Are Mainstream Economists Out Of Touch?
Two Reflections on the AEA meeting in New Orleans
Greetings, The War on Prices subscribers, and Happy New Year!
Last week, I was at the American Economic Association (AEA)-Allied Social Science Associations (ASSA) meeting in New Orleans. It was the first academic economics conference I’d attended for years. There were some excellent sessions on applied policy, housing, macroeconomic risks, lessons from the pandemic and more (some of which I shall write about in future). And yet, as refreshing as it was to catch up with folks and listen to some new research findings, I left wondering whether mainstream economists, as a group, are out-of-touch.
COVID-19
Much has been written about how the conference’s COVID-19 were a throwback to early 2021. The AEA required attendees to show a COVID-19 vaccine card indicating they’d had at least one booster shot to pick up their conference pass. There was a mask mandate for those in attendance at the main hotel.
Now, the Hilton Riverside New Orleans (the main conference HQ) is an extremely large hotel with lots of shared spaces and, unsurprisingly, does not require mask wearing of guests in general. So you had the ridiculous spectacle of other guests and families in the hotel walking around unmasked as hordes of smartly dressed economists paraded their KN95s; of economists walking unmasked in busy shared areas only to then mask up when entering sparsely populated sessions; of presenters taking off masks to talk loudly at large groups in sessions before putting their masks on to watch other presenters in silence; of groups of economists eating and drinking together in the hotel or surrounding bars and restaurants, only to then put their masks on to chat with the same people in the hotel conference areas.
It was a real throwback to the nonsense days of mask wearing to walk to the toilet in restaurants, with the AEA completely failing to consider the broader costs and benefits of such a rule at this stage of the pandemic. Indeed, it’s bizarre that economists (economists!) have not re-evaluated who the least cost avoider might be for dealing with any (much smaller) COVID-19 externality in a world of vaccines. In fact, given presenters had the option of participating remotely anyway, should we even consider this an external costs issue at all? That’s one to ponder. But to actively require masks for all attendees at this stage is to require masks forever. It was an ill-thought-through error.
Nor did the behavior of attendees with masks reflect any logical understanding of personal risk. During the first full morning of the conference (Friday), I decided to note down some rough compliance figures . With the health warning that this only reflects the experience of sessions I attended, compliance initially was about 90 percent for those I judge to be in their 40s and younger and only about 30 percent among over 50s.
Now, I am less interested in the debate about the efficacy of mask wearing or indeed whether individuals choose freely to wear one based on their subjective judgements of the risks, costs, and benefits. What was interesting to me is that at an AEA *population*-level, compliance rates with the rule appeared negatively correlated with the age-related risks of COVID-19 itself. At this stage when those risks are well known, that strongly suggests a lot of signaling going on, whether that be potential job market applicants looking to signal their compliant personalities, masks as a political statement, or something else. What it does not show is some well-grounded understanding of “the science.” It was little surprise that, as the weekend wore on, and given their experience in the rest of the city, all groups’ adherence to the rule waned.
[As an aside, there were several panels about the working-from-home jolt caused by COVID-19 and its benefits. But this conference again exposed the limits of hybrid sessions for major live conferences. In those I attended with remote participation, there were massive tech issues meaning long delays, presenters not being able to hear discussants, and numerous other problems. The only levity this provided was hearing Larry Summers’ voice first alongside a black screen, only to then see him beamed up in his pre-recorded video with a wonderfully sunny picturesque beach background. The jam-packed ballroom of attendees that he’d attracted, thinking he’d be in person (it was the busiest session I attended…and at 8am), saw the funny side.]
Session Topics
If the COVID-19 policy was out-of-touch with the stage of the pandemic we’re at, and observed mask-wearing behavior out-of-touch with the risks of COVID-19 itself, then the topics of the paper sessions might be considered more out-of-touch still.
By my calculations, of all the panel, paper, and plenary sessions, there were 69 featuring at least one paper that focused on gender issues, 66 on climate-related topics, and 65 looking at some aspect of racial issues. Most of the public would probably argue that inflation is the acute economic issue of our time. So, how many sessions featured papers on inflation? Just 23.
There was little evidence here then of economists being “knee-deep in postmortems” on inflation. Greg Ip had bemoaned last June that “economists have thus far devoted remarkably little attention to how their theories and models got inflation so wrong. There has yet to be a surge of studies from the National Bureau of Economic Research, the leading outlet for academic economics, on inflation as compared with the gusher of papers on pandemics in 2020.”
This is despite the lack of major economists warning about the risk of inflation ex-ante (except Larry Summers - which is probably why so many want to hear him) and the obvious hugely contested questions that remain over the balance of what caused this inflationary moment.
No, the lack of focus on inflation relative to other politically “trendy” topics was striking. But you might say, “well, after a long period of very low inflation, we’d not expect as many economists to be studying or presenting on it!” And to be sure, inflation is a recent phenomenon- it’s not been a structural problem for decades.
So let’s instead look at papers that could credibly be thought of as being about economic growth - which has been historically slow over the past 20 years and is of first-order importance. My calculations suggest there were, again, only 23 sessions featuring papers that could reasonably be considered to be about that subject. This, despite growth being the overwhelming determinant of long-term living standards, and slow growth being a contributing factor behind many of our current economic, social, and political challenges.
To summarize: there were roughly three times as many sessions featuring papers on each of race, gender, and climate as there were sessions on the topics of inflation or growth. For the conference as a whole, that means 13.2 percent of all sessions featured gender issues, 12.6 percent climate, 12.4 percent race, against just 4.4 percent for inflation and growth (some sessions featured more than one of these listed topics).
When I told one DC economist these figures, his impulse was to blame a lot of the kooky Marxist and self-described “heterodox” associations that are affiliated to the conference. And, for sure, there were plenty of sessions with titles such as “Innovations in Teaching Economics of Gender: Feminist Pedagogy for Economics” hosted by non-AEA associations.
But it’s an error to think that the results above are not broadly indicative of the relative balance of these topics explored at the core. Even if one restricts the sample to just sessions run by the AEA or the AEA in conjunction with another association, for example, you find 16 percent of the 187 sessions featuring papers on gender issues, 13 percent for race and 9 percent for climate. That compares with just 7 percent of sessions featuring papers on inflation and 4 percent featuring papers on growth. Not as lop-sided, for sure, but still…
In producing these calculations, I’ve tried to be cautious in assigning labels to papers, as many required a degree of subjective judgment. But even if you just look at the overall title of the sessions yourself, you can clearly see *a lot* more that contain the words gender (21), race/racial (12), and climate (16) than growth (7), and inflation (5).
Which really brings me back to the question: given what Americans say they care about, are economists a bit…out of touch?
Ryan
It's a bit over the top cynical to assume the reason younger people are wearing masks more often is "signaling" or unawareness of science without giving consideration to the thought that young people might be more likely to wear them out of respect for older, more vulnerable people.
Being part of an more vulnerable group tends to lend itself toward thinking your preferences should apply to everyone in your group.. or maybe as well, if you have a lot of older colleagues you have more confidence that, overall, older people are okay with the risks.
If however, you are younger, it's less acceptable to put someone else at risk, and disobey the rules. By less acceptable, I mean not simply some kind of virtue signaling, but actual virtue as well.
This also remains consistent with the lower usage over the course of time, as others become familiar with others lack of concern, they gain confidence that they violating someone else's preference.
I'm sure there is some effect of virtue signaling, but to assume that all signals of virtue are lies, takes the concept too far. There is almost always a way to, at an individual level, determine the difference between virtue and virtue signaling. Some level of skepticism combined with some level of optimism, allows you to identify the two, and use those judgements to the advantage or yourself, the virtuous, and society overall. Absolute cynicism however leads to a predictable outcome, the virtuous lose as they stop gaining any of the benefits of their goodwill, yet still suffer the costs.
Good post. The inflation point is partly because it is a macroeconomic topic, and the overwhelming majority of academic economists are micro. Tacking on gender or race to one's research is pretty straightforward - in some cases it amounts to little more than sample splits when generating results. But most economists wouldn't consider inflation to be near enough their area to contribute to. An additional problem is that inflation has been studied by economists a bunch, and there's a premium in academic econ placed on studying a new issue, or at least in a new way: the current bout of inflation isn't necessarily a better one to study than those of the past. And, because of data lags, many datasets covering the current bout aren't even out yet, limiting the quality of papers substantially. The returns to writing a good paper when the issue is irrelevant for policy is vastly more than writing a mediocre paper when the policy value is high.
Maybe these things represent a bad equilibrium, maybe not, but it's the one we're in. Some of the above applies to growth too - at least the macro point - though you could ask why there are so few growth economists in the first place. I don't know why that is.
Climate change is a little different - you can't just do a sample split - but there are lots of little interventions (some RCTs, others quasi experiments) that are amenable to microeconomic study.
As the quote from Ip said, there was no shortage of COVID papers in 2020, so it's not like economists don't take account of their key issues of the day.