Exploring Careers in Economics October 19, 2018


Exploring Careers in Economics
Transcript QUENTIN JOHNSON. Good morning, and welcome. On behalf of the
Board of Governors of the Federal Reserve, my
name is Quentin Johnson, and I want to thank you for
joining us for Exploring Careers in Economics, both
in-person and online. I’m joined here today by my
colleague, with my colleague. STEVE RAMOS. I’m Steve Ramos. I am a Senior Research
Assistant. And today, we’re going to
spend the next hour discussing existing careers in economics,
exploring careers in economics, and we’re going to be doing
this by talking to economists, officers, and research
assistants at the Fed about their experiences and the
need for diversity in economics, and also existing opportunities
that you can all take advantage to fully understand
what it means to have a career in economics. JOHNSON. And before we hear
from our first economist and Fed officer, Karen Pence, we would like to share
a short introduction from Atlanta Federal
Reserve Bank, President and CEO, Dr. Raphael Bostic. Dr. Bostic took office in June,
2017 as the 15th President and Chief Executive Officer
of the Federal Reserve Bank of Atlanta, which serves the
6th Federal Reserve District, and covers Alabama, Florida, and
Georgia, and parts of Louisiana, Mississippi and Tennessee. In addition, he serves on the Federal Reserve’s
chief monetary policy body, the Federal Open
Market Committee. Prior to his appointment at the
Federal Reserve Bank of Atlanta, Dr. Bostic served in many
distinguished capacities as a professor at the University
of Southern California. He’s no stranger to public
service either, having served as an economist here at
the Board of Governors, and as the Department of Housing and Urban Development’s
Assistant Secretary of Policy, Development, and Research,
where he was a principal adviser to the secretary on
policy and research. Dr. Bostic grew up in Delran,
New Jersey and graduated from Harvard University
with a combined degree in economics and psychology. He earned his doctorate
in economics from Stanford University,
and with such an impressive and impactful career, we are glad to have him deliver
this morning’s opening remarks. And without further ado. PRESIDENT BOSTIC. Hi. My name is Raphael Bostic,
and I’m President and CEO of the Federal Reserve
Bank of Atlanta. I want to welcome you to this
program on careers in economics. And I’m just so thrilled
that you’re here, either in-person,
or tuning in online. This is such an important
program because economics
is really important. I know some people
think about economics, and others will call
it the dismal science, but I don’t think
it’s dismal at all. I think it’s important,
it’s interesting, and it’s actually a lot of
fun when you get into it. And so I’m, I’m really
here to kick this off and give you a sense of
why I think it’s important and why I think it’s really good
that you consider economics, and really get a
sense for yourself as to whether it’s for you. Now, let me tell you a
little bit about my story. I discovered economics
totally by accident. I was good in math in middle
school and high school, but I didn’t have any formal
programs, formal courses or classes in economics or
finance or anything like that. I went to college. I went to Harvard and took a
course in chemical engineering. I wanted to be a chemical
engineer, and it was only after a kind of crazy
experience in my first year of chemistry class that I decided I needed
to do something else. And so I got out of chemistry,
and I first went to psychology. I really enjoyed psychology, and then ultimately
I found economics. Now, it worked out for me,
and I’ve found my field. I love it. I really enjoy it on
a day-to-day basis, but what I know is that
serendipity is not the best way to think about getting
people to find a field. And so I’m going to do all
I can to work to make sure that economics does
not use dumb luck as its strategy to find people. And that’s one of the reasons
why we’re doing programs like this today. Now, when I finished graduate
school, I came to work at the Fed, and the Fed has been
a wonderful experience for me. I had a group that I worked
with that allowed me to work on issues that I had been
thinking about and caring about for a long time, how
does capital affect communities in the city, but also
across the broad country? And I learned a lot. And from my experience
at the Fed, you know, a couple things have jumped out. First, the Fed is a really
important institution. Second, it’s really
evidence-based, so they try to get
the best knowledge and do the best analysis. So we have a superior
understanding of how the markets work and
how issues can be resolved. And then third, it’s a real,
it’s a really collegial place. People are very nice. They’re open to different
perspectives, and it’s really helped me grow
as a researcher and as a leader. And the things I worked
on initially at the Fed in my first years there
I continued to work on for the next several years in growing a reputation
and a stature. And I actually keep
working on that stuff today. It’s part and parcel of what we
do at the Federal Reserve Bank of Atlanta and across the
entire Federal Reserve System. Now, let me tell you
just a couple things. First, I want to do a
special shout-out to any women that are present, and all
people from minority groups. And this is mainly because our
field is really not doing a good job in being diverse. And that lack of diversity
disappointments me, and it disappointments me because I think it
really hurts the field. Now, how does it hurt the field? What we know is that
when people come from a particular
background, if everyone comes from a particular
background, they look at issues in exactly the same way. And when you have
a team that looks at issues all the same
way, you’re going to get to a group think perspective,
or a perspective where ideas and issues don’t get challenged. And I’ve seen this time and time
again in my time as an academic in economics departments. And what I understand
and what I’ve seen is that people leave the room,
scholars leave the room, policy-makers leave the room,
with only a partial picture of why people are
making decisions that they’re, that
they’re doing. And so having a more diverse
team increases the likelihood that you will have ideas
challenged and made to be tighter and more robust,
squeeze out conventional wisdoms that may or may not apply. And so you have a role to
play to make our field better. And when our field is better,
our policies will be better. And then if our policies
are better, people’s lives will
ultimately be better. So please do think
hard about this and take this quite seriously
because diversity, I think, is the future of
economics to make sure that it remains an
important policy area. Now, let me just close by
saying, I am very, very pleased, again, that you’re
here listening, and trying to learn more
and get more information about careers and economics. By taking these first early
steps to get more information, you’re doing the hard work,
that initial non-sexy blocking and tackling that will
guarantee your path to success and make sure you wind
up in a career that is, that is positive,
that works for you, and that really makes our
world a whole lot better. So best of luck, and enjoy
the rest of the program. [ Applause ] JOHNSON. And Dr. Bostic
talked about the importance of diversity within
the field of economics. And next we’ll hear from our
first economist and Fed officer about that specifically,
Karen Pence. She’ll talk about the
state of diversity in the economics field
and why it matters. Karen? [ Applause ] KAREN PENCE. Thank you very much,
Quentin and Steve. And thanks very much to all
of you for being here today. I’m delighted to join my
colleagues in welcoming you to Exploring Careers
in Economics. I myself am a graduate of
the D.C. public schools, so I’m delighted to see
so many students here from local high schools
and universities, and also a special
welcome to the students around the country
watching us at watch parties or following us online. So welcome to all of you, and
thanks so much for being here. Like President Bostic, I’ll
spend a little bit telling you about my journey to economics, which also is a little
circuitous. I didn’t study economics
in high school, didn’t really know what
it was, went to college, thought economics
wasn’t really for women, was a little intimidated by
the math, but my first year, I had friends who took
economics, and by the end of the first year, it
was clear to me I was as smart as they were. So I signed up for economics,
and I found out I liked it. And the reason I liked it is that economics really
rewards hard work. You know, if you study,
if you look at it, there is an answer out there. And so in contrast, you know,
I loved my English classes, but I’m a very literal person. I read the book. I got the plot. I never saw the metaphors. Try as I might, I would just
be able to write down the plot. But economics, you
could keep working, and you could get to the answer. I didn’t decide to major
in economics, though, until my junior year in college. And so I was doing a study
abroad program in Cameroon in Africa, and the end of my semester was
an independent study of a coffee cooperative. And it was a coffee
cooperative that women in a rural village had
founded because they wanted to earn money to send
their kids to school. But then something
terrible happened. The world coffee
market collapsed. The women didn’t get the
money for their coffee. They stopped the cooperative. The kids stopped
going to school. I mean, just, you
know, really any, very little positive you
can say about that story. And as it turned out,
I had a lot of time to think about that story. It was a small village. It didn’t have electricity. It was on the equator,
which means there’s 12 hours of darkness every day. Most of the people spoke a
dialect I didn’t understand. So I had a lot of time to think
about that story and to think about what a tragedy it was. And that’s when it really
hit home to me, you know, economics can change the world. Understanding things about
markets, understanding things about incentives, that can
really change the world, and it can change
people’s lives. And that’s what caused
me to go back to school and become an economics major. Today’s event is designed
to give you information about pursuing a
degree in economics and a career in economics. And I hope encouraging you
to consider such a career. And there’s two reasons
that I’d like you to think about economics as a career. So first of all, why
should you study it? First of all, it’s
tremendously fun. So, I mean, I think I have
the best job in the world. I get to think about and answer
really interesting questions, and the answers matter
for people’s lives. So here’s a couple questions. We think about them at
the Fed, but people think about them over the whole world. So think about this
first question. Why do individuals who
want to work not have jobs? If you think about that,
that’s also kind of a tragedy. Imagine you have someone, they
want to contribute to society, they want to provide for their
family, and they can’t do that. Like just the sheer
waste involved of someone not having a
job is a terrible thing. And that’s one of the things
that economics studies. Another question, very salient
to all of you in the room, is going to college worth it? Is getting a degree
in economics worth it? If you spend four years going
to college, studying economics, are you going to decide at the
end, wow, that was a good use of my time, wow, that was
a good use of my money, or are you going to wish
you did something else? And second, and I’ll echo
President Bostic’s questions here, economics, like all
fields, does its job best if there’s a diverse group
of voices, a diverse group of perspectives in the room. And unfortunately, now that’s
only partially the case. So I’ll show you some
data from my colleagues, Amanda Bayer and David Wilcox. These are data over
students who graduate with a bachelor’s degree from a
four-year college or university. The first set of
bars is for women. And you’ll see that 57% of
all bachelor’s degrees earned in the U.S. are earned by women. But then you look at bachelor’s
degrees earned by students in economics, and only 31%
of those students are women. The story is not any
better when you look at underrepresented minorities. And so the data here of
talking about Hispanic or Latino students, black
or African-American, American-Indian, Alaska
native, and you’ll see, these students represent
21% of the people who get bachelor’s degrees
in the United States. But they represent
only 12% of people who get economics degrees. I should note here that
Asian-Americans are not included in these statistics because
they actually get degrees in economics at a
higher rate than whites. But in saying that, I don’t mean to minimize the incredible
variety within the Asian-American
community, or minimize the obstacles
that those groups face. And so then you might say,
well, why does it matter? Why does it matter if it’s
not a diverse group of people? And so let me start by
showing you a statistic here. This is a survey. It was done by economists in the
U.S. And they were asked a bunch of questions, and one of them
was, the distribution of income in the U.S., should
it be more equal? And you can see, there’s
big differences here between men and women. So 65% of women said that yes,
they thought the distribution of income in the U.S.
should be made more equal, compared to only 40% of men. This data, in a little bit
more I’m going to talk about, is going to be more about
women, just because that’s more of my experience and because
we have data limitations, and some places we
have better data by gender than we do by race. So you think and look at the
differences across these groups, and you say, wow,
how would economics as a field be different? How would the policies that economics influences
be different if a more diverse group of
people, if a more diverse group of perspectives were
at the table? One question that’s
often asked is, why isn’t economics
a diverse field? And there’s one answer
people sometimes give that I personally
find very hurtful. And so I’d like to challenge
that directly here today. And there’s this idea
out there that like, oh, women don’t like math. And there are similar
narratives, of course, for many other groups. Well, the facts really don’t
support that interpretation. So economics, overall, is a
much bigger major than math. And yet the share of women who
major in math is much higher, is higher, not much higher,
but it’s higher than the share of women who major in economics. So it doesn’t really seem
like math is the answer. And that’s commensurate
with my experience. You know, math is
like everything. You study it, you work
at it, you can do it. There’s nothing special. There’s no like fancy math gene out there that’s distributed
unequally across the population. I don’t think math
is the answer. I think the answer
is just that we’re in what economists
call a bad equilibrium. So right now, we’re in
a situation where people from underrepresented groups
don’t see people like them in the field, and so they don’t
know about the opportunities. They don’t know about what
a great career economics is and how you can use it
to change people’s lives. And to me, that’s a
really hurtful equilibrium. It’s hurtful to the students because they don’t
have the opportunity to pursue what’s a
very rewarding career. And it’s hurtful to our society because we don’t
have a broad range of perspectives considering
some questions that are extremely
important to all of us. And we need those voices,
including the voices of everyone here
today in the room. The Federal Reserve wants
to be part of getting us to a better equilibrium. And, in fact, economists from diverse backgrounds
have been crucial to the Federal Reserve’s success
in fulfilling its mission. I’m thinking of people like
President Bostic, who you heard from at the beginning,
who started his career at the Federal Reserve,
and is now President of the Federal Reserve
Bank of Atlanta. I’m thinking of people like Janet Yellen,
our former Fed chair. I’m thinking of people
like our former vice chair, Roger Ferguson, who
was instrumental in the Board’s work
stabilizing financial markets after the September
11th attacks. And this is a commitment
that we are still living out every day here at
the Federal Reserve. I have here some remarks from
our current chair, Jay Powell. These are on the Federal
Reserve’s website. And let me read these words. I find them very powerful. “I am committed to
fostering diversity and inclusion throughout
the Federal Reserve System. Our mission touches the
lives of all Americans, and we serve the
public more effectively when our workforce fully
reflects the characteristics and experiences of the
full range of people in this diverse nation.” Thank you very much for
joining us today for this event and for this very
important work. We need young people like you
to bring your diverse talents to improving this field,
and through it, the world. Thank you, and please
enjoy the event. [ Applause ] JOHNSON. Thank you
very much, Karen. Thank you, Karen. Now we’re going to move
into the next phase of this morning’s program,
where we’ll have a panel of economists talk
to us a little bit about their background,
their paths, and what they do as economists. We’ll be joined by Laura
Feiveson and Antulio Bomfim. Laura, Antulio? [ Applause ] As they take the stage, I
will give you all a little bit of background on
the two of them. Laura is a Senior Economist
here at the Board of Governors, and she currently
works in the Household and Business Spending Section,
where she prepares forecasts of aggregate consumer spending. Her research is focused
mainly on empirical studies of consumption and
saving behavior. She received her B.S.
in math and physics from Yale University, and her
Ph.D. in economics from MIT. Antulio Bomfim serves
at, serves the Board as a Special Adviser
to the Chairman. He rejoined the Board in
2016 as a Senior Adviser in the Division of
Monetary Affairs. He was formerly with the
consulting firm Macroeconomic Advisers, as well as
Oppenheimer Funds. He’s published articles in
finance and monetary policy and macroeconomics and is
the author of the book, Understanding Credit Derivatives and Related Instruments,
Second Edition. He received his Ph.D. in
economics from the University of Maryland, and his master’s of
science in mathematical finance from the University of Oxford. Now, the first question
I want to start with, Laura and Antulio, is why is
economics important to you? And I would like for you
to describe your path and a little bit of your
training that you took to become an economist. LAURA FEIVESON. So I’ll start that off. I, similar to President Bostic,
came in from a math background. So in college, I majored
in math and physics, and I did not have
one economics class, which understates how little
I knew about economics at the time I graduated college. I then went on to teach high
school for a couple of years. I was teaching math
at high school. And it was during
that time that one of the economics high school
teachers that I was teaching with convinced me that
economics is math meets people. And in addition to loving
math, I did love people too. So I decided to think about
whether to give economics a go. And I came back, I took a
couple economics classes as a post-graduate, and while
applying for Ph.D. programs. So for me, it was
my math background that got me into
a Ph.D. program. I didn’t really know
economics yet. And I took a few
years, I got into MIT. I went to MIT. I took the classes. At the beginning
of a Ph.D. program, classes are very math-heavy. And that was good for me
because I had a lot of math. But I still didn’t
really have a sense of the real power of economics. And that left me, when I
started working my dissertation in a sticky place, because
I suddenly was lost. The classes were over, I had to, to figure out what I was
doing my research on, and I didn’t really
know economics yet. And so it was this time, I took
a year off graduate school, and I worked as a
junior economist at the Council of
Economic Advisers. And this was the first year
of the Obama Administration. It was the end of
the Great Recession. We were trying to figure out
how to recover as an economy. And the Recovery Act, which was
a big historic stimulus act, had just been passed,
and the CEA, the Council of Economic
Advisers, had the mission of reporting on the
effectiveness of how well the stimulus
was working. And I worked on that
for that year. And suddenly economics clicked. I suddenly understood
how important it was and how it can help provide
a structure for thinking about the world and the
effectiveness of policy. And so that was, I think,
the most important part of my economics education. So I finished my Ph.D.,
I ended up at the Fed, and I think even more than
opening career doors for me, which economics certainly has
done, it’s helping me think about the world in a different
way in being able to engage with policy debates in a different way that’s
been so powerful for me. JOHNSON. Antulio. ANTULIO BOMFIM. First of all, it’s a great
pleasure to be, to be here. I mean, Friday is usually it’s
hard for me to get out of bed because I’m tired
from the week work. Today, you guys actually made
me wake up and happy and full of energy because I knew I was
going to be spending some time with you, and so thank you. So let me say this. My way of getting into
economics was a little unusual. When I went into undergrad,
I grew up in a country where you have to
decide on your major when you’re still
in high school. So I had no doubt as a
senior in high school that I wanted economics. I liked math, I liked history,
and I, as I talked to people, I said, well, what is the
discipline that is going to combine both my love
for mathematics and my love for history, and a lot of
people kept saying economics. But I had absolutely
no intention whatsoever of having a career in economics. What I wanted to do
at that point in time, I wanted to join the Foreign
Service, to be a diplomat. So if I had followed my
initial planning, would find me at some embassy in some corner
of the world not working for the Federal Reserve. Economics, at that point for me, was just a stepping stone
towards the ultimate goal, which was to become a diplomat. Now, why is this important? Let me say this to you. Economics, it gives you a
toolkit, a body of knowledge that you can apply in
just about everything, including being a diplomat
in somewhere in the world. When I was thinking of,
see, where I grew up, to become a diplomat, you
first have to get a degree in something, anything,
and then you take an exam to take a two-year course in
the ministry of foreign affairs so you can become a diplomat. It’s really hard to get in, but
that’s how, how, how it works. And people are going to say, you
can get a degree in anything, this is when I was in high
school, but economics or law, those are the ones that will
prepare you better for it. So that’s how I got into,
into, into, into economics. And what I wanted to
impress upon you is this. Even if you decide not to be an
economist, and we’ll come back to this hopefully today, I
mean, you do get some skills, a way of thinking about the
world, a disciplined way about thinking about problems
that we face in society that you don’t get, you don’t
get as broad a body of knowledge as you would in economics
in many, many other, in many other instances. So that’s– so just to end
up my story, once I finished with the undergrad, I said,
hmm, maybe there is something to this economics business. I’m going to try for a
master’s because maybe by the– it was hard to get into the
diplomacy school, so I said, oh, it will be my plan B. At
least I will have a master’s if diplomacy is not for me. I started with the master’s. Before the end of the
first year, I had fallen in love with the place. Never even applied
to diplomacy school. And it’s just something
that, it’s a fond memory, it nurtures my love for foreign
languages, but I fell in love, and before I knew, I was doing,
I was in a Ph.D. program, and before I knew, I
was here with you all. JOHNSON. Thank you
very much, Antulio. I guess we can consider you now
a diplomat for economics, right? Next question. Could you start by telling
us, what does an economist do? And describe some of the types
of problems that they work on? FEIVESON. So I can–
there’s lots of different things
that economists do. And as Antulio said, there’s
a toolkit that can go– you’d be used for many
different types of problems. So I will talk about what I do. I am a forecaster here,
so I forecast GDP. And that is, that forecast
is used by the Board to help make their
monetary policy decisions. What I specifically
work on is the forecast of consumer spending, which
makes up 70% of the economy. And so I have to think about– so being a forecaster means not
only I report on the assessment of current conditions, and also
a prediction of what will happen over the next couple of years
that’s used for policy analysis. And just to give a couple
examples of issues that I’ve had to think through and provide
some quantitative analysis about, one is the effect of
tax cuts on consumer spending. So when taxes are cut, do we
expect consumer spending to go up as people have
more income to spend? And if so, how much? And also, does it matter
who the tax cut goes to, if it goes to lower income
or higher income families? Two, when hurricanes
hit, we use– I’ve been using credit
card transaction data that gives us spending at a
daily level in specific areas to find out what the impact
is of growth in these areas where the hurricanes have hit. And one other example
is the effect of student loans on growth. So there’s a lot of
discussion about the burden of student loans on individuals. And one of the questions
that have come up is can student loans
be holding back growth going forward? And so that’s another thing
that I have looked at. JOHNSON. Antulio? BOMFIM. So I’ll share
a secret with you. If you haven’t been
able to tell yet, I’m more than a little older
than Laura, so I’ve had, I’ve had– that means
that I have a longer time to experience the different
things that an economists do. And so I’ll tell you a little
built about some of the things that I have done
along, along the way. So I actually started my career
here, as Quentin mentioned. And when I came in,
that was at a time where the Federal
Reserve was revamping. They had this big– to this day, this big macroeconomic computer
model of the U.S. economy, about consumption, about
how interest rates are set, about how business is a vessel. So they are putting
that together. So I joined that group as a
freshly minted baby economist, a Ph.D., a freshman to
Ph.D. at that point. So that was the beginning
of my career. Try to, to capture in a bunch
of equations in a computer, how is it that people decide
to consume, and how much? And how businesses– what
determines the decision that businesses make
about what, what, how much to invest
and wages and so on. So I started that way. And along the way, I was
assigned to work on the part of the computer model that had
to do with how interest rates and stock prices are determined. That gave me a test of a
financial, financial markets, which is a big part
of the economy. To fast forward 11 years later,
I ended up leaving here to go to the private sector. And again, I want to touch
on this point of, again, the toolkit that
economics gives to you. I left here when I
had this traditional, very traditional economist’s
job to have a job that just about anybody could do. You didn’t have to
be an economist. So I left to be a portfolio
manager, an investment manager, to manage investment bond
portfolios for corporations, for penchant funds, for people. And I didn’t have to be
an economist to do that. But I’ll tell you what. I was hired for that job
because I was an economist, because I had a certain way
of thinking about the world, the discipline that
comes from say math, certain things they
have to adapt. And my job then as a
portfolio manager was to think about what I had learned about
economics, and how was that– how, say, perceptions about the
economy were being reflected in the prices of a
10-year Treasury bond, for example, or a corporate net. And tried to use my knowledge
of economics and my knowledge of financial markets to look
at situations where I could, I could say, look, there
is an opportunity here. This particular bond
doesn’t seem to be reflecting the
economic reality out there. Maybe we should buy
or sell this. And so does that serve
you as an example of how just the versatility
that you have in economics. You can have a traditional job,
as I have now, as Laura has now as an economist,
but you can apply to many different,
many different areas. In terms of what I do
now, I love what I do now. It’s thinking about
monetary policy. It’s trying to give my
best input, my best advice to policy-makers, those who
are making the decisions that affect all of us. Should interest rates be at
this level or at that level? And what are the
implications of doing that? And, I mean, I mean, how much
cooler does it get than working for an institution as
the Federal Reserve if you truly love
economics as Laura and I do? JOHNSON. Thank you very much. There are a lot of students here
studying economics right now, some that will study
economics at an entry level. To give them an idea of what to expect will be the lasting
effects of that education, what principles for economics
would you say that you use on a daily or regular basis? FEIVESON. So I– so, I
mean, I tremendous amount. So the primary one, I’ve got
to say, supply and demand. Like that’s, every day, my
career, every day at home, I mean, that’s just kind
of motivates my whole life. But I’ll add a few things. One is I find myself– and
this is on a daily basis, not on my job, but
just going around, I’m constantly thinking
about moral hazards. So driving down, you know,
driving down the road, there’s a car in front of us
with the baby on board sticker. And whenever I see
that, I always think, does that sticker make them
drive a little more dangerously because they know other
people are driving more– driving more carefully
around them? Football, which I don’t watch
a lot of, but my husband does, you know, football helmets. So yes, it’s great that football
players are wearing football helmets, but did
the sport not evolve to be a little bit more violent because they were
wearing football helmets? So that’s another example
of one of the principles that constantly is on my mind. JOHNSON. Antulio? BOMFIM. Are there any high
school seniors in the room? Okay, so the reason
I ask is this. So I have a high
school senior at home. One of my daughters, she’s
a senior in high school now, and she’s probably some of
you are either doing this or getting ready to this do. Or if you are really
like an early person who has done it already, but working on your college
applications and supplements and all of that, I feel like I
am applying to college now too. But anyway, so my daughter,
she’s one of those, oh, she wants to get
everything done. So she comes to me a week ago or
so, and she’s all stressed out. She says, papa, papa is
daddy for Portuguese. That’s my native language. She says, papa, I am really
stressed out because I want to get these things
done, but I have also to deal with high school. So I turn to her and said, look,
how many hours are in a day? Twenty-four. Can you make it 25? She says, no. Thirty? No. So you have a constraint. It’s 24 hours. So you have to decide how much of those 24 hours you are
going to apply to sleep. Hopefully at least eight. How much of them you apply to, you defer to your high
school obligations, how much of that to swimming. She’s a swimmer. How much of that to
applying to college. Make a plan, decide how much it
is, and stick with that plan. Now, this is a principle
that in economics we call a constraint optimization. What is constraint optimization? It’s a fancy name for
saying, look, in life, we face many constraints. If I am a consumer
with my family, we have what we call
a budget constraint. Income is this much, and
we have to decide how much to spend, how much to save. My high school daughter, she
has to decide how much time to devote to college
applications, how much– so this notion of constraint
optimization, to me, is a beautiful mathematical
concept. You can write out the equations and you can divide first order
conditions and everything. But it is also great
principle for life. We all face constraints. Health constraints,
financial constraints. Constraint optimization
applied to our day-to-day life, whether you are economics or
not, is trying to make the best out of your constraints, try
to make the best out of it. And apply that to your life. So whether you go to chemistry,
engineering, English, French, that’s a constraint, that’s
an economic constraint that will serve you
well, and that I try to apply to my life too. JOHNSON. Thank you very much. FEIVESON. I’ll add, since
you brought up your daughter, I have younger daughters
who are four and six. So I thought of one
other principle, which was decreasing
marginal utility. So, so I get a lot more– if
I’m trying to convince them to do something, I get a
lot more bang out of my buck if I normally deprive
them of candy and then offer them
one piece of candy and they’re really
excited about it. But I found that if I, if I make
the mistake of showering them with gifts or candy, then
offering them one more on top of that really doesn’t get me
very much or get them very much. So that’s another one. JOHNSON. Awesome. And so with the constraint
optimization in mind, we have about a minute
or so left. But I want each of you to
take roughly 30 seconds, that’s the constraint
we’re working with here, and answer the question,
if there wasn’t economics, how would society operate? FEIVESON. Okay, so my 30 seconds
is, this is similar to asking if there wasn’t biology, how
would the human body operate? Or if there wasn’t
physics, what would happen when someone drops a ball? Economics is the
interaction between people, the incentives that
drive people. So it’s almost impossible
to ask that question. That’s where I will- BOMFIM. Yeah, that’s, that’s
a tough one to follow. But yeah, I mean,
without, without economics, I’ll give you a– I
said I love history. Let me give you a quick
historical example. After World War I, they
are trying to decide on reparations for Germany. How much should Germany, the
defeated power at the time, pay to the allies, the
allies they had early in the war, right? And some policy-makers
at the time came up with some completely
crazy numbers. And they would say, oh, it just
sounded like a good number. There was no discipline
thinking about, okay, the GDP of Germany is this much,
so here is, here is something that would, that would,
that would serve the purpose of the reparation
mechanism at the time. So without having that,
that, I am a true believer, and there are those who believe
it too, that at that point, part of that, those,
of those reparations, they were actually not
knowing sowing the seeds of World War II, and I think
we would have done much better if there was, at
the time, a more, a more sound organized thinking
around, not around the politics, not around the punishment,
but also taking into account constraints. How much is it? What is the GDP of the
economy at the time? How much could be, could
be imposed in a way that the victors would get
their fair share, but without, without making it so
stringent that you ended up again contributing
to World War II. JOHNSON. Well, thank
you both very much for your impassioned responses. Give them all a round
of applause. [Applause] We will now
move on to our second panel with research assistants led
by my colleague, Steve Ramos. RAMOS. Thank you, Quentin,
and thank you to both Antulio and Laura for those
thoughtful responses. So as Quentin mentioned, I
will be moderating the RA, or Research Assistant, panel. So research assistants here at
the fed have the opportunity to work with Ph.D. economists on various interesting
topics and research. So this can range from
developing countries to consumer debt and student
loans and credit cards. And aside from this research,
they also have the opportunity to work in things like the
forecast that Laura mentioned, and also stress testing,
or any other activities that can result in
policy formation. And so with that, we
have three RAs here, and I’ll let them
introduce themselves, and we’ll start with Teresa. THERESA DINH. Hi, everyone. I’m Theresa. I was born in Hanoi, Vietnam, but I grew up in
Tallahassee, Florida. And I went to college not too
far away at the University of Florida, and I graduated
recently with a bachelor’s in economics and mathematics
and a minor in statistics. I am now a research assistant on the emerging market
economy’s team here. And my work so far has largely
had to do with the countries such as Columbia,
Mexico and India. FANTA TRAORE. Good morning, everyone. My name is Fanta Traore,
and I am from New York. I studied at Howard University. I majored in political
science and economics. And I currently work in the
International Finance Division. GERARDO SANZ-MALDONADO. My name is Gerardo. I am from San Juan, Puerto Rico. I also lived in Florida
for a little while. And I majored in
economics at Stanford. I work in the Monetary
Prints Division. RAMOS. So with that, we’re going to get started with
the questions. So I think this is a very
important question that a lot of you probably asked
yourself before. So what attracted you
guys to economics? And do you recall
a specific memory or incident that inspired you? And Gerardo, do you
want to start? SANZ-MALDONADO. Yeah, sure. So I took my first economics
class in high school. I was a senior. It was a graduation requirement. Like I didn’t know very much
about economics going into it. But I think one of
the interesting things about taking economics in the
fall of 2012, in particular, was we’re in the middle of this like very contentious
presidential election. It was all about the economy. And I found myself having these
like really heated discussions with my classmates about
like the Optimal Tax Rate, and like unemployment,
and GDP growth, which like in retrospect sounds
super lame, but I honestly, I found this important. And so I decided to major in
it when I went to college. It was kind of, over the years,
as I learned more about it, that I started to
think more about it, and it became a little
bit more personal. And I thought about
my own childhood. And I thought about growing
up in Puerto Rico and this like horrible recession
that happened. You know, people were getting
laid off left and right. My mom was one of those people. And that was pretty hard. But it was a very pivotal moment
in my life because that was kind of the factor that reciprocated
our move to Florida. And that opened up
so many opportunities and so many resources
that I don’t know that my family would
have had in Puerto Rico. And so I think about that a lot. And it’s always been very
fascinating to me to think about how this like complete
economic accident changed the course of my life. And if this hadn’t happened, I
don’t even know if I’d be here. But I know that that wasn’t
the story for everyone, and I asked myself why. And I think that’s kind of
what we do in economics. We think about kind of the
paths that people’s lives take and how economic conditions
affect those things. And understanding how closely
tied economics was to the story of my life, and the story
of other people in my life, and understanding that if
someone was going to tell that story, that it would
probably have to be me. That’s kind of how
I ended up here. RAMOS. Fanta? TRAORE. I can definitely
relate with that, Gerardo. And my journey towards
economics is definitely inspired by my family background. So my mother owned a hair
salon in New York City. And through that, seeing her
be a small business owner, I saw her hire her sisters,
and also employ people in the Malian immigrant
community. And seeing that firsthand,
I saw how that experience of her taking on that leadership
to open that salon has led to money being sent back home
to family members in Mali. So seeing that was really
seeing international finance. And another experience that
has also prompted my interest in economics is participating
in the Public Policy and International Affairs
Program between the summer of my junior and my senior year. So while I was in that program,
I saw how data can be used to help disenfranchised groups. And an example of what
happened while I was there was that a New York official
came to that program and basically showed us how a
supermarket was now introduced to a community that
I’m very familiar with, which is in Harlem. Basically, for a
large range of land, there is no supermarket
in that area. And that is basically
called a food desert. So this New York official
used economic data to now have a supermarket
be reinstated in that area. And prior to that, it was just
like Wendy’s and McDonald’s. And because I have a
passion for social justice and seeing communities
that aren’t doing well off, doing better, economics really
spoke to me in that moment. And after that experience,
I went ahead and no longer had my minor as
economics, and double majored. So my senior year, I
was then taking a bunch of economics classes
because it really spoke to me that data can be used to serve
disenfranchised communities. RAMOS. Theresa? DINH. So my interest in
economics also has a lot to do with my family background
as an immigrant. My family and I moved to
the U.S. when I was four. And it wasn’t until I was 11 that we went back
to Vietnam again. So seeing the general standard
of living that my grandparents, aunts, uncles, cousins lived in,
the lack of economic development in the country and the lack of
opportunities for my cousins, that planted this seed for my
interest in using my career to address global
poverty and inequality. When you see such stark
disparities and lack of opportunity, you can’t
help but ask yourself why. And that question why has
been the driving force that has led me to pursue a
career in economic research. RAMOS. So the next question,
so once you guys decided to pursue a career in economics,
so this question will be– we’ll start with Teresa. What challenges did you face
as an economics student? And how did you approach these
challenges to overcome them? DINH. Yeah, so the challenges
that I faced had to largely due with lack of resources at
my department in economics, and lack of sort of
structured opportunities in economic research
for undergraduates. So coming from a
large state school. And some of the ways, or when
you say a lack of opportunity, I essentially had to
create my own opportunities. And some of the ways in which
I did this were I did well in my courses. And then when the semester was
over, I asked my professors, hey, can I be involved
in your research? And this didn’t have to
be in just economics. I approached my, well,
economics professors, but it also spanned business
management to African studies. I also was an exchange
student, so I could take sort of economics electives
that weren’t offered at my university, such
as China and Africa, or development economics. And I also did an
internship in data analysis, so getting those hard skills. I also had the huge
privilege of being in the American Economic
Association Summer Program. That was really pivotal for me
in figuring out what a career in economics looks like and
what it takes to get there. And now I have an amazing
community of alumni who provide like support and a community
for being in this career. RAMOS. So Fanta, could
you talk about some of the challenges
that you faced? TRAORE. Absolutely. So there are two main challenges
that I would say I faced as a person pursuing
the field of economics. And the first one
is lack of exposure. So I bridged that gap
through participating in the same program that Theresa
actually participated in, which is the American Economics
Association Summer Program. And through that
program, I learned more about a pathway towards
the field of economics. So I took graduate level
coursework while I was in this program. I had mentors and also access
to resources to really carve out a way towards a master’s
or Ph.D. in the field, and also learning more
about public policy in the way economics looks
like when it’s applied. Another issue is the
lack of representation. So earlier today, Karen
Pence shared some data about how there is a push
for diversity in the field, and why that is so important. Currently, what I’m doing about
that is leading the creation of the Sadie Collective, alongside Anna Gifty
Opoku-Agyeman, who’s here in the room as
well, representing University of Maryland Baltimore County. And basically, the
Sadie Collective is all about getting more black women
into the field of economics, and we’ll be hosting our
first conference in February. And the purpose of this
organization is really to connect aspiring economists to existing economists
in the field. So in seeing that there is
a lack of representation, my way to address that is
to create that community where I will see examples, and also get other young
people thinking about the field through being around
those examples as well. And I really want to
emphasize, do not let that lack of representation deter you. There is space for
us in economics. The economics field is
pushing for more of us to enter because they see the
value that we all bring through our very
unique experiences. And with that, I also
just want to share a quote from Sadie Tanner
Mossell Alexander, who is the first black woman
to get a Ph.D. in the field, because I think it really
says something about her going after a Ph.D. in economics,
especially during a time when she couldn’t vote, she
couldn’t practice in the field, and also had all of these
barriers to be an economist. That quote is, “I knew well
that the only way I could get that door open was
to knock it out, because I knocked
all of them down.” She was the first woman to
get a Ph.D. in economics, and also the first woman to
graduate with a law degree from the University
of Pennsylvania. So if she could do that during
her time, you, for sure, can. And the economics community
is right behind you. RAMOS. Thank you for
sharing that with us. So I want to move on
to the next question. Gerardo, can you tell us about how you translated
your education into a career in economics? And what you do as a
research assistant? SANZ-MALDONADO. Yeah, so I think there are
like kind of two pieces to how I turned my education
into a career in economics. And I think they talked
about this a little bit in the economist panel. The first one is that
an undergraduate degree in economics really prepares
you to tackle a variety of different issues and a
variety of different fields. And the reason why is because
it emphasizes learning, like frameworks, like
analytical frameworks, or like structured ways of
thinking, so that you can like approach a problem that’s
very complicated and can think about it in a really
careful and structured way. And I think that the
second piece is technical. Like it was conveyed to me
early on in my undergrad that it was really
important for me to take computer
science classes. And I encourage everyone in
this room and everyone listening to take as many computer
science classes as they can. Because it really does give you
a leg up, I think like at least in my job, it’s a little
bit on the technical side for me like specifically. Like I work with a lot of
data, and it’s not always like structured super nicely, so
I have to think about how to use like code to solve these
problems in a careful way. And the fact that I
learned, that I took the time to learn how to code in
undergrad gave me a huge leg up and made it so that I was like
ready to hit the ground running when I made it to the fed, even
though at the fed there’s a lot of opportunities to
learn about, you know, not computer science
specifically, but data science and computing. RAMOS. So Fanta, the
same question to you. How did you translate your
education to a career? And why do you do as
a research assistant? TRAORE. Sure, so I’ll start
with the second question. As a research assistant,
I do economic research, and I also do data
analysis for the policy work that we do here at the fed. And as far as translating
my education into a career, I would say that my education
has been very multifaceted. So I had the skills that I got
from, like Gerardo mentioned, just critical thinking skills
from my economics coursework. But then I also was
very interested in other things while
I was an undergrad, such as learning French, because
Mali is a francophone country, and I’m very interested
in francophone affairs. And I also was educated through
my study abroad experiences. And those experiences were
traveling to South Africa to Morocco to Senegal
to Ghana to Rwanda, to all these different places
to really get a sense of Africa as a region, because
I’m really interested in doing work in Africa. And those experiences,
the French background, the studying abroad, as well
as my economic coursework, is what helped me
get my first job. So prior to joining the fed,
I worked in South Africa with a Social Innovation
Incubator. And that experience really
came about because I had all of those particular experiences that I had while I
was an undergrad. And my work looked like going
to places like Madagascar, going to places like Tunisia because of my French-speaking
background, and spreading some information
about entrepreneurship that our work in South
Africa was about. And I really would like
to push you all to think about obtaining those kind
of skills in pursuing, in pursuing economics. RAMOS. Yeah, for sure. So once we kind of got
to the fed, Theresa, what were some misconceptions
that you had prior to starting your position? And how did working at the
fed kind of dismiss some of those misconceptions? DINH. Yeah, so I thought I had
to know everything there was to know about finance
and accounting. And while it may
be useful to know, it wasn’t absolutely necessary. A lot of the learning
happens on the job. And there’s a huge
community here of research assistants
at the fed. And one thing I didn’t realize
is leveraging that community. So, for example, if I
have a quick question on like how do I do this in
code, I can always like ask any of the research assistants. We have so many resources here,
panels, speakers, how to apply to grad school, it
really is so nice to have such a great peer community as
a research assistant at the fed. RAMOS. So Gerardo,
what about you? What are some misconceptions
you had about the RA position? SANZ-MALDONADO. So it’s kind of interesting
because like for me, when I was like, I was first
like encouraged by my adviser to think about applying
for an RA with the fed. And to be honest, I like
really didn’t see myself here because I had a lot
of misconceptions about what it was going to
be like to work at the fed, or what it was going to be
like to work at the government. Like I thought like I
was going to like go to work wearing a suit every
day, and then it was going to be like really serious,
and I was going to have to like hide all these
things about myself on a day-to-day basis
about my background. And that’s really not the case. It’s a very like
open environment. It’s very collegial. I feel like because it’s
collegial, it makes it possible to have these like collaborative
kind of like relationships with other people in the office. And one thing that is
also like very interesting that I’ll note is that as a
research assistant at the fed, it’s different from a research
assistant at a university because instead of working for
one professor, you’re an asset to a team of economists. And what that means is that
you’ve got to work with a lot of different people, you
get to work with teams of different sizes that are
composed of different types of people, and that
kind of teamwork, teamwork environment is really
nice, and I really enjoy it. RAMOS. Okay, so we’re going to
be going to our last question. This one is for all of you. So what is one piece of
advice that you would give to a high school or a college
student who is interested in a career in economics? And what is some advice that
you wish you would have told yourself when you
first started college? Theresa, do you want to start? DINH. Yeah, so anything that
you do, have a deeper reason or conviction as to why you’re
doing it, as that will get you through many of the
challenges that it takes to accomplish anything
in any field. Chances are if you’re
interested in economics, you’re also interested in
like law, business, finance, psychology, political science. And you have to figure out, of
these, which is the best way for you to make your
unique impact? So do an economic internship,
or try to do some research, join various student
organizations in different fields to figure
out what your strengths are, what you find worthwhile, what
you don’t find worthwhile, because once you
find your reason why, the choice of whether
economics is right for you will be a confident one. RAMOS. Fanta, do
you want to go next? TRAORE. Yeah, so I will echo
some of what Theresa is saying. Figure out what it is that
you’re passionate about, and involve yourselves in
that in many different ways. So, for instance, let’s
say you’re passionate about small business ownership, if that’s what you’re
interested in, there’s so many different
ways to look at the experience of small business ownership. So immerse yourself in it through perhaps starting
your own small business. Another way that you can go
about it is through working with someone who’s a
policy-maker and is interested in seeing more small
business ownership. Another way to go about that is
also working with an economist who is doing research on
small business ownership. And the reason why I say to
expose yourself to one interest, for example, in different
ways, is because you’ll see that there’s so many ways to
go about economic development, community development, and
exploring this interest, and that will open you up
to understanding what it is that you like, what it
is that you don’t like, which is also just as important,
because you don’t want to do that for the rest of your life,
and also get an understanding of what the field consists of. So having all of those different
kinds of exposure is going to be beneficial for you
to understand yourself and what opportunities
there are. And then as far as advice
on how to go about college and high school, my
advice is to think about building a skill
set that you can sell. So with everything
that I’ve mentioned about my own background
and getting my first job, I managed to get
skills in data analysis, I managed to gain skills
and an understanding of the Africa region, and I
also had French as a skill set, which led me to travel to these
different francophone countries representing the
organization I was working for. So for you all, I would say,
I would suggest that you look into that for yourself. And that is something
that will carry you on through your career. RAMOS. So unfortunately, we are
running out of time, Gerardo. I’m sorry you’re not able
to answer that question. But at this time, I’d like
to invite Chris and Lil, who will talk about
the resources that we have available
here at the fed to help you in pursuing these
careers in economics. And thank you to our
panelists here as well. [Applause] CHRIS KURZ. Hi, my name is Chris Kurz. I’m an economist here at
the Federal Reserve Board. You’ve heard from the
president of a regional bank, our outreach specialist,
three fabulous economists, a gaggle of research assistants, and all of these folks
are an important component about why the Federal
Reserve works the way it does. At this stage, you might
be asking yourself how you, your school or your staff
can get more involved and take advantage
of the resources that the Federal
Reserve Board provides. And I’d like to describe three of those educational
programs to you guys today. Those resources are listed
on the handout you have, and it’s available online. So please take that with
you, because this is going to be your way of being able to
reconnect with us in the future after seeing this event today. So the first program is called
Coffee With the Economist. This is a program designed
for undergraduates. It’s really a lot like comedians
and cars getting coffee without the comedians,
without the cool cars, and without the celebrity
status. And actually, you don’t
have to have coffee either. Coffee With the Economist
is a program that’s designed to actually provide sort of this
mentorship light for individuals who are thinking about
a career in economics, that provides one-on-one
interaction for individuals between a Federal Reserve
Board economist and people that sign up for the program. And what I mean by
mentorship light, it’s not necessarily a long-term
commitment, it’s really a way of putting you in contact
with somebody either locally, in the D.C. region where you can
meet with an economist and go to the Federal Reserve Board,
have coffee, have a discussion about some of the questions
you are trying to think about your career path. Or more recently, we kind
of evolved the program to work remotely as well so you
can have a Skype conversation with a Federal Reserve
Board economist and talk about a possible career
trajectory in economics. Importantly, I’d like
to say that right now, we have over 300 economists
at the Federal Reserve Board. And if you want to
think about a statistic that shows you the commitment
of the organization to try and further diversity inclusion
throughout the profession, about a third of those, a hundred economists have
signed up for that program. Over the past two years,
we’ve made about 60 matches. And we hope that
some of you all, and some of you guys paying
attention right now online, some of you all paying
attention online will be signing up for the program and be
matched sometime in the future. The second program I’d like
to talk about is Fed Ed. This is for local high
schools and colleges. And really the goal of that
program is to expose individuals and educate individuals
about economics. This is a great program. It has research assistants
visit a local institution, visit a high school,
and have discussions about different programs,
about economics and educate about the Federal Reserve. The last program I’d like to
talk about is Fed Challenge. This is for undergraduates. They essentially come to
the Board and compete. It’s a college fed challenge. It’s a team competition
for undergraduate students, and they analyze economic
and financial conditions. They formulate monetary policy. And they essentially
act as the FOMC. And these competitions take
place across the country, and also take place
in our Board room, where the FOMC actually meets. So I’d like to hand
it over to Lil. LIL SHEWMAKER. Sure. Thank you, Chris. So I guess I have one real
message, and my message is that we have jobs, and
we have lots of jobs. And so hopefully that’s
good news for you. My name is Lil Shewmaker. I work in the Economics
Research Division. I’ve been involved in
recruiting and hiring for a number of years. I want to mention two positions
that we have available. And that’s the research
assistant position and summer internships. And I also want to
emphasize that I’m here not to talk about– or that
I’m not just talking about positions here at the
Federal Reserve Board in D.C., but I want to make sure
everyone understands that we are a Federal
Reserve System. And that means that
you have opportunities at 13 separate institutions, and that all 13 institutions
do hire research assistants and interns. Keeping in line with that
one system approach, we, a few years ago, developed
a system portal, and that, that portal, I would encourage
you to take a look at. It’s fedeconjobs.org. What that portal does is
briefly explain the role of a research assistant, which is basically this same
general responsibilities, whether you’re working at one of the fed banks or
here at the Board. So the portal talks
about the RA job. The portal includes testimonials
from our current RAs and some of our former RAs. And importantly, it lists
the 13 separate institutions and provides links to
each of those institutions where you can find specific
information about the openings and the application instruction,
which is a little different at each of the, at each of
the banks and the Board. So I would encourage
you to kind of decide, assuming that you’re
interested in economics after this wonderful
program this morning, to think about where you might
want to be geographically, and to use the portal
to access those sites at the various fed banks
and submit applications. Lastly, I just want to
mention, which has been a theme of the program this morning, that the Federal Reserve
System is truly committed to diversity and inclusion. And in reviewing
applications for our positions, we very much appreciate and
recognize the importance that different perspectives and
different experiences bring. And we do look at the
various experiences that everyone has had, and
we pay very much attention to looking at perspectives that could bring us
to a better place. Thank you. [Applause] JOHNSON. Thank you, Lil. Thank you, Chris. Today really has
been a great day. You’ve heard from people
at every level of the fed, on careers and economics and
why it’s important that each and every one of you
hear this message. You’ve heard today from the
largest employer of economists in the U.S., if not the
world, that you matter, that you can be here, that yes,
this is a career field for you. Ph.D. programs exist. They are looking for
students like you. Undergraduate programs
exist that are looking for students like you. Organizations like this
exist that are looking for students just like you. And no, you are not a
nice-to-have addition in this field. You are a need-to-have
addition in this field. I encourage you all
to be curious. Like Theresa said earlier, find
out, explore, learn new things, fill your head with
all kinds of ideas. Because at that intersection
is where economics lives. Wherever there are people,
wherever they are interacting with each other and
their environments to pursue a living,
you have economics. You live it every day. Learn more about it. And I also encourage you
all to follow the hashtag, hashtag fedeconjobs, and
at fed underscore careers. Thank you all for
joining us today. And again, on behalf of
the Federal Reserve Board of Governors, have a great day. This has been Exploring
Careers in Economics. [Applause] October 19,
2018 Federal Reserve Board of Governors Page 1 of 32

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