Economists come in all shapes and sizes

Tag: Economists come in all shapes and sizes


The Wall Street Journal reports that “Corporate Economists Are Hot Again.”


With more data available than ever before and markets increasingly unpredictable, U.S. companies—from manufacturers to banks and pharmaceutical companies—are expanding their corporate economist staffs. The number of private-sector economists surged 57% to 8,680 in 2012 from 5,510 in 2009, according to the Bureau of Labor Statistics. In 2012, Wells Fargo had one economist in its corporate economics department. Now, it has six.

And this:

The key to the revival of in-house economists, companies and economists say, is the need to digest huge amounts of data—from production volumes in overseas markets to laptop usage in urban areas—to determine opportunities and risks for companies’ business units, not just in the U.S. but around the world.

As those of you who read this blog probably already know, we think that life as an economist is pretty awesome.  And it’s not just us saying it, either.  Here’s Noah Smith from the Noahpinion blog who says it thusly:

People often ask me: “Noah, what career path can I take where I’m virtually guaranteed to get a well-paying job in my field of interest, which doesn’t force me to work 80 hours a week, and which gives me both autonomy and intellectual excitement?” Well, actually, I lied, no one asks me that. But they should ask me that, because I do know of such a  career path, and it’s called the economics PhD.

“What?!!”, you sputter. “What about all those articles telling me never, ever, never, never to get a PhD?! Didn’t you read those?! Don’t you know that PhDs are proliferating  like mushrooms even as tenure-track jobs disappear? Do you want us to be stuck in eternal postdoc hell, or turn into adjunct-faculty wage-slaves?!”

To which I respond: There are PhDs, and there are PhDs, and then there are econ PhDs.

The emphasis is mine and I scrubbed the links, but the sentiment remains.  A highly recommended read for the thinking-about-a-Ph.D. set.

Better Late than Never, I Say

But why are economists, once thought to be humorless practitioners of the “dismal science” suddenly becoming celebrities? Since when did they become gurus to whom ordinary people can turn to for everyday-life advice?

That’s from “Rise of the Celebrity Economist,” at

If you have to ask why, then my guess is that you aren’t going to get a very flattering portrait.

“Economists are in surprising agreement about surprising statements”

Continuing our series of posts about what economists believe, my colleague reminds me of the list at the beginning of Deidre McCloskey’s text, The Applied Theory of Price, available free for download!

Here’s McCloskey in all her rhetorical glory:

Considering the obstacles, economists agree about a surprisingly large number of things. Their agreements, in fact, are often about things that noneconomists would think silly or wrong or even evil.  That is, economists are in surprising agreement about surprising statements…

The list of surprising agreements is a long one.  Most of the 20,000 or so members of the American Economic Association would answer yes to questions such as:

  1. If gasoline is taxed to conserve energy, will the quantity consumed go down by a nontrivial amount, despite the protestations of drivers that they cannot do less than the amount they are now consuming?
  2. Was the rise in the standard of living of the American worker over the last 50 years chiefly a result of better knowledge and more machines rather than of activity by trade unions?
  3. Is the American Medical Association, far from being a benevolent organization set on improving medical care, in fact a monopolistic trade union like the plumbers, longshoreman, and electricians?
  4. Does the resting place of the burden of the social security tax depend exclusively on how workers and employers react to a change in wages, and not at all on the legal division of the tax (paid half by workers, half by employers)?
  5. Is there an optimal amount, greater than none, of polluted air and water, noisy streets and airports, and ruined countrysides?

Although the text was written more than thirty years ago (!), the policy issues still seem rather germane — the burden of social security taxes, energy conservation, rising standards of living. I like the bit about the longshoreman.

McCloskey does not weigh in here on drug legalization, but my guess is that she would argue that economists would agree on certain aspects.  First, decriminalization or legalization would definitely lead to more drug use, due to both supply and demand increases. Second, the level of violence associated with organized crime and others would decrease.  What there appears to be no consensus on in whether the goods outweigh the bads, or if the distributive implications are desirable, or even whether we want to be a society that “endorses” drug use.

That, my friend, is the classic positive v. normative distinction.

Lawrence Students v. Card-Carrying Economists

In the previous post, I mentioned the Robert Whaples survey of American Economic Association (AEA) members on their public policy views.  Of course, Whaples isn’t the only one with access to Survey Monkey, and with the help of some of my colleagues, we gave the same survey to students in Freshman Studies, Economics 100, and Economics 300 courses.

The Freshman Studies sample (n=26) should be fairly representative of incoming freshman population, as every student takes freshman studies and these students are allegedly distributed randomly across the sections.  I have data from two sections with a 90% response rate. The Econ 100 course is predominantly freshman as well, but is a much different cross section of the University, with 70% planning to major in economics or some other social science.  The Econ 300 is, of course, generally for students taking the first “major” step to joining Team Econ down here on Briggs 2nd.  It is well-worth noting that the Econ 100 (n=35) and Econ 300 students were surveyed at the beginning of the course,* not the end.   Perhaps next year we will switch that up.

The survey participants rate the questions on a 1-5 scale, with 1 being strongly disagree and 5 being strongly agree.

Here are selected results, sorted by the scores of AEA members:


Continue reading Lawrence Students v. Card-Carrying Economists

Finally, Something We Can Agree On

Did you just say we should eliminate corporate taxes?

You have probably heard about the exasperated President Truman asking for a “one-handed economist” because all of his economics advisers were prone to saying “on the one hand… on the other hand.”   Or, perhaps you’ve heard of the First Law of Economists: for every economist, there exists an equal and opposite economist (with the Second Law of Economists being that they are both wrong). Or, you might have even heard that if you were to lay all economists end-to-end, they still wouldn’t reach a conclusion.

Hilarious, indeed, and fair enough, it’s true that our profession is prone to qualifying our assessments.  But as a recent NPR Marketplace segment uncover, there are some thing views that seem to hold from east-to-west, from north-to-south, and, yes, from left-to-right across the profession.

And here they are, six shared policy beliefs among economists:

One: Eliminate the mortgage tax deduction, which lets homeowners deduct the interest they pay on their mortgages. Gone. After all, big houses get bigger tax breaks, driving up prices for everyone. Why distort the housing market and subsidize people buying expensive houses?

Two: End the tax deduction companies get for providing health-care to employees. Neither employees nor employers pay taxes on workplace health insurance benefits. That encourages fancier insurance coverage, driving up usage and, therefore, health costs overall. Eliminating the deduction will drive up costs for people with workplace healthcare, but makes the health-care market fairer.

Three: Eliminate the corporate income tax. Completely. If companies reinvest the money into their businesses, that’s good. Don’t tax companies in an effort to tax rich people.

Four: Eliminate all income and payroll taxes. All of them. For everyone. Taxes discourage whatever you’re taxing, but we like income, so why tax it? Payroll taxes discourage creating jobs. Not such a good idea. Instead, impose a consumption tax, designed to be progressive to protect lower-income households.

Five: Tax carbon emissions. Yes, that means higher gasoline prices. It’s a kind of consumption tax, and can be structured to make sure it doesn’t disproportionately harm lower-income Americans. More, it’s taxing something that’s bad, which gives people an incentive to stop polluting.

Six: Legalize marijuana. Stop spending so much trying to put pot users and dealers in jail — it costs a lot of money to catch them, prosecute them, and then put them up in jail. Criminalizing drugs also drives drug prices up, making gang leaders rich.

The catch, of course, is that politicians tend to not like these policies.  You can listen to the full NPR segment here.

For more on what economists do and don’t agree on, you might check out this survey from Robert Whaples at the Econ Journal Watch.

800 Years of Ineptitude

For today’s recommended reading, The New York Times profiles Carmen Reinhart and Kenneth Rogoff, authors of This Time Is Different: Eight Centuries of Financial Folly.

You may recall this title from our summer reading recommendations that we posted a few weeks ago.  You can find a paper approximation of the book here and a summary of its principal findings here.

Both of these economists seem to be pretty interesting characters and the article is a fun read.

The Secret Lives of Economists

A recent Wall Street Journal piece provides a rare glimpse into the propensities and proclivities of economists. If you don’t find what the economists are doing at all unusual, then you are probably in the right place.

The article includes a nice couple of quotes from Yoram Bauman, who will be speaking at Lawrence later this year:

“The economics students seem to be born guilty, and the other students seem to lose their innocence when they take an economics class,” says Mr. Bauman, who has a stand-up comedy act he’ll be doing at the economists’ Atlanta conference Sunday night. Among his one-liners: “You might be an economist if you refuse to sell your children because they might be worth more later.”

I’m not sure if the take-home point is that we take our models too seriously or not seriously enough.