Racism and the Economy: Focus on the Economics Profession - Transcript - April 13, 2021

Introduction

Esther George: Hello, and welcome to today's Racism and the Economy series presented by the 12 regional federal reserve banks. My name is Esther George; I'm President and CEO of the Federal Reserve Bank of Kansas City. This landmark series focuses on inequality in our society and examines ways in which structural racism manifest in our economy. Today's event is the fifth in this series and it's focused on the economics profession. The discussion will consider racism and the pipeline into the field of economics, racism and the practice of economics, and promoting inclusivity and effecting change.

The economics profession has widely acknowledged that it has a problem with diversity in its ranks. Last year, the American Economics Association hosted a panel titled How Can Economics Solve Its Race Problem? During that session panelists cited poor leadership, institutional dysfunctions, discouragement from specializing in the study of race, and in some cases a toxic professional culture. Such issues would be a problem in any profession, but it is a particular problem in economics where the field informs policy judgments with wide ranging effects on the American public's well-being.

The federal reserve system is a large employer of economists in the United States and plays a unique role in shaping the field. Economists contribute to all aspects of our mission including monetary policy, supervision and regulation, and payments. In service to that mission we have a strong interest in shifting our workforce and the economics profession as a whole toward racial inclusion.

Addressing today's economic dynamics is a complex task. It will serve us well to invite new perspectives and new questions about old issues, to challenge dominant paradigms, group think, and even blind spots. And as a public institution, the Federal Reserve's credibility depends on the expression of diversity of thought background and race. With so much influence over the economy and people's day-to-day lives the entire population must see themselves reflected in the Fed.

As one of the regional Reserve Bank presidents, my own perspectives on race and the economics profession are shaped not as a member of the economics profession, but as a central banker and policy maker whose views rely on input from those trained as economists. I'm a strong proponent of a system specifically designed to elicit a geographically diverse set of views on the state of the economy and the proper stance of monetary policy. It has been my experience working within this decentralized system for nearly 40 years [that] the policymaking is improved when diverse views are represented and assumptions or questions.

With that backdrop, I'll offer a few of my own thoughts on how I view my role as a policymaker and an employer in making diversity a reality. First, it begins with me, not because I can solve every problem in every place, but whatever I can do I should do. I'm accountable for actions within my sphere of influence and for the results in my own organization, including its culture, its hiring philosophy and its public engagement. Inclusivity must be embedded into the values of the institution to the point of being part of its identity. This starts with broad policies and a statement of values, both of which are in place at my bank and throughout the federal reserve system.

The progress requires continuous advocacy and monitoring by leaders, including the use of employee surveys, exit interviews, and tracking and reporting metrics. Importantly, the value of inclusivity must be part of everyone's job, it has to be how we do business. Second, inclusivity must be reflected in hiring. This requires looking at the broadest possible applicant pool and holding leaders accountable for doing so. For example, the Federal Reserve's fedeconjobs.org website cast a wider net for potential applicants. As we hire, we have to ensure that the education and experience filters that we use are set to promote inclusivity.

The Fed can also play a role in encouraging students, even prior to college, that economics is a relevant and attractive career path. This requires outreach and active engagement, often to overcome general misperceptions about the field that can discourage students from pursuing an education in economics. My colleague at the San Francisco Fed, Mary Daly, has often pointed out that how we describe the profession's aims and the scope of the questions it can help answer is key.

Finally, when we are a in position to provide opportunities, it is essential that we pursue inclusivity in the allocation of those opportunities. For example, the Kansas City Fed hosts a number of conferences and events, including the annual economic policy symposium in Jackson Hole, Wyoming. As we consider the speakers and other participants for such programs, it is our job as the organizer to invite diversity, including bringing more women and people of color into the room. Doing so actively expands the diversity of our network of contacts and improves the quality of the program.

This in turn can help expand the diversity of information we collect and regular economic intelligence gathering, the diversity of participants on our boards and advisory councils, and ultimately a fuller understanding of the economy we seek to promote. I look forward to learning from others how to affect the change we need. It is my hope that every economist and indeed every stakeholder in the economics profession will take what we learn and commit to a set of actions that will make diversity in the field of economics a reality.

Today's program will consist of three panel discussions, followed by a discussion with three of my Federal Reserve Bank president colleagues, and closing remarks by Raphael Bostic of the Atlanta Fed. I'm honored to join my Federal Reserve colleagues as sponsors of this important series, as well as the other distinguished panelists for this particular topic. And I encourage you to continue these conversations beyond today's virtual experience. Hundreds of today's attendees have pledged to be a conversation leader and organize further discussions within their institutions and throughout their communities on this important topic. These simple actions can bring greater awareness to issues of structural racism in America's economy and by doing so serve as a catalyst for change. And with that I'll turn it over to Jeanna Smialek from the New York Times, who will moderate our first panel.

Racism and the pipeline into economics

Jeanna Smialek: As President George mentioned, I am Jeanna Smialek. I'm a reporter with the New York Times and I cover the Federal Reserve and the economy. I'm thrilled and honored to be here today to moderate what I think is going to be a really great panel and an interesting conversation among four experts who have grappled with issues related to representation in economics extensively.

Randall Akee is chair of the American Indian Studies Interdepartmental Program and Associate Professor of Public Policy at the University of California in Los Angeles. Randall's recent work has looked at the difficulties in desegregating race and ethnicity data for small populations in the COVID-19 era.

Judith Chevalier is the William S. Beinecke Professor of Finance and Economics at Yale University School of Management, Chair of the American Economic Association's Committee on the Status of Women in the Economics Profession, and a member of the EAE's Outreach Committee.

Trevon Logan is the Hazel C. Youngberg Trustees Distinguished Professor of Economics at the Ohio State University, and he researches the historical factors in contemporary racial inequality, including segregation, health disparities, and racial violence.

And Ebonya Washington is the Samuel C. Park Jr. Professor of Economics at Yale University and Co-Chair of the American Economic Association's Committee on the Status of Minority Groups in the Economics Profession. Ebonya is going to start us off with a presentation overviewing state of race and ethnic diversity in the economics profession. And so with that, I will hand it off to her.

Ebonya Washington: Okay, good afternoon and thank you to the Fed for hosting this very important event. I've been asked to lay the table out and I'm going to lay out the key facts that we know about representation in economics. And if taking the measure of a... The first step in solving a problem is to take good measure of it, then unfortunately we have not even taken a good first step yet because the answer to the question of what is the share of employed PhD economists who are members of underrepresented minorities, the answer to that question is we don't know.

We have estimates from different sectors in which economists work, and none of the estimates is really good. For instance, this number from Academia comes from a questionnaire that the American Economic Association sends out. And last year where these data are from, the AEA received back fewer than half of these questionnaires. These data tells us that of full-time folks working in academia in economics departments, under 8 percent are black or Latinx and Native American.

The government data are similarly flawed with under-reporting and similarly come to an 8 percent number. Fortunately, with Jeanna Smialek's own work we have better numbers for the Fed and so we know that amongst Fed economists about 1 percent are black, under 10 percent are Latinx. Industry -- you see have got a question mark there. Again we don't know, and think tanks -- we only have this study that includes only the one think tank.

What we can measure better are degree recipients, because schools and individuals report this information to the government. And so what you see here is an integrated post-secondary education data system data for 2019 U.S. citizens and permanent residents. And as you can see in the first column, that [of] all of the economics degrees awarded in that year, none was awarded to a Native American, 2.8 percent to black individuals, 5.82 to Latinx. And I sum these three groups together in the next line as URM, underrepresented minority, clearly underrepresented when compared to their U.S. population number in the fourth column.

But perhaps it's even more instructive to compare these numbers not to U.S. population but to representation among PhD recipients. So if we compare representation in economics to representation in STEM, we see that economics fall short for all three groups are better represented amongst STEM PhD recipients than among economics, and better still amongst all degree recipients.

Now, that was 2019 data, and of course if we're talking about who's working in the economics profession today we did not get our degrees in 2019 and so it's helpful to take a look backward and that's what these NSF data allow us to do to see PhD recipients going back to the early '70s. And when we're looking at Latinx scholars, we see something that maybe looks encouraging. The black circles, the black lines are the economics degrees, the red triangles STEM, and the green squares are all subjects -- and all are trending upward. I mean, not hitting representation numbers that you saw before, but that Latinx folks are increasing share of PhD recipients in all these groups.

Unfortunately, the trends do not look as good when we talk about Native American or black PhD recipients. For Native Americans, you get a graph that bounces from zero to a positive, to zero to a positive because of small numbers but since I didn't grab it, but the trend would be basically flat. And for black scholars, slide please, perhaps something even more discouraging. You can see in the early parts of the data certainly that economics line is increasing even above STEM for many years but then since the '90s you have what can best be described as flat and really looks like it wants to fit a negative trend in terms of PhD representation in economics.

But we compare that to STEM and all subjects and black PhD recipients are an increasing share of PhD recipients in those two groups, so clearly a relative decrease in economics. Slide, please. This problem does not first manifest itself at the PhD level. If we look to BAs, if we look to people majoring in economics, we don't see representation shortfalls as great as PhD, but we certainly do see them for all three groups, and again, relative to STEM and relative to all fields majors.

Let me take you back even a step further to the very first course in economics, and right from the beginning we see falls in representation. So these are four different studies, four different school groups, and in all cases the percent of principal students who are underrepresented minorities is smaller than the percent of students on campus who are underrepresented minorities.

I don't just want to count bodies because that does not give us the full extent of what we're talking about here. We want to also tally experiences. Unfortunately, the AEA climate survey allows us to have some data on this. And from there we know that 28 percent of black, Latinx, and Native Americans in economics feel personally discriminated or treated unfairly on the basis of race, ethnicity by someone else in the field of economics. Black and women of color respondents, both students and professionals, are the most likely to report having experienced discrimination and are the most likely to have taken costly actions such as leaving a job to avoid bias. So we're talking about inequities as well as inefficiencies here.

Finally, let's let some of these experiences be spoken in people's own words. This is from work that I did with Amanda Bayer and Gary Hoover, and this is in response to the question of what is the most important thing that we should know about what helps and hurts minorities in the economics profession. So says a former tenure track professor, emphasis on former. "The most disappointing time in the academy was training the next generation of minority economics and policy students who would confide, 'Why should I do a PhD in economics and putting all the time and effort only to face what I see you facing?' My best and brightest students opted for professional degrees to resist first-generation students, but were not interested in a PhD in economics because of all the constant microaggressions they witnessed."

And finally, let's let the students speak about those microaggressions, or macro actually in this case. "It is very difficult to imagine belonging in a field that on the whole doesn't do the work to enact structural change. It's very resistant to seriously incorporating other social sciences work, and doesn't even really allow much scholarship that names and/or addresses racism directly.”

Thank you, and I look forward to the conversation.

Smialek: Dr. Washington, thank you for what was a really thorough overview there. I wonder if you could add a little bit of interpretation in here and give us your take on what these data are really telling us.

Washington: Well, I think the clear message from the data comes from the comparisons of the economics with the STEM and the other professions. And so it's telling us that this issue is in many ways an economic-specific issue. And so in the conversation today I hope that we're focusing on problems within economics and solutions within economics. We can't say it's a STEM problem or it's an education problem more generally; we're talking about economics too.

Smialek: That actually opens up another question which maybe Dr. Logan you can answer for us, which is when we talk about economics what defines economics as a profession in your view?

Trevon Logan: Economics is actually quite broad, and so a very curiously smart expression as you know, economics is what economists do. And that does, when you think about the breadth that our field has and undertakes, it involves everything from policy analysis to very deep theoretical thinking about decision-making, to sophisticated analysis and structural estimation and causal identification. And so they might appear to be disjoint, but underlying that is fundamentally an analysis of decision-making and allocation. And so there's inherently a macro aspect to what economists do. And there's a wonderful breadth there that I think simultaneously attracts students but then also can repel them if they see that that breadth isn't actually realized into what economists are paying attention to, and then in the culture of the profession more broadly.

Smialek: Okay, interesting. Interesting. And I think when we were planning for this panel I think Judith also had some thoughts about this and I was wondering if I could throw that question open to you as well. When you're trying to define economics, how do you think about it?

Judith Chevalier: Professor Logan gave a great answer so I can't really top that. But I will say that I think that unlike maybe some other academic fields where if you pursue a PhD in economics... Where if you pursue a PhD it's expected that you go on to be an academic. If you pursue a PhD in economics or a higher degree in economics in general, you have opened to a variety of really worthy and important activities. So academics is just one, but as we can see around us there are so many economists working in government, in think tanks, and in industry. And I think it's important that when we talk about the economics profession sometimes people mean the academic economics profession, but they shouldn't because where the contributions to economics are being made [are] throughout these variety of spheres.

Smialek: Right, absolutely. And actually I'll throw this one back to you immediately but then I'd also love to hear Ebonya's thoughts on this. But I think one thing that we often ask ourselves as journalists covering you all is do you to have a PhD to be an economist? Do we define economics as PhDs or is it a broader category than that?

Chevalier: I think that people do work in economics at all levels. If you get an undergraduate degree in economics and you work as a research assistant or you work for a company, you're clearly using the tools of economics and you are using an economics degree. But I think Professor Washington emphasized the PhD because people who have the PhD contribute to the field and push the field forward and show leadership in an important way. So when I use the term economist I usually mean people who have a PhD, but that's not to eliminate the importance of the roles that people with other kinds of economics training have in the field.

Smialek: And then Dr. Washington, maybe you could talk a little bit about what we mean when we talk about the pipeline as well, I think in addition to answering that question.

Washington: Well, I think when we... In addition to answering that question, okay. So as far as answering that first question, I agree that I generally am speaking about people with PhDs when I talk about an economist, but I think that issues of representation are important all along the way because these jobs are important all along the way. We have people working as research assistants, we have people working in government with master's degrees or bachelor's degrees, as well as PhDs. And so when we're thinking about representation and why it is important in economics, all of these levels really do need to be considered.

And then the second question that you asked me was about the pipeline. And so the term pipeline is thinking about having a PhD is being the end point and you can think of people flowing through from taking off math through getting a bachelor's to now needing a post-doc and finally into a PhD program and getting a PhD. That term may not always be... We use it a lot when thinking about these sorts of issues, but it may be too narrow at times in that it suggests that there's only one way to get from A to B. And in fact, I did not take that path, I did not have a bachelor's degree in economics, yet I got my PhD. So let us please emphasize to all the wonderful young people out there that if you didn't take calculus in high school, or you didn't take principals in first year in college, that there's still room for you in the economics profession if it interests you, and so we'd love for you to give us a try now.

Smialek: I wonder... I'm actually going to throw this over to Professor Akee right after you, but I wonder if you could maybe talk about your experience a little bit because that might be useful and instructive for folks listening in.

Washington: Oh, well, how did I come to economics? I was a public policy major in undergrad and I came to it because... I came to public policy, that was the kind of work that I wanted to do. I saw myself as the academic who would be in and out of government. And very cool, in my second semester of senior year I asked my advisor to please write me a recommendation. I was going to go abroad; I wanted him to write me a recommendation that would be on file so that I could go for PhD in policy when I came back.

And he told me that he would not write me this recommendation because that was not a good idea and it was better to get a degree in a discipline, so that is how I came to economics. Some people come because of a love of math or its elegance, or something like that. I came because I was interested in the policy issues, and I don't think I'm alone at all in that kind of a drive bringing someone to gain the tools of economics.

Smialek: Randy, I wonder if you could talk a little bit about sort of pathways into the profession, how they impact the issues we're talking about, and then I think you actually have a really great personal story that bears on some of this.

Randall Akee: So thanks again for having this and having invited me. I think some of the important aspects of the research that Professor Washington just showed -- the obstacles and why we see these differences in economics in particular, some of the exposure that people get to economics really are the principles classes. And when you're told there that discrimination is eliminated in the market, a perfect market will just eliminate it, as well as the fact that women in the labor force are earning what the market will bear.

When you're learning these principles and you're not learning the nuances of it and why these things persist, because you don't get that until the higher level classes, and then even in some senses you don't even get it until graduate school,you really realize the fundamental flaws in some of these assumptions; that's part of the reason why people are turned off. I experienced that as an undergraduate. This doesn't make sense to me that all of this discrimination should be competed away in the marketplace. But you don't get to challenge that until you have the tools and you don't get the tools until the later level classes.

And so what helped me get through and find my way was, again, looking for the allies, looking for the people that weren't the ones that are necessarily in the mainstream of economics but who were in various different places. One person that was a mentor to me was Willie Johnson who was at the New York Fed while I was an undergraduate. And she seemed like a unicorn, just this African-American woman at the Fed and an economist, and she was one of those people that I didn't know existed.

And just having a few people like that along the way helps to make the path okay. And I think the more people and the more activities that we have and the more organizations, and I think there potentially are more these days than when I was an undergraduate 30 years ago, that helps. But again, clearly as the numbers show it hasn't solved the problem.

Smialek: Right, absolutely. And I guess actually I think it maybe at this point it would be useful to dig into what we're defining as the problem here. When we look at the numbers that Dr. Washington laid out so beautifully there, where are we compared to where we want to be in the economics profession. Maybe Dr. Logan you could speak to that.

Logan: Well, in economics we say that the economists are where they want to be because this is their real preference as a profession, and that might be a disturbing answer. But if this is and appears to be a trend, there's a point in which you might say that it's an equilibrium outcome and that is something that we'd want to then disrupt if we desire a different outcome. So the first is if we are talking and saying that we don't want this we're admitting that we are currently in a situation that is either one, undesirable or two, unsustainable. I certainly don't think it is the latter, so it should be the former and what should we desire to look like.

Certainly to the extent that economists have said in many years, and certainly in the more than 20 years I've been active as a graduate student or professional economist, discussing what Dr. Washington spoke about in terms of the pipeline of being a problem of math and being a problem of having the tools to enter into a PhD program, it is still the case that more African-Americans earn PhDs in mathematics than earn PhDs in economics when you consider the breadth of economics and the variety of professional positions that economists can enter into.

And as any good economist would think about the ways in which economists are remunerated for their services, it really would seem plausible that you have more people who have that skillset certainly interested in economics. And so all of the arguments that have previously been made about why the profession has had this diversity problem don't match up. I think that we now see that it is a problem perhaps of culture, perhaps of the homogeneity of the profession as well that we have to solve as a profession. And that's difficult to do because we think about solving these problems at individual institutions. The profession itself is actually quite amorphous when you think about all the economists that we were talking about earlier and all the places that they populate. And then solving these problems is really actually fundamentally a problem of agency here. When you have a number and a variety of institutions who individually train economists, to become members of the profession and the profession has a problem. How do we solve that, as a profession? I think that is one of the issues that we're currently grappling with.

Smialek: Both Judy and Randy as well. I wonder if you could kind of walk me through... kind of what Dr. Logan just touched on. What are the drivers that you see as contributing to this under-representation of people of color in Economics?

Washington: Oh, so the drivers within our profession are many. Our profession is unwelcoming to folks of color and that begins, as Randy explained, from the first course. So, the first course is... People come to us because they're interested in these Social Sciences kind of issues and either we don't talk about these issues from the beginning, or we talk about them in a way that is overly simplistic. So, there is not welcoming all the way through in terms of we don't value all topics at all equally, and topics that certain groups want to work on are not considered mainstream Social Science or... there was a quote that I had cut out of the presentation, where a young woman was saying that she was always being told, she was a PhD student, and she's always being told: "Well, no, not that topic, because what value does that have to Social Science?"

She didn't think anything of it at first and then she realized: "Well, what they're saying is: What value does it have to white males who are the Social Scientists?" So, we have unwelcoming in terms of topic areas, wanting to let people in and be able to run the journals, and so forth. So, it's unwelcoming from beginning to end. There are information issues, where not everyone gets the information that they need to succeed in the profession, or even to know about the profession. There's mentoring, more mentoring that needs to happen, but I think we need to be clear that there are a lot of wonderful programs that Randy Nick mentioned. Travon runs the A's Mentoring Program for underrepresented minorities and it's a fantastic thing, a summer program... All of these things do great jobs of helping minority students meet the challenges of Economics, but what we need much more of is Economics. People who are already within Economics, doing the work to make things better within Economics.

Smialek: And Randy, you obviously already touched a little bit on sort of the class progression and how that influences things, but I wonder if you see other aspects of the sort of professional culture influencing this...these issues.

Akee: Everyone sort of touched a little bit on this already, but there's sort of the sense of... sort of there's self-replication. So, that coming out of a PhD program, you create people who work and conduct work and those people get jobs that look similar to the institution, right? It's this sort of self-perpetuating situation. So, people who go beyond the bounds of that aren't necessarily rewarded in getting a job, aren't necessarily easy to be evaluated by job ... the job markets, both the academic and I think even in the professional aspect of it. I certainly succumbed to that as a person who studies non-standard groups: American Indians, Pacific Islanders, First Nations communities.

People didn't know how to evaluate me when they looked at me when I went on the job market. "Are you a Labor Economist, are you a Development Economist?" "What you do a little bit of both? We don't know how to place you in an academic setting." "We don't know how to evaluate you in a professional setting."

So, it took me... I had to do a postdoc for three years, which was actually fantastic, that's a whole other story. My advisor, who sentimental enough and who's coming up, said: "Randy, sometimes the market doesn't get it right and it undershoots and overshoots and you have to take a long view of it." That was really insightful advice at the time. It was really difficult to hear, but it ended up proving true. So, you need sort of somebody there to tell you: "You'll be okay, you'll be fine, you just keep plugging away at it." So, I think that's sort of what some of the problems that exist, is that there are these really structural points, these break points that occur where the disillusion and the disappointment can really sort of break a person and say: "I'm done with this."

I think that happens again from high school to college. College to graduate school. Graduate school, to tenure track job. Even within a tenure track job, there's lots of obstacles. So, having to face more of those than the average Economics PhD, I think is... explains some of what we're seeing. So, we need that ability to help people stay within and provide some of those resources and reassurance that, it's possible.

Smialek: Absolutely, and Judy, I wonder if you could both talk to the cultural aspects of this. Also, as the other panelist have touched on, some of the potential solutions.

Chevalier: I'll just pick up on something that was mentioned earlier, that... it starts actually with the first ... the problems start with the first course, but maybe even start before the first course. I think there's an interesting tension here, in that... I'm a member of the AEA's outreach committee, and I've been involved in various efforts to introduce people even pre-college to the exciting and interesting things that Economists do, the questions we work on.

So, we do want people to know that Economics, isn't just this sort of narrow set of topics around finance or around business, but that Economists work on a variety of public policy relevant and important topics. On the other hand, I think as my colleagues here have mentioned, if we are to entice students into Economics, with the promise of this broad range of exciting things Economists can work on, then we can't... then we actually have to make good on that promise.

So, my colleagues here on this panel have talked about the ways in which the profession has discouraged that diversity of thought, and of course, diversity more generally. We can see from the AEA climate survey, that we really have a lot to work on. So, you asked about solutions, pretty much everyone on this panel has worked on, and many much harder than me, have worked on possible interventions and solutions, mentoring, because we know mentoring is not in the wild achieved, is disparate in how much people get, if they don't have formal mentors. We've talked about ways in which course content can be changed to be more welcoming. I think as you know, Dr. Washington mentioned in her presentation, what we know from the AEA climate survey, is that there's really problematic behavior in the profession as well.

So, we are doing things like; studies to measure whether different messages attract students differentially into the profession, and those things are important. We... My group, the committee on the status of women in the Economics profession, has done studies studying our mentoring program, but we don't really need... and those are rigorous, randomized controlled trials, but we don't really need a randomized control trial to tell us that if you treat people terribly, they're not going to want to stay in the profession. So, what are the solutions? One of them is: improve the culture of Economics. There's a variety of programs and people in this group have worked hard on those programs, but rooting out really problematic behavior in the profession has to be part of it too.

Smialek: Interesting plan. Dr. Logan, I wonder if you could talk a little bit about the things that the profession is currently working on to try and address some of these issues and make sure that people can feel comfortable coming into this profession.

Logan: I think the profession has made some giant steps for, in terms of even doing a climate survey, which gives us some evidence about the experiences of variety of people in the profession. Certainly, there are two things to really take into account when we think about moving forward as a profession. We have a hierarchy in Economics, and it is quite rigid relative to our related Social Science disciplines. So, the replication of movements, what I would call, "the elite of the profession," is very common in our field. Some of those movements I think have been generative, but I also think that we have to seriously think about the negative externalities there. One of the movements is: the creation and institutionalization of pre-doctoral programs, which are designed to take students, particularly students who might not come from elite undergraduate experiences, and better prepare them for PhD programs.

That is great, but now that has also itself become an arms race and a signaling race, where we have a number of people doing pre-doctoral programs who have, really frankly, no need for them. This is elongating the time to a PhD. It used to be that students completed their PhDs in four or five years, most commonly in departments, and now that has extended to six years. If I add to that a maybe related master's program, that's one year and now a pre-doctoral program that is two years, we have turned this PhD in Economics into training that is similar to those who have attended medical school and had a residency, and are now practicing physicians in private practice. We're not saving really anybody's life as Economists. I don't necessarily think we need a decade of training in order to produce articles in journals.

So, some of the solutions that we're coming up with, I do think have the right spirit behind them but I think that we might want to consider some of these negative externalities and also the ways in which people can strategize around those systems that can lead to replication of the inequality that they're designed to solve. So, I do think there's a really strong that we have a pipeline problem, it's not clear to me that our solutions to it are necessarily going to reverse those trends.

Smialek: That's interesting, and actually, on that exact note, which I think is a really interesting one... I'm actually going to stay with you for a minute if you don't mind, because I'd love to start talking a little bit about whether we've seen any interventions meant to improve the diversity of the field, that didn't work, that backfired. It sounds like you might be touching on one there, but I'm not sure how broad the consensus is. I'd love for you to talk a little bit more about it.

Logan: I think the jury is still out very much about pre-doctoral programs. What I can say is students, and certainly the undergraduate students that I interact with here at the Ohio State University, are convinced that they must do a pre-doctoral program. That's the sort of news to me, like I just went to a PhD program. I had worked in industry for a year, went to a PhD program and got a PhD. That now there appears to be... certainly this received wisdom of what you have to do. So, going back to what Dr. Washington was speaking about earlier, there really is not a pipeline, but probably now more than ever, there is a belief that the pipeline is there and that it isn't that quite rigid. That I think is probably one of the things that has been a negative externality, an unintended consequence of this.

I don't necessarily know, these programs have not been around for decades so that we can study them and rigorously study them, and see what the outcomes are related to them. I do think it's problematic to think about what it's doing simply to the lengthening of the PhD in and of itself. Similar to the problem that we have in the profession of simply taking forever to publish our research in journalism, particularly in high-impact journals. Those things, while themselves can seem as if they are race neutral, can actually be very disparate when you're thinking about the opportunity cost of obtaining a PhD program, when you're thinking about other obligations that people from underrepresented groups might have in terms of accessing things that would lead to publications. Those things that appear to be race neutral can actually lead to racially disparate outcomes. We see that in the publications that are coming out in those journals, in the diversity of our PhD programs. So, even though there are these race neutral things that are going on in the profession, they can still have very racially disparate impact.

Smialek: That's a really interesting point. Actually, Judy, I wish... I would love it if you would unpack a little bit with what Dr. Logan was just talking about, because it does seem like there are maybe some sort of race, gender, Socioeconomic background, neutral things, that happen in Economics that end up having disparate impacts. I wonder if you could sort of talk about: how as someone who's talked a lot about women in Economics... It's clearly an issue you focused on, where the sort of intersections are between these racial questions and these issues of diversity when it comes to gender and how that informs interventions and how we think about dealing with these problems.

Chevalier: So, as you mentioned, I chair the committee on the status of women in the Economics profession. So, obviously our focus of this group is on women Economists, and the organization has been around since the 1970s, trying to do the hard work of improving the representation of women in the profession. I will say about improving the status of women in the profession. People sometimes ask me: "What have we learned from improving the status of women in the profession, that will help improve the status of minorities in the profession?" I guess I might pause at first, just to kind of reframe the question, because of course, if the committee on the status of women in the Economics profession is not advancing the status of Black women in the Economics profession or Latina women in the Economics profession or Native American women in the Economics profession, then we're not, advancing the status of women in the Economics profession.

So, there's a sense in which, the question... those questions are inseparable because we're not doing our job. If we're not advancing the status of, for example, Black women in the profession. I think that being said, I agree with everything Professor Logan said about, for example, pre docs and other well intentioned efforts to improve diversity in the profession. I think, he raises an important point that products have become another part of the arms race and maybe concerning. I think some of the programs that the AEA is trying, that the profession is trying... Programs involving outreach, programs involving mentoring, I know my pro... my committee, we do sessions at the AEA meetings, in part, to make sure that the topics that women economists are working on are represented at the AEA meetings. We have our mentoring programs.

We've been trying to reach out more to grad students. I think our program for a long time, had more of its focus on women with PhDs, as opposed to the younger stages of the profession. We've been really trying to think hard about how having... how we reach the younger stages of the profession. I will say that I know in the last year, I think we've learned a lot about all the things that we can do virtually that might help us have more access. I think a lesson that I had, that I should have thought more about sooner, was all of the face-to-face programs and things that we were doing, still only reached the people who had the budget to get to the program, an event at the AEA meetings, et cetera. So we've been, even though we all have mixed feelings about how much time we spend in the virtual world, trying to do more in the virtual world is one of the things. We've been trying to do to reach people. But I agree with Professor Logan that we really have to stop and consider the impacts of some of these... what we're doing every now and again, to see if they're helping or hurting.

Smialek: Right. That's interesting. Dr. Washington, I wonder if you could talk about when you sort of surveyed the landscape. What interventions here seem to be working and which ones seem to be potentially backfiring.

Washington: I mentioned several interventions that are working. I would say, the AEA summer program, with its long history of training minority students in the Math-micro econometrics needed to get into the PhD program. So, we've been quite successful. The mentoring program that Dr. Logan runs again, very successful. There's the tight program diversity initiative for Tenure and Economics, which is doing what its name says. So, there are a lot of PhD excellence initiative. There are a lot of these programs that work with students at the undergraduate or graduate level to help them underrepresented minority students and make it to the next step. So, there are a lot of these that are working. What I would like to see more of is programs that rather than focus on changing the student, is focused at work on changing the, the folks in the profession.

So it, a training program that is for people who run journals and it teaches them to be more open to various topics, which would then allow people who are writing on things that, Economists maybe don't traditionally do, to have an opportunity to actually publish in these journals and make it to Tenure and make it into these positions. So, there are a lot of programs that we can point to that are working very well. Students do say, at least in our interviews, they would like more of these programs, precisely, because of the arms race issue that Dr. Logan brought up, that everyone feels like they need to be in a program or maybe in one, two or three programs.

So, that's great and we have resources on the resource page for people are interested in starting programs, that's really a wonderful thing, but I just want to make sure that we're clear in this conversation that it's not solely about changing the student to fit into the flawed profession. Let's attack the flawed profession.

Smialek: Absolutely. Randy, we have a question from the audience that I'd love for you to take on, which is: "Are there interventions at the K-12 stage of schooling that could potentially help here? You talked a little bit about the... how these things build on themselves and I'd love it if you could talk about the early stage of things.

Akee: Sure, that's where I got my taste for Economics. I had an... I had a Economics teacher in high school who just made it magical for me. I knew in high school, I was going to become an Economics major in college. Almost dropped out during college, because again, it was an unrewarding, uninviting major, kept at it. So, I think at the high school level, there are incredibly important interventions that can be made. It's just sort of changing this mentality that Economics is necessarily only about finance and the business world. There are aspects of that if you want it to be that, but it's also this spectrum that exists on really interesting things that lots of people are interested in. So again, it's this idea of changing the mentality. I think that's one of the things that I see all the time, the students who self-select into becoming Economics majors are sort of thinking they're going into finance or, and maybe will.

So, you get to select a group of individuals, but they're the potential pool for Economics majors are also Sociologists Political scientists, public policy people was [inaudible 00:52:33] was talking about right. Sort of at the undergraduate level even, and not realizing that their interests truly can be fulfilled, and Matt, in Economics for my communities... I'm native Hawaiian and sort of a lot of the indigenous peoples that I know they want to work in their communities. They want to work for the betterment of their tribal nations, their communities. They go into law because that's the only viable path nobody thinks about economics because it's not a viable path. It's not something that others have done. It's just... and I know so...

I have so many friends who are lawyers and they're effectively doing public policy and advocacy without a degree in there. I'm always like: "Man, you guys have missed the boat. You can't even do like, statistical analysis to compare the A and B." I'm like, "Man, you guys just missed the boat". It's because it was an option that from K through 12 just was not on the table. It doesn't seem realistic or of interest. So, I think more programs that turn the direction and show them the breadth of opportunities would be fantastic.

Smialek: Right. Absolutely. Dr. Logan, did you want to respond to that?

Logan: Yes. I think similar to what Dr. Akee mentioned students under underrepresented groups, given the significant economic disparities that exist in American society by race, are very interested in economic issues, but there's a disconnect in the ability that they believe of Economics in the study of Economics to actually solve those issues. So, they're much more likely to go into fields like: law or to go into specific areas of inequality like health, or if they're trained, they'll go into engineering. So, they don't see Economics... They see economics as a problem as a substantive problem with inequality, but they don't see the study of Economics and becoming an Economist as part of that solution. If we look at the empirical record, that's would apparently be the case, right? So we have had in the last year, a series of ways in which you've had to confront a variety of significant and literally deadly racial inequalities and racial economic inequalities, and the profession has largely been flat footed and its response to those very problems that students are intimately interested in and have been interested in for some time.

So, we have not provided a very strong evidentiary base that Economics and the study of Economics is generative to the problems that they're thinking about as opposed to the study of health, as opposed to legal scholarship, as opposed to these other areas. So, we have a duty of going back to Dr. Washington's point to change what this profession is about. We have a serious public relations problem, which is related to the way that we're actually doing our business. So, this is not just a PR problem. There's also a substantive problem behind it, but solving both would actually lead to greater diversity in the profession, but also could pique the interest of the students who have almost a natural inclination to be concerned about these issues.

Smialek: Interesting. Dr. Chevalier, I see you nodding a lot. So, would you like this?

Chevalier: Well, I just, what professor Logan was saying, just reminded me of an anecdote. It's kind of just a one-off, but I hosted a panel, one of our CSWEP [Committee on the Status of Women in the Economics Profession] panels. I don't know, maybe this was one that I just watched. I can't remember. Anyway, there's a woman faculty member at Howard University, Dr. Javaid Grooms, and she was talking about her path into Economics. I think, we're writing it up in our next CSWEP issue. She said that she was all very excited to become a lawyer because she thought that being a lawyer was a great way to bring about social change as professor Akee mentioned, that one of her professors told her: "The students who really do well on the LSAT are the Econ majors." So she said: "Okay. I'll major in Economics in order to do well on the LSAT."

Then of course discovered that the field was interesting, discovered that her interests were very well aligned with Economics, and then went on to do a PhD and is now a distinguished professor at Howard University. So, it's just an illustration that people... I agree with professor Logan that, it's both a PR problem and sometimes the actual lived experience of being a pro... an Economist. That is a challenge, but it is also a PR problem. We do work on interesting things in Economics, and we've done a really terrible job of explaining that to high school students to undergraduate. So, there's at least a little bit of hope, I think in that.

Smialek: That's an interesting point. Dr. Washington, we actually have an audience question for you, a little bit unrelated to this, but it related to your slides, which is: "Are the data masking the extent of the problem for disadvantaged Latinx students by including Latinx economists from abroad who may have had different experiences with racism." I wonder if you could just respond to that?

Washington: Well, yes, as the slides indicated, we're talking about... in these data, US citizens and permanent residents. So, it is not talking about people who necessarily did say they're high school in the United States. If, we wanted to use that definition with experience with U.S.-based racism. So, right. These groups are mixed and of course the groups are mixed. If we, if we think about the three different groups I focused on, they're mixed to differing extents. They're going to be more international folks in the Latinx group.

Smialek: Okay. Interesting. Actually, I was hoping that we could maybe unpack a little bit, the data in that slide in particular. I thought it was really striking to see sort of some of the difference between what was happening with Latin X students and Black students in the... as we get into the PhD levels. I wonder if you could kind of walk through... aside from that data issue that you just mentioned, and talked about, what you think might be behind that... those two disparate trends.

Washington: Well, they're really different groups with different histories, different phenotypes. They're going to be looked at in different ways by outside individuals. So, there are just many differences between the groups and I would not necessarily expect that we should see the same relation to the Economics profession, between the two groups. They're grouped together in the sense that they're both underrepresented, along with Native Americans, but really distinct groups, distinct histories. So, I did not have any expectation that they should, that we should necessarily see the same numbers.

Smialek: That absolutely makes sense. That's interesting. I guess, as we... Randy, I think you had a comment.

Akee: Can I just jump in real quick with that too? I think the other point to make in this is that these groups are heterogeneous themselves, so Latinx, there's a wide differential between being Cuban American and being Guatemalan American or Mexican American. And the same goes actually for Asian, which is not necessarily considered underrepresented, but within the Asian category, there are stark differences. There are very few Filipino economists, but we have relatively large amounts of Chinese and Asian Indian economists, so that would tip the balance in certain ways. And so again, this idea of just aggregating data is quite important when we talk about disparities and clearly, the data we have... We're grateful that we have what Ebonya has shown us, but just to show us that even within these big race, ethnic group categories in the US, there are heterogeneities in there that we can't even account for, even in our own profession.

Smialek: Dr. Logan, would you like to respond to that? I saw you nodding vigorously there.

Logan: Oh, no I'm just a huge advocate for the disaggregation of data and speaking about these specific experiences, particularly in these groups, such as Asian, or as the census data recorded Hispanic, because it can really hide very different experiences, both historically, and then contemporarily, which can give you spurious impressions about the diversity and really when you group them all together. And that's particularly important when thinking about diversity in the profession.

Smialek: That's a really interesting point. And Judith, I wonder if you could speak a little bit to that question of how do you cater responses to deal with heterogeneity within groups? Anytime we talk about the effectiveness of response, it's obviously important to ask who is it being effective for? And I wonder how you think about those issues.

Chevalier: Yeah. I do think that's an important issue, and I think to be honest, something that the profession... We haven't done a great job figuring that out. So I do think, especially the way we... Dr. Logan mentioned he's a big fan of more disaggregated data. One of the reasons to get more disaggregated data is to actually figure out, who are we leaving behind? Who are we missing? I think it's something, to be honest, we just haven't done a great job of, so are we doing a good job of measuring which specific groups have we attracted, or maybe failed to attract with some of these interventions we're undertaking? I mean, unfortunately I don't have a very good message about that, other than this is the place where this disaggregated data that professor Logan is talking about really plays an important role.

Smialek: Dr. Washington, do you want to respond to that quickly? And then also, can I ask you... We have about five minutes left, so if everybody just wants to give their final thought, that would be fantastic. And Dr. Washington, we'll start with you.

Washington: I'm glad that we're speaking about this, and I don't mean just in the forum. I'm glad that the profession is now at least talking about it, but obviously the talk needs to be followed by the walk the walk. Again, we have many programs and will continue to have programs that are aimed at helping underrepresented minorities fit into the profession. And I hope now, we're going to have more programs focused on improving the profession. I would urge everyone within the profession to take an action related to improving diversity in economics. Not everyone is going to start their own mentoring program, but people can certainly do better where they are. You can provide more information to your students about what we do. They don't know what they don't know. They don't know that you can make a good living doing this.

They don't know that you can answer interesting questions, so that could be the focus. You could be more expansive in thinking about what journal articles you're going to accept. You must, I would say, be more expansive in thinking about admissions, and hiring, and promotion, and tenure decisions. And so I would say this is a problem of the profession, and it needs to be solved by the profession, not just the black and brown folks in the profession, not just... everybody in the profession needs to take an action to improve this issue.

Smialek: Randy, do you have some quick backup thoughts?

Akee: Okay. So, I think a great way to support these efforts is to support the national economics association, ASH and ARIP, which are organizations that help mentor... NEA has been doing this for 50 years now, minority economists. So I think anyone interested should join those organizations as supporters.

Smialek: Okay, great. And we have 30 seconds left, so if Dr. Logan and Judy, if you could just quickly go through yours.

Logan: I would say quickly, and first of all, supporting everything that has been said previously, but to recognize that we will lose our comparative advantage as researchers if we do not change the culture of our profession. So this is an existential crisis for the profession. It is not something about just our pipeline, but what the profession looks like for those who are currently in the profession as a signal to those who should be entering the profession.

Chevalier: I was going to say something close to that, which is we got good suggestions about what should be done and what people in the profession should do. And the reason to do it is because it matters. It matters for what we can learn as economists and how ultimately we can make the world a better place as economists, so I can't say it better than Dr. Logan who said, "It's existential."

Smialek: Wonderful. That is a great place to end, so thank you all for joining so much. The next panel is going to be a conversation on research in economics with President, Mary Daly, of the San Francisco Fed, and that will come up after a short four-minute break, because I stole one of your minutes. Thank you, everybody for joining. What a great panel.

Racism and the practice of economics

Mary Daly: Well, welcome everybody. I'm Mary Daly, president of the San Francisco Fed. And in this next session, we're going to talk about racism in the practice of economics. Now, as people we've all lived through a year which we can't turn away from. We've seen disparities in health, disparities in economic opportunity and outcomes, disparities in safety, the ability to get to your home without incident. And those, as people, make us feel distressed and angered and frustrated.

But as a profession, we've done little to make change in those areas. As a profession, we remain passive observers to these things, documenting oftentimes without challenging. And so today, we're going to talk about that. It is a roll-up-your-sleeves moment in our profession. We're going to talk about how the practice of economics, the very way we conduct our research, may in fact contribute to, perpetuate, some of the things we've seen that horrify us. And there are no two people better to do this with us today than the guests we have. Our first guest is Dr. William Spriggs, president of economics at Howard university, and an advisor to the Opportunity & Inclusive Growth Institute at the Federal Reserve. Our second guest is Sendhil Mullainathan, distinguished professor at the University of Chicago and someone who has spent his career studying how our biases, implicit or not, have in fact contributed to the outcomes and the differences in outcomes among the people who we know.

And so I'm delighted to offer that conversation and to have both of these guests with me, and we're going to call each other by our first names. We predetermined that because this is a roll-up-our-sleeves moment in the profession. And as all of you as listeners, it's time for us to be in our profession of practice, our community of practice, to think about this. And Bill, I'd like to start with you. Last year, about a year ago, after the killing of George Floyd, you wrote an open letter to your colleagues in economics-- to all of us--and I'd like you to talk a little bit about why you wrote it and what you wanted us as a profession to hear.

Dr. William Spriggs: Thank you, Mary, and thank you to the Minneapolis Fed for organizing this session and to your fellow colleagues, your other board presidents, for your regional bank presidents, for organizing this. I wanted to convey the way in which economics was complicit. And as a guard or as a guardian of institutions, we are important for replicating them, for setting the tone for them. I came upon this by looking at our role in the beginning of the 20th century, as a profession of promulgating notions of inequality and enshrining inequality and approving of inequality. And with a very disturbing bent to it, and that virtually everyone who founded the American Economics Association and what we consider to be modern economics were all the brains behind the eugenics movement, and so justified inequality on very harsh racial lines.

So you get the anomaly at the beginning of the 20th Century, where massive progressive things take place and where technology makes lots of things possible, but our racism gets doubled down on as a nation. And here we were in another one of those moments, and I think as economists, we don't think the way we talk about race, the way we don't acknowledge our profession's treatment of race as this exogenous natural variable, like those eugenicists did, that we don't treat it as a social construct like the rest of social science does. And our very peculiar model of statistical discrimination, which of course is really just stereotyping and giving a cover for a notion that rational beings could come to a conclusion of inferiority.

And then not tying that to what we constantly hear from the police, that their sense that if I stop a black person, he's dangerous, he's predatorian, and I can take these extra means against them, even if it's for an expired license plate, and it has tragic consequences. And the fact that we don't see that we reinforce that with the way that we talk about race, with our view of racial disparities, it was disturbing and very disturbing as an economist is the sense of what proof do I need to show economists that discussing discrimination and racism actually is an above-board thing to do.

We finally had videotapes these last couple of years. The rest of America's kind of come to grips with the fact that yes, black people have been complaining about this for a long time. Look back at the reason why the NAACP was formed at the beginning of the 20th century, through the March on Washington, where Dr. King's speech spent a long time on police misconduct and police brutality. And finally, because we have videotapes, the rest of America goes, "Oh, that's probably true." But to economists, there appears to be no evidence that will get economists to admit yes, there's discrimination, and yes, it matters.

And since there seems to be no videotape that can convince economists, maybe this is one of those moments because what we all fear was the evidence so far, is it's very hard to put together a jury, a randomly chosen set of citizens who would convict a police officer of murdering a black man. And what economists aren't putting together, we're supposed to be good at modeling and statistics. Looking at videos, and we've had several juries that have looked at videos, if you're telling me that I can't get a randomly selected group of people who will convict somebody with video evidence, aren't you telling me that prejudice and discrimination must be a big factor, because you don't think you can find people who can look at that evidence and then reach a conclusion of conviction?

And in fact, all of us are probably still holding our breath, even with this current trial going on in Minneapolis, because we actually aren't convinced that we are so advanced as a nation that all of the evidence that we've heard so far, and the video, will convict this police officer; that we still feel that there are three jurors who would say, "No." So economists haven't put together if discrimination and values are that distorted, doesn't that mean something is distorted within the marketplace? Do you think that these same people would be objective when evaluating someone as a job candidate, would they be objective in making decisions about selling them a home? Would they be objective about making loans to them? And it was that frustration with the profession's inability to account for its own contribution to the national conversation, its own ability to improve its own conversation, and its inability to actually look at evidence. It was all of that.

Daly: Well, I found the letter very... It was thought provoking. It was startling. It was moving. I mean, that was how I felt about it. And it changed how I approach things. It just did. But Sendhil, you've been actually providing some of the evidence that Bill says we're, as a profession, a little bit hesitant to take in. And so I want to ask you two things, how did you feel when you read Bill's letter? And also, how have you found the reception to some of the work you've done and how do you think about changing people's impressions of what you're finding given that if Bill's right, we're just kind of resistant to it?

Sendhil Mullainathan: Thanks for the question, Mary, and thanks to the organizers for organizing this, and especially thanks to all the participants who showed up. I was just looking and we're nearly at a thousand people who've taken their time off to pay attention to this issue. I think that by itself, to me, is very telling that we're in the midst of a very positive change, and I just want to thank everyone who's listening in. And finally, thanks for your letter, Bill. I really enjoyed it, and the thing I liked most about it was that it was heartfelt. And I think so much of the writing we do is so clinical, and I think that clinical nature of our writing allows us to hide behind certain things, and to pick up on the issues you described, I think whenever I do this work, for me, it's very hard not to be touched by the data that you see.

These are real human beings and are experiencing these things. I'll just tell a little story that, it breaks my heart every time I get one of these, but we did these studies on resumes where we sent out the resumes and we put stereotypically white names or stereotypically black names, and you find big differences. Far fewer callbacks with stereotypically black names, but when those stories got out about the paper, I would periodically get a letter or a postcard or an email from someone who would say something like the following, "My name is Jamal. I just read about your study, and I thought I would try my own experiment. And I sent out half my resumes with J period and half my resumes with Jamal. And I did, in fact, see..." This is a person who's struggling with the grim reality of something they've always... It just breaks your heart.

And I think that there's an element of this work that we do where we have to maintain neutrality and we have to maintain some amount of clinical remove, but I worry that we've let too much of that creep in. And we've lost our fundamental humanity a little bit in the process. And to pick up to your question, Mary, about how this work is received, I want to just follow up on one part that Bill just mentioned that was in his letter about statistical discrimination, and I want to unpack that a little bit. So what do we do as a profession when faced with empirical evidence? It's an illusion to think we take the data as it is. What we actually do is we have some beliefs, some prior beliefs, and we require the data to overcome those prior beliefs that we have. So in our paper, people were saying, "Well, how do you know that this is about discrimination? How do you know this is about race?" Maybe the name just signals whatever it is. And if it is about race, how do you know this isn't efficient for employers to do this? Now, what that means is the hurdle for evidence that we need to clear involves overcoming these prior beliefs. But if you step back and you say, "Wait, are those your prior beliefs?" That absent, overwhelming evidence you're willing to believe that employers are efficient and do not have racism inside of them, that's your extreme starting point? And you could believe that, but by virtue of setting that starting point, you've created a very high bar that has to be cleared to demonstrate that there is some sort of... And I just want to point that out because somehow all that gets lost in, "Well, no. We're just trying to show that you got the right theory, or whatever..." No, you have a prior. You should just stay with your prior.

This whole thing would be much better if you just said, "Hey, my prior is employers aren't prejudiced at all. You're going to have to really show me a smoking gun. This is a lot like being on trial, unless you can really prove that this...” That is a prior. You're free to have that prior. And to speak to Bill's point about, we have camera evidence now. We had one paper that really struck me when I was working on this as a grad student. I think Larry Katz pointed me to it... was interviews with employers asking them about their hiring practices. This is webcam evidence, it's just written on paper. And in these interviews, employers were happy to say, "We just don't hire black..." They would even go further. They'd say, "You know what? I don't even consider them, but I will consider Haitians, but not Nigerians."

They got into details about what they would and wouldn't do. They just said it, but of course that's not evidence. That's just employers talking. "Where do we have the quantitative evidence?" Like at some level, I think we have to look inside ourselves as a profession and say, "We are not prior neutral. We are imposing some priors." And then we have to be thoughtful about what those priors are. And I have dabbled with sociology, and one of the interesting things that sociologists talk about is how disciplines can reinforce power structures. And I don't know to what degree that's generically true in economics, but in this conversation, it definitely has the feeling that built into the way we evaluate evidence is a bias towards a certain kind of status quo that reifies and says, "There is no problem in this status quo. It's all efficiency. Prove to me otherwise, show me a big bar. "

I think that type of thing, which I wasn't aware of when I was in the midst of it and giving seminars, and you're just giving answers and playing the game of bat it back and forth. But when you zoom back, you're like, "Oh my God, what a weird set of rules of the game to accept."

Daly: I have my own epiphany on this set of rules. I mean, you're really talking about the burden of proof. The burden of proof is shifted all on to the people, a black individual or any ethnicity or other race, to show that it's actually not an efficient outcome, as opposed to when we see that race explains a lot of what you see in health, economic, and safety outcomes. That that isn't something where we say, "Oh, what's going on?" I think this is, Bill, what you meant in your letter is when you see that, the face validity component of it, which epidemiologists use all the time would be, "Uh oh, we've got a problem here."

But the economist thing is, there must be something that's associated with being black that we can't measure that would explain why this is an effective and efficient outcome. And my aha moment was when I went to give my first seminar in France and someone asked me why black was in my regression as a control variable.

And my answer was, "Because everybody else did it." And so I thought that one of Bill's... I was brand new PhD, and I think one of Bill's points was that reflexive just put it in the equation because everybody before us did it, is a problem. So that brings me to my next question, and Bill, we'll go back to you, and Sendhil, both of us, let's just all have a conversation, but how did we get here? Part of the issue is how do we get out? But the other issue is, how do you think we got here? How did we get off track? And Bill, you alluded to it a little bit, and Sendhil you did as well. But if you had to really point to it, how is it self-perpetuating that we reflexively put race in an equation and think it's a control variable?

Spriggs: Well, I think it gets back to the roots of the profession itself and accepting the idea that race was exogenous and not something created, and it's the variable where economists are lazy. If I put any ... regression, just as you were asked by those people, why is that in this equation? What does it measure? You get asked that question when you have to go through this long thing about what you are actually measuring. What is race? In the United States, black means the group of people we wrote a set of laws to deny access to something. That is what it measures. And so when you go, "So it's a group of people defined by laws that deny access, rights, privileges, or something," and you put in an equation, and then you tell me it measures something different.

How did you get the something different? Where did this something different come from? And I think because the progression of the discipline, we cleaned up the overt racism within what the eugenicists would say, but the bias within the discipline was still to assume that certain amounts of inequality are reflective of efficiencies in the marketplace. We're rewarding higher productivity to lower productivity, and economists who are very poorly trained in American history, exceedingly poorly trained in American history, allow that to creep into the profession and the way we model, and we talked about it to become that race would be this exogenous variable because that's what their predecessors had done. They thought of themselves as improving on it by not adopting overtly racist language but ended up at the same spot.

And in the way we explain the long period of inequality during America's Jim Crow, being bad practitioners of American history, we accepted it as a taste preference. As the Supreme Court said, "It's separate, but equal." We passed that off as if it were nothing, that this was not a system maintained by violence. That it was a violent system.

And we don't admit to the violence. We don't admit to the intimidation. We don't admit to any of that. And so then we, as economists, beginning became comfortable with the sense that that race was natural, and you could use it and you could ignore these laws, the violent enforcement of these laws, and you could ignore what the purpose of those laws were. And you don't have to ask the question, "Why is the color line where it is in the United States, but not the same color line if you go to other countries?" I mean, if you go to Brazil, there's a color line, but it's not the same as the United States. Go to Cuba, there's a color line, but not in the same place. We don't have to ask these sort of complicated questions because it's not relevant. It's not of general interest to economists.

Daly: Sendhil, what's your thought on this?

Mullainathan: Yeah, I was going to pick up right where you left off, Bill. I worked in quite a few different fields, and one thing I've found in working in different fields, I mean outside of economics, is that it's actually really helpful to ask yourself, "What is the deepest insecurity of this field?" Every field, like a person, has an insecurity. I think the deepest insecurity of economics is that it's not a science. And one of the consequences of that insecurity is we build up a lot of walls to protect us from that fear. And one of the biggest walls we build up is to protect us from the obviously messy human beings that populate our world. By messy, I just mean they're strange. They do odd things. They don't comply. I mean, they're just weird people. And all of the things you mentioned, Bill, they don't fit comfortably in our very precise models.

And we don't want a world where we're subjective. We as a profession need to make some subjective calls where we need to pay attention to some historical factors and say, "This is the way it is." Where whole groups of people can have very strange opinions, prejudices, beliefs that aren't tastes. They can lie to themselves. They can lie... That messiness.

And I think to me, the way we deal with race is actually indicative of how we... Or rather, fail to deal with, and the way of how we fail to deal with a lot of other elements of human behavior that are like this. And it's one thing when we're dealing when economics used to be. "Okay, look. We're measuring GDP. We're measuring..." When it was at that level, these problems were not as... But over the last 30 years, we've gone from that level down to the level of individuals. And we just can't stay here anymore. And I think to me, that's the underlying tension in all of this, which is, how do we evolve while maintaining our aspirations to be scientific, but also imbibe the fundamentally social elements of the thing that we do? How do we move to being a real social science, which means recognizing some elements from the humanities, from the history, from psychology? And you just can't. We just shut ourselves off for so long. I think that's the broader thing that I see in response to the question you asked. I think that, that's the thing we'll probably need to change.

Daly: I actually really liked the way you framed it with our insecurities, and that we are dealing with messy problems. I would argue as a federal reserve policymaker that, even when we were studying aggregate GDP, not having the history of how that forms in our country has bridled our growth, because we've tolerated a lot of inequities that we could have seen while bridling GDP, if we were more studious about the underlying aspects of GDP. Okay. So we diagnosed the issue. We've talked about what we think is underneath it, but then how do we go forward, right?

I really took in the words of Dr. Washington in the previous panel, when she said that we can't rely on a new pipeline to change us, we're going to have to change the economics profession from within, because we actually try to throw them back out if they don't swim in the way we want them to. And so how are we going to change ourselves to make that pipeline of people more at home and comfortable when they want to study policy. And also to change this way we're treating things, this messiness becoming quantified. Other than going to therapy, my wife is available for help. What are we going to do as a profession here? And Bill I'll go back to you.

Spriggs: Yeah. Well, we do need therapy. But as the previous panel mentioned, it's really changing the institutions. The constant harping on the problem are minorities, as opposed to the problem is the profession. This is an institutional problem. To the credit of the Fed, it's having meetings like this, where we can be more honest and candid about discussing these issues. It has real consequences. There are people who think when the Fed says, we need to worry about black unemployment, "oh my God, the earth is going to fall. We're going to have hyperinflation. If you worry about black unemployment", as opposed to, "If there is discrimination in the labor market, how would the labor market respond to economic expansion?"

And if you understand that there's discrimination in the labor market, that's different. And the path of growth is going to look different, including the response to inflation. Then someone who says, "This is all a skills gap. The black unemployment rate, we've lacked nothing but skills.” And therefore, you could ignore what the black unemployment rate is. In fact, you would get a far richer picture of how the labor market actually functions, if you would recognize it. So part of it is to have these candid conversations, so that we can have other voices at the table. So that we actually listen to other perspectives and truly weigh the breadth of the evidence as opposed to shutting off the conversation and saying, "I only want to hear from these three people." And we magnify it, because as economists we're so Orthodox, it could be three of us or a thousand of us, even though we say on the one hand, on the other hand, on certain things we're not that diverse. So it is empowering other voices. And that's the key.

And when institutions like the Fed empower other voices, it matters. I mean, as a profession, we should reflect that President Biden chose three excellent economists to be his council of economic advisors. None of them are in the department of economics. We should reflect on that. Somebody is telling you that the best possible advice isn't coming from you. I needed to find very knowledgeable people who aren't you. So we're not that humble as a profession. Instead, there are people who are interpreting, what he has done is finding somebody who is inferior, but you've been locked out. You're not in the room, as they say in Hamilton. And you should reflect on why you aren't in the room. So I think it's empowering other voices. It's our journals challenging themselves about what they publish. It's our journals challenging themselves about who reviews, and where the rep who will get chosen as referees.

It's about our very powerful institutions, The National Bureau of Economic Research, who are research associates. Where do the papers come from, that are MBR papers. It's up and down the mechanisms by which we reinforce who gets heard, why do they get heard, and do we even read their work? And it's up to us as faculty to look at what's on the reading list, and our courses. Who do you have your students reading? If you want to inspire a young black economist and you don't... and you're going to discuss race, and there is no article by Sandy Darity or by Sam Myers, who's there at the University of Minnesota, then I'm sorry, you're not going to get me interested in economics, because you're missing the most important voices and the professionals on those things.

If I don't see Patrick Mason on your syllabus, then no, you're not going to inspire a black economist. In fact, you're going to turn them off. And most of the courses would turn me off because I would believe in order to succeed I'm going to have to mimic the same stuff. I'm going to have to say those same things. And many black kids are going to read that and go, "I'm not going to say that. There's no way I'm going to say that."

Daly: Sendhil, you want to add to that?

Mullainathan: Yeah. Let me, I love those suggestions. Let me add a couple, one builds off of something you mentioned Bill, which is I think one thing that would really invigorate economics is if it decided to truly be the imperialist discipline that it claims to be. What I mean by that is, it's one thing to say, "We've shed light on these topics." It's another thing to say, "We've shed light on these topics, and we're going to convince other people outside of the profession that we've shed light on these topics." If economics, which has a lot to say, the empirical work on race has things to say, if it says, "We're not speaking just to ourselves; we are actually going to enter into the foray, into the marketplace of ideas and convince others."

The marketplace of ideas is incredibly powerful disciplining device. Suddenly, you're going to have to answer to Lawrence Bobo, and ... There are people that, and you... Economics is weird. It tends to shy away from these things, like "Ah, who knows what those people think. Let's just convince ourselves. We know what we're doing." Which is a weird insularity. So I think the first step is, be as arrogant as you claim to be. Go out of it. And I think that would be a refreshing. I mean, that would just bring a lot of water into the system. That will flush stuff out.

Daly: But ...

Mullainathan: Sorry, go ahead.

Daly: I was just going to say, do you think we're going to have to have some humility though? Because a lot of times I think, we think we're smarter or better, or maybe more quantified than other people quantitative. And so, I mean, I just want to pull on that a little bit, because I do feel us resisting, it might go back to that basic insecurity you mentioned. But that seems like a high hurdle. So can you just give one more sentence on how we're going to do that?

Mullainathan: I think the humility for me is a consequence. Humility follows when you're exposed to people very different from you and you realize, "Wow, they have a lot to say too." So I think for me, it's the ... when you get out into the converse, it's like, "Okay, you've got a great paper. Great. I'm really glad your paper is ready. Why don't you go and present it to the sociology department?" See what they have to say, and then don't come back and say, "Oh, those idiots didn't understand what I have to say." Be like, "I failed to convince them."

Daly: Yeah. Great idea.

Sendhil Mullainathan: Confront that.

The second piece of advice I'd give is that, I did a little calculation a while back asking what is the half-life of an economist, and it's not that large. It's between five to seven years. What I mean by that is, you look at the productive life, you look at how many... five to seven years. Why is that important? It means change happens really fast. Five to seven years means the set of people writing turns over about 50 percent in about five to seven years. So the thing I would say to everyone who's watching is, be bold. Write the kind of papers that you think we ought to be writing. Don't write to the past, write to the future. And as you can see from the number of people on this call, there are a lot of people who want to move to that future.

Will it be a hundred percent of the profession? No. Will it be 80 percent? No. But you only need 20 percent, 10 percent to agree with you. And now you have a group of people defining, and it's much easier for others to come on board when they're like, "I read that amazing thing. I want to write more like that." It's much easier for grad students to then follow. So I think you'll be amazed at the power of someone just writing a paper that defines the future for us. And that is the best part of research. The world changes.

When I was a grad student, it was all about theory. Theory still exists, but now it's a large part empirical. And so things change. Now granted that was a hundred years ago when I was a student, but still even in short horizons, things can change.

Daly: So we're coming up on the end of our time. And I want to ask a question I always ask. And so, Bill I'm going to start with you. If you had a magic wand, you could wave it and you could change one thing that would harp us in along this journey. What would you do?

Spriggs: One thing.

Daly: One thing.

Spriggs: Yeah. I think the starting point really is for us to stop looking at the pipeline as the problem here. And to all think about what does the institution do and how we can change the institution, right? I hope at the end of this day, people understand it's not math, it's not people processing math, it's not your third-grade math teacher. The problem is us, and how are we as economists going to change us? And we're all joining that therapy table you offered us.

Daly: Okay. Sendhil, we're going to pass the magic wand to you. What do we change?

Daly: Thank you, Bill.

Mullainathan: I'll...that was a great...I'll build on the therapy thing. I would love if everybody in the profession could have a heartfelt one-hour, two-hour, three-hour conversation with someone who's been disadvantaged by the system that we see today. I don't mean a superficial conversation, but a truly heartfelt conversation. I just think, I believe in the 'walk a mile in someone else's shoes,' I think if people could feel what the barriers truly are from the inside out, I think they would take a much more humanistic... genuinely change what they did. I think the barriers are just not salient enough and the problems are not salient enough for most people.

Daly: So you've heard it here. These are true terrific suggestions about what to start on, but I think we heard a whole host of things that we need to do as a profession.

I mean, the truth of it is, you've got three people here who are economists because we love economics, but ultimately we have to go back to first principles. Economics is about people, and if we're not reflecting the constraints and the views and the challenges that people have, and we're probably really not reaching our full potential. So I heard here, get out among people, read history and start with talking to people who don't look like you. That's a really good place to learn.

So with that, I'm going to say, you're going to talk a lot more about how to put all of this into practice in the next session, but we're going to have a 10-minute break beforehand. Bill and Sendhil, thank you so much. Really a terrific conversation and honor to be here with both of you. Look forward to the next panel. 10-minute break now. Thank you guys.

Mullainathan: Thank you!

Promoting inclusivity and effecting change

Kimberly Adams: Hello. My name is Kimberly Adams. I'm a hosting correspondent at the public radio program, Marketplace. Welcome back everyone to the latest installment of the Fed's Racism and the Economy series. Thank you so much to the Federal Reserve for inviting me back to be involved in these conversations and a special thank you to the staff members at the Minneapolis Fed, who are supporting us today while that city is going through so much. So thank you very much to everyone.

And I'd like to introduce our next panel to focus on promoting inclusivity and effecting change. We've heard so much today about where the problems are, and I'd like to carry forward what Dr. Daly was talking about just before the break about solutions. So to help us with that discussion: Lisa Cook, who is professor of economics and international relations at Michigan State University. David Wilcox, senior fellow at the Peterson Institute for International Economics. Catalina Amuedo-Dorantes, professor of economics at the University of California, Merced. And Arthur Lupia, also goes by Skip, Gerald R. Ford professor of political science at the University of Michigan and the assistant director of The National Science Foundation.

And with all of our guests' permission, I am going to be referring to them by their first names. And I'll start with Lisa. If you could talk about something that professor Spriggs mentioned in the last panel, that we say the pipeline is the problem, or some people say the pipeline is the problem, but it is actually the institutions themselves. Can you respond to that, and other things that you may have heard today, and how you've seen that in your professional journey?

Lisa Cook: The institutions are definitely a big part of the problem. This is institutional, that's certainly true. I agree with the way Bill framed it in the last panel. The pipeline is part of the problem. It is a significant part of the problem. It's not the only problem, I would completely agree with that. President George was talking about inclusion and not just diversity, about thinking about the skills that are needed in the federal reserve system, that she is a part of, rather than the roadway of thinking about candidates and qualifications. I would say that folks in the pipeline see everything. So I think I come here with a lot of the lessons from being director of the AEA Summer program that encourages and prepares underrepresented minorities to do PhDs in economics.

And one thing that is ... I'm speaking from them, from their perspective, and in terms of folks who were in the pipeline, they don't see the behavior model that they're being told is being implemented. So with respect to, say inclusion, they don't see people who look like them on their syllabi, right? Or teaching them. I think one of the comments that we get consistently in our evaluations in the AEA Summer Program is, this is the first time I've ever had an Asian woman professor as a professor in an econ class. This is the first time I've had a black woman as a professor in an econ class. We're not developing, promoting, tenuring black women or other minority women in the profession where...nd that's true for underrepresented minorities more generally. We're not doing that. And they see the lack of support. So I certainly think it is institutional, and I think that at the same time, the solutions are sometimes very localized. Everybody has to be an active bystander. A bystander who says, "That's not okay", when they see a person of color being dismissed or that person without everybody being in the room, being berated or talked about poorly in a faculty meeting, for example. Or in tenure decision meetings, people have to stand up. And I think this is one of the best practices that is listed on the AEA website, Active Bystander training. We've got to see everybody.

Sendhil Mullainathan was just saying, if he had a magic wand, he would have all of us talk to someone who is in a disadvantaged position. And I so wholeheartedly agree with him. As a person who works on segregation, I know that it has become more segregated and we do not understand each other's positions. We don't understand. We don't think that sometimes our policies, the policies that we're suggesting, actually have a fundamental effect on many people. So, because it may not affect us, we don't think it affects many people. So I think that, that is a very good prescription. And why don't I leave it there? I don't want to pound a dead horse but look forward to hearing what the other panelists have to say.

Adams: Well, I'm actually interested in continuing that line of thinking a bit with Catalina. You were, Dr. Cook was just talking about how important it is for people to see someone like themselves. We've talked a lot about how that today...about what that means in terms of getting people into economics. But what about throughout the professional development of new and continuing economists?

Catalina Amuedo-Dorantes: Thank you. No, I think that is crucial. I think that there is obviously a problem. There are two stage problem. One is attracting into the profession, and also retaining in there. And I think that the attracting for sure was something that was brought up by the first panel in particular. I think that even...I remember actually as an anecdote at San Diego State where I used to work, a couple of times I went actually to talk to high schools in the area. And one of the things that you see is that many times the students used to have a complete...I mean, they just don't think that economists work on particular issues on policies that pertain to them. So when you talk to them about, maybe I know in the case of Hispanics, immigration policy, or if you talk about policies addressing racial inequalities and you show them the studies and findings, they actually get interested in it. They are more likely to go and investigate that option. And we actually had to do that because we had fellowships that were intended to promote minorities, and we've had difficulty in attracting the students to apply for the fellowships. And so I think that that is one problem. And then there is a problem that Dr. Cook has indicated, that is a problem of retaining minorities as well. And I think that here, I mean, there's a lot of things that have been done that are obviously very helpful. The mentoring is one.

I think that somehow that has to be a premium also in the profession through those activities. And I see that a lot of universities have gone into putting diversity as one of the sections that we value, but really at the end of the day, it's almost the last thing that people look at. And there is obviously an investment of time and resources that goes into that, and that should be valued as well. And so I think that that is very important. And I think that overall providing, like Dr. Cook said, a role model is essential for students, because when they see someone that looks like them, they are more likely to consider that, that is a possible outcome for them to pursue. So I think that all those strategies are key, but I do think that actually the PR, the course content, having a role model, the mentoring, all of those things are just crucial. We really need to dedicate more attention to that. And not just simply stated, but really practice it, and maybe have some sort of accountability process at the end of each year.

You have some short-term or medium-term goals. You collect data, which it was interesting how Dr. Washington had a problem of presenting some of the figures. So it's really important to make an effort to do that, and then really track that progress and see what is it that we failed? What is it that we achieve and we even achieve this year? What can we do different in the next year, and being people that really are involved with those difficulties into the discussion?

So I think that all those things could be potentially helpful. There's a lot of things that we could do.

Adams: David, can you talk a little bit about the role the federal reserve system in particular can play in fixing not just the pipeline, but also the systems and the institutions. It is the institution. It's one of the largest employers of economists.

David Wilcox: Sure. Thank you. Kimberly. The Fed plays an extremely important role in the marketplace for economic employment, for people who study, research, teach and apply economics in real-world settings that have a tremendous consequence for the way that the society works for so many individuals.

I want to come back to the point about institutions. It's true that institutions matter. Individual actions also matter. There's a tendency I fear that, to think that these problems are somebody else's problem, that policing in predominantly black communities is somebody else's problem. That hate crimes against Asian Americans, that's somebody else's problem. That if there's a failure of representation in the field of economics, that's somebody else's problem, it's not my problem. I came up through the system, it worked fine for me. It's somebody else's to take care of. And I want to just strongly affirm that's the wrong view. Individual actions matter. It is our problem. We have agency, there are practical steps to be taken.

I had the privilege of participating in an AEA task force that was ably chaired by Amanda Bayer. We worked hard as economists to put together recommendations for economists that are practical and implementable. You can find those on the AEA website, they're called 'Best Practices for Economists', it's easy, it's one step on Google. And my key message today is, you don't have to make it up. There are research-founded steps that you can can take to improve the way that your institution behaves and feels to the people who inhabit that institution.

Adams: Skip, I'd like to turn to you for more of that research-influenced, and research-designed strategies that actually work to improve diversity and inclusion at institutions. As I mentioned in the introduction, you're an assistant director at the National Science Foundation. What can the economics field learn from other field about what works?

Arthur "Skip" Lupia: Yeah, that's a really good question. One way to put in context, maybe how to think about pivoting, is if you think about science as a service. So economics is certainly a science. It's a question about that before, but it's also this amazing service. And I would argue, it's one of the most amazing forms of service that humanity has ever invented, because you take a lot of situations where you look at the world you have, and you think about the world you want. And as human beings, as cute and fuzzy as we are, magical thinking wants to jump in right there. But one great thing about economics, is it asks you to stop and wait a minute and say, "Okay, what situation are we in? What can people perceive? What are the incentives? What are the contexts?" And that's an amazing tool.

So in a sense, some of the answers to these questions are based in economics. And so, in terms of things that people can do, I think there's two. One is, I want to go back to something that Dr. Mullainathan said, "and speak bold", but here's the bold step you're not going to like exactly. And this is for all fields. The primary consumer of the products that economists make are other economists. We like to say they're policymakers, we like to say they're the public, but if you look, they're not buying many journals subscriptions, they're not hiring any tenure track economists; it's insight, right? And so, a systematic commitment in the discipline to incorporate different perspectives is huge. I'm happy to talk later. Other fields have done it.

In the health field, the change over the last couple of decades in the percentage of black PhDs is some... it's almost at parity. Economics is nowhere close. So think about who you're serving. That's one thing. The other is, outreach just isn't enough. Most members of historically underrepresented groups are not at the top research universities, but that's where most of the money is. And so, if you really want to change opportunity, it's not enough to do outreach. It's great if you want to bring people to your campus. But I think the most important thing is to create opportunities at historically black colleges and universities, at minority-serving institutions. So that hundreds, dozens, thousands of people have a shared experience in conducting economics, in seeing the amazing thing that economics can do. So that the next time an opportunity is there, they have a support network where they can use economics to solve the problems that they see, right? So those are two things I think we can do.

Adams: In an earlier discussion, it was this idea of, we talk about a pipeline, but I think David was saying that instead of a pipeline, maybe we need to look to what's happening with the pandemic, and the mobile vaccination clinics. David, can you talk a little bit more about what it means to bring people into the traditional structures of how people move through the profession of economics versus taking those resources to them?

Wilcox: That's a critically important point, and one on which I think economics is uniquely ill-suited to think about it constructively. An earlier panel touched on the idea that, we are not used to marketing our classes and our modes of analysis to others who don't look like us. If you go on a campus, for example, at my Alma Mater, it's not unusual to see a department at the beginning of the semester, marketing themselves to other students.

Our tradition as economists is to assume that the students who show up in our classroom are there because they have tastes and preferences to study economics. It must be the efficient market outcome. Guess what, demonstrating your relevance to other individuals who might be interested in choosing economics as a course of study, as a profession, it works. Marketing actually matters. Demonstrating that you have things to say that are relevant to the broadest spectrum of individual lives and experiences. It matters. It's a way in which, I think we are uniquely challenged as a profession.

Adams: Lisa, this touches on something that has come up a few times. This idea that, this word efficient, and also just how economics works. The theories that are valued, and the way that economists think. Can you talk about how that plays into the actual struggle to make this change, to address racism in the profession?

Cook: It is amazing to me, and I guess you have to live outside of the white male dominated paradigm in economics to question almost everything about it. And let me give you an example. My dissertation was on the Russian banking system in the 1990s. And one thing that I knew was that nobody was giving me data that I could believe. That everybody was giving me data that was misleading, whether it was intentionally misleading, because they wanted to hide profits or because it was just not a good set of data collection exercises, they just didn't have the infrastructure to collect data on all the banks. The central bank may not have had that infrastructure. I had to question everything, I had to question whether the models that we used in the United States were applicable to Russia and the macroeconomic data were comparable to the data we use. I had to be a forensic economist and question everything. I had to question the GDP data, understand how critical those assumptions were. We have to do the same when we are including the race variable. We have to do the same.

I think one of the things that I've learned in the five years of directing the AEA Summer Program is that one of the most confusing things about the research that we present in our classes, is that students do not understand what this is. Do not understand why this is a catch-all. And if it is systemic racism, why isn't anybody calling it that? And further, why is it that we're leaving it there? Many of the papers they have demonstrate discrimination; they don't suggest what to do about it, or suggest systemic racism, and economists never touched what to do about it. So, we think, in the Russian context, we think everything's efficient. So, of course the banks that are failing for example, would be reviewed and would have their licenses taken away, and end of story. Well, I went back and talked to some of those banks, and even though their licenses had been taken away, they were still operating, and still messing up the system.

We've got to be more thoughtful. So, my analogies come from studying the Russian economy because we didn't, at the time, we didn't know that much about it. And one would argue, we often still don't know that much about it. But again, I think there's an analogy with respect to race. We don't talk, we often don't talk to people who were in these communities, and much credit to Janet Yellen and her work as president of the San Francisco Fed. When the housing crisis was raging, and their community development arm of the San Francisco Fed gathered a lot of information about what was going on in the broader public and the broader economy and used that for decision-making purposes.

So, I think that it's not just a symmetric flow of information that economists, no matter where they are not just to the Fed, no matter where they are, should think about, they should think about... they shouldn't think about an asymmetric flow. They should think about a symmetric flow of information and that information should change, they have the information and don't do anything. They should change their behavior. We should be open to a symmetric flow of information; we don't know everything. We have to be humble as Mary Daly was saying earlier.

Adams: Catalina, can you talk a little bit more about the data shortage around these issues?

Amuedo-Dorantes: Well, I think that it was obvious even in the first final, when they put the table. Even the institutions, the willingness to go, to respond to surveys about their faculty, and it's interesting. I work a lot with a different group, I work more with Hispanics and immigrants, and so this is also an issue that comes up a lot. But I would say that we're all that... Yeah, data is fundamental because we need to have a way in which we can track progress. And if we're incapable even of tracking, of collecting the data on the issue, it's really hard to then go back and really track the progress and see what is it that we failed. I actually also think that this issue of information networks is something that... I felt that when I've gone through the ranks, that I wasn't as informed as some of my other colleagues because somehow there is more, as Dr. Cook said, and I'm sorry for the other participants, but white male network.

And I felt that I didn't know about a lot of the options, a lot of the possibilities that were out there. And so there is this issue, it's extremely important to address, and hopefully the mentoring is doing much of that. And the other one like Dr. Akee was mentioning in the first panel, that I thought it was very interesting and Dr. Cook has brought it up as well, has been this issue of acknowledging limitations and really acknowledging problems and how we attempt to address them and how we can look at these problems in economics instead of basically just saying, "Oh, the market is perfect, and it's also these issues." Or really, I think that these students have way more insight into problems and questions that they want the discipline to address.

And I think that at the end was discussed also in the other panels, it's almost like an existential problem. We really need to bring in the discipline to address these issues, and these are going to be evolving and maybe a century way back, it was a different set of issues. Right now we have a different set of issues on the plate. And I think that we need to be able to really address these limitations. So yes, but I think that the data issue is really just one of the many steps into addressing problems and really acknowledging that we have difficulties in some areas.

Adams: Skip, do you have any good examples of how other fields have addressed that network issue that she brings up? This idea that you not only need a mentor, but you also need a broader network of people to help you navigate the profession, to get those introductions and things like that, because it feels like mentorship is not enough.

Lupia: NSF in general, they've had a program in place for several years called NSF INCLUDES. And one of the main lanes for NSF INCLUDES is a broadening participation research center. So, the idea is to try and build that network internally. And the key thing to making networks like that work is you can't impose them from outside. You can't drive by and drop it off. Because as so many of the speakers said beforehand, where you get the buy-in at every level is when people think that you can use the scientific phenomenon, in this case economics, to solve essential problems for my family and my community and so forth. If the questions are dictated to you or the approach is dictated to you, it's just Charlie Brown's mother in the background. But if, basically you provide an opportunity for communities solving problems, bringing in this amazing worldwide set of intellectual resources to help your problems. All of a sudden people become very interested.

We've also just launched a program called Build and Broaden. And the basic idea there again, is this is money that we have for our partnerships to locate work at minority serving institutions. Anybody who wants to help make that happen, it's a great thing, but the whole idea is to build it there from the perspective of people at those institutions. I think when you get the internal buy-in, when you get people in a network supporting each other, that's where the efficiency and the energy and the scale can really start to develop.

Adams: David, I'm going to turn to you for a question that we have from the audience. Do the panelists think we should expand opportunities for and prioritize students of color in pre-doctoral programming across the United States?

Wilcox: Sure. I guess I'd say my answer to that is yes, but we need to be doing so much else. We need to pursue, in my view, an all-of-the-above kind of strategy. Change isn't going to come from doing the same thing over and over again. As one of the earlier panelists observed, we'll simply succeed in replicating our own profession. I guess another point ... there are two other points I'd like to make. One is that the status quo is actively damaging the field of economics. It is sometimes held as a view that change would come at the expense of quality. I want to flip the script on that and say, that change is what's essential to make our field relevant, to ensure the highest quality. Lisa just gave, a couple of minutes ago, a fantastic illustration how coming out a problem from a different perspective, advances quality. So, replicating what we've been doing before is a losing strategy.

The second thing I want to emphasize is the agency that individuals have no matter their station in the organization. If you're a senior person, a manager at a federal agency as I used to be, a department chair in an academic department, obviously you have a leadership responsibility to implement change. If you're a junior person, somebody other than the types of people I just mentioned, you can drive change by going and asking the leaders in your organization, "Why aren't we doing X?" And if you're confused about what X might be, go to the AEA website, Best Practices for Economists, and you'll see there a list of practical suggestions that you can take to the leaders in your organization and say, "Why aren't we doing this?" It will lead to practical change.

Adams: That actually sets us up very well for the next audience question, which I'll take to you Dr. Cook, because you did give that really good example of bringing a different mindset. What is the danger to the economics profession if it doesn't succeed in becoming more inclusive?

Cook: It's going to become irrelevant. It's going to become absolutely irrelevant. If we don't understand the problems that are going on around us, we don't understand how policy affects people. If we're only, say, tailoring our responses and our models to the upper end, say, of the K in this K-shaped recession we're having, the economy will never become whole. So, I'm saying this, whether we're talking about empirical work, whether we're talking about theory, whether we're talking about policy. This is absolutely critical that we become more inclusive.

I work on the economics of innovation, the same is true there. I find that patent teams, when they're more diverse, are more productive. So, that means a lot of CEOs are leaving money on the table because they aren't as integrated as they could be along several dimensions. So, when I show them these data, they become worried because they are profit-maximizing institutions, typically their firms; most patents are assigned to firms. They are profit-maximizing institutions. We would like to remain relevant. And as long as we're engaging in some of the navel gazing that you heard about in the previous panels, we dig a hole for ourselves and we make ourselves irrelevant.

So, we need to embrace all of the ideas and something that I certainly say about the economics of innovation is that my hope is that we will augment the ideas that increase the arrival rate of ideas, that help the economy to grow, that augment living standards. But what stands in the way? Discrimination stands in the way. Racism and sexism and stand in the way. Sexual harassment stands in the way. We've got to fix this in our profession because this stands in the way of ideas.

We know from women who present in economic seminars that sometimes they would rather not present in seminars because they fear harassment. They fear interruption. They fear the fact that they can't get their ideas out, and that they will have one thing that is paid attention to and not the entire paper. So, we have a lot of data from economic seminars, and we really should change the culture of economic seminars so that those ideas can get out, and so that they can be disseminated. We just can't generate the same old people, the same old ideas, because the world is changing around us. We have to be able to adapt.

Adams: I'm interested in the rest of the panelists' thoughts on this question of the consequences of the economics profession not becoming more inclusive, starting with you, Skip.

Lupia: I want to plus one everything Dr. Cook said. But there's a complementary angle here and it has to do with changes in the job market for economists. In economics, like so many other fields, the supply of economics PhDs keeps increasing, but the rate of increase for tenure track positions started going south a long time ago, and in a lot of places it's becoming flat. And so a lot of people think, "Oh no, my graduate students can't get jobs." And I think there's an amazing opportunity here. If you actually believe in the power of economics to improve people's lives, then part of it in the training when we bring people in, is if we can direct economics and young economists to high-value problems, to be able to add value in other organizations, to be able to serve vulnerable populations more effectively.

There are so many organizations that need the wisdom of economics. And so where people see a crisis now of, "We're not going to be able to get our students hired." There's so much value that economics can produce, but it has to have the perspective, it has to have the people, it has to have the experience to really be of value. If you're just doing a drive by and giving advice, it's not really going to work. So, there's a huge opportunity for economics here to increase its relevance by looking at the future of who's going to hire economics PhDs and empowering them to empower other people in new ways.

Adams: Catalina.

Amuedo-Dorantes: Yeah, I think that we lose a lot of perspective. One of the things that I... Early in my career, when I started to go to conferences and I went to conferences in economics, they were all economists. And then you go to other conferences in, for example, fields like population, and then you're here, you go to a session and in that session you have an idiographer, you have a demographer, you have an economist, you have a political scientist, and it's so enriching. Somehow they manage to integrate better, to be more welcoming, more integrating, to assimilating. Other fields have managed to do that better. And I'm not sure if part of this is same to what blessing Mary Daly was referring to; to also have more humility. And I think I even remember talking to someone, actually one of the foundations, and she indicated, "Please, in your proposal do not say you're the very first one to do this."

Yeah. But we do it all of the time. And somehow just reminded me that, it reminds me of... We have to have some way of not only bringing up issues that attract the attention of other groups, but also be welcoming of those groups, providing you need to acknowledge limitations and differences and be accommodating. And I think this is also for our students and the faculty, because definitely there are economic, social and educational barriers that minority groups encounter that are different, and we need to acknowledge that. But I do believe that unless we really become more inclusive we'll just become obsolete. And it's just basically listening to the same thing over and over. And you just don't see what are the new challenges and what is it that people want you to address. And not just a minority like in that K-shaped recovery, but really everybody else.

And I think that is the biggest challenge, really becoming more inclusive. And really maybe with a little bit more of humility and maybe also just to be able to bring students. Even I would say, to me, I would like to have a more diverse when they come even to the university, to institutions. So, I wish that even at the high school level or even, I don't know, even lower level to bring something else to students other than home economics or whatever it is that they learn. But really show them what are the issues and the questions that economists can address. And it could be great that some effort gets to be directed towards that so as to have other cohorts being attracted to the field.

Adams: David, looking at the risks and consequences of the field not becoming more inclusive, it feels like, based on what we've heard today, in some way we're already feeling the consequences of this.

Wilcox: I don't think there's any question about that. We have a long way to go to... We're playing catch-up here. And we have a long way to go before we can have any satisfaction about where we are. One of the profound misconceptions about economics that I run into all the time of course, is that it's mostly about portfolio management or other aspects of finance. I think one way to frame the situation could be to ask, what does success look like? And it seems to me that success looks like a situation where economists, frankly, no longer disproportionately look like me and share my background. Where a full range of personal characteristics that make us who we are and then embody human beings in their three dimensionality are represented at the table in all places where economics is taught, and learned, researched and applied.

I think success looks like where all persons, no matter their characteristics or backgrounds, are not only welcomed but are actively valued for what they bring to the table. I think it's critically important to recognize that success in my mind would look like a situation where change is driven from all levels of an organization. Yes, from leaders, but also from people who are more junior in the organization, because they feel empowered, because they know that it's safe to promote change, because they know that every healthy institution is constantly evolving and because they feel empowered to bring up ideas that will increase their ability to thrive as individuals in this vibrant community. So, those are some of the hallmarks, it seems to me, of what success would look like. And let me simply close by saying, I want to ratify what Lisa said in the strongest possible terms. Damage is what will result from spaces. If we're satisfied with where we are at the moment, we will continue to hobble our effectiveness. We will become, as Lisa said, irrelevant, even more so than has already happened thus far.

Adams: Catalina, I'd like to come back to you for another question from the audience. How does the extent of funding for economists PhD students affect the ability of students of color, particularly those from low income families, to enter the profession? You've seen some of this firsthand, I think.

Amuedo-Dorantes: This goes back to acknowledging the problem that we have and differences that are historical. We can just ignore things, but the truth is that there are really huge economic, and social, and educational gaps. And there are groups that are disproportionately disadvantaged and they don't have the privilege of basically considering the way it is, this or that. One of the thing that I thought that it was interesting, when you look even at the back and you see where youth, basically the fields that they go into to study, depending on the background of the parents. You see that actually your students come from more disproportional disadvantaged backgrounds. They actually go for occupations that they think that they are going to be able to be employed immediately. Okay? They don't have the privilege of thinking of, "I'm going to go into the arts" unfortunately.

Yes, and so basically you see this gap that is very interesting. But I do think that we need to acknowledge that we need to be able to set up some, I don't know, some mechanisms that really are targeting these groups. And like I said, the problem also is to get students from those backgrounds to apply as well and to be aware. It's an information issue too, because many of the times you just don't know that those possibilities are out there. And so this is where we really need to roll everything back and be able to inform even at the high school level or even lower, what are the options, and what are the possibilities, what are the funding opportunities. So that the kids are aware and they actually go for that, and they see themselves potentially doing that.

And like Dr. Cook was mentioning earlier in that topic, I think that the role models are essential too. And I think that this needs to be there and it needs to be promoted because to be quite frank, that's what the students see, and this is where you see yourself. And if you never see somebody like you, then you're just not going to see yourself there. It's very hard to see yourself there.

Adams: Lisa, you have worked with so many students in the economics field, and I wonder, not just the funding opportunities, but also the culture of work around being in the economics profession, and whether it's at a university, or a post-doc program, or at a think-tank. Is there something about that that affects how people are moving through the profession?

Cook: I think there is. Early on in the AEA Summer Program, the students made sure to demand that they saw other people besides those who were in academia; they didn't see themselves in academia. So, why just present them academics? So of course, we responded to that and we showed them people all over the gamut, and government. Certainly, I should stop and thank the Federal Reserve System, because I really leaned on them heavily, and they responded by sending presidents of banks, to sending the chair of the Fed three times. So, we really benefited from hearing about the Federal Reserve System, from government, from industry. They had heard Hal Varian, the chief economist of Google, and they just needed to see the broad range of outlets that they had as economists.

And they also needed to see, and I think this was key, they needed to see the research that was relevant for their lives, so that they could back out the skills that they needed to be able to weigh in on this research. Oh man, they really creamed my fellow macro-economists because they really told them in their undergraduate classes, how macroeconomics was relevant to their lives. Why monetary policy or banking policy would be relevant for their lives. And of course, by the time they get to the AEA Summer Program, I can't get anybody to write a paper on macroeconomics.

So, it's no wonder we have this equilibrium or not that many macro-economists existing, because we haven't introduced the subject to them in a way that is tangible for their lives. So, I think this is one of the big things that we all need to do as economist and talk about the skills and the problems that motivate them and the research that motivates them and how the skills apply to answering those kinds of questions. So, I think that's what I understand from my students. So, it's what I've learned from my students.

Adams: We have just under five minutes left and I want to do a quick round-robin with our last audience question, which sets us up very well for the next panel. The Fed is a large employer of economists. Beyond today's discussion, what can it do to address some of the issues raised today? Skip, I'll start with you.

Lupia: I think if you adopt a service orientation of science and you commit to building real things, real relationships, real networks, and so forth, the down note I'll strike is that I thought that I understood the difference between thoughts and prayers and pipelines. Now, I'm not sure I do. We actually have to build real things. And people from historically underrepresented groups, they face headwinds at every single career stage. So, anything that we can do to meet people where they are, to understand their core concerns, to understand the lives they want to lead, and then make economics relevant to that and support that, we can do a great thing for the nation.

Adams: David, you addressed this earlier, but I'm wondering if you have any additional thoughts based on what we've discussed here.

Wilcox: Well, I think one thing the Fed can do, has been doing, and should continue to do is to set the standard in terms of what a great place of employment looks like. I'd love to see, to invoke a concept that is familiar among economists. I'd love to see competition breakout. Why is it that, to my knowledge, departments, for example, academic departments, don't advertise themselves as come to the department of X because we will nurture you in your professional development to a greater degree than any other department. I think the Fed has a long way to go. I was unconscious of that in my time, they acknowledged that, but I think they're hard at that. They're working on becoming that kind of employer. We all as a profession have a long way to go. The Fed bears a huge responsibility as a big player in that market. I'd love to see an explosion of competition, to be the best place to live, work, eat, teach, and do economics.

Adams: Catalina.

Amuedo-Dorantes: I actually like that today we had two presidents that were female. And so, I actually like that. I think that overall, I think that the Fed should continue to create awareness about the problem and really bring it up in these discussions. I think it helps because they help remind everybody of what is it that we're not doing and what is it that we might do differently, and everybody comes up with the strategies and ideas for other people to implement and to bring forward. So, I think that this type of activity is excellent. I think actually overall it would be great to do some kind of what the Biden agenda was trying to propose. Having some sort of, in some manner, I think that everybody should do this. And it's create some sort of, design some sort of gender and minority agenda that has some equality agenda, that has some sort of clearly defined goals and maybe assigned roles as well. And then, maybe in some way, then track the progress like we were talking before, with data or it can be quantitative or qualitative, but some sort of tracker, and then have some sort of an accountability process at the end of the year and really see what is it that you achieve or didn't. What are things that you could change and what other strategies you could implement? And I think that the Fed is great at doing this and I think that they also set an example as a major agent in the economy and so, it's that role model.

Adams: Lisa, you get the last word in our final minute.

Cook: First, I want to thank the Federal Reserve System. We couldn't have done what we did with the AEA Summer Program without the help of Lowell Shoemaker, David Wilcox, lots of support from Raphael Bostic, Mary Daly and other regional presidents. So, I would say continue something, continue that engagement with not just pre-doc programs, but with economics departments. Because when this happens, when what David was suggesting happens, it becomes the best place of employment, the most diverse place of employment for economists. Finally, economics departments will have some competition. Thank you.

Adams: Well, thank you so much to Lisa Cook, Arthur Lupia, David Wilcox, and Catalina Amuedo-Dorantes. Thank you all very much. We are now ready to move on to our next panel, where we can actually hear from the Fed about how they plan to deal with the racism, not just in the economy, but in the economics profession itself. We have Raphael Bostic, the President and CEO of the Federal Reserve Bank of Atlanta; Loretta Mester, President and CEO of the Federal Reserve Bank of Cleveland; and Eric Rosengren, President and CEO of the Federal Reserve Bank of Boston. I think I mixed up those names a bit, but thank you all so much for joining this conversation. And I want to start with Loretta, and I have everyone's permission to use their first name, with your takeaways from today, but also this is the fifth one of these panels and how it's changing, how you do your job, day-to-day.

Why diversity, equity, and inclusion in economics matter to the Fed

Loretta Mester: I want to thank you everyone who presented today and particularly for all the efforts that you did on this session, but you're all working very hard to diversify the profession and to make it a more inclusive profession and I want to thank you for those efforts. I think one of the themes that comes out of all the panels that we saw today, as well as the previous sessions in this series, is that different people will have different experiences. They'll have different viewpoints and perspectives, and we want to be able to harness all that difference in viewpoints, for the good of our policymaking in the Fed and also for the good of our organization.

So, I run a reserve bank, right? We have various ... It's not all monetary policy, there's other things that go on in the organization. We want to be top form and to do that, we have to be diverse. We have to be inclusive. And so, I think the work that's being done in the economics profession is going to be able to be used in other parts of our organization and I particularly want to thank everyone for working on that.

I thought today was very good in starting with some numbers. I really think it's important to shine light on the issues and quantification can really contribute to that, our understanding of problems. And in particular, it was striking that the STEM fields are doing better than economics in terms of the percentage of PhDs that are diverse, as Professor Washington showed us. So on the one hand, that's pretty disheartening. But on the other hand, I think it shows that if you pay attention, right, and Dr. Lupia talked about this, you pay attention. We can make progress in the field. We can address this in economics.

And so I think that the sessions that we've been having, I think try to shine that light and to really move us forward. I think President George in her opening remarks put it really well, is that we and the fed have to start with our own initiatives to try to raise inclusion within ourselves. And there is a lot of work going on, and your last session talked about it, in terms of diversifying our boards of directors, diversifying who we contact to do reconnaissance on the economy, even like Beige Book contacts on our own staff, and how we give the right incentives to the organization and change our culture to be really one that is inclusive. In terms of the profession itself, what I think the thing should be is that yes, we definitely have to change the institution. Right? And we talked a lot about it today.

Dr. Spriggs, Professor Washington, Professor Cook all are truly right about that. But I think we also, given the nature of change, we also have to ensure that the people who have chosen to go into the profession can succeed in the profession. And that's, we can wait, we can work hard to change the profession, but I think we can do a lot to engender success in the people that are entering the profession and therefore help change the institution. Because once we have attracted a more diverse crowd to the profession, right, they're going to be champions for change and we can get that whatever the cycle of whatever they, I can't even remember what they call that, but sort of the good right, gendering better, gendering best. And I think we can do that. So that was some of the takeaways I had and I'm looking forward to the conversation because I thought the session talking about techniques in use to studying and economics was very interesting as well. And I have some thoughts on that, but I'll end here and turn the podium over back to you, Kimberly.

Adams: Well, I'll turn it over to Eric and ask you what you heard today in terms of techniques or strategies or other just fodder for thought that you think is going to shape how you do your job.

Eric Rosengren: So there were a number of very interesting observations in the various panels that we had today. The first I would touch on a topic that Dr. Washington and Dr. Cook raised, which is what topics we choose to even research. So we tend to focus on topics that reflect our own background and our own experience. And if we don't have a diverse group of people in the field, we're not going to have the right topics to be focused on. And I think that's come up very clearly in the discussions, but it's more endemic to the field because even if you have a great idea and a great topic, you need peers that also find it interesting because they're going to be your referees when it comes time to send it to a journal. And so if our referees aren't diverse, it's not going to see the light of day and your ideas aren't going to actually get a full fleshing out in the profession.

And finally the editors make the final decision on what gets published and what doesn't get published. And most of the editors are not diverse either. And so if we don't have colleagues and we don't have editors that are diverse, our field is going to continue to be much more narrow than it should be. So I think it's very important that we consider how we have a broader diversity in the pipeline. In part, so that we do hit the right topics over time, and I would say that over the last 20 or 30 years the economics profession has not focused on issues of discrimination, has not focused on racism, in the way that some other fields have. And I think it's partly reflected by the lack of diversity in the field.

The second observation I would make is on the practice of economics. Economics tends to focus, as many people have highlighted on these various panels, on rationality and efficiency. And so topics of race, topic of human behavior that may not be particularly rational or efficient, don't fit into the paradigm of economics particularly well. So we do a lot of statistical work in economics, but we don't focus on initial conditions, tend to be very different. And that when we look at race variables, they're embedded in all the variables that we're putting on the right-hand side that are supposedly exogenous.

So whether you're looking at income or wages or whether you went to University, the race variable's significant in all those variables. And so it contaminates a lot of what we're doing that we don't think about how structural racism plays more broadly into how we do our empirical work, because much of the work that economists do is related to data. As Loretta started this discussion, we started with data and showed that we are not doing particularly well on the data and economists do like to refer to data and then, well, maybe I'll stop there. And then we'll talk more about what can be done. So I'll turn it back to you, Kimberly.

Adams: Right. Raphael, what were your big takeaways?

Raphael Bostic: Well, I'm going to start by doubling down where Eric ended, which is, a line that really stuck out to me was race, I think Bill Spriggs said this, that race is a variable that economists are lazy about. And it really speaks to what Eric was just talking about in terms that race is embedded in a lot of the things that economists treat as controls. So it's always present even when we act as if it's not, which means we're drawing conclusions oftentimes that are not really reflective of reality. And it means that, as others have said, our answers are not going to really be able to move the dial and that's a big issue. A second thing I would speak to is about intentionality. And I heard a lot about intentionality today that we need to be forceful about how we build a syllabus to make sure that the voices are diverse.

We need to be forceful about who we think to expose our students to. So they see a diversity of perspectives. We have to be thoughtful and intentional about how we talk about issues and which issues we even talk about in class. So that when students go through, they see that their interests can actually be reflected in that. And then the other thing I would say, and we talk about this a lot in the bank, and actually I should back up and say, I'm guilty of all of these things, right? So as a product of the field, I haven't always been as intentional. I've been lazy with how I treat race and I've also been passive. There's a passivity in the field that assumes that we don't have to do anything. Everyone will automatically see our value. And so they'll all come us and we open the doors and that'll be it.

And that really ignores the reality that lots of folks don't really see economics as a solution. Lots of folks don't even think of economics as a possibility. We're doing some work now to try to have younger people actually see economics as a possible pathway because oftentimes they've not gotten positive reinforcement in their early years. So we're losing people who I believe could be real contributors to our field and really push us in important ways. And so we've got to be intentional and we've got to be active to move forward. And those things are things I'm definitely going to take away from today.

Adams: One thing, if I may, that I took away from today is that this entire conversation and this entire series really accepts racism in the economy and racism in the economics profession, as the default. Yet, as was brought up in other panels, there are still some folks who don't believe that this is an issue. And I wonder how being intentional, how you all are thinking about how you have those conversations with not just people in the economics profession, but also the stakeholders with whom you all interact, whether it be members of Congress, whether it be those in the public about... Dr. Spriggs said there was no amount of data that can convince people that there's racism in the economy. How do you have these conversations now with people who are the holdouts? I'll start with you, Loretta.

Mester: Well, you're right. There are people who don't get it, but I think there's a lot more people who do get it. And I think one of the things that we're trying to do in Cleveland is have those conversations in our district and expose some of the disparities that exist in terms of economic opportunity, which then lead to differences in economic outcomes. And those conversations are not necessarily easy to have depending on the constituents, but they're important conversations to have. And I would say the businesspeople in Cleveland and the business, they are starting, I would say they're on board. The Greater Cleveland Partnership is essentially the Chamber of Commerce in the region and they certainly have initiatives and have really stepped up their discussions about race and the impact it has on the economy. I think Lisa Cook and, in that session, they talked about, it really affects the bottom line in businesses, right, if you're not diverse. And I think that's going to be increasingly important going forward as the population gets more diverse.

And so I think these are hard conversations, but I think they're becoming easier for two reasons. One, you know, we've all seen what happened last summer and I think that was a wake-up call for all of us about how things are. And two, the amount of research being done on this now has increased. And so I think the combination of the studies that have come out that you can point to, the time is right, and I don't think this is just, oh, it's a fly-by-night issue. I think there's genuine focus to try to improve things. And it certainly is true, I think in the Federal Reserve System and some of the initiatives that we're undertaking to try to make sure that we're, our policy actions are representative of the constituents, right, of all of our constituents. And I think if you look at our new strategy for monetary policy that was put out in the summer, we acknowledged that maximum employment is an inclusive and broad goal because we're trying to say, we kind of understand that the way we were looking at it before wasn't good enough. And I think those are things that will take some time to get put into the institutionalize, in a way. But I think there's a lot of progress being made. On the idea of the way we do economics, that the technologies we use in terms of the, you putting a race variable in. And I found that discussion really interesting because it really is underscoring the fundamental tension that has existed in the profession for a long, long time, and not just about race, about reduced form regression techniques versus structural modeling and structural labor market techniques.

And I found that interesting because one of the things that a structural model does is that it makes transparent the assumptions you're coming in with. So it doesn't change the bias of the researcher. Everyone comes to their research with certain biases, and we talked about that in the session, Sendhil talked about that. But if you're actually doing a structural model and I don't want to get too wonky here, it makes you reveal some of those biases. You have to be transparent about them. And that's good because then the conversation can turn to, well, why are you making those assumptions? And then you can sort of have a better discussion. So I think there are things changing even in the profession and how we go about studying these issues that I think is important.

Adams: Eric, if I can turn to you. Fed Chair Powell said on 60 Minutes the other day that he hopes to have people back in the office, working at the Fed in person, hopefully by the fall. Y'all have spent the whole summer, well, it's not summer yet, the last few months, having these conversations, I'm optimistic for the sun, having these conversations. And I wonder how different of a workplace you think the Federal Reserve banks all over the country are going to be, as you all go back to work, given that you've been having these conversations.

Rosengren: We're having this conversation that's very public and many people are viewing it. I'd say we've been having these conversations within the reserve bank, actually for some time. So I'm actually fairly optimistic. I think that we in the Federal Reserve have been trying to take actions. I think if you look at the boards of the reserve banks, they're far more diverse than they were 10 or 15 years ago. If you look at the officer corps within the Federal Reserve system, it is more diverse than it was 10 or 15 years ago. Now that's not to say that we don't have a lot more room for improvement, but I would say that even though this kind of very public discussion that we're having here, we haven't done in the past, we've been having these discussions within the Federal Reserve system over the time, certainly that I've been president with the last three Fed Chairs.

So I think there is an intentionality. I think part of it is also thinking though about, I don't think we were as intentional about thinking about, for example, our RA pool, how good are we at recruiting a diverse pool of RAs? That convinces them, whether or not they want to be in economics. Many of those RAs go to some of the top schools in the country. Once you go to one of the top schools, you're much more likely to land one of the better positions in academia or in the Federal Reserve.

So I do think that we have to bring our thinking back to an earlier stage. Both Loretta and Raphael have talked about this, but I think that is critically important that we can't wait to do it until somebody is an employee of the Federal Reserve. We really need to be intentional at a much earlier stage, but I do want to leave with a bit of optimism that I think the fact that we're having this discussion publicly and all the last sessions that we've had as well as kind of the pattern in the data that have been changing over time, I think there is a different discussion that we're having now and certainly the discussion in the country is different than just a few years ago.

Adams: Highlighting the difference, and I'll stay with you please, of the conversations that you say you've been having internally for a long time, there was new research out just this morning from Brookings, highlighting still, the lack of diversity in leadership at the Fed. So I wonder what you think is different this time and how you all are thinking, not just about diversifying the people coming into the economics profession, but also whom you're preparing for leadership roles. Who's going to be the next Fed presidents?

Rosengren: So I think you see that by looking at not only how the workforce has changed, but the officer corps at all the reserve banks has been changing as well. And those are going to be the future leaders when the people that are presidents and governors decide to retire or move on to other jobs. I do, you're seeing many more women. You're seeing more minorities in senior positions that are positioning them to become presidents or governors. It takes a little while to get presidents and governors to turn over. These are positions that people tend to stay in for a while. So it's not going to happen instantaneously. There's much more turnover, the lower in the organization you are. But I would say that this, I became president in 2007, this is a more diverse senior corps of people. And I would say not just by gender and race, but even a broad set of views that I think get represented. So again, we have a lot better that we can do and need to do, but I think we shouldn't ignore the progress that is being made.

Mester: Can I add one point to that?

Adams: Please.

Mester: And that's why it's very important that we diversify our directors, the Boards of Directors, and that's why that's an important thing because they are, after all, the group, that's going to choose the presidents of the reserve banks. So that's one thing that's very important for us to be doing. And I think the study that you pointed out today does show that there's been progress there. Of course, as Eric says, we need to make more progress.

Adams: Raphael, if I can turn to you. So much of the conversation today has been about representation, who gets their journal articles published, who gets elevated, who has the networks. And that matters a lot for journalists like me, who talks to economists all the time, because who are the top-ranked or known economists shape the economic narrative. And I'm thinking about that a lot with a debate over inflation and how you all are talking about it versus how the media is talking about it and therefore how the public perceives it. What are you all doing in terms of concrete steps to think about the role that diversity and economics plays and how everyone talks and thinks about the economy?

Bostic: Well, first of all, I just want to congratulate Marketplace for doing a much better job in the last year and finding voices from the wide diversity of economics backgrounds. And I think that's been great. In terms of what we're doing and how we think about inflation, I will just give an example of what we've done in our bank. So just yesterday we had an economic briefing and the question was how do people at different stations in life respond when inflation happens? And it's a function of differences in wealth, differences in assets, differences in what jobs you have. And what we found is that they're very different responses by income level and by extension, depending on your racial background and what your history is. And so that will inform how I think about what I should expect to see in my modeling about how the economy is going to perform moving forward, which then in turn will inform how I think we should want to do our monetary policy.

So I think those sorts of perspectives are becoming much more explicit in terms of how, I know in our building, how we're thinking about how the economy is playing out. And as a direct by-product of really planning for sessions like this and having more conversations that bring in a different set of voices. So it's actually a very important thing. I actually wanted to, you asked Loretta a question very early on about now, how do we have this different, this difficult conversation? I would just say two things. So one, I do think that the events over the last year have really changed people's openness and willingness to talk about these things that have been under the radar screen for a long time. You know, part of the issue with a structural problem is that it's embedded in the structure. You won't see it unless you choose to see it.

And, and we've been, we've really had a chance to choose that. And then the other thing I would just add, and a couple of people have said this over the course of this session is that in the last year, I feel like I've become a pocket historian. That many people don't know that there are, there were laws and there are structures that were explicitly designed to prevent people from having access to building wealth, to owning homes, to participating in social security. And those have real implications downstream for what their children and grandchildren are going to be able to do. And that's what we're living with today. So if we don't know that history, that is much easier for an economic model to just assume that, oh, it must be something about the minorities or the women who they have in their dataset and not something where they are just a by-product and really a victim of these earlier decisions.

Adams: That is actually all of my time. And I want to thank all three of you for your time and really for everyone today and their amazing comments and the thoughtfulness and everybody who's in the audience, who's taking the time today to think seriously about this issue and president Bostic, I will turn it over to you.

Bostic: Well, thank you, Kimberly. I really want to thank you for your moderation today. You had double duty today with two panels. I really want to appreciate that. And I also want to thank Jeanna Smialek from New York Times for her moderation. And of course, Mary Daly, the president of San Francisco. I also want to just say, this has been a great conversation. So I'm an economist by training so this is my area. I thought that all the speakers did an excellent job in talking about the nature of the problem, but not staying there, but instead pivoting to things that we can do. And you know, one of the hallmarks of this series has been our commitment to being solution-oriented and not just talking about the problems. So I want to thank all of them. And then I want to thank you for joining us.

It's really been gratifying to see all of you participating. And I want to especially thank you for your questions because they really help to ground us and make sure that we are staying focused on the things that you care about. So, one last thing for you is I hope that you keep this conversation going. Talk about this with your friends, your families, your colleagues, mention this and have a conversation on social media because we really intend this to be an ongoing conversation for all of us. So I want to thank you for being here at the last thing I want to say is mark your calendars for June 2nd. That will be the sixth installment of this series and its focus will be entrepreneurship. So I hope you enjoyed our program today, and I hope you have a great rest of the afternoon.