (1.5 hours each), Prof Sumner provides a snapshot of how to cover main ideas in just 75 mins…

A dialogue between a populist and an economist

July 26, 2018

4 IMF economists have this interesting way of presenting research. The research is on trying to understand the rise of populism in the world. One could just go about preparing a research paper with detailed lit review, research 0bjective, research gap, methodology, empirical estimation, result explanation and then conclusion.

But instead the econs choose to explain their research via a dialogue between a populist politician and economist:

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COBOL: The antique code that runs the financial system

June 28, 2018

As we talk so much about digital and high end technology in finance, here is a crude reminder: The ancient COBOL still runs the financial system.

The last time you used an ATM, chances are the transaction was powered by a nearly 60-year-old computer programming language.

Common Business-Oriented Language—the ancient computer code better known as COBOL—was developed in 1959 as a business-focused standard programming language, and is still relied upon by banks around the world. It’s responsible for $3 trillion in commerce in the US every day. As of 2014, 92 of the top 100 banks, as well as 71% of the companies in the Fortune 500, were still running COBOL programs on mainframe computers.

And if it’s not broke, why fix it? Well, with COBOL, when something does break, there soon may not be anyone left who can. The baby boomers who know the language best are either retired or close to it, and those who would replace them just do not find COBOL very sexy.

So what happens next?

Back to physical world?

A macroeconomics workshop for MPhil/PhD students in Indian universities….

May 24, 2018

Azim Premji University is organising a macroeconomics workshop on Aug 23-24 2018.

One would expect an advanced macro workshop to be just more modelling and math. But this one is on heterodox economists and developing critical thinking on macro policy:

There is substantial published research by scholars working in universities, central banks, and research institutes on macroeconomics. Most of this research completely ignores the advanced research inspired by heterodox economists.

More importantly, there is inadequate critical evaluation of the dominant macroeconomic thinking – both in theory and policy. The formulation of good macroeconomic policies for India requires a mix of good macroeconomic theory, empirics, and understanding of Indian socioeconomic institutions. In order to better understand the core logic of the dominant macroeconomic thinking, this workshop features presentations on the role of competition and potential output in their framework, and alternatives are presented. In addition, presentations will be made on demand-led growth theory.

Through a mix of senior and junior academics, policy makers, and economics students, this work strives to communicate the importance of good macroeconomic thinking to a wide audience.

The last date for application is 20 June 2018. If possible, please pread the word to MPhil/PhD students in Indian Universities.

Thinking about dominance of language and currency (Kindleberger edition)…

August 2, 2017

Timothy Taylor on his blog shares a superb paper by Charles Kindleberger.

Kindleberger was one of the few economists who wrote with lots of flair and clarity. His pieces were minus all the models and math jazz but were quite rigorous in their own way and made you think about several issues.

However, the analogy which interests me most is that between the use of the dollar in international economics and the use of the English language in international intercourse more generally. Analogies are tempting, and dangerous because frequently misleading. But the dollar “talks,” and English is the “coin” of international communication. The French like neither fact, which is understandable. But to seek to use newly-created international money or a newly-created international language would be patently inefficient.

Languages are ordered hierarchically. Like sterling, French used to dominate. Like the dollar, English does now. Frenchmen must learn English; it is not vital for Anglo-Saxons to learn French.

The analogy with the language quarrel in Belgium is exact. The Flemish must learn French, but the Walloons, despite their constitutional edict of equality between the languages and the legislative edict which requires civil servants to do so, do not learn or use Dutch. The Flemish are offended and begin to insist on Flemish, exactly as France has insisted that its representatives at international conferences, even when they know English perfectly, must speak only French and insist on all speeches in English being translated into French. The transactions costs of translation, including the misunderstanding in communication and the waste of time, are even more evident than the transactions costs of converting gold to dollars and dollars to gold, when it is dollars—not gold—that are necessary to transactions.  …

It is easy to imagine what is implied in a “sabotage” of French as a working language at the United Nations. Someone—presumably an Anglo-Saxon—at a working-committee meeting, observing that all the Francophones had a good command of English, suggested that the translation into French from English and possibly from French into English be dispensed with in the interest of efficiency. The transactions (translation) costs of simultaneous but especially of consecutive translation are high in efficiency, owing to loss of time or accuracy and of intimacy in two-way communication. It is highly desirable for Americans and British to know enough French, German, Italian, Spanish, and perhaps Russian to be able to receive in those languages, or some of them, even if they transmit only in English. But world efficiency is achieved when all countries learn the same second language, just as when the different nationalities in India use English as a lingua franca. …  One’s own currency is the native language, and foreign transactions are carried on in the vehicle currency of a common second language, the dollar.

It is hard on French, which used to be the language of diplomacy, to have lost this distinction; but it is a fact. In scientific writing, as in communication between international airplane and control tower, English is the universal language, except for the rescue call “Mayday” which … would have put in French as “M’aidez.” But a common second language is efficient, rather than nationalist or imperialist. 

Fascinating.

Why the quest for a single currency for West Africa won’t materialise soon

August 1, 2017

Interesting piece by Prof. Tahiru Azaaviele Liedong of University of Bath. One would imagine most monetary union projects would be stalled seeing the case of Europe, but not really.

Apparently there are 15 West African countries which want to form a monetary union. Of these 15, 8 are French colonies, 5 English and two are Portuguese. Of the 8 French colonies, 7 are already in a monetary union along with one of the Portuguese speaking nations (Guinea-Bissau). Their common currency is CFA Franc.

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The Fed Ups: New Inflationists in town arguing for a higher inflation target…

July 28, 2017

Prof Larry White has a scathing piece on continued attempts by economists to push central banks into influencing real economy. Recently, several top US econs signed an open letter asking Fed to raise inflation target.

Prof White says these are the new Fed ups in town:

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How to think like an economist (if you wish to)…

July 19, 2017

Brad DeLong has a long post on the topic:

I have long had a “thinking like an economist” lecture in the can. But I very rarely give it. It seems to me that it is important stuff—that people really should know it before they begin studying economics, because it would make studying economics much easier. But it also seems to me—usually—that it is pointless to give it at the start of a course to newBs: they just won’t understand it. And it also seems to me—usually—that it is also pointless to give it to students at the end of their college years: they either understand it already, or it is too late.

By continuity that would seem to imply that there is an optimal point in the college curriculum to teach this stuff. But is that true?

Every new subject requires new patterns of thought; every intellectual discipline calls for new ways of thinking about the world. After all, that is what makes it a discipline: a discipline that allows people to think about a subject in some new way. Economics is no exception.

In a way, learning an intellectual discipline like economics is similar to learning a new language or being initiated into a club. Economists’ way of thinking allows us to see the economy more sharply and clearly than we could in other ways. (Of course, it can also cause us to miss certain relationships that are hard to quantify or hard to think of as purchases and sales; that is why economics is not the only social science, and we need sociologists, political scientists, historians, psychologists, and anthropologists as well.) In this chapter we will survey the intellectual landmarks of economists’ system of thought, in order to help you orient yourself in the mental landscape of economics.

Nice bit..

Too Late to Compensate Free Trade’s Losers

April 14, 2017

The usually superb Dani Rodrik has a piece:

Today’s consensus concerning the need to compensate globalization’s losers presumes that the winners are motivated by enlightened self-interest – that they believe buy-in from the losers is essential to maintain economic openness. Trump’s presidency has revealed an alternative perspective: globalization, at least as currently construed, tilts the balance of political power toward those with the skills and assets to benefit from openness, undermining whatever organized influence the losers might have had in the first place. Inchoate discontent about globalization, Trump has shown, can easily be channeled to serve an altogether different agenda, more in line with elites’ interests.

The politics of compensation is always subject to a problem that economists call “time inconsistency.” Before a new policy – say, a trade agreement – is adopted, beneficiaries have an incentive to promise compensation. Once the policy is in place, they have little interest in following through, either because reversal is costly all around or because the underlying balance of power shifts toward them.

The time for compensation has come and gone. Even if compensation was a viable approach two decades ago, it no longer serves as a practical response to globalization’s adverse effects. To bring the losers along, we will need to consider changing the rules of globalization itself.

Role of immigrants in US innovation history

March 27, 2017

I would be surprised if there was no role. How immigrants are attacked despite they bringing benefits to the local economies.

Profs. Ufuk Akcigit, John Grigsby and Tom Nicholas have a piece:

The Journey of Humankind: How Money Made Us Modern (National Geographic edition)

March 27, 2017

It is interesting when likes of National Geographic Channel discuss matters of money. They have a program as well on power of money for the human civilisation.

Civilization existed before money, but probably wouldn’t have gotten very far without it. Ancient humans’ invention of money was a revolutionary milestone. It helped to drive the development of civilization, by making it easier not just to buy and sell goods, but to pay workers in an increasing number of specialized trades—craftsmen, artists, merchants, and soldiers, to name a few. It also helped connect the world, by enabling traders to roam across continents and oceans to buy and sell goods, and investors to amass wealth…

Over the centuries, money continued to evolve in form and function. The ancient world’s stones and shells gave way to coins, and eventually to paper currency and checks drawn upon bank accounts. Those physical tokens, in turn, gradually are being superseded by electronic ones, ranging from credit card transactions to new forms of digital currency designed for transferring and amassing wealth on the Internet.

Nice pictures in the story as well…

How economists should advise Governments: lessons from Walter Heller who pushed Kennedy to cut taxes…

February 20, 2017

Beatrice Cherrier’s blog is quickly becoming one of the blogs to read.

In her recent post, she points how Walter Heller as a Chief Economic Adviser managed to advise the Kennedy Government. This is important as there is lot of criticism on role of economic expertise:

Trump’s decision to demote whoever might be nominated chairman of the Council of Economic Advisers (CEA) from his cabinet has been interpreted as a final blow to a though year – in which economists’ advice has been systematically ignored by voters- within a though post-financial crisis decade. Economists are under the impression that since 2008, their expertise has been increasingly challenged, and they have offered several analyses and remedies: more micro, more data, more attention to distribution and less to efficiency, more humility, more awareness to the moral and political element in economic expertise, more diversity and more interdisciplinarity –economic education included- Few of these however rely on the whopping literature on the history and sociology of scientific expertise.

….

Histories of how economists painfully gained reputation and trust during the XXth century abound. Most of them are focused on public policy – data on private businesses are more difficult to obtain, and tracking economists’ influence on the public is elusive–. And none of them fail to mention the canonical proof that economists’ expertise is/have been influential: it was Walter Heller, 4th CEA chairman, who convinced J.F. Kennedy and L.B. Johnson to propose a massive income and business tax cut, passed by the Congress in 1964.

The facts are well-known: Eisenhower’s legacy was a sluggish decade, with growth stuck at 2,5% per year and unemployment at 8%. Recurring budget deficit, which topped 12 billions in 1959, prevented much needed defense, education and welfare expenditures. Kennedy’s campaign was consequently focused on the promise of restoring growth, of “get[ting] this country moving again.” The candidate had nevertheless straightforwardly rejected the fiscal stimuli proposed by those economists, including Paul Samuelson, who had participated in his Democratic Advisory Committee. Kennedy came to the oval office with the notion, inherited from his father, that the budget should be balanced and the money supply tightly controlled. Under the influence of his CEA chairman, Walter Heller, Kennedy became more favorable to sustaining a budget deficit, and by early 1963, he had submitted to Congress the largest peacetime voluntary budget deficit: $12 billion. He proposed to reduce income tax rate from 20-91% to 14-65% and corporate income tax rate from 52 to 47% and to abolish loopholes and preferential deductions to enlarge the tax base. He promised that, should the Congress pass his tax cuts, the 1965 budget would be equilibrated. The proposal was finally enacted in 1964, under Johnson. 1965 saw the smallest Federal deficit of the decade (1 billion), strong growth and unemployment down to 4%. The trend persisted throughout the decade, with inflation pressures slowly building in response to Johnson’s spending frenzy.

Thought the contribution of the tax cut to this period of prosperity, and to subsequent imbalances, is still fiercely debated, its positive spillovers on the whole profession commands wide agreement. Heller’s CEA has contributed to shift economists’ image from ivory tower technicians to useful experts and to strengthen public trust. It has been heralded as the canonical example for economists’ ability to increase society’s welfare, a symbol of a (some would say lost) golden age. The scope of Heller’s influence has, in fact, extended ways beyond the tax cut. He was instrumental in putting poverty on the presidential agenda, and, as recently unearthed by Laura Holden and Jeff Biddle, he was the one who turned human capital theory into an argument in favor of federal funding for education. His peculiar status as the “economic experts’ expert” was immediately recognized. He made Time’s cover twice in two years. No other CEA chair made the cover of the magazine before the late 1976, and none ever made it twice as CEA chair. But if the fallouts of his expertise are well known, its determinants are less so. The nagging question remains: how did he do it?

Read the post for more details.

What is interesting is how in US you can actually remain relevant as an economist knowing about policy and people. These ideas are so important for history of thought. Whereas in India there is no chance despite such a rich history..


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