David Warsh: We should pay more attention to this outfit

1050 Massachusetts Ave. in Cambridge, where the National Bureau of Economic Research is based.

— Photo by Astrophobe

SOMERVILLE, Mass.

An interesting fact: The leaders of Harvard University, Stanford University, Brown University and the University of California at Berkeley have something in common.  Alan Garber, Jonathan Levin, Christina Paxson and Richard Lyons are all research associates of the National Bureau of Economic Research.  Four out of 17,000+ NBER researchers, the preponderance of them economists, is not a large portion of the whole. But it may offer a hint of what top universities are looking for in their presidents.

The NBER is an unusual organization.  Founded in 1920 by two individuals of very different outlooks, an executive of the American Telephone and Telegraph Company and a socialist labor organizer with a PhD from Columbia. Their idea was to fund independent studies of issues about which widespread differences of opinion existed: changes in the gap between rich and poor during the Gilded Age and the Progressive era, as well as the effects of large-scale immigration on wages. National income and its distribution have been the core of NBER studies ever since, along withe the structure of business cycles, too.

Since the 1970s, though, when its headquarters moved from New York City to Cambridge, Mass., and decentralized its research, a host of new topics have come under the NBER microscopes. Everything from the economics of health insurance and childhood education to inflation and national defense practices are investigated with imaginative theory, data, and statistical technique.

A look at the governance of the organization discloses the key to its success over a hundred years. Three classes of directors keep their eyes on the organization’s pursuits: a diverse collection of outsiders; a class of representatives of universities; and another of professional associations of one sort and another.

As in the days of its founding, the NBER seeks to bridge gaps between antagonistic factions. Its culture is suffused with respect for differences of opinion. Its goal is building consensus.

Would those characteristics be attractive to universities eager to get themselves off the front pages of newspapers?

Of course they would. A little more attention in those newspapers to NBER findings might help as well.  

David Warsh, a veteran columnist and an economic historian, is proprietor of Somerville-based Economic Principals.

David Warsh: Cambridge will be even more of a capital of economics than usual this month

MIT’s main campus, in Cambridge

SOMERVILLE, Mass.

For the first time in three years the Summer Institute of the National Bureau of Economic Research is meeting in-person in Cambridge, Mass., at least for the most part, with some on-line components as well.  (In the days before Zoom, venture capitalists used to describe more expensive face-to-face gatherings as “flesh-meets,” to distinguish them from conference calls.) A parallel, pan-European policy research institution, the Centre for Economic Policy Research, now headquartered in Paris, was founded in 1983.

A substantial fraction of the NBER’s 1,700+ research affiliates, who are drawn from colleges and universities mostly in North America, and a few others scattered around the world, will troop through the Sonesta Hotel in East Cambridge over the next three weeks, along with  enough colleagues and students to add up to an attendance of some 2,400 persons in all. It is the forty-fifth annual meeting of what has become, in essence, a highly decentralized Wimbledon-style tournament of applied economists, staged as a science fair, and conducted in a series of high-level seminars.

Wimbledon, in that NBER players are professionally ranked; affiliates are selected by peer-review. Decentralized, in that 49 different projects are on the docket, many of them overlapping.  Science fair, in that investigators choose their own problems, and rely on agreed-upon methods to study them, while new methods themselves are the subject of a separate annual lecture. Seminars, in that presenters don’t simply read their papers they have written; they briefly describe them and then respond to discussants and badinage.

An overall program is here. A detailed day-by-day listing of sessions is here. First Deputy Managing Director of the International Monetary Fund Gita Gopinath, of Harvard University, is slated to deliver the Martin Feldstein Lecture July 19 at 5:15p.m. EDT. It’s titled “Managing a Turn in the Global Financial Cycle’’.

Meanwhile, a mile down the Charles River, the Russell Sage Foundation Summer Camp in Behavioral Economies has been underway in the Marriott Hotel, some twenty-five or thirty Ph.D. candidates and post-docs studying with leading researchers, under the direction of David Laibson and Matthew Rabin, both of Harvard University.

The Summer Institute is where economic policy approaches are argued among experts. Nobel Prizes emerge mostly from summer camps. I look forward to a lot of (virtual) running-around.

David Warsh, a veteran columnist and an economic historian, is proprietor of Somerville-based economicsprincipals.com. where this essay first ran.