30 Ways to Be an Economist

Diego Comin – Why New Technologies Do Not Make Poor Countries Rich

 
Over the past two hundred years, poor countries have become faster at adopting the technologies of rich countries. So why is it, the economist asks, that poor countries have remained poor, by and large? The answer, Diego Comin says, is that poor countries use technologies less intensely: fewer people use less advanced computers less often. To find out why – finance, institutions, geography? – Diego amasses data to measure the diffusion of technologies over two centuries. Compiling a big data set to study the drivers of technology adoption – this is new economic thinking.
image: 
In this video: 
Diego Comin

Suresh Naidu - Property Rights and Growth: Lessons from Slavery

Strong enforcement of property rights is good for economic growth, says the conventional wisdom. The link may not be as clear cut, says Suresh Naidu. He and co-investigator Jeremiah Dittmar are digging through court records and newspaper ads on runaway slaves to come up with a measure of property rights enforcement. The hypothesis is that weak enforcement of property rights in people – slavery that is – discouraged investment in slaves and encouraged investment in manufacturing and infrastructure instead. A new angle on the link between property rights and economic growth – this is new economic thinking. Read more

image: 
In this video: 
Suresh Naidu

Moritz Schularick: Credit Booms Gone Bust

About the Interview

Carmen Reinhart and Kenneth Rogoff tell the history of financial crisis as a tale of excessive public debt. But what more commonly drives financial instability, says Moritz Schularick, is excessive private debt. Financial crises are credit booms gone bust. Schularick and his collaborators compile a long-run data set of disaggregated credit flows, separating loans for productive investment from loans for the purchase of existing assets. A marriage of economic history and modern statistical methods to investigate the role of finance in the macroeconomy -- this is new economic thinking. Read more

image: 
In this video: 
Moritz Schularick

Sanjay Reddy - Facts and Values Are Entangled: Deal with It

About the interview

Are there more poor people on our planet today than there were last year? Many economists would approach this question as mainly a technical problem, a matter of counting. Sanjay Reddy did, too, but soon recognized that a sound answer required making normative criteria explicit. Much confusion and many technical muddles in poverty measurement can be avoided, Reddy says, only if we become conscious and deliberate about how values enter the analysis. Fact and value are entangled, and Reddy shows how recognizing this leads to greater analytical clarity -- this is new economic thinking. Read more

image: 
In this video: 
Sanjay Reddy

Pavlina Tcherneva - Bottom Up Fiscal Policy: Direct Employment of the Unemployed

To cure unemployment, mostly we prime the pump: we devise fiscal strategies on the presumption that jobs follow economic growth. But the strategies have not worked, unemployment remains high. That is why Pavlina Tcherneva studies policies that target the unemployed directly. She says that the government can reduce income inequality and restart the growth engine by putting people back to work. In other words, growth follows jobs. Investigating different models of fiscal policy -- this is new economic thinking.

image: 
In this video: 
Pavlina Tcherneva

Stephen Kinsella - Irish Crisis Demands New Economic Thinking

About the Interview

Most "state of the art" macro models trivialize financial flows and largely neglect the interaction between finance and industry. That is why they failed at predicting and illuminating the collapse of the Irish economy. Stephen Kinsella sets out to provide a remedy: starting from a web of balance sheets, stock-flow-consistent models make it possible to trace the financial flows connecting firms and banks, households and government. Kinsella moves beyond mere simulation, and empirically calibrates a stock-flow consistent model of the Irish economy with the goal to inform policy -- this is new economic thinking. Read more

image: 
In this video: 
Stephen Kinsella

Cosma Shalizi - Why Economics Needs Data Mining

About the Interview

Cosma Shalizi urges economists to stop doing what they are doing: Fitting large complex models to a small set of highly correlated time series data. Once you add enough variables, parameters, bells and whistles, your model can fit past data very well, and yet fail miserably in the future. Shalizi tells us how to separate the wheat from the chaff, how to compensate for overfitting and prevent models from memorizing noise. He introduces techniques from data mining and machine learning to economics -- this is new economic thinking. Read more

image: 
In this video: 
Cosma Shalizi

Ed Kane - Measuring Systemic Risk To Empower the Taxpayer

About the Interview

Banks take on excessive risk since they know, in case of failure, the taxpayer will step in to rescue them. That is a form of free insurance, and Ed Kane wants to end it. To do so, he says, we need to put a number on systemic risk, the amount for which the taxpayer is on the hook. Kane uses the contingent claims model developed by Nobel Laureate Robert Merton to calculate the market value of the implicit insurance -- making the cost explicit, and so empowering the taxpayer. This is new economic thinking. Read more

image: 
In this video: 
Edward J. Kane

Steven Medema - The Coase Theorem As Fiction

About the Interview

When externalities are present and transaction costs are absent, private parties will strike welfare-enhancing deals regardless of who owns what. In a frictionless world, bargaining leads to efficiency. That is the essence of the Coase Theorem, and it is fiction, according to Steven Medema. The world is not frictionless, which is why the Theorem is not applicable to it. And yet the theorem, distorted versions of it, entered into textbooks and came to captivate the minds of economics and legal scholars alike. Medema investigates how that came to be. Writing the intellectual history of the Coase Theorem -- this is new economic thinking. Read more

image: 
In this video: 
Steven Medema

John Davis - How to Avoid Herding in Research

About the Interview

An individual fish reduces the danger to itself by swimming as close as possible to the center of the school. That is how schools hold together. John Davis says that researchers and fish are alike -- both engage in herd behavior. PhD production, the role of journals, the incestuous relationship between top universities -- Davis looks at it all with an eye to informing policy to promote diversity and alternative views in the profession -- this is new economic thinking.

About John Davis

Davis is professor of history and philosophy of economics at the University of Amsterdam and professor of economics at Marquette University. Full profile

image: 
In this video: 
John Davis