The making and dissemination of Milton Friedman’s 1967 AEA Presidential Address

Joint with Aurélien Goutsmedt

In a few weeks, the famous presidential address in which Milton Friedman is remembered to have introduced the notion of an equilibrium rate of unemployment and opposed the use of the Phillips curve in macroeconomic policy will turn 50. It has earned more that 8,000 citations, more than Arrow, Debreu and McKenzie’s proofs of the existence of a general equilibrium combined, more than Lucas’s 1976 critique. In one of the papers to be presented at the AEA anniversary session in January, Greg Mankiw and Ricardo Reis ask “what explains the huge influence of his work,” one they interpret as “a starting point for Dynamic Stochastic General Equilibrium Models.” Neither their paper nor Olivier Blanchard’s contribution, however, unpack how Friedman’s address captured macroeconomists’ minds. This is a task historians of economics – who are altogether absent from the anniversary session – are better equipped to perform, and as it happens, some recent historical research indeed sheds light on the making and dissemination of Friedman’s address.

Capture d_écran 2017-11-28 à 00.27.52

The making of Friedman’s presidential address

 On a December 1967 Friday evening, in the Washington Sheraton Hall, AEA president Milton Friedman began his presidential address:

 “There is wide agreement about the major goals of economic policy high employment stable prices and rapid growth. There is less agreement that these goals are mutually compatible, or, among those who regard them as incompatible, about the terms at which they can and should be substituted for one another. There is least agreement about the role that various instruments of policy can and should play in achieving the several goals. My topic for tonight is the role of one such instrument – monetary policy,”

 the published version reads. As explained by  James Forder, Friedman had been thinking about his address for at least 6 months. In July, he had written down a first draft, entitled “Can full employment be a criterion of monetary policy?” At that time, Friedman intended to debunk the notion that there existed a tradeoff between inflation and unemployment. That “full employment […] can be and should be a specific criterion of monetary policy – that the monetary authority should be ‘easy’ when unemployment is high […] is so much taken for granted that it will be hard for you to believe that […] this belief is wrong,” he wrote. One reason for this was that there is a “natural rate of unemployment […] the level that would be ground out by the Walrasian system of general equilibrium equations,” one that is difficult to target. He then proceeded to explain why there was, in fact, no long run tradeoff between inflation and unemployment.



Phillips’s 1958 curve

 Most of the argument was conducted without explicit reference to the “Phillips Curve,” whose discussion was restricted to a couple pages. Friedman, who has, while staying at LSE in 1952, thoroughly discussed inflation and expectations with William Phillips and Phillip Cagan among others, explained that the former’s conflation of real and nominal wages, while understandable in an era of stable prices, was now becoming problematic. Indeed, as inflation pushes real wages (and unemployment) downwards, expectations adapt: “there is always a temporary trade-off between inflation and unemployment; there is no permanent trade-off. The temporary trade-off comes not from inflation per se, but from unanticipated inflation, which generally means, from a rising rate of inflation,” he concluded.

In the end, however, the address Friedman gave in December covered much more ground. The address began with a demonstration that monetary policy cannot not peg interest rates, and the section on the natural rate of unemployment was supplemented with reflections on how monetary policy should be conducted. In line with what he had advocated since 1948, Friedman suggested that monetary authorities should abide by three principles; (1) do not make monetary policy a disturbing force; (2) target magnitudes authorities can control, and (3) avoid sharp swings. These 3 principles were best combined when “adopting publicly the policy of achieving a steady rate of growth like a precise monetary total,” which became known as Friedman’s “k% rule.”

The usual interpretation of Friedman’s address is the one conveyed by Mankiw and Reis, that is, a reaction to Samuelson and Solow’s 1960 presentation of the Phillips curve as “the menu of choice between different degrees of unemployment and price stability.” Mankiw and Reis assume that this interpretation, with the qualification that the tradeoff may vary across time, was so widespread that they consider Samuelson, Solow and their disciples as the only audience Friedman meant to address. Yet, Forder and Robert Leeson, among others, provide substantial evidence that macroeconomists then already exhibited a much more subtle approach to unemployment targeting in monetary policy. The nature of expectations and the shape of expectations was widely discussed in the US and UK alike. Samuelson, Phelps, Cagan, Hicks or Phillips had repeatedly and publicly explained, in academic publications as well as newspapers, that the idea of a tradeoff should be seriously qualified in theory, and should in any case not guide monetary policy in the late 1960s. Friedman himself had already devoted a whole 1966 Newsweek chronicle to explain why “there will be an inflationary recession.”

This intellectual environment, as well as the changing focus of the final draft of his address led Forder to conclude that “there is no evidence that Friedman wished to emphasize any argument about expectations or the Phillips curve and […] that he would not have thought such as argument novel, surprising or interesting.” We disagree. For a presidential address was a forum Friedman would certainly not have overlooked, especially at a moment both academic and policy discussion on monetary policy were gaining momentum. The day after the address, John Hopkins’s William Poole presented a paper on “Monetary Policy in an Uncertain World.” 6 months afterwards, the Boston Fed held a conference titled “Controlling Monetary Aggregates.” Meant as the first of a “proposed series covering a wide range of financial and monetary problems,” its purpose was to foster exchanges on “one of the most pressing of current policy issues – the role of money in economic activity.” It brought together Samuelson, David Meiselman, James Tobin, Alan Meltzer, John Kareken on “the Federal reserve’s Modus Operandi,” James Duesenberry on “Tactics and Targets of Monetary Policy,” and Board member Sherman Maisel on “Controlling Monetary aggregates.” Opening the conference, Samuelson proposed that “the central issue that is debated these days in connection with macro-economics is the doctrine of monetarism,” citing, not Friedman’s recent address, but his 1963 Monetary History with Anna Schwartz. That same year, the Journal of Money, Credit and Banking was established, followed by the Journal of Monetary Economics in 1973. Economists had assumed a larger role at the Fed since 1965, when Ando and Modigliani were entrusted with the development of a large macroeconometric model, and the Green and Blue books were established.


Reflecting on “The Role of Monetary Policy” at such a catalyzing moment, Friedman thus tried to engage variegated audiences. This resulted in an address that was theoretical, historical and policy-oriented at the same time, waving together several lines of arguments with the purpose of proposing a convincing package. What makes tracking its dissemination and understanding its influence tricky is precisely that, faced with evolving contexts and scientific debates, those different audiences retained, emphasized and naturalized different bits of the package.

Friedman’s address in the context of the 1970s

Academic dissemination

GordonFriedman’s most straightforward audience was academic macroeconomists. The canonical history (echoed by Mankiw and Reis) is that Friedman’s address paved the way for the decline of Keynesianism and the rise of New Classical economics, not to say DSGE. But some ongoing historical research carried by one of us (Aurélien) in collaboration with Goulven Rubin suggests that it was Keynesian economists –rather than New Classical ones –  who were instrumental in spreading the natural rate of unemployment (NRU) hypothesis. A key protagonist was Robert Gordon, who had just completed his dissertation on Problems in the Measurement of Real Investment in the U.S. Private Economy under Solow at MIT when Friedman gave his address. He initially rejected the NRU hypothesis, only to later nest it into what would become the core textbook New Keynesian model of the 1970s.

What changed his mind was not the theory. It was the empirics: in the Phillips curve with wage inflation driven by inflation expectations and unemployment he and Solow separately estimated in 1970, the parameter on inflation expectation was extremely small, which he believed dismissed Friedman’s accelerationist argument. Gordon therefore found the impact of the change in the age-sex labor force composition on the structural rate of unemployment, highlighted by George Perry, a better explanation for the growing inflation of the late 1960s. By 1973, the parameter had soared enough for the Keynesian economist to change his mind. He imported the NRU in a non-clearing model with imperfect competition and wage rigidities, which allowed for non-voluntary unemployment, and, most important, preserved the rationale for active monetary stabilization policies.

Gordon textbookThe 1978 textbook in which Gordon introduced his AS-AD framework exhibited a whole chapter on the Phillips curve, in which he explicitly relied on Friedman’s address to explain why the curve was assumed to be vertical on the long-run. Later editions kept referring to the NRU and the long run verticality, yet rather explained by imperfect competition and wage rigidity mechanisms. 1978 was also the year Stanley Fischer and Rudiger Dornbusch’s famed Macroeconomics (the blueprint for subsequent macro textbooks) came out. The pair alluded to a possible long run trade-off, but like Gordon, settled on a vertical long-run Phillips curve. Unlike Gordon though, they immediately endorsed “Keynesian” foundations.

At the same time, New Classical economists were going down a slightly different, yet  famous route. They labored to ‘improve’ Friedman’s claim by making it consistent with rational expectations, pointing out the theoretical consequence of this new class of models for monetary policy. In 1972, Robert Lucas made it clear that Friedman’s K-% rule is optimal in his rational expectation model with information asymmetry, and Thomas Sargent and Neil Wallace soon confirmed that “an X percent growth rule for the money supply is optimal in this model, from the point of view of minimizing the variance of real output”. Lucas’s 1976 critique additionally underscored the gap between the content of Keynesian structural macroeconometrics models of the kind the Fed was using and Friedman’s argument.

Policy Impact

Friedman Burns

Friedman and Burns

Several economists in the Washington Sheraton Hall, including Friedman himself, were soon tasked with assessing the relevance of the address for policy. Chairing the 1968 AEA session was Arthur Burns, the NBER business cycle researcher and Rutgers economist who convinced young Friedman to pursue an economic career. He walked out of the room convinced by Friedman’s view that inflation was driven by adaptive expectations. In a December 1969 confirmation hearing to the Congress, he declared: “I think the Phillips curve is a generalization, a very rough generalization, for short-run movements, and I think even for he short run the Phillips curve can be changed.” A few weeks afterwards, he was nominated federal board chairman. Edward Nelson documents how, to Friedman’s great dismay, Burns’ shifting views quickly led him to endorse Nixon’s proposed wage-price controls, implemented in August 1971. In reaction, monetarists Karl Brunner and Allan Meltzer founded the Shadow Open Market Committee in 1973. As Meltzer later explained, “Karl Brunner and I decided to organize a group to criticize the decision and point out the error in the claim that controls could stop inflation.”

Capture d_écran 2017-11-23 à 16.09.45While the price and wage controls were removed in 1974, the CPI index suddenly soared by 12% (following the October 1973 oil shock), at a moment unemployment was on the way to reach 9% in 1975. The double plague, which British politician Ian MacLeod had dubbed “stagflation” in 1965, deeply divided the country (as well as economists, as shown by the famous 1971 Time cover). What should be addressed first, unemployment or inflation? In 1975, Senator Proxmire, chairman of the Committee on Banking of the Senate, submitted a resolution that would force the Fed into coordinating with the Congress, taking into account production increase & “maximum employment” alongside stable prices in its goals, and disclosing “numerical ranges” of monetary growth. Friedman was called to testify, and the resulting Senate report strikingly echoed the “no long-term tradeoff” claim of the 1968 address:

“there appears to be no long-run trade-off. Therefore, there is no need to choose between unemployment and inflation. Rather, maximum employment and stable prices are compatible goals as a long-run matter provided stability is achieved in the growth of the monetary and credit aggregates commensurate with the growth of the economy’s productive potential.”

 If there was no long-term trade-off, then explicitly pursuing maximum employment wasn’t necessary. Price-stability would bring about employment, and Friedman’s policy program would be vindicated.

Capture d’écran 2017-11-28 à 01.03.04.pngThe resulting Concurrent Resolution 133 however did not prevent the Fed staff from undermining
congressional attempts at controlling monetary policy: their strategy was to present a confusing set of five different measure of monetary and credit aggregates. Meanwhile, other assaults on the Fed mandate were gaining strength. Employment activists, in particular those who, in the wake of Coretta Scott King, were pointing out that black workers were especially hit by mounting unemployment, were organizing protests after protests. In 1973, black California congressman Augustus Hawkins convened a UCLA symposium to draw the contours of “a full employment policy for America.” Participants were asked to discussed early drafts of a bill jointly submitted by Hawkins and Minnesota senator Hubert Humphrey, member of the Joint Economic Committee. Passed in 1978 as the “Full Employment ad Balanced Growth Act,” it enacted Congressional oversight of monetary policy. It required that the Fed formally report twice a year to Congress, and establish and follow a monetary policy rule that would term both inflation and unemployment. The consequences of the bill were hotly debated as soon as 1976 at the AEA, in the Journal of Monetary Economics, or in Challenge. The heat the bill generated contrasted with its effect on monetary policy, which, again, was minimal. The following year, Paul Volcker became Fed chairman, and in October, he abruptly announced that the Fed would set binding rules for reserve aggregate creation and let interests rates drift away if necessary.



A convoluted academia-policy pipeline?

The 1967 address thus initially circulated both in the academia and in public policy circles, with effects that Friedman did not always welcome. The natural rate of unemployment was adopted by some Keynesian economists because it seemed empirically robust, or at least useful, yet it was nested in models supporting active discretionary monetary policy. Monetary policy rules became gradually embedded in the legal framework presiding over the conduct of monetary policy, but this was with the purpose of reorienting the Fed toward the pursuit of maximum unemployment. Paradoxically, New Classical research, usually considered the key pipeline whereby the address was disseminated within and beyond economics, seemed only loosely connected to policy.

Capture d_écran 2017-11-21 à 00.45.26 Indeed, one has to read closely the seminal 1970s papers usually associated with the “New Classical Revolution” to find mentions of the troubled policy context. The framing of Finn Kydland and Edward Prescott’s “rule vs discretion” paper, in which the use of rational expectations raised credibility and time consistency issues, was altogether theoretical. It closed with the cryptic statement that “there could be institutional arrangements which make it a difficult and time-consuming process to change the policy rules in all but emergency situations. One possible institutional arrangement is for Congress to legislate monetary and fiscal policy rules and these rules become effective only after a 2-year delay. This would make discretionary policy all but impossible.” Likewise, Sargent and Wallace opened their “unpleasant monetarist arithmetic” 1981 paper with a discussion of Friedman’s presidential address, but quickly added that the paper was intended as a theoretical demonstration of the impossibility to control inflation. None of the institutional controversies were mentioned, but the author ended an earlier draft with this sentence: “we wrote this paper, not because we think that our assumption about the game played by the monetary and fiscal authorities describes the way monetary and fiscal policies should be coordinated, but out of a fear that it may describe the way the game is now being played.”

 Lucas was the only one to write a paper that explicitly discussed Friedman’s monetary program, and why it had ‘so limited an impact.” Presented at a 1978 NBER conference, he was asked to discuss “what policy should have been in 1973-1975,” but declined. The question was “ill-posed,” he wrote. The source of the 1970s economic mess, he continued, was to be found in the failure to build appropriate monetary and fiscal institutions, which he proceeded to discuss extensively. Mentioning the “tax revolt,” he praised the California Proposition 13 designed to limit property taxes. He then defended Resolution 133’s requirement that the Fed announces monetary growth targets in advance, hoping for a more binding extension.

 Capture d’écran 2017-11-28 à 00.49.03.pngThis collective distance contrasts with both Monetarist and Keynesian economists’ willingness to discuss existing US monetary institutional arrangements in academic writings and in the press alike. It is especially puzzling given that those economists were working within the eye of the (institutional) storm. Sargent, Wallace and Prescott were then in-house economists at the Minneapolis Fed, and the Sargent-Wallace paper mentioned above was published by the bank’s Quarterly Review. Though none of them seemed primarily concerned with policy debates, their intellectual influence was, on the other hand, evident from the Minneapolis board’s statements. Chairman Mark Willes, a former Columbia PhD student in monetary economics, was eager to preach the New Classical Gospel at the FOMC. “There is no tradeoff between inflation and unemployment,” he hammered in a 1977 lecture at the University of Minnesota. He later added that:

“it is of course primarily to the academic community and other research groups that we look for …if we are to have effective economic policy you must have a coherent theory of how the economy works…Friedman doesn’t seem completely convincing either. Perhaps the rational expectationists here …. Have the ultimate answer. At this point only Heaven, Neil Wallace, and Tom Sargent know for sure.”

 If debates were raging at the Minneapolis Fed as well as within the university of Minnesota’s boundaries, it was because the policies designed to reach maximum unemployment were designed by the Minnesota senator, Humphrey, himself advised by a famous colleague of Sargent and Wallace, Keynesian economist, former CEA chair and architect of the 1964 Kennedy tax cut Walter Heller.


The independent life of “Friedman 1968” in the 1980s and 1990s?

Friedman’s presidential address seem to have experienced a renewed citation pattern in the 1980s and 1990s, but this is yet an hypothesis that needs to be documented. Our bet is that macroeconomists came to re-read the address in the wake of the deterioration of economic conditions they associated with Volcker’s targeting. After the monetary targeting experience was discontinued in 1982, macroeconomists increasingly researched actual institutional arrangements and policy instruments. We believe that this shift is best reflected in John Taylor’s writings. Leeson recounts how, a senior student at the time Friedman pronounced his presidential address, Taylor’s research focused on the theory of monetary policy. His two stints as CEA economist got him obsessed with how to make monetary policy more tractable. He increasingly leaned toward including monetary “practices in the analysis, a process which culminated in the formulation of the Taylor rule in 1993 (a paper more cited that Friedman’s presidential address). Shifting academic interest, which can be interpreted as more in line with the spirit, if not the content, of Friedman’s address, were also seen in 1980s discussions of nominal income targets. Here, academic debates preceded policy reforms, with the Fed’s dual inflation/employment mandate being only appeared in a FOMC statement under Ben Bernanke in 2010, in the wake of the financial crisis (see this thread by Claudia Sahm). This late recognition may, again, provide a new readership to the 1968 AEA presidential address, an old lady whose charms appear timeless.


Friedman 1968 title

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Les économistes sont-ils sexistes?

Un pavé dans la mare des économistes

Sexisme: le mot est sur les bouches de tous les économistes américains depuis quelques semaines. Depuis que, le 8 Août, Justin Wolfers a attiré l’attention sur le mémoire de master rédigé par Alice Wu, étudiante à Berkeley (l’article de Wolfers est traduit ici par Martin Anota). Celle-ci a effectué du text-mining sur les millions de posts de l’Economic Job Market Rumors, un forum anonyme initialement conçu pour partager des informations sur le recrutement des économistes, et devenu depuis un lieu contesté, une machine a café virtuelle où toutes sortes de rumeurs et conseils techniques sont échangés, et où les principaux écrits des économistes Américains sont discutés. Grâce à des technique de machine learning, elle a identifié les mots qui predisent le mieux si chaque post traite d’un homme ou d’une femme.. Pour les premiers, ces mots sont en général associés à leur travail (même si on note la présente de termes tels qu’ « homosexuel») Pour ces dernières, la liste fait froid dans le dos, et une traduction n’est pas nécessaire :

hotter, lesbian, bb (internet speak for “baby”), sexism, tits, anal, marrying, feminazi, slut, hot, vagina, boobs, pregnant, pregnancy, cute, marry, levy, gorgeous, horny, crush, beautiful, secretary, dump, shopping, date, nonprofit, intentions, sexy, dated and prostitute.

 Les réactions, sur twitter, puis sur divers blogs d’économistes ne se sont pas fait attendre.

Une partie des discussions s’est focalisée sur ce qui justifie l’utilité d’un tel forum avant sa colonisation par des trolls, et sur le caractère néamoins minoritaire de telles dérives : l’asymétrie d’information, le caractère très hiérarchique de la discipline, l’anonymat : la totalité du forum était-elle bonne à jeter ? Fallait-il modérer, fermer, remplacer ? Même le nouveau président de l’American Economic Association, Olivier Blanchard, s’est exprimé sur le sujet. Mais parce que certains ont opposé qu’un tel forum anonyme ne saurait constituer un échantillon représentatif, les échanges se sont élargis : le sexisme ordinaire de la profession toute entière a été pointé du doigt, la dureté des séminaire, les remarques en entretien de recrutement, le manque de crédit accordé aux femmes économistes dans la presse, etc.

La faible féminisation de l’économie : un phénomène quantifié difficile à expliquer

Les conséquences de ce sexisme ont ensuite été abordées, en particulier la faible représentation des femmes en économie, et une tendance à la détérioration depuis les années 2000.   Les femmes représentent aujourd’hui aux Etats-Unis 31% des doctorants en économie, 23% des enseignants-chercheurs en tenure-track, 30% des professeurs assistants et 15% des professeurs C’est certes plus qu’en 1972 : les femmes représentaient alors 11% des doctorants, 6% des enseignants-chercheurs dont 2% de professeurs dans les 42 principaux départements du pays. Mais c’est moins que le nombre de femmes travaillant à des postes de direction dans la Silicon Valley (pourtant l’objet de nombreux scandales) ou qui votent dans les jurys décernant les oscars. Ces niveaux de féminisation sont très inférieurs aux autres sciences sociales, et classent l’économie parmi les disciplines les plus inégalitaires, avec les sciences de l’ingénieur et l’informatique. Surtout, le différentiel de salaire entre hommes et femmes assistant et full professor a explosé depuis 1995 (le salaire d’une professeure est passé de 95% de celui d’un homologue masculin à 75% aujourd’hui). Le phénomène est atypique. La source de ce déséquilibre l’est aussi. Alors que la majorité des sciences souffre d’un leaking pipeline, le nombre de femmes diminuant au fur et à mesure qu’elles passent du premier et second au troisième cycle puis évoluent dans la hiérarchie académique, l’économie peine aussi à attirer des étudiantes de premier cycle. Aux Etats-Unis, celles-ci constituent moins de 35% des étudiants de premier cycle ; l’économie est ainsi la seule discipline ou la proportion de docteures en économie (PhD) est supérieure au nombre d’étudiantes titulaires d’une licence (BA). La proportion de doctorantes a également chuté de 6 points depuis les années 1990.

La situation n’est pas meilleure en Grande Bretagne, où la proportion des femmes en premier cycle d’économie, inférieure à 30%, accuse elle aussi une baisse ces dernières années. Cette proportion semble fortement corrélée à celle du taux d’élèves étudiant l’économie dans le secondaire. En revanche, le pourcentage de femmes économistes au gouvernement est en constante augmentation. Seulement 19% des économistes enregistrés sur RePec – une base de données mondiale de plus de 50 000 économistes publiant dont on ne connaît pas la représentativité – sont des femmes. Soledad Zignago documente une forte différence entre les pays (de 4% à 50% de femmes) et entre les champs. Elle montre que les femmes sont encore moins représentées dans les « top 100 » que le site publie régulièrement. Il n’y a qu’une femme, Carmen Reinhart, dans les 100 économistes les plus cités aux Etats-Unis, 5 si on se limite aux 10 dernières années.

Cette faible féminisation n’est pas nécessairement liée au sexisme, qui, quoique rarement défini dans ces débats, semble perçu comme un facteur résiduel. Considéré comme une croyance infondée sur l’infériorité présumée d’un groupe d’humains, c’est-à-dire comme un biais, il constituerait la variable explicative vers laquelle se tourner une fois qu’on a pris en compte d’éventuelles différences d’aptitudes mathématiques, de préférences et d’arbitrage carrière/famille, de socialisation ou de productivité. Car la plupart des facteurs ci-dessous sont soit inexistants (les différences d’aptitude mathématiques), soit insuffisants pour expliquer la totalité des les inégalités de promotion et de salaire entre économistes hommes et femmes. Mais ce qui peut causer ces inégalités résiduelles appelées discrimination (et donc comment celles-ci peuvent être effectivement combattues) n’est pas clair pour autant. Sont invoqués des problèmes d’information imparfaite, de frictions, mais aussi de norme et de culture sexiste suffisamment importants pour altérer l’évaluation des travaux des femmes économistes et leur trajectoire professionnelle. Erin Hengel a par exemple montré que les femmes sont soumises à des exigences de lisibilité plus fortes pour publier dans la prestigieuse revue Econometrica, et que le processus de révision de leurs articles prend en moyenne six mois de plus que celui des hommes. Heather Sarsons a étudié les décisions de tenure (octroi d’un poste de professeur des université) effectuées par les comités de promotion américains, et a constaté que les femmes sont pénalisées quand elle co-signent leurs articles de recherche. Les hommes reçoivent une promotion 75% du temps, qu’ils écrivent seuls ou en équipe. En revanche, seuls les femmes publiant des articles en solo ont un taux de promotion équivalent. Pour celles qui choisissent de coécrire, ce taux chute à 50%

L’apport de l’analyse historique

            Une remise en perspective historique du statut des femmes économistes dans les pays anglo-saxons permet de formuler des hypothèses supplémentaires. Car les femmes ne sont pas absentes de l’histoire de l’économie. Elles rédigent jusqu’à 20% des thèses validées par l’American Economic Association dans les années 30, mais ce chiffre tombe à 4,5% en 1950. En cause, des règles universitaires qui interdisent au femmes de suivre des études doctorales dans nombre de département d’économie, la difficulté d’y trouver un poste, et les opportunités qui s’ouvrent à la même période dans les départements de travail social, d’économie domestique, et dans les agences d’un gouvernement en pleine révolution statistique. Quoiqu’effacées de l’histoire officielle, elles prennent une large part au développement de l’économie empirique. Le premier économiste à programmer un logiciel de régression se nomme Lucy Slater ; l’expert en simulation des années 1950, s’appelle Irma Adelman ; et la première expérimentation contrôlée sur l’impôt négatif est réalisé par Heather Ross. Ces évolutions ne sont pas sans rappeler celles, encore plus tranchées, qu’ont connu les sciences de l’informatique. Les historiens de l’informatique ont montré que la programmation était, après la Second Guerre mondiale, avant tout une affaire de femmes, et que celles-ci furent poussées à quitter ce champ au fur et à mesure que leur spécialité devenait plus scientifique, plus prestigieuse, et plus rentable. Les tests d’aptitude mis en place participèrent à la création d’une identité genrée – le bon programmeur est asocial, systématique, geek, etc. Comprendre comment le sort des femmes économistes est lié au développement de l’économie, et de l’économie appliquée en particulier, nécessite donc d’analyser, outre les inégalités de sexe, les identités de genre, mais aussi les hiérarchies entre sous-domaines d’une même discipline et la trajectoire de cette discipline dans la hiérarchie symbolique du champ scientifique.

            C’est enfin sur fond de troubles sociaux et de controverses théoriques et empiriques que les économistes américains commencèrent à s’intéresser aux problèmes de représentation féminine dans leurs rangs. Car la spécificité des économistes est que la discrimination n’est pas d’abord un problème expérimenté, mais un objet de travail. Cela crée un effet miroir intéressant à étudier. Le débats sur l’offre de travail des femmes du début des années 1970 opposaient les tenants d’une approche plutôt béckerienne  ( explication basée sur les préférences des choix de spécialisation effectués au sein d’un ménage) aux tenantes d’approches plus empiriques, marxistes ou féministes qui mettaient l’accent sur la ségrégation du marché du travail et soulignaient l’importance d’en étudier les institutions. Ce furent ces chercheuses qui dénoncèrent le plafond de verre et des difficultés rencontrées par les universitaires, organisèrent un caucus et obtinrent le vote d’une série de résolutions. Le résultat fut la création d’un marché de l’emploi (le fameux Job Market des économistes américains) et d’un Committee on the Status of Women in the Economic Profession (CSWEP) chargé d’une étude statistique annuelle. Cette démarche fut appuyée par le président de l’époque, Kenneth Arrow, qui, comme le montrent les travaux de Cleo Chassonery-Zaïgouche, travaillait lui aussi à une alternative à la théorie béckerienne : une théorie de la discrimination statistique mettant l’accent sur l’information imparfaite et les coûts de recrutement. Les archives de l’AEA montrent que dans l’esprit de tous ces protagonistes, les modèles utilisés pour comprendre les phénomènes de discrimination ne sont pas séparés des discussions sur le statut des femmes économistes.

Et les femmes économistes en France ?

En France, en revanche, le silence semble assourdissant. Il ne s’agit même pas de se demander si les économistes sont sexistes, mais en premier lieu de se demander quelle est la place des femmes dans la science économique, et si elles subissent des discriminations. Si la question n’est même pas posée, c’est parce qu’il n’existe quasiment aucune donnée sur ce sujet. Car si les causes et conséquences de la faible féminisation de la discipline sont aujourd’hui discutées aux Etats-Unis et en Grande-Bretagne, c’est bien grâce aux efforts d’accumulation des données réalisées par le CSWEP, la Royal Economic Society, où plus récemment, l’association des femmes en finance – le champ le moins féminisé de l’économie. Et de telles données n’existent tout simplement pas en France.

Les chiffres agrégés montrent que si plus de la moitié des étudiants de premier cycle, toutes disciplines confondues, sont des femmes, celles-ci ne forment plus que 40% des maitre de conférence et 20% des professeurs des Universités. Ce constat, complété par des recherches sur les concours de l’enseignement supérieur (qui révèlent une discrimination positive), sur les promotions universitaires, et sur la représentativité des femmes en science (voir cette synthèse de Thomas Breda) a donné lieu à un cycle de conférences gouvernementales et un plan d’action sur l’égalité hommes-femmes dans l’enseignement supérieur et la recherche. Par ailleurs, de nombreux économistes travaillent, en France, à une meilleure compréhension des mécanismes discriminatoires, comme en témoigne ce rapport du conseil d’analyse économique, ce numéro spécial de Regards Croisés sur l’Economie, le succès du programme PRESAGE commun à SciencesPo et l’OFCE, visant à coordonner les recherches et l’enseignement autour des problématiques de genre, ou cet ouvrage rédigé par Jézabel Couppey-Soubeyran et Marianne Rubinstein pour intéresser les femmes au raisonnement économique.

Ces programmes de recherche utilisent des méthodologies différentes, discutées par exemple dans cours dispensé par Hélène Périvier. Mais ces outils ne sont pas appliqués à l’étude du statut des femmes économistes. Celles-ci représentent 26% des économistes français enregistrés sur RePec, et 14 femmes font partie du top-100. Une étude menée par Clément Bosquet, Pierre-Philippe Combes et Cécilia Garcia-Penalosa a partir des données du concours de l’agrégation du supérieur en économie pour les postes de professeurs des universités (PU) et celles du concours de directeur de recherche CNRS (DR) montre que les femmes économistes ont une probabilité d’occuper un poste de PU inférieure de 22 points aux hommes (40 contre 18%), et une probabilité d’occuper un poste de DR CNRS inférieure de 27 points (45 contre 18). La probabilité de réussir le concours est sensiblement la même, la différence se situant au niveau des candidatures : la propension des femmes à postuler est inférieure de 37% à celle des hommes pour l’agrégation et de 45% pour le concours DR CNRS. 86% de ce différentiel est attribuable au sexe des candidats, toutes choses égales par ailleurs. Là encore, il est difficile de faire plus que d’émettre des hypothèses économiques, sociologiques ou psychologiques pour expliquer les sources de ce différentiel.

A ma connaissance (limitée), c’est a peu près tout. Aucune données n’est disponible sur les sites de l’AFSE et de l’AFEP, les deux principales associations d’économistes universitaires. Si la question n’est pas posée, c’est peut-être en raison de différences de tradition statistiques et de réponses institutionnelles aux phénomènes de discrimination entre la France et les pays Anglo-Saxons (cf le débat sur les statistiques ethniques). C’est peut-être aussi que la culture du monde universitaire français rend la question informulable, au risque d’être immédiatement étiqueté comme « la femme chiante qui bosse sur des trucs de femme » (risque dont j’ai cruellement conscience en écrivant ce post). Pourtant, la question de la représentation (statistique et symbolique) des femmes économistes en France est un sujet qui réclame la constitution de bases de données, une créativité théorique empruntant à d’autres sciences humaines, des défis empiriques, et qui ouvre, in fine, vers des possibilités d’amélioration d’allocation des ressources intellectuelles vers de nouvelles question de recherches et de nouvelles techniques : de quoi passionner tous les économistes.

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On sexism in economics

A recent paper by Alice Wu, publicized by Justin Wolfers is creating a stir on the econ-twittosphere. The paper uses machine learning assisted text mining and topic modeling to document the astonishing sexism on the Economic Job Market Rumors US student anonymous forum.

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Excerpt from Wu’s paper


In the last 24 hours, the paper has generated several layers of discussions online. Doubts about the representativity of EJMR users have been countered with broader denunciation of sexism within economics, attempts at better characterizing it (from open downgrading and irrelevant remarks about women economists’ bodies to subconscious biases and norms), calls to change this “sexist culture,” and suggestions on how to end the “EJMR cesspool” and how to fight sexism in economics more largely. There has however been less attempts to understand the roots and mechanisms of a sexism that seems comparatively higher than in other disciplines, the reasons why it hasn’t reach the top of economists’ agenda earlier, and its effects on women economists’ career and on the intellectual dynamics of the field. The existence of assholes might be impossible to explain, but why they are more numerous or louder than in most disciplines from physics to psychology (if so), and why they are given a free pass is definitely something to chew on. As for consequences, pervasive sexism has been tied to the low feminization of the  profession, which, as has been largely documented, is only matched by computer science and engineering, persisting wage gaps, full professorship glass ceilings and “small pipeline” issues (the problem is not female econ students’ drop off rate but their unwillingness to choose to purse econ undergrad studies in the first place). As for causes, Noah Smith has linked the persistence of EJMR and sexist behavior in the profession to a shift in economists’ political beliefs toward the left (and more gender-friendly attitudes), one that would generate reactions from a fringe of conservative angry men.

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Economics’s small pipeline (by Cecci, Ginther, Kahn and Williams)

One idea I’m toying with (without being convinced yet) is that the mix of sexism, discrimination and gender inequality that econ-twitter is all about now is tied to the tools and models economists use to study inequality and discrimination more generally. Let me be clear. I am not in any way implying that economists’ sexism derive from the use of some kind of “neoclassical” models or that economic modeling begets sexism. I’m simply suggesting that if your job is to study labor discrimination, wage inequality or female labor supply, how you believe these issues play out in your own profession and what should be done to fix it probably shapes, and is shaped by, the models you choose to deploy as an economist. This is what happened when economists initially turned their attention to sexism and discrimination in their community in the 1970s. The mounting protests against the glass ceiling and the pressures and hurdles female economists were experiencing were brought forward by women working on female labor supply and domestic labor. And archival record shows that they explicitly related theoretical and empirical controversies to social fights, as did those male economists who supported them. The “Domestic Labor debate” pitched proponents of Beckerian rational choice explanation for household specialization against the likes of Marianne Ferber, Barbara Bergmann, Francine Blau, Barbara Reagan or Myra Strober who used a whole range of models ranging for neoclassical to feminist and Marxist to emphasize how distorted and segregated the labor market and to promote a historical approach to labor institutions. As recently highlighted by Cleo Chassonery Zaïgouche, then AEA president Kenneth Arrow was forging yet another weapon against Becker’s taste-based model. His theory of statistical discrimination emphasized imperfect information and recruitment costs.


Capture d_écran 2017-03-31 à 03.26.44As I have explained here, the mix of theoretical and social debate resulted in the establishment of the Committee on the Status of Women in the Economic Profession (CSWEP) in 1972. In the CSWEP inaugural report, published in the AEA the following year, Kenneth Boulding introduced gender imbalance in economics as a economic problem in which the AEA was tasked with solving a “betterment production function” : “what are the inputs which produce this output, and particularly, what are those inputs that can be most easily expanded and that have the highest marginal productivity?,” he wrote. And therein might lie the explanation for diverse reactions to gender issues in economics. If you see the small rate female full professor as a result of their choices or productivity, then there is not much to be done. In a more sneaky way, if you don’t endorse Becker’s household economics but routinely write down models in which economic agents’ wages result from their choices and some brand of human capital, you might be gradually drawn to explain the status of your female colleague that way. But if you see an information asymmetry issue (and current debates suggest that EJMR was allowed to thrive and go off rail because of the otherwise privy job market information it provides), then the solution is to build another information structure (another website, new moderating rules, etc). Back in the 1970s, an annual survey on the status of women in economics was established, and an “open market,” the JOE, was set up. So maybe fighting sexism is economics is a market design issue? Or if that’s an expectation issue, try to change women’s expectations.  And if that’s a culture issue, then…change the AEA logo ?

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 This sketch, unearthed by John Singleton, is Kenneth Boulding’s 1975 proposal for a new AEA logo. Explanation reads: “Adam and Eve both pick the apple of the Tree of Knowledge which leads to mutual labor and economic product after expulsion from eden. The arms form supply and demand curves.” 

That the profession is ripe for a serious discussion of Wu’s article and the changes she advocates in her conclusion may reflect not only political shifts but also changes in economists’ approach to inequality, discrimination, norms, and culture. And raising the status of women in the profession might in turn improve  the visibility of women economists’ work, and shift the political leaning of the profession, as well as field and method hierarchies further. Enough to scare some.

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Why I tweet

Tweeting from scratch only requires a computer and an hour time. Set up an account, choose a name for your handle, read a few “how too” guides to get a sense of what the twitter etiquette is, how to use a #hashtag, how to ask a question and pursue a conversation, and you’re ready to put your thoughts, links and pictures online, and to read those by any other user. Those by the people you follow will appear on your screen in the order they are posted, creating a timeline. You can like a tweet (which is akin to bookmarking), retweet to make it visible to those who follow you, comment, reply and enter a discussion. You can see whatever a nations president, a journalist, a central banker, a blogger, a Nobel Prize recipient, a rockstar economist or a registered colleague sees fit to package in 140 characters and put online. You can also engage with any of them.

Capture d_écran 2017-07-25 à 02.58.11This is where most historians of economics might be tempted to quit reading. For what kind of scholarly idea can be expressed and circulated in 140 characters? Are years of research, construction of objects and subtle methodological distinctions reducible to a 15 words sentence? This social media thing  is total nonsense! The purpose of this post, therefore, is to convince the reader to rethink her resistance to using social network for scholarly purpose, by outlining the various functions twitter can serve in historical research. It is not intended as a “how to” guide or a set of warnings. First, because tutorials specifically designed for historians and discussions of twitter’s shortcomings – from trolling to abuse, limited impact, ephemeral attention, dopamine surge and fleeting illusion of mastery – already abound on the web. Second, because each platform aimed at creating and sharing content and networking has its own set of interaction rules and technological constraints. These rules are constantly transformed, and several platforms, including twitter, might not survive 2017. The present discussion therefore seek to emancipate from the institutional and technical constraints associated with tweeting to focus on the new practices and questions it generates, and their significance for historians of economics.

Capture d_écran 2017-07-25 à 03.14.25For tweeting is not merely about compressing an idea in 140 characters and sending it in the wild, though that exercise is interesting it itself. It allows the dissemination of working papers and professional news, and fosters the development of new objects such as a thread or a tweetstorm, a series of tweets which, taken together, introduce a more elaborated opinion, a narrative, a set of papers or a list of references. Writing a tweetstorm is an interesting writing exercise for a historian. It has to be consistent and organized enough so that the reader will want to read the next one to the bottom of the thread. 140 characters do not allow subtle logical articulation and transitions, so that overall consistency requires shaping a kind of flow, a simple yet compelling narrative arc, possibly a chronological one. Doing so forces the writer to weed her story until its spinal chord is excavated and strengthened.

 The most straightforward benefit of twitter is to improve scholarly communication, but this plays out differently depending on the state of each discipline. In history of economics specifically, it raises questions of objects and audiences. Less known, but equally promising, is how twitter can serve as a tool for researching and writing the history of economics. 

Communicating the history of economics

Our first readers are our colleagues. The gradual marginalization of the history of economics since the 1970s has made places where several historians can interact and trade ideas scarce. Our community is scattered, with members often working alone in an intellectual and institutional environment that is at best curious, sometimes hostile, often indifferent. Restoring a sense of community is momentarily achieved through disciplinary conferences, and such was the purpose for the establishment of the SHOE list in 1995 and of the young scholars’ Playground blog in 2007. As Adam Kotsko has noted in the early days of social media, blogging is “especially great for academics who would otherwise be quite isolated from other academics with similar interests.” I believe that twitter offers a less costly, more flexible and more permanent infrastructure to support an online community. It allows researchers from various locations, disciplinary and institutional background to share news, call for papers, working papers, Capture d_écran 2017-07-25 à 03.15.28publications, PhD defenses, hires. The History of Economic Society and the European Society for the History of Economic Thought have thus recently pooled together to set up a twitter account. It also allows conferences to be live-tweeted: if a paper is publicly available online, or if panelists feel confortable with social media, scholars in the audience tweet major ideas and most significant questions. This helps those who could not attend keep track of the reception of new research and of ongoing debates.

Twitter thus works as an online “faculty lounge.” Since exchanges are (1) public and (2) searchable, these virtual lounges are less closed and exclusive than physical ones. They escape disciplinary boundaries, which is especially fit for a discipline whose survival is predicated on the reaffirmation of an identity, yet not a disciplinary one. What unites the twitter community is its objects, not its institutional structure. It does not matter whether you come from an economics, history, history of science, sociology or anthropology Capture d_écran 2017-07-25 à 02.54.04department, or else. The online structure of scholarly twitter also eases bibliographic search and comparative study. When I work on how economics is classified, why the American Economic Association has set up a prize system after World War II, or on changing notions of what makes “good data,” I systematically wonder what the situation is in other sciences. Querying major history of science publication does not always yield a satisfactory outcome. Twitter allows to jump from account to account, from research program to research program, and to identify ongoing work on physics classification or on the social history of the Fields medal. It also eases the identification of those artifacts which stand in between big fundamental texts and archival traces of the daily lives of scientists, which happened to shape a generation’s approach without being set in stone: an American Economic Association presidential address that was not so much cited but influenced a generation of graduate students, how the Lucas critique was weaponized, which textbooks were in use during the 1980s, or some exchange in which the naming of a new generation of macroeconomic models generated meaningful disagreement.

Other audiences can be reached through twitter: students, journalists, citizens, and of course, economists. Here, the platform offers a new opportunity to solve a longstanding tension. On the one hand, historians of economics complain that their scholarship is largely ignored by economists, but on the other, dissemination is usually held as a separate, secondary and often lower kind of activity compared with research. The problem we face is not one of contempt of disinterest anymore. It’s one of invisibility. The 2017 economics graduate student or assistant professor does not hold history of economics in low esteem, she does not even know such scholarship exists, even less where to find it. Yet, the thirst for history has not disappeared. Students want to know why and how they discipline has become mathematized, how to define a model, or who this “Haavelmo” is. Twitter can be a substitute to those disappeared history courses, it allows economists’ attention to be hacked, hooked, and channeled to a piece of history that could become significant for her. “Social media platforms have disintermediated communication between scholars and publics,” Kieran Healy notes (It might not be true  though that economic twitter has no power structure. A new kind of structure, which does not mirror the tight hierarchy that characterizes academic economics but is hierarchized nonetheless has emerged).

Hacking attention however requires: (1) open, or at least easy access (time is scare, attention is fledging, it is often a matter of now or never, of immediately accessing a paper) and (2) articulated content, overarching stories and clear narrative arcs. Historians of economics are good at studying how Irving Fisher or Charles Kindleberger conceived debt, how Robert Solow produced its growth model or how Lawrence Klein thought individual behavior and macroeconomic aggregate related to one another. At providing broader narratives on how measurements, theories and models of growth have changed throughout centuries or how they have managed to predict in the last 100 years, much less so. There is little incentive to write surveys, to hook pieces of research together. Twitter allows putting reference together, discussing a set of paper together without the costs of writing a full-fledged survey.

            What twitter allows should however not be conceived as reconnecting to a lost audience. There are as many reasons to be interested in the history of economics as they are registered users on twitter. Predicting what topic will “work” and what will not is bound to failure –except Friedman and the Chicago School, always a hit. And altering research interest to please a fantasized audience is the surest path to loose our hard-won intellectual independence. A suggestion, then, is to adopt Corey Robin’s admonition: the public intellectual “is writing for an audience that does not yet exist […] she is writing for a reader she hopes to bring into being.” While Robin uses this idea to target fashionable and successful writers, it is also one useful as a guide for scholars working in a marginalized area: do not strive to regain a lost audience, but bring one into being. Because tweeting is to some extent shouting in the wild, it paradoxically dispenses the history with targeting a specific audience.

Researching the history of economics

 Economics, past and present

Social media platforms have enabled the observation, quantification and measurement all kind of social behaviors, interactions and engagements. Through its APIs, twitter data were initially largely accessible to social scientists, who have scrapped huge quantities of data, and the platform has quickly emerged as a valuable repository. Scrapping and visualizing data is becoming standard practices in some branches of sociology, and the word “digital ethnography” has been coined to designate a new set of practices whereby social behavior is being observed through twitter. Of course, contemporary economists’ behaviors and networks as measured through twitter and the ideas they trade online have not yet become history.  But it does not mean twitter data are not relevant material for historians. First, because they allow us to distinguish permanent from changing features in economists’ methods, discourses and practices. New storage, processing and real-time recording technologies and companies may have ushered economics in an age of big data, but the debates I witness are strikingly reminiscent of the Cowles vs NBER “Measurement Without Theory” controversy and the economics as an inductive vs deductive science question.

Second, the boundaries between the past and the present are unstabilized and permeable, in particular in contemporary history. Till Düppe defines the latter as dealing “with the past that is still remembers by some of those among us.” “Some” might be the former students or children of the economists we study. They might be those economists themselves, retired, or as we move toward present, still active. Twitter offers data which, with appropriate tooling up in sociological and ethnographic methods, harness some of the challenges Düppe highlights. First, observing economists’ exchanges highlights how they wield and weaponize their history, the canonical and the one we produce. Whose protagonists our narratives serve become clearer, and that economists cooperate with historians in part to influence them too. Even those projects which are not aimed at restoring credit alter the relationships of protagonists or communities with one another. By becoming historical objects, the sunspot literature, disequilibrium economics or contingent valuation, become worthy of attention, and, in the end, distinct, consistent and worthy scientific endeavors. Proponents of self-called “heterodox” approaches have long understood this; there are more histories of heterodox economics than mainstream ones.

Twitter offers the possibility of interacting directly with graduate students, government and think thank economists, academics, central bankers, and more. Yet doing so might change our practice as much as we may want to change theirs. At the very least, it makes tensions over purpose, methods and identities more salient. Over the past decades, we have evolved from being economists doing history to become historians studying economics. We have emancipated in terms of objects and methods. Archive oozing and interviews have spread, and the deployment of quantitative techniques more akin to digital humanities than econometrics or experiments are on the rise. Our disciplinary identity has expanded to the edges of sociology and history of science, sociology and intellectual history. Yet, in spite of calls to move to history departments, I suspect that history of economics contributors are still in majority located in economics departments, teach economics, are evaluated according to economics rankings, and define themselves as economists (that’s my case). Most important, we do write history with a purpose, however largely unconscious: changing economists’ theories and practices, providing facts to anchor current debates on the state of the dismal science, instilling more reflexivity into their intellectual and institutional practices, improving policy-makers, citizens and journalists’ ability to decipher and assess economists’ work. We may have diverse audiences in mind, but we want to be relevant, and twitter offers us the ability to get a better grasp at current debates and angst. Whether our research topics should be allowed to shift is a matter of debate, but twitter cues may help us pitch our chosen stories to improve our outreach.

From writing history for public uses to writing history “in public”

According to sociologist Kieran Healy, social media “tend to move the discipline from a situation where some people self-consciously do ‘public sociology’ to one where most sociologists unselfconsciously do sociology in public.” This, he explains, because “new social media platforms have made it easier to be seen,” creating “a distinctive field of public conversation, exchange and engagement.” Twitter does not merely enable historians of economics to trade reference, discuss alternative “modeling” practices of monetary theories or disagree on the influence of the Cold War or Civil Right movements on the objects and methods of economists. It requires them to do so in public. It is often considered as a shortcoming – being challenged in public might highlight some weakness in the analysis and create a reputation of sloppiness. Resistance to airing disciplinary dirty laundry online also derived from the notion that scientific credibility is tied to the ability to achieve and publicize some kind of disciplinary “consensus.

I don’t share this worry. Science is predicated on the belief that truth is not sui generis, involves puzzles, trials and errors. Doubting and arguing in public is a sign of individual soundness and disciplinary self-confidence. It is being comfortable with scientific method. Tweeting is “thinking in progress,” and it is recognized as such (though I have never seen formal guidelines, the etiquette seems to allow tweets to be quoted in blog posts, and blog posts to be quoted in academic papers.) Researching the history of economics in public is also a way to help other scholars relate to our practices. Laying out a puzzle –why have subfields who most benefited from computerization, such as large-scale macroeconometrics or, computational general equilibrium became marginalized as the PC spread –, posting an exchange between Paul Samuelson and Milton Friedman or a figure representing a principal component analysis, a co-citation network or the result of some Newsweek articles text-mining and arguing over interpretation allow to frame history as a process whereby some quantitative and Capture d_écran 2017-07-25 à 03.32.32qualitative data are gathered, exploited and interpreted. Rough data – qualitative and quantitative – are put on display, suggesting both commonalities and specificities in the methods historians need to use to make them speak. Finally, opening the narrative black box by writing history in public and circulating working papers allow fellow historians to engage in a sort of early online public referee process, and economists to react in a public and articulated way.

ICapture d_écran 2017-07-25 à 03.15.00n short, twitter is a tool for researching and communicating the history of economics. The latter can be done at little cost, with the uncertain yet real prospect of high spillovers effects. This is a good reason for all historians who like a good economics argument to give it a try, and join their some 50 colleagues already registered. Twitting also raises all sorts of questions on our research practices and audiences. It forces those who routinely eschew reflexive endeavors (such as the author) to articulate their perspective on the present state and future of their discipline. For writing the history of economics in public and disseminating it in the end requires a good deal of enthusiasm for the quality of what is being published and optimism in its possible social benefits.

Note: this is a draft paper for a historiography volume. Comments welcome. 

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Defining Excellence in economics: 70 Years of John Bates Clark Medals

clark_medal_front_smAndrej Svorenčík and I have a new working paper on the history of the John Bates Clark medal (SSRN  and SocArXiv links). We combine archival evidence on the establishment and early years of the award and quantitative analysis of the profiles of the laureates to study the intellectual and institutional determinants of “excellence” in economics: how economists disagreed on what count as a “fundamental contribution” in economics, how they handled topic, methods, institutional and gender diversity issues.

We are still struggling with how to interpret our data, so comments are very much welcome.

Below are excerpts from the introduction. There will be another post dealing with my unanswered questions, methodological struggles and findings on this project.

In 2017 the John Bates Clark Medal (JBC Medal) turned seventy, and the 39th medalist was selected for this prestigious award. Established in 1947 by the American Economic Association (AEA) to reward an American economist under the age of forty for “most significant contribution to economic thought and knowledge,” it has become a widely acknowledged professional and public marker of excellence in economics research. It is frequently dubbed the “baby Nobel Prize” as twelve awardees later went on to receive the Bank of Sweden Award in Economic Sciences in Honor of Alfred (hereafter Nobel Prize). It provides an excellent window into how economists define excellence because it is as much a recognition of the medalists’ achievements as it is a reflection what is considered to be the current state and prospects of the discipline. For the Committee on Honors and Awards (hereafter CHA) and the Executive Committee of the AEA, selecting a laureate involves identifying, evaluating and ranking new trends in economic research as they develop and are represented by young scholars under forty.

The Medal has become such a coveted prize commanding the attention of the entire economics profession and the public that it went from being awarded biennially to annually in 2009. It might thus seem surprising how little is known about the reasons for its establishment and about its tumultuous past. Even less is known about the debates that it provoked such as those pertaining to its selection criteria. After three first unanimous choices of laureates – Paul Samuelson (1947), Kenneth Boulding (1949), and Milton Friedman (1951) – the Medal was increasingly challenged. It was not awarded in 1953, then almost discontinued three times before it finally gained acceptance and stabilized during the 1960s.

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1947 ballots (Samuelson elected against Boulding and Stigler)

Our purpose, in this paper, is not to study the medal as an incentive, but as a signal for the changing definition of excellence in economics, as well as a marker of how merit and privilege are intertwined in scientific recognition. Indeed, Robert Friedman argues in his study of the history of the Nobel prizes, “excellence is not an unambiguous concept, not even in science” (2001, p. ix). The Nobel Prize has become the ultimate symbol of scientific excellence and a shorthand indicator for genius. But even though exceptional talent is a shared feature of scientists who become laureates, Friedman adds that “prizes, by definition, are political, are a form of governing marked as much by interests and intrigues as by insightful judgment” (2001, p. 1). His extensive survey of discussions surrounding the chemistry, physics and biology prizes show how some awards (or lack thereof) reflected the changing scientific, cultural, political and personal agendas of the members of the Swedish committee. The Nobel Prize in Economics was no exception. Offer and Söderberg 2016 and Mirowski 2016 relate how the prize was born out of the frustration of those economists at the Riksbank and their lack of independence in setting the Swedish monetary policy.

Michael Barany’s 2015 history of the Fields Medal likewise showcases a general point that myths surrounding prizes often conceal a messier reality, and that their history convey rich information about a discipline’s standards and identity. Barany argues that the Fields Medal was not established as a substitute for a missing Nobel Prize in mathematics, but as a way to unify a discipline riven with political and methodological divides in the 1930s. While “exceptional talent seems a prerequisite for a Fields Medal,” he argues, “so does being the right kind of person in the right place at the right time.” Acknowledging various types of contingencies “does not diminish the impressive feats of individual past medalists”. The laureates as a group represent “the products of societies and institutions in which mathematicians have not been mere bystanders” (p. 19).

It is such an approach that we want to follow in this paper in order to understand the evolving nature of excellence in economics. The archival evidence we have gathered shows that the establishment of the John Bates Clark Medal, and early disputes on what represents excellence in economics speaks volumes of the internal dynamics of economics and its situation among other sciences since the 1940s and 1950s. Further, both Barany and Friedman emphasize the lack of diversity both within selecting committees and among laureates in terms of gender, educational background and employment, yet they do not provide a thorough quantitative analysis of their claims about the missing diversity. In order to understand how the nature and diversity of “right person in the right place” have evolved across decades, we have supplemented our qualitative evidence with a quantitative analysis of the trajectories and characteristics of the 39 laureates.

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How about every historian of science nominates a candidate for the Golden Goose Award?

This morning, while searching for material on the history of mechanism design, I stumbled on the Golden Goose award webpage. Though I’m being told it is quite important in scientific/policy circles, I had never heard of it.

Capture d_écran 2017-05-12 à 03.11.53Founded in 2012 by a pool of private and public patrons, it was aimed at countering Senator William Proxmire’s “Golden Fleece Awards” influence on public society and policy-makers’ perception of science. Between 1975 and 1988, Proxmire set out to throw light and lambast public institutions and research projects he believed were a ridiculous waste of time and money: a NSF-funded study on love, some physical measurement of airline stewardesses, the development of facial coding systems, a study of why prisoners want to escape or Ronald Reagan’s second inauguration. The Golden Goose committee thus wanted to dissipate the idea that federally funded research that sounded odd or obscure to non-scientists was necessary useless, by highlighting cases in which such research happened to have a major impact on society.

Capture d_écran 2017-05-10 à 11.17.51The stories behind laureate research programs are recounted through texts and videos. These include a 1950 study of the sex life of screwworm flies (which was wrongly considered a target of Proxmire and contributed to eradicate the fly and save millions of dollars in cattle treatment and loss), the honeybee algorithm, the national longitudinal study of adolescent to adult health, the marshmallow test, and two economics research programs: the “market design” award went to Alvin Roth, David Gale and Lloyd Shapley in 2013 (one year after the Nobel), and the “auction design” award went to Preston McAfee, Paul Milgrom and Robert Wilson the following year.

Capture d_écran 2017-05-12 à 02.56.18I don’t know about prizes in other disciplines, but I feel the Golden Goose could be bolder on the economics research it singles out. Not that I want to diminish the  outstanding achievements of market and auction design, but my sense is that this research was not the most in need of public spotlight. The history of mechanism design is still in infancy and much contested. It is an area whose protagonists have been eager to write their own history. Historians largely disagree on how to interpret the famous Federal Communication Commission radio spectrum auctions (Francesco Guala and Michel Callon reconstruct them as a case of performative research. Eddie Nik-Khah disagrees and argues that telecommunication business imperatives displaced scientific ones. See also his forthcoming book with Phil Mirowski). My issue is with portraying mechanism design as a field previously perceived as abstract, obscure or irrelevant. Some research in progress suggests that the Stanford environment in which mechanism design was developed benefited from sustained and stable relationships with military then industrial and tech clients, which were confortable with having their scientific clients pursuing theoretical ideas with uncertain applicability. The research program involved economists initially trained in operational research departments, who might have carried new conceptions of theory, applications, and risk-return tradeoffs. As NSF social science funding came under attack at the turn of the 1980s, economic theorists then singled out a mechanism design lab experiment as their flagship example of “socially useful” research. And after the 2007 financial crisis broke out and economists’ expertise came under attack, matching market aud auction design became ubiquitous in their defense of their discipline’s social benefits (here are a few examples).

While it is certainly good to have the key role of Robert Wilson in architecting Stanford’s brand of game theory and mechanism design finally recognized, I nevertheless remain skeptical that this research has ever been construed as obscure, odd or silly. I’m willing to concede that I may be too naïve, given the permanent threat upon federally funded research (see Coburn’s 2011 attacks and summer 2016 debates on the social benefits of NSF-funded economic research). The point is that the Golden Goose award jury could make bolder choices, in economics as in other sciences.

ECapture d’écran 2017-05-12 à 03.10.06.pngducating policy makers and the public on how science is made is the purpose of the Golden Goose award. And it’s one shared by historians of hard, tech, STEM, medicine, computer or social sciences. They spend countless hours uncovering the diverse and complex relationships between theory and applications, induction and deduction, how much is planned and how much is accidental. Operational Research historian Will Thomas told me he’d like more research on “delayed applications” (whether because of the lack of adequate theories or computer infrastructure or money or else, or because of unexpected applications). Historians are also tasked with uncovering the many external hindrances scientists face in pursuing research programs, from claims of being too abstract to claims of being too specific (Proxmire targeted that not just highly abstract science, but also empirical research which seemed to specific to be ever applied elsewhere or generalized was often derided). Scientists have routinely faced pressures by public, private, military organizations and agnotology lobbies to alter, hide or dismiss scientific results. Nevertheless, historians sometimes conclude, they persisted. Historical inquiry finally offers a unique window into the difficulty of defining, identifying and quantifying science’s “social benefits.”

Golden Goose alumni Josh Shiode confirmed that the jury welcome nominations by historians of science. There is neither disciplinary nor temporal restrictions (it is not necessary, for instance, that the scientists whose research is nominated are still alive). Three nomination criteria are:

  • federally funded research
  • projects that may have appeared unusual, obscure, which sounded “funny” or whose value could have been questioned
  • major impact on society

Nominating research projects seems an excellent way for historians of science to educate the public.

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Speculations on the stabilization and dissemination of the “DSGE” trade name (in progress)

Some research I’ve done for the history of macroeconometric modeling conference that will be held in Utrecht next week led me to wonder who coined and disseminated the  term “Dynamic Stochastic General Equilibrium.” Not the class of models, whose development since Lucas and Prescott’s 1971 paper has been the topic of tons of surveys.  Fellow historian Pedro Duarte has a historical meta-survey of the flow of literature in  which macroeconomists have commented on the state of macro and shaped the idea of a consensus during the 1990s and 2000s. Neither am I hunting for the many competing words used to designate the cluster of models born from the foundational papers by Robert Lucas or Finn Kydland and Ed Prescott, from Real Business Cycle to Dynamic General Equilibrium to stochastic models. What I want to get at is how the exact DSGE wording stabilized. Here is the result of a quick tentative investigation conducted with the help of JSTOR (an unreliable database for historical research) and twitter.

According to JSTOR, it was Robert King and Charles Plosser who, in  their famous 1984 paper titled Real Business Cycles, used the term DSGE for the first time, though with a coma (their 1982 NBER draft did not contain the term): “Analysis of dynamic, stochastic general equilibrium models is a difficult task. One strategy for characterizing equilibrium prices and quantities is to study the planning problem for a representative agent,” they explained upon deriving equilibrium prices and quantities.

Assuming the JSTOR database is exhaustive enough (information on the exact coverage is difficult ti find) and that the term didn’t spread through books or graduate textbooks (which is a big stretch), dissemination in print was slow at first.

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For more than a decade, only a handful of articles containing the word were published each year. Lars Hansen and Jim Heckman used “Dynamic Stochastic General Equilibrium” without the acronym in a 1996 JEP  survey on calibration. While Hansen causally used the word in many publications throughout the 1990s, Eric Leeper, Chris Sims, Tao Zha, Robert Hall and Ben Bernanke used the word and its acronym much more agressively in a widely cited 1996 BPEA survey of advances in monetary policy research (I thank  Now Here Not There for the pointer).  In a telling footnote, the authors explain that “the DSGE approach  is more commonly known as the real business cycle approach. But while it initially used models without nominal rigidities or any role for monetary policy, the methodology has now been extended to models that include nominal rigidities.” In other words, RBC models were being hybridized with new-keynesian insights with the hope of shaping a synthesis, and their name was evolving alongside their substance. In 1998, Francis Diebold published an article on macroeconomic forecasting, in which he moved from a descriptive to a prescriptive use of the name. DSGE was “the descriptively accurate name” for this class of models originated in Lucas 1972 with fully-articulated preferences, technologies and rules, “built on a foundation of fully-specified stochastic dynamic optimization, as opposed to reduced-form decision rules” (to avoid the Lucas critique).

I’ve been told that, by that time, the word was already in wide currency. But many other terms also circulated, and at some point the need for a new label reached a climax and competition intensified. In November 1999, the Society for Economic Dynamics published its first newsletter. In it, Stern professor David Backus explained that finding a new name for the models he, Jordi Gali, Mark Gertler, Richard Clarida, Julio Rotemberg and Mike Woodford were manipulating was much needed: “I don’t think there’s much question that RBC modeling shed its ‘R’ long ago, and the same applies to IRBC modeling. There’s been an absolute explosion of work on monetary policy, which I find really exciting. It’s amazing that we finally seem to be getting to the point where practical policy can be based on serious dynamic models, rather than reduced form IS/LM or AS/AD … So really we need a better term than RBC. Maybe you should take a poll,” Backus declared.

Capture d_écran 2017-04-03 à 02.35.12And indeed, Chris Edmond told me, a poll was soon organized on the QM&RBC website, curated by Christian Zimmerman. Members were presented with 7 proposals. Dynamic General Equilibrium Model (DGE) gathered 76% of votes. “Stochastic Calibrated Dynamic General Equilibrium” (SCADGE) was an alternative proposed by Julio Rotemberg, who explained that  the addition of “stochastic” was meant to distinguish their models from Computational General Equilibrium. The proposal collected almost 10% of the votes. Then came  Quantitative Equilibrium Model (QED, which Michael Woodford believed was a good name for the literature as a whole, though not for an individual model and Prescott liked as well), RBC, Kydland Prescott Model (KPM, which Randall Wright found “accurate and fair”), and Serious Equilibrium Model. Prescott and tim Kehoe liked the idea of having the term “applied” in the new name, Pete Summers wanted RBC for “Rather Be Calibrating” and Frank Portier suggested “Intertemporal Stochastic Laboratory Models.”

It wasn’t yet enough to stabilize a new name. Agendas underpin names, and in those years, agendas were not unified. Clarida, Gali and Gertler’s famous 1999 “Science of Monetary Policy” JEL piece used the term “Dynamic General Equilibrium” model, but  they pushed the notion that the new class of models they surveyed reflected a “New Keynesian Perspective” blending nominal price rigidities with new classical models. In  his 2003 magnum opus Interests and Price, Woodford eschewed DGE and DSGE labels alike in favor of the idea that his models represented  a “New Neoclassical Synthesis.”  It was only in 2003 that the number of published papers using the term DGSE went beyond a handful, and in 2005 that the acronym appeared in titles. I don’t know yet whether there was a late push to better publicize the “stochastic” character of the new monetary models, and if so, who was behind it. Recollections would be much appreciated here.

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