The future of economics

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Every year i go to the meeting of the american economic association it’s literally 13,000 economists they pack into three or four hotels in a downtown somewhere this year was atlanta and they speak to their own kind i write about economics for the financial times i am not an economist but i observe them for a living this meeting is like thanksgiving in america with

Your family everyone knows everyone and the fights are also familiar every year there’s a meta conversation about the study of economics has the profession learned from the financial crisis and how should it teach those things to the next generation so i don’t think that we’ve really learned lots of lessons from the crisis and that’s partly why i’m here i think

Some of the lessons that are being discovered or really in academia it’s been a decade since the crash this year so we decided to see how the family is doing we asked mom and dad the older economists who were working through the crisis but we also talked to the kids the ones who’ve gotten their phds since the crisis i think that we’re emerging from a time period

Where economics took a focus on abstract theory and rational decision-making that i think was overstressed when i started my undergraduate studies in 2008 as i said there was already this discrepancy between the textbooks and what you saw in the real world and we were really so to say using what we learned in classes and compared it to the real world and that gave

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Us a foundation to discuss what we were actually seeing and we were thinking about okay what has changed and what what is happening nowadays that is not represented in these kind of models and these kind of methods that we use for the older generation the crisis is a benchmark it’s a way to measure whether the profession has changed for the younger generation the

Crisis is more likely to have affected them personally but it also gave them something to publish about the crisis gave them data here’s something though that i hadn’t expected to discover this family of economists has been talking about the financial crisis for so long it’s easy to forget that a decade is just a long time the profession of economics has changed

In ways that have absolutely nothing to do with the fall of lehman brothers there’s some real cutting-edge academics looking at things like automation the future of work things like that the relationships that just seem to have broken down in economics and so i’m here trying to suss that out because even though this work exists i don’t think it’s being translated

Into the mainstream you see that there is a shift toward more empirical work i’m very much integrated with people working on financial frictions and financial crises monetary policy issues these are very new issues that probably would not have been studied in such detail before the financial crisis more and more people are including machine learning techniques

Although sometimes you know the value above more traditional approaches is questionable but you see that there is a trend and that’s certainly also something to do with the possibility of outside options and in the in the profession itself it’s being more and more value to have these skills because it’s a hot topic here’s the other thing economics is like every

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Other industry it studies power but there’s also power within the profession this is a fight the family has only just started but it’s an important one and it’s an uncomfortable one women don’t feel welcome there’s still a lot of departments that are have very few female research faculty or at least that are experienced research faculty that can serve as sort

Of mentors and advisers to female phd students i am concerned about the lack of diversity i’m not just women but the lack of diversity generally because i think that the way that we come up with new ideas and really think outside the box in order to figure out you know what went wrong in the crisis and why have things work so differently since then is to have a

Massive diversity of thought and i don’t think we’re embracing that in academia or in the private sector what did i walk away with closure i’m done wondering how economics needs to change because honestly the new phds weren’t that worried about it they were worried about what people their age worry about jobs their own in the last ten years i got old yeah it feels like thanksgiving you

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The future of economics By Financial Times

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