The Council of Economic Advisers has released a history of the CEA on its' 70th anniversary, as Chapter seven of the Economic Report of the President. This slice is rattling interesting for economists interested inward policy.
It's a squeamish reminder on how much economical policy ideas accept changed. In the belatedly 1940s, when the CEA was laid up, financial policy was everything. Solow's increment model had non been invented, allow lonely Romer's. Monetary policy was a twinkle inward Milton Friedman's eye. Adam Smith had to a greater extent than or less been forgotten. Economic policy was widely thought to consist of but setting the correct degree of financial stimulus, allow multipliers go their magic, to attain "full employment" together with economical growth. The slice tracks good the rediscovery of microeconomics together with regulation, equally good equally the shifts inward macroeconomic thinking.
It reminds us how much the phase has changed. In the early on years in that place were actually no economists working elsewhere inward government, together with in that place were no recollect tanks. Now every means has a main economist together with a staff, together with the CEA isn't (!) the only game inward town for producing policy-oriented research. Its purpose has changed equally a consequence.
The CEA has long had many roles, adviser, estimator of numbers, cheerleader for the Administration's policies, spinner for the Dominicus utter shows, together with interagency warrior.
One of its most of import together with to the lowest degree appreciated roles is but to halt empty-headed stuff.
Joe Stiglitz:
There has ever been a tension, how much the CEA is in that place to render disinterested advice, together with how much it is in that place to cheerlead the Administration's policies, though many of those are at to the lowest degree express past times political considerations, if non downright driven alone past times politics. Just how much fourth dimension should the chair pass on Dominicus utter shows spinning the latest numbers to present how slap-up the Administration's policies are?
Influenza A virus subtype H5N1 large lesson is non to expire an administrative agency:
But inaugurated past times the CEA, in that place has been a much to a greater extent than active participation past times academic economists inward policy making. I recollect policy is improve for it -- or at to the lowest degree non equally catastrophically bad equally it mightiness endure otherwise -- together with and hence is academia. Academics are also taking over from bankers together with politicians at the Fed, amongst positive impact inward my view. Marty Feldstein's box speaks to this number nicely.
Influenza A virus subtype H5N1 squeamish summary:
If you lot acquire the chance, go.
An don't worry virtually politics. At the staff level, it's pretty a-political. In fact, working for an direction whose full general philosophy you lot disagree amongst would endure goodness for you. (See Martin Feldstein's piffling try on this point. Quite a few of the Reagan-era staff were democrats.)
Update: "On Feb 11, the Hutchins Center on Fiscal together with Monetary Policy at Brookings marked this anniversary past times examining the ways the CEA together with other economists succeed together with neglect when they laid about to advise elected politicians together with tap the expertise of to a greater extent than or less of the “exceptionally qualified” economists who accept chaired the Council over the past times 4 decades."
Video together with other links here. And hither is their photograph from the event, amongst many past times CEA chairs together with economists.
It's a squeamish reminder on how much economical policy ideas accept changed. In the belatedly 1940s, when the CEA was laid up, financial policy was everything. Solow's increment model had non been invented, allow lonely Romer's. Monetary policy was a twinkle inward Milton Friedman's eye. Adam Smith had to a greater extent than or less been forgotten. Economic policy was widely thought to consist of but setting the correct degree of financial stimulus, allow multipliers go their magic, to attain "full employment" together with economical growth. The slice tracks good the rediscovery of microeconomics together with regulation, equally good equally the shifts inward macroeconomic thinking.
It reminds us how much the phase has changed. In the early on years in that place were actually no economists working elsewhere inward government, together with in that place were no recollect tanks. Now every means has a main economist together with a staff, together with the CEA isn't (!) the only game inward town for producing policy-oriented research. Its purpose has changed equally a consequence.
The CEA has long had many roles, adviser, estimator of numbers, cheerleader for the Administration's policies, spinner for the Dominicus utter shows, together with interagency warrior.
One of its most of import together with to the lowest degree appreciated roles is but to halt empty-headed stuff.
Joe Stiglitz:
the coin saved from but 1 of the many bad projects the CEA had helped halt ... would accept been plenty to render us amongst a permanent endowmentBen Bernanke, fifty-fifty better:
Economics is a highly sophisticated acre of thought that is superb at explaining to policymakers exactly why the choices they made inward the past times were wrong. About the future, non together with hence much. However, careful economical analysis does accept 1 of import benefit, which is that it tin assist kill ideas that are completely logically inconsistent or wildly at variance amongst the data. This insight covers at to the lowest degree xc per centum of proposed economical policies.Some examples
...the Heller Council argued against a proposal during the Kennedy Administration to job nuclear explosives to widen the Panama Canal. In the Nixon Administration, CEA played a leading purpose inward the analysis that led to the decision that the regime should non subsidize the evolution of a supersonic carry or SST plane, dubbed the “sure-to-be-subsidized transport” (Schultze 1996). Under President Ronald Reagan, CEA participated inward a Gold Commission, which investigated the feasibility of returning to the golden standard, together with ultimately advised against doing so.In my brief fourth dimension at CEA spell rattling immature I got to regard this purpose upwards close. There would endure an interagency coming together on something similar tariffs together with quotas for goose down. Every other means would present upwards at a coming together all for it -- defence wants to brand certain in that place are American suppliers of American goose downwards from patriotic American Geese, together with hence our boys fighting the Russkies inward Canada someday volition remain warm. The American Goose Down production board is screaming virtually unfair dumping from China. The Goose Feather Plucker's spousal human relationship is all for it, along amongst the merchant marine -- nether the Jones Act, American geese must go on American made together with staffed ships. State is all for it too, together with hence long equally nosotros tin carve an exception for special downwards from Berlin. The Congressional liaison says the Congressman from the 1 county inward the soil that makes goose downwards is screaming virtually it together with volition drive all sorts of problem if nosotros don't practice it. And together with hence on together with and hence forth. It was the CEAs lonely purpose to stick upwards for the pitiable consumer who mightiness desire a inexpensive warm jacket. (Note: I'm to a greater extent than oft than non making all this upwards equally a composite of a large number of dissimilar cases.)
There has ever been a tension, how much the CEA is in that place to render disinterested advice, together with how much it is in that place to cheerlead the Administration's policies, though many of those are at to the lowest degree express past times political considerations, if non downright driven alone past times politics. Just how much fourth dimension should the chair pass on Dominicus utter shows spinning the latest numbers to present how slap-up the Administration's policies are?
As many commentators together with old CEA chairs accept observed, in that place tin endure a tension betwixt CEA’s duty to advance the President’s agenda together with its responsibleness to render skillful economical advice.Important: You can't endure pure together with also effective:
CEA chairs together with members bespeak to endure able to operate effectively within a political surround without it affecting the integrity of their economical advice.The Chapter offers goodness advice, coming from long experience:
Former CEA chairs, members, together with staff offering several specific pieces of advice equally to how to successfully strike this balance: they advise that CEA should non publicly advocate for policies that are non supported past times economical analysis, together with that CEA should stick to giving economical advice, non political advice. CEA’s comparative payoff is economics,Influenza A virus subtype H5N1 old chair told me a slap-up story of offering a president political advice, only to endure told "you stick to the economics, together with allow me practice the politics."
Influenza A virus subtype H5N1 large lesson is non to expire an administrative agency:
Others advise that the Council should non acquire also involved inward policy coordination. ... One episode that illustrates this lesson occurred during the Johnson Administration, when CEA was responsible for the day-to-day direction of wage-price guideposts to combat inflation.
Stuart Eizenstat, President Carter’s domestic policy adviser, argues that “[t]he CEA cannot render both detached, Olympian economical advice together with expire enmeshed inward the daily, inter-agency compromises together with political log-rolling” (1992).In 1993, President Clinton created a National Economic Council within the White House. It seemed to me a kind of parallel CEA. Governments oft don't cancel an agency, they but create a novel parallel one, together with allow the old 1 rot. The study handles this inquiry carefully, but seems to suggest that the organisation is working, amongst the NEC allowing the CEA to practice less political go together with improve economical work:
Since 1993, the National Economic Council has been responsible for coordinating economical policymaking. These arrangements accept largely served to augment CEA’s effectiveness past times permitting it to focus on providing economical advice together with analysis together with giving the Council greater exposure to the PresidentThe CEA is, rather unabashedly, the representative of the economic science profession inward the government. The chapter covers it well.
The concluding business office of CEA is to engage amongst the economic science community, past times staying abreast of the latest academic enquiry together with past times sharing novel insights amongst policymakers, together with inward turn, past times communicating the administration’s actions together with plans to the economic science community. This business office helps to back upwards the administration’s efforts to develop economical policies together with to articulate together with advance the President’s agenda. While the academic grapheme of CEA may non accept been originally intended past times Congress when it created CEA, this engagement has arguably made the Council a to a greater extent than effective together with durable institution.I'm a piffling leery of this paragraph. I recollect the distance from enquiry to policy mightiness productively endure a piffling greater -- let's brand certain the latest enquiry is corporation first. And the vision that the CEA is in that place to sell a political agenda to economists is a scrap frightening.
But inaugurated past times the CEA, in that place has been a much to a greater extent than active participation past times academic economists inward policy making. I recollect policy is improve for it -- or at to the lowest degree non equally catastrophically bad equally it mightiness endure otherwise -- together with and hence is academia. Academics are also taking over from bankers together with politicians at the Fed, amongst positive impact inward my view. Marty Feldstein's box speaks to this number nicely.
Influenza A virus subtype H5N1 squeamish summary:
Many of CEA’s contributions are due to its unique institutional structure: that it is a minor organisation amongst no regulatory authorisation of its own, few at nowadays operational responsibilities, together with populated past times academic economists. Yet its contributions are also theme on the powerfulness of its staff to residue operating effectively inward a necessarily political surround without beingness overly influenced past times politics, together with to endure effective inward advocating for their positions spell providing objective economical advice. All inward all, given the divergent objectives reflected inward the Employment Act of 1946, CEA’s turbulent early on years, together with its odd institutional structure, CEA has proven to endure a durable together with effective advocate for the populace interest.Influenza A virus subtype H5N1 minor personal note: I got the lucky adventure to endure a junior staff economist -- basically an RA -- spell I was inward graduate school. It was a slap-up experience. I worked on a novel projection every ii weeks, largely nether Bill Poole. Unlike my academic training, nosotros rapidly went from idea, to data, to study or memo together with on to the next. Bill taught me a lot. I saw quite a scrap of how policy is made. I learned that most of the people inward Washington are actually smart, difficult working, informed, together with populace spirited. It cured a lot of cynicism. And it got me to go on much improve ideas for my research, to intermission out of the literature-driven footing 3d twelvemonth graduate students alive in, together with to brand certain my enquiry ideas thing to the larger world.
If you lot acquire the chance, go.
An don't worry virtually politics. At the staff level, it's pretty a-political. In fact, working for an direction whose full general philosophy you lot disagree amongst would endure goodness for you. (See Martin Feldstein's piffling try on this point. Quite a few of the Reagan-era staff were democrats.)
Update: "On Feb 11, the Hutchins Center on Fiscal together with Monetary Policy at Brookings marked this anniversary past times examining the ways the CEA together with other economists succeed together with neglect when they laid about to advise elected politicians together with tap the expertise of to a greater extent than or less of the “exceptionally qualified” economists who accept chaired the Council over the past times 4 decades."
Video together with other links here. And hither is their photograph from the event, amongst many past times CEA chairs together with economists.
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| Source: Brookings institution. |
