Empirical macroeconomics

On 2 May, it was announced that the economist, Emi Nakamura (Berkeley), had earned the John Bates Clark Medal, an annually-awarded prize which enjoys similar prestige among young American economists as the Yrjö Jahnsson Award does among young European economists.

While myself being an enthusiastic follower of the “credibility revolution” within microeconomics – which can be broadly depicted as a trend of greater attention sought into the identification of causal effects through careful empirical exercise – Emi Nakamura is hailed for pushing such a revolution within macroeconomics. In fact, the ways in which her efforts have taken place have been part of a broader trend of incorporating microfoundations into macroeconomic modelling since the late 1970s (known as “New Keynesian economics”). Among her most well-received papers are “Identification in Macroeconomics” and “Price Rigidity: Microeconomic Evidence and Macroeconomic Implications, both co-authored with the economist Jón Steinsson (Berkeley).

Methodologically and historically, macroeconomics has been the more heatedly contested field within economics. In particular, its intense fond for mathematical theory has in recent years triggered warnings that the sub-field is potentially becoming chronically “dis-innovative” and unresponsive to the ever-changing aspects of an economy today. Regarding this concern, see “Mathiness in the Theory of Economic Growth” by Paul Romer, or for a short version here. Also read from page 85 of Dani Rodrik’s book, “Economics Rules“, arguing how a set of macroeconomic models preferred by a handful of economists prior to the 2008-09 financial crisis blinded them from foreseeing the magnitude of the event’s eventual calamities.

However, it must be emphasized that “predicting crises” are not the main responsibilities of all economists. Modelling of such can only go as far as helping us to understand what is most likely to happen under certain assumptions about the individual (preferences) and market (nature of competition), among other assumptions. Against the backdrop of this, awarding Emi Nakamura the John Bates Clark Medal comes at a critical conjuncture for macroeconomics. The last time a macroeconomist won the medal was in 1993 (Lawrence Summers), followed by 1961 and 1959(!).

On a more personal level, I am also excited that the medal was given to a female economist. Such level of recognition and respect provides a boost of self-confidence for other aspiring female economists who have ever considered leaving the field. Only 4 out of 41 John Bates Clark medalists have been women. Evidence for rife gender discrimination taking place within economics has now become so solid to the point that this year, the Journal of Economic Perspectives ran a paper series dedicated to the gender problem in economics. Similarly, during this year’s American Economic Association Annual Meeting, the gender problem was more openly acknowledged by the field’s top scholars.

But this is just the beginning of raising awareness about the levels of intimidation faced by female economists. A widely disseminated paper in 2018 by Berkeley student, Alice Wu, using quantitative text analysis found that users of the (infamous) EconJobRumours.com website were more likely to associate men with their academic and professional characteristics and women with their physical appearances and personal information. While I visited the website to observe how Nakamura’s award would be framed, I couldn’t be the least surprised by how many of its users attempted to discredit her by raising the fact that many of her papers were co-authored with a male economist (her husband). I keep thinking: would the same “concern” be raised as frequently if she was a male economist? Or would “his” female co-authors be typically shrugged off as research assistants or some kind of? It all reminds me of the trolls who recently attempted to degrade the role of the astrophysicist, Katie Bouman, in establishing an image of the black hole.

So here are a few Twitter threads explaining further the importance of the award to Emi Nakamura:

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