A Farewell Letter from America - Royal Economic Society
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The RES is a learned society and membership
organization founded in 1890 to promote economics.
We publish two major journals and organise
events including an annual conference. We encourage
excellence, diversity and inclusion in all activities.
Issue no. 193
April 2021 www.res.org.uk | @RoyalEconSoc
A Farewell
Letter from America
Sir Angus Deaton writes to us one last time
CONTENTS
Inside this issue…
APRIL 2021 | ISSUE NO. 193
major shocks to economic
activity leave long shadows
see page 12
01 THE EDITORIAL 12 THE COVID-19 RECESSION 20 THE WOMEN’S COMMITTEE
AND HEALTH
Endings and new beginnings: a brief How concrete steps on recruitment
introduction to the redesigned April James Banks, Heidi Karjalainen, and could improve the representation of
2021 issue, from the new editor Dame Carol Propper consider how women in economics
the Covid-19 recession will influence
future health
02 LETTER FROM… 21 THE ECONOMIC JOURNAL
The farewell Letter from America by An update on a year in the life of
15 AN UPDATE FROM THE
Sir Angus Deaton, reflecting on past the Economic Journal, based on the
ECONOMICS NETWORK
Letters, and his life and times detailed report for 2020
Alvin Birdi and Caroline Elliott
take stock on the pivot to
07 LETTER FROM… HIGHLIGHTS 22 OBITUARIES
teaching online, and describe the
Highlights from the Letters from ongoing response of the An obituary for Domenico Mario
America, chosen by the editor, and Economics Network Nuti, prepared by Joseph Halevi
an appreciation from Peter Howells and Peter Kriesler
18 COMMENT
10 PROFILE 23 NEWS
A comment from Jan Toporowski,
From Marshall to obesity, and other and a response from the original A selection of news items, including
discoveries: a question-and-answer authors, Roger Backhouse and a new Joint Managing Editor for the
profile of Dame Rachel Griffith James Forder Economic Journal
@RoyalEconSoc | www.linkedin.com/company/royal-economic-society | www.youtube.com/user/RoyalEconomicSociety
EDITORIAL 01
The editor:
JONATHAN TEMPLE
A guide to the April issue
T
his is an issue of endings oline Elliott takes stock of online
and new beginnings. Sir teaching and the response of the
Angus Deaton has contrib- Economics Network. For more
uted a much-admired Letter from information on economics and the
America every six months for pandemic, see the Covid-19 hub on
twenty-five years, but has decided the RES website.
that the one in this issue will be Another beginning will be obvi-
his last. His farewell Letter is a ous: our new look. We hope you
retrospective, longer than usual, like it. The issue would not have
and reminds us of what we will been possible in this form without
be missing. We also present some the unstinting help of the outgoing
highlights from his past Letters. editor, Peter Howells, and the new
My hope is that the latter feature designer, Phil McAllister. Many
will be as much fun to read as it thanks to them both, and to Helen
was to prepare, and I would like to Miller and Julia Randall-Edwards
thank Angus for his illuminating for their advice and guidance.
contributions over so many years. Finally, the previous issue
The new beginnings include the included an excellent piece on the
first in a series of profiles of lead- history of economic thought by
ing economists, which will often Roger Backhouse and James Forder.
feature economists connected to In this issue, Jan Toporowski
the RES. We start with a Past RES responds. He draws on the work of
Another beginning President, Dame Rachel Griffith. Gunnar Myrdal to argue that eco-
will be obvious: our Elsewhere in the issue, you can nomics is often, or even always, pol-
new look. We hope find an article by James Banks, itics in another guise. The original
Heidi Karjalainen, and Dame Carol authors provide a measured reply.
you like it Propper on the long-run effects of Some economists would have chosen
the Covid-19 recession on health. to be less measured – but that is for
A feature by Alvin Birdi and Car- each reader to decide.
02 LETTER FROM…
Letter from America:
ANGUS DEATON
A Farewell
Letter from America
After twenty-five years of writing for the Newsletter, Sir Angus Deaton contributes his final
Letter from America, in which he reflects on past Letters, economics, and his life and times
W
hen I was a Research the admirable Peter Howells, who who had built their own lives in
Officer in the Department has been a model of punctuality, Chicago and New York.
of Applied Economics in encouragement, and appreciation. More ominously, non-citizens
Cambridge in the early 1970s, I The Letter helped me learn to have always been at risk in the US,
was befriended by Thelma Liesner, write for a non-specialist audi- especially after 9/11, even before
then Thelma Seward. When she ence, or at least a non-specialist the horrors of Trump. Under the
became Editor of the Newsletter audience of economists, a half-way Patriot Act of 2001 (“Inequality
in 1995, and after I had moved house that is much easier than in America”, April 2002), univer-
to Princeton, she remembered writing for newspapers. It allowed sities were commanded to hand
me and, because she was a fan of me to write about things that over personnel files of non-citizens
Alistair Cooke’s Letter from Amer- interested me but didn’t always on demand, and prohibited from
ica on BBC Radio 4, she suggested I know much about, and I am grate- divulging that they had done so. In
might write a Letter about economic ful for my readers’ forbearance. my own case, I (think I) suffered
events in America. She suggested Writing the Letter has rarely felt nothing worse than the boorish
the budget, which I never did like work, more often joy. Many attentions of an immigration officer,
write about, if only because, unlike have been kind enough to say nice who took a dislike to me, tore up
Britain where the contents of the things over the years, and it seems my green card, and turned my life
budget become law, the American that many readers know of me into a bureaucratic hell that lasted
“budget” is a fantasy wish list that only through the Newsletter. for more than a year. As President
the White House sends to Congress I moved to Princeton from Bris- Obama writes in his autobiog-
each year. But I did find other tol in 1983. I have never given up raphy, immigrants “are always
things to write about—this is my my British citizenship, and did not afraid that the life you’d worked so
50th letter—and found an ideal become an American citizen until hard to build might be upended in
outlet in the Newsletter, always 2012, in part because, until Obama an instant.” Even after that near
attractively produced, relatively became president, I was less than upending, I was deterred from
short, and with news, professional enthusiastic about swearing alle- applying by the impossible require-
information, and obituaries. I was giance to the United States and ment that I document every trip
always pleased when it landed on its leadership. But as the years abroad for the last 30 years, until
my desk and always looked at it, passed, it seemed perverse not to I eventually realized that, for the
and others appeared to do so too. acknowledge that my home was earlier trips, their records were no
Thelma retired in 1997, and here, not to mention the homes better than mine. And Anne found
since then I have worked with of my children and grandchildren my old passports in the basement.
LETTER FROM… 03
Once I decided to apply for the Delaware?) As a final hurdle,
citizenship, the lights turned on, with no chance to prepare, on the
and the agency that I’d seen as a day of the ceremony, I was asked at
Writing the Letter has persecutor became my friend. The the door whether, in the two weeks
rarely felt like work, bureaucracy could not have been since I had passed the test, I had
more helpful—votes matter—and I worked as a prostitute. My late col-
more often joy
even qualified for a special old-age league, Uwe Reinhardt, claimed to
dispensation that allowed me to have answered “I have long looked
answer correctly only 12 out of 20 for something in that line of work,
possible questions (instead of 60 but so far without success.” At the
out of 100), many of which had the ceremony, the immigration official
same answer. (What is the capi- who welcomed the new Americans
tal of America? Who was the first began by telling us that voting
president? Who famously crossed was not an important part of citi-
04 LETTER FROM…
zenship, something that I already
knew to be false. I resisted the urge
to raise my hand.
That I long did not become
American reflected real ambiva-
lence, admiring many aspects of
American life while watching oth-
ers with fascinated horror. Both
reactions are well represented
in the Letters. I frequently wrote
about the immense prosperity of
American institutions like Prince-
ton, how their riches were put at
the service of scholarship, but how
wealthy universities, faced with
(relative) adversity after the finan-
cial crisis, acted to protect their
endowments, rather than using
them to ride out the crash (“Moon
over Texas,” October 2010). I wrote Anne Case and Angus Deaton (image: Rebecca Wilcox,
about some of the best of Amer- Purdue University)
ican economics, how immensely
distinguished scholars—and oth- few journals, several not under hard to tell what subjects they
ers—served changing administra- professional control, gives great cover, or whether economics has a
tions in Washington (“News for leeway to strong-minded and recognizable core. Perhaps that is
parrots,” April 2001). About how sometimes idiosyncratic editors all to the good.
the National Bureau of Economic who push their own views of what The American profession can
Research, under its longtime pres- is good economics, regardless of look after itself, but publication
ident (the late) Marty Feldstein, whether the journals are owned in these same top journals has
generated a stream of invaluable by a professional association. It increasingly been used to assess
externalities to the profession is hard to start a new journal, let young economists around the
(“Economists without borders,” alone a top journal, and the rents world, risking the demise of distinct
October 1998). are sometimes subverted to idio- approaches and schools that one
The Newsletter, with an audi- syncratic agendas. day will be necessary for economics
ence of economists, was a venue In one Letter in 2007, I wrote to evolve or to save it from exces-
where I could write about the positively about the extraordinary sive American inbreeding. And
American profession, again with breadth of research by job-market even within the US, I wrote of my
both admiration and horror. Eco- candidates, in contrast to how horror at being told in a post-job-
nomics remains extraordinarily economics had been in 1983 when market seminar office visit that, for
open to new ideas and to young I first arrived in Princeton, a time the candidate, whose talk demon-
people; in the US, there are still when theorists, empiricists and strated great virtuosity but neither
plenty of jobs, and talented people econometricians were all working concern for nor awareness of previ-
can still be tenured at top univer- on different parts of what was ous scholarship or approaches, the
sities in their 20s. The American recognizably the same (price the- main threat to productivity was the
profession’s susceptibility to fads is ory) elephant (“Random walks by amount of top-journal refereeing
perhaps a consequence, though at young economists”, April 2007). graduate students were expected
75, I doubt that I am a good judge. Of course, it was a myopic ele- to do. In such an environment,
If the profession does well by the phant that knew little about pov- fads spread fast, and knowledge
young, it does much less well by erty, inequality, race, or health, cannot cumulate. In contrast, I told
women; as the number of female leaving such topics to other social a story from the 1970s about an
economists grows so, rightly, do scientists. Of those job market elderly Italian economist who, after
the protests about how badly they papers, I wrote that it was often several glasses of brunello, splut-
are treated in seminars and in the hard to tell to which field of eco- tered with rage (and wine) about
refereeing process. nomics they belonged. Today, the a new journal (I suspect it was
I have written (perhaps too divergence has gone further, so the then newly-founded European
often) about the publication pro- that, for example, looking at the Economic Review) sending papers
cess, which today seems badly contents of recent issues of the to “unknown readers,” a procedure
broken. The dominance of the top American Economic Review, it is that was an affront to age and dig-
LETTER FROM… 05 nity, and indeed to the orderly pro- tion, and still today an item of unsafe in politics and unsound in duction of knowledge. At the time, I faith on the right, where free-mar- morals.’ He was remembered annu- thought our new world was better, ket fundamentalists believe there ally after 1962 through the Richard that meritocracy (and unknown is no problem that markets cannot Ely lecture at the annual meetings. readers) were good things. Now, I solve. One of my ongoing sorrows In 2020, the Executive of the AEA am not so sure. (And I am increas- about economics is that, amid the removed Ely’s name from the lec- ingly fond of brunello.) cacophony of our conflicting recom- ture, not because of his views on I frequently wrote about aspects mendations, we have not been able laissez-faire, but because he “wrote of American inequality, not only in to help politicians and the public approvingly of slavery and eugen- income and wealth, but inequality understand important, but per- ics, inveighed against immigrants, across race and citizenship, and haps not so obvious things, like the and favored segregation,” views my evolving understanding that fact that free markets can’t deliver inconsistent with the AEA’s code of the American government, unlike healthcare. The piece was picked professional conduct. In “America the British government, which up by one of the health columnists wakes up to inequality,” April 2014, my parents and I had confidently in the New York Times, and my I wrote warmly about Woodrow looked to for protection, was fre- hip became famous. At my son’s Wilson, a contemporary of Ely, quently an oppressor, more often wedding, a guest asked who I was, who struggled (in the end unsuc- redistributing up than down. One and when told flashed immediate cessfully) against inequality and of my colleagues in 1983 liked recognition, “aah, you’re the man privilege at Princeton, and (with to proclaim that “government is with the hip.” more success) in the United States theft.” I was appalled, but have In one Letter, when I was Pres- (he was President when the Consti- learned how often it is true. Mem- ident of the American Economic tutional Amendments for women’s bers of Congress impeded regu- Association, I noted my surprise suffrage and the income tax were lators from stopping opioid man- at discovering that the AEA was implemented). He too was “can- ufacturers and distributors from founded five years before the Royal celed” by Princeton in 2020, in part addicting and killing tens of thou- Economic Society, which began for segregating the federal govern- sands of less-educated Americans, in 1890 as the British Economic ment’s workforce, and his name no and they have consistently—across Association, and whose founding longer appears on the School where both parties—prevented attempts meeting was attended by Edwin I once taught and worked. Amer- to rein in the depredations of a Cannan, Francis Ysidro Edge- ica—at least in part—has come to healthcare system that absorbs a worth, Robert Giffen, Neville understand that inequality is about fifth of GDP. There are five health- Keynes, George Bernard Shaw, more than money. care lobbyists in Washington for and Alfred and Mary Paley Mar- Anne and I spend a month every every member of Congress. shall. Richard T. Ely, a founder of summer in Montana, a break that Many Letters were about Amer- the AEA, and its sixth president keeps us sane, and the state itself, ican healthcare, whose horrors are in 1900-1901, was a leader of the where I usually write the fall Letter, an endless source of amazement Progressive Movement, and wrote, has often made an appearance. The and amusement to British eyes. as part of the AEA’s platform, great cosmopolitan universities on Perhaps the highpoint was about that ‘the doctrine of laissez-faire is the coasts (Atlantic, Pacific, and my own hip replacement (“Trying to be a good hip-op consumer”, April 2006), trying to find a good surgeon in the first place (“He’s the guy who did the Pope, but he’s past it”) and being mistaken for someone else at 3.00 am by a terrifyingly insistent nurse armed with drugs and needles. The point of the piece was to document the absurdity of expecting consumers to shop for healthcare as they shop for other items, an idea then being pushed by the Bush administra- The Madison Valley and Madison Range in Montana, sometimes mentioned in the Letters, including this Farewell Letter
06 LETTER FROM…
Lake Michigan) are astonishingly have good reason to mourn the
disconnected from much of America, decline of unions. The intense
making it hard for those of us who political reactions to the work from
work in them to sympathize with deeply interested parties, espe-
or understand the way that many cially the fast-food industry, would
Americans think. This includes have been no surprise to Adam
their historically well-founded sus- Smith when he wrote about “The
picion and detestation of the Fed- clamour of our merchants… for the
eral Government. They often see support of their own absurd and
federal regulations as attempts by oppressive monopolies.”
outsiders to make them behave like I also had the special pleasure
extras in the theme parks where of writing about the events around
those outsiders come to play, outsid- the Nobel Prize. One highpoint
ers who have little understanding of Princeton University, home to that stays with me (“Special edi-
the ever more limited employment Sir Angus Deaton since 1983 tion from Stockholm and Wash-
opportunities for them and for their ington,” April 2016) was an event
children. You are unlikely to meet that has not taken place since
someone in Princeton who has had 2016, which is the reception in the
four children serve in the US mili- Oval Office of each year’s Ameri-
tary. I drew a parallel—that I con- Economics remains can laureates. President Obama
tinue to see as real—between the extraordinarily open to new opened the door himself, and as I
regulations that bother Montana shook his hand, I gestured towards
farmers, and the increasing meth-
ideas and to young people Anne behind me, beginning “I
odological regulation of academic would like to introduce. . .” which
research, from which economics was as far as I got. “Professor Case
is far from exempt (“Your wolf is needs no introduction to me, and
interfering with my t-value,” scientific content in economics.” now we are going to discuss the
October 2012). He went on to congratulate him- paper that you have both written.”
My first Letter, in October 1996, self and the rest of the profession, The paper—the first one of our
was about the minimum wage, but presumably neither Card nor “deaths of despair” work—had
particularly the then new work Krueger, for not being “a bevy of been published three days before,
of my colleagues David Card and camp-following whores.” Another and he had read it carefully, and
Alan Krueger, and I returned to notable economist, June O’Neill, suggested that we draw a parallel
it two years ago after Alan died. noted, like a good Bayesian, that with the catastrophe in the Black
I have never worked on the min- “theory is evidence too.” Of course, community forty years before, an
imum wage, but the issues—how the profession, camp followers or idea we adopted in our book. There
to do empirical work, how to bring not, understood that the empirical were no Nobel visits in the Trump
evidence to bear on policy, the role result made sense if employers had years; I quoted the quip from a
of theory, and the potential for monopsony power, but that fast New York Times op-ed, asking
violent political controversy—are food restaurants could be monop- what Trump could possibly learn
ones that I care about. sonists was itself seen as likely as from someone (Dick Thaler) who
The minimum wage work, and water flowing freely uphill. works on the lack of self-control.
its use of the natural experiment Jason Furman later wrote that In the next Letter (“On becoming
methodology, seemed like magic Card and Krueger’s work changed superannuated,” October 2016),
at the time, raising the curtain the minds of half of the profession, I recounted the story of how the
on new possibilities of investiga- still a good description. In my Nobel magic brought humanity
tion. As with all new methods, its own judgment, the accumulating and festivity to a dreary govern-
problems became more apparent evidence supports their original ment benefit office. As my friend
over time, but the history since results, as does the experience Danny Kahneman told me in
1994 is important and instruc- in Britain after 2000, and, as a 2002, the single best thing about
tive. For many economists, the result, the importance of monop- the prize is, not the happiness it
result that employment might go sony is more widely recognized, brings to the recipient, considera-
up with an increase in the min- if far from universally so. This is ble though that is, but the happi-
imum wage was obviously false. not just water flowing uphill, but ness it brings to other people.
James Buchanan wrote that this a whole new world, in which the Writing these Letters has given
was like claiming that water runs economy looks less like a benevo- me great pleasure, and I hope
uphill, and was “equivalent to a lent market and more like a class that it has brought pleasure to my
denial that there is even minimal struggle, in which working people readers too.
LETTER FROM… HIGHLIGHTS 07
Letter from America: highlights
The Letter from America
in Retrospect
We present highlights chosen by the Editor
On social security funding, April 1997 was immediately denounced by 120 billion-
The [American social security] system could aires (including George Soros, Bill Gates
be made solvent for the next 75 years if père, and Warren Buffett) in an advertise-
the current social security payroll tax were ment in the New York Times…
raised from the current 12.4 percent to 14.6
percent, a solution that is about as likely as From a letter on American development
universal health insurance, gun control or policy, October 2002
the abolition of the death penalty. The book [by William Easterly] ... will be
much enjoyed by professional economists for
On policy debates, October 1999 its exposition in intelligent lay language of
… given the quality of much that is pub- how the technique of instrumental variables
lished in both fields, it is hard to believe solves the causality problem. (The intelli-
that peer-review in either economics or gent lay public is likely to doubt the sanity
public health can bear the burden of certifi- of economists even further.)
cation. When the results of working papers
posted to the web instantaneously become
part of the policy debate, traditional proce- Peter Howells, the former
dures hardly seem adequate. Editor, writes:
On economics and health research, When I took over from Thelma Liesner
April 2000 in 1998, the ‘Letters from...’ America,
… it is no longer unusual for economists to be France and Germany were a regular and
asked to team up with doctors who fear that popular feature. I have lost count of the
their research will not be funded without the number of times, at various RES events,
presence of economists and their insights about that readers told me they enjoyed the
behavior, for example about smoking or alcohol Newsletter and that it was worth reading
consumption. These partnerships involve real for Angus’s letter alone. (I took this as
mutual learning and are more evenly balanced a compliment in spite of its ambiguity.)
than the much-noted imperialist excursions of Dealing with his letter was certainly one
economics into other social sciences. Econom- of the easiest of my tasks as editor. It
ics may be the 600 pound gorilla in the social was always on time (one needs to have
sciences jungle, but it’s still a barely visible been an editor to appreciate what a rare
creature in the Bethesda zoo. and valuable quality that is); it never
needed any work; and above all it was
On the new George W. Bush administra- always interesting to read. I am pleased
tion, April 2001 to see that Angus has mentioned some
[Larry] Lindsey has described the estate tax outstanding examples in his farewell
(referred to by Republicans as the ‘death’ letter. I couldn’t have done that. They
tax) as ‘the biggest impediment to capital were, all of them, gems.
formation on the nation’s books.’ This view
08 LETTER FROM… HIGHLIGHTS
On the George W. Bush tax cuts, April 2003 Zero pure time preference, if it is a vice, is
In Washington, there will be deficits for surely a minor one. Relying on markets to
many years to come, in part in response to teach us ethics is very much worse.
a weaker economy, but mostly as the result
of tax cuts whose beneficiaries are typically On the Economic Journal, as part of a
very well-off. In the states, most deficits letter on the AEA, April 2010
will be closed in a way that protects those The first issue of the Economic Journal
who are benefiting from the federal tax cuts. starts with a statement of purpose by the
There is no such protection for the elderly, Editor, Edgeworth, proclaiming that the
the poor, and the sick. ‘difficulties of Socialism will be dealt with
in the first number, and the difficulties of
On American healthcare, April 2006 Individualism in the second.’
This situation has been compared by my
Princeton colleague Uwe Reinhardt to shop- On economies and universities in reces-
ping blindfold in a department store, and sion, October 2010
then months later being presented with a …economics has failed to set any limits on
bill on which some items are charged at the public debate about cause and effect in
full price, and some at some fraction of full macroeconomics… what people think is well
price, but with no advance knowledge of predicted by their political ideology… While
either what one has bought or what it will I am not naïve enough to suppose that eco-
cost. And this is for those fortunate enough nomics has a core scientific content that
to have insurance. can be separated from politics, an outsider
might wonder just what we have all been
On changes in economics, April 2007 doing for the last eighty years.
If the typical thesis of the eighties was an
elaborate piece of price theory estimated by On criticisms of economics, October 2011
non-linear maximum likelihood on a very Robert Zoellick… jibed that ‘in physics,
small number of observations, the typical the- Nobel prizes are awarded for being correct
sis of today uses little or no theory, much sim- while in economics they are often awarded
pler econometrics, and hundreds of thousands for being brilliant’. (It is an interesting exer-
of observations... The extent to which data cise to list economics laureates, and allocate
can effectively be substituted for theory is them to one or other of Zoellick’s boxes.)
clearly a topic that is being actively explored,
at least empirically... In the end, it is hard On economics and other disciplines, also
not to think that the quality of research owes from October 2011
more to people than to methods. Behavioral economics and psychology are
everywhere, and it is much harder than
once was the case to see any real distinc-
tions between what economists do and what
the refusal to consider ethical questions is done by sociologists, psychologists, and
explicitly but to leave them to the market political scientists. This is not the imperi-
is surely the American vice. How do the alist economic enterprise of 20 years ago,
where economists set out to conquer their
preferences of unborn generations get poor sisters – armed with rational choice and
expressed in the bond market? a self-proclaimed monopoly on the tools of
causal inference… Instead, economists now
believe that it is impossible to think about
economic development, or about macroeco-
On climate change and the Stern Review, nomic policy, without incorporating politics,
October 2007 and that sociology and psychology have seri-
If zero discounting (with perhaps a touch of ous things to tell us about human behavior.
paternalism) is the British vice, the refusal
to consider ethical questions explicitly but On the costs of unemployment, April 2012
to leave them to the market is surely the While there is endless speculation about the
American vice. How do the preferences of effects of unemployment and recession on
unborn generations get expressed in the the election prospects of President Obama
bond market? Do we really want to discrim- and his opponent… there is little discus-
inate across people by their date of birth? ... sion of what the recession is actually doingLETTER FROM… HIGHLIGHTS 09
l have often thought of the story of the dog who liked to chase
buses, but had little idea of what it would be like to catch one.
The Nobel is not just catching the bus, but being run over by it
to people. Apparently, the main effects of On the minimum wage debate, April 2019
interest are those on the chances of politi- My friend Anthony Appiah, a philosopher
cians in the election… Jobs mean more than who thinks about and comments on public
income, and the loss of a job brings a loss of policy, recently asked me, with some irrita-
structure and meaning and it is most likely tion, why economists had still not managed
this that brings the loss in well-being. to settle what seemed like a straightforward
question… But perhaps Appiah’s question
On economists and inequality, October 2013 is ill-posed and has no general answer? Why
Yet here are two areas [health and do we economists — as well as non-econo-
gender equality] where I believe that econ- mists — suppose that the effect of a treat-
omists, not through any political commit- ment should always be the same, or at least
ment, but through their regular activities, always act in the same direction?
have been helping keep inequality under
control, and where, as is often the case, On the Covid-19 pandemic, April 2020
the realisation comes only when they stop But the truth is that no health system, how-
doing so, or when the forces on the other ever well designed and funded, could deal
side win a victory. with the plague that threatens to overwhelm
us. No planner would make preparations for
On winning the 2015 Nobel Prize, April 2016 something that we have not seen in a cen-
As many previous recipients have told, the tury, would construct intensive care units
experience is both exhilarating and over- that are almost always empty, nor construct
whelming; l have often thought of the story tens of thousands of ventilators that are
of the dog who liked to chase buses, but had almost never needed and would rust in place.
little idea of what it would be like to catch
one. The Nobel is not just catching the bus, On multiple crises, October 2020
but being run over by it. …it is hard not to infer that, so long as the
elite are not suffering, and as long as the
On the American healthcare debate, stock-market remains airborne, our current
April 2017 political system will not help those in trou-
At the end of his [1963 AER] paper, Arrow ble… I hope that I am wrong. Perhaps there
wrote: ‘It is the general social consensus, is hope in the idea that it will take multiple
clearly, that the laissez-faire solution for crises to change a deeply broken but well-de-
medicine is intolerable.’ This is perhaps one fended economic and political system.
of the few sentences in the paper that has
not stood the test of time, though there is
nothing at all wrong with the last clause.
The Letters from America
On personal memories of economists,
October 2017 The RES has an online archive dating back to
The first seminar I ever heard in economics, April 2013, at
in Cambridge in 1969, was Tony [Atkinson] https://www.res.org.uk/news/newsletter/
presenting his famous paper on the meas-
urement of inequality. It made me think The full set of Letters, from October 1996
that economics was a pretty cool subject, I onwards, is available here:
thought all economics talks were like this, https://scholar.princeton.edu/deaton/
and it ruined me for a lifetime of seminars. letters-america10 PROFILE
The Profile: Dame Rachel Griffith
From Marshall to obesity,
and other discoveries
In this new series, we profile leading economists. We start with Past RES President,
Dame Rachel Griffith of the University of Manchester and the IFS
Let’s start with your background, and its that she has been able to achieve all that
influence on you. she has and still look like she’s having fun.
I am the youngest of four and grew up in A very close second is Janet Yellen. She is
an environment where people were always incredibly smart, public spirited, and - I can
debating current events. From a young age only imagine - must have nerves of steel to
I was expected to argue my position. It was do the job she does. Yet she comes across as
great training to be an academic, and I’m kind, engaging, and genuinely interested in
sure it helped to give me confidence to put what others think and do. She has done a
my own ideas forward. lot to promote equality and diversity in eco-
My parents were from Texas. They both nomics, and I think we are all better for it.
had a strong work ethic, and strong moral
values. They instilled in us the idea that if Is there a book or paper that you think
you are fortunate in life it is your respon- all economists should read?
sibility to work to help others who are less Marshall (1890), Principles of Economics, is
fortunate. They were involved in the civil one of the best written and most insightful
rights movement, and anti-war activities. books in economics that I have read. Well,
My father was a freedom rider, and my OK, I have to admit that I haven’t actually
mother travelled to Vietnam to witness the read it from cover to cover, but it is very
US bombing of civilians. accessible, and sounds very modern and is
Growing up in this environment had as applicable today as it was when he wrote
an enormous impact on me. I didn’t enjoy it, so I really should go back and reread it.
school, and in fact dropped out and never
finished high school. I later went back and
took the Graduate Equivalency Degree
(GED) so that I could go to university. How- Unexpected discoveries have played
ever, I don’t think this has really harmed
my career much. My parents and older
an important part in my career
siblings had taught me how to think and
how to learn, and when I later got inter-
ested and returned to education, it wasn’t
too hard to catch up. Do you believe in sudden breakthroughs?
Yes, absolutely. Serendipity and unexpected
Are there people you especially admire? discoveries have played an important part
Michelle Obama is someone who comes in my career.
across as having enormous integrity and One example is the work that I’ve done
compassion. Her relationship with Barack with Philippe Aghion. He and I were teach-
seems to be a genuine partnership. I admire ing a graduate class together at UCL onPROFILE 11
competition, innovation, and growth. The
way we organised it was that one week he
gave a lecture on the theory and the next
week I’d give a lecture on the empirics. We
very quickly realised that we were confus-
We very quickly realised
ing the students because we were telling
them opposite things. From that experience that we were confusing
we wrote a book (Competition and Growth)
which takes the form of a dialogue between the students
an applied theorist using Schumpeterian
growth models and a microeconometrician
employing new techniques to gauge compe-
tition and entry. It was great fun to write.
Another example is the work that I did
with Melanie Luhrmann and Rodrigo Llu-
beras. Rodrigo was a PhD student of Mel-
anie’s, and he was putting together some
data for us on long-run trends in calorie
purchases recorded in the main UK house-
hold expenditure survey. We wanted it
as background to something we were
looking at. He brought us this figure
that showed that the number of
calories that households were pur-
chasing had fallen over the past few
decades, by quite a lot. We told him
it must be wrong, but after several
iterations he convinced us it was
right, and we wrote a paper that I
really like that shows how this fact is
consistent with rising obesity (life has
become more sedentary).
What makes you pessimistic about the
world, and what optimistic?
I’m basically optimistic about most things.
I think the human race is very resilient
and that at heart most people are well
intentioned. I’m constantly amazed at
the generosity and kindness that
people can show in all sorts of
unexpected situations.
However, two things have
made me somewhat more
pessimistic over recent
years. The Brexit vote was
depressing; I felt that a
monumental decision
was made for all the
wrong reasons. The way
that social media has
turned out also makes
me pessimistic - I don’t
think it’s delivered all
the things that people
hoped it would, and it
has caused quite a bit
of harm.12 FUTURE HEALTH
The Covid-19 recession and health
James Banks, Heidi Karjalainen, and Carol Propper consider how the Covid-19
recession will influence future health
A
The authors t the end of 2020, the UK Intuitively, it might seem
economy had shrunk by natural to think that mortality
JAMES BANKS just under 10%, there had increases in bad economic times.
UNIVERSITY OF MANCHESTER been over 100,000 deaths from But when looking at mortality
AND INSTITUTE FOR Covid-19 and five percent of the among the whole population (and
FISCAL STUDIES labour force were unemployed. not just those who lose a job as a
While the vaccines offer hope that result of a recession) the evidence
HEIDI KARJALAINEN the lockdown will ease, and the is mixed, with some studies find-
INSTITUTE FOR death toll will slow and the econ- ing it to decline in recessions (for
FISCAL STUDIES omy pick up, we know from past example, Ruhm 2000) or others
experience that major shocks to finding it to be either unaffected
DAME CAROL PROPPER economic activity leave long shad- by macroeconomic conditions or
IMPERIAL COLLEGE LONDON ows. Here we focus on the poten- only slightly increasing in reces-
AND INSTITUTE FOR tial effect of the economic recession sions. While deaths may not
FISCAL STUDIES on future health. change very much, many studiesFUTURE HEALTH 13
References
Adda, J. and Fawaz, Y. (2020). The Health Toll of Import Janke, K., Lee, K., Propper, C., Shields, K. and Shields,
Competition. Economic Journal, 130(630), 1501-1540. M. A. (2020). Macroeconomic Conditions and Health
in Britain: Aggregation, Dynamics and Local Area
Bellés-Obrero, C. and Vall Castelló, J. (2018). Heterogeneity. IZA DP No. 13091, March.
The Business Cycle and Health. Oxford Research
Encyclopedia of Economics and Finance. Kivimäki, M., Batty, G. D., Kawachi, I. and Steptoe, A.
(eds.) (2018). The Routledge International Handbook of
Case, A. and Deaton, A. (2015). Rising Morbidity Psychosocial Epidemiology. Routledge, Abingdon, and
and Mortality in Midlife Among White Non-Hispanic Routledge Handbooks Online.
Americans in the 21st Century. Proceedings of the
National Academy of Sciences, 112(49), 15078-15083. Pierce, J. R. and Schott, P. K. (2020). Trade Liberalization
and Mortality: Evidence from US Counties. American
Case, A. and Deaton, A. (2017). Mortality and Economic Review: Insights, 2(1), 47-64.
Morbidity in the 21st Century. Brookings Papers on
Economic Activity, 397-476. Ruhm, C. J. (2000). Are Recessions Good for Your
Health? Quarterly Journal of Economics, 115(2), 617–650.
Coile, C. C., Levine, P. B. and McKnight, R. (2014).
Recessions, Older Workers, and Longevity: How van den Berg, G. J., Lindeboom, M. and Portrait,
Long Are Recessions Good for Your Health? F. (2006). Economic Conditions Early in Life and
American Economic Journal: Economic Policy, Individual Mortality. American Economic Review, 96(1),
6(3), 92-119. 290-302.
find that mental illness and deaths The long-run effects of reces-
by suicide increase in recessions, sions have been shown to be
and a review of the evidence goes particularly strong on certain
so far as to say that the deteriora- a review… goes so far as to groups of people according to
tion of mental health in recessions say that the deterioration of their situation at the time the
is the only well-established finding mental health in recessions economic shock hits. Recessions
across studies (Bellés-Obrero and experienced in early childhood
Castelló, 2018). is the only well-established can have an impact on mortal-
Mortality during the Covid-19 finding across studies ity at the end of life, implying
pandemic and associated recession effects that last the lifetime of the
will be dominated by the direct individuals who are born during
effects of the pandemic and its recessions (for example, van den
associated effects on healthcare Berg et al. 2006). And all current
provision. Any aggregate short-run A range of studies have found younger generations may well
evidence from previous recessions long-run consequences of reces- have long-lasting effects of this
will be even harder to generalise sions for mortality and morbid- pandemic given disruptions to
given the particular nature of the ity. Workers who experience a primary and secondary schooling,
economic and social changes expe- recession in their fifties have been higher education, and transitions
rienced within the pandemic, and shown to subsequently die sooner into the labour market, which
the way these have fallen differen- (Coile et al. 2014). The unem- would all be expected to have per-
tially on particular groups. ployment caused by the 2007-9 manent effects on life-time earn-
However, whilst the evidence global financial crisis increased ings. In addition, those with low
on short-run effects of recessions the prevalence of chronic illness, incomes, insecure jobs, and poorer
on health may be mixed, the long- especially mental illness, in the living situations and family sup-
run health effects of economic UK over the two years following port arrangements are more likely
downturns have been shown to be the onset of the recession (Janke to have greater financial worries
large and persistently negative, et al. 2020) which will then track and poorer mental health out-
and it is here that we might see through to subsequent mortality, comes in the pandemic, which are
some more concrete implications given the link between long-run themselves risk factors for future
for mortality and health of the chronic illness and mortality poor physical health and prema-
Covid-19 pandemic. (Kivimäki et al. 2018). ture mortality.14 FUTURE HEALTH
from alcohol, drugs and suicide
(which have been termed ‘deaths
of despair’, Case and Deaton, 2015,
2017). The US local labour markets
with greater exposure to Chinese
import competition experienced an
economic decline that led to higher
rates of physical and mental health
problems (Adda and Fawaz, 2020)
and increased mortality, especially
from alcohol and drugs (for exam-
ple, Pierce and Schott, 2020). This
kind of structural change takes
place over several business cycles
rather than during one recession,
and its effects are distinct from the
health effects of the more tempo-
Finally, the economic effects of rary state of a recession.
the virus and the lockdown are not So there will certainly be long-
evenly distributed, with strong dif- term effects that depend on how
Current younger generations ferential impact by occupation and the remainder of the pandemic
may well have long-lasting geography. To the extent that those and the recession plays out, the
effects of this pandemic areas and occupational groups that policies that are put in place as a
have been hit hardest by Covid- result, and the nature of post-pan-
19 do not recover, the pandemic demic outcomes when it comes to
may lead to not just an increase in the structure and distribution of
mortality, but a further increase economic activity and the nature
in inequalities in lifespan across of our lifestyles. We will be feeling
people and areas. Decades of indus- the health consequences of Covid-
trial decline in the United States 19 long after the virus itself is
may have led to a rise in deaths under control.
Further reading
Social distancing saves lives. So do recessions: The impact of Covid-19 on chronic health in the UK:
Anne Case and Angus Deaton discuss how the Katharina Janke, Kevin Lee, Carol Propper, Kalvinder
lockdown measures may actually save lives through Shields, and Michael Shields summarise the evidence
mechanisms that are additional to avoiding the Covid- from a recent study about long-term effects of
19-related deaths. recessions on chronic illness.
https://www.politico.com/news/ https://voxeu.org/article/impact-covid-19-
magazine/2020/04/02/coronavirus-economy- chronic-health-uk
reopen-deaths-balance-analysis-159248#2
Covid-19 pandemic hits mental health, especially of
Recessions and health: the long-term health the young and of women, and widens inequalities:
consequences of responses to the coronavirus: James Banks and Xiaowei Xu analyse initial mental
James Banks, Heidi Karjalainen, and Carol Propper health impacts of Covid-19 and find substantial
summarise some of the evidence on the impact of negative impacts on mental health across
recessions on health. the population.
https://www.ifs.org.uk/publications/14799 https://www.ifs.org.uk/publications/14876
How might the Covid-19 recession affect your health? For further details and a broader perspective, see
An economist explains: Christopher Ruhm talks about Banks, J., Fancourt, D., and Xu, X., 2021, ‘Mental health
the potential effects of the current recession on health. and the COVID-19 pandemic’, in Helliwell, J., Layard,
https://news.virginia.edu/content/how-might-covid- R., Sachs, J. and De Neve, J.-E. (eds.) World Happiness
19-recession-affect-your-health-economist-explains Report 2021, 20 March 2021.THE ECONOMICS NETWORK 15
An update from the
Economics Network
Alvin Birdi and Caroline Elliott discuss the pivot to teaching online
and the Economics Network’s response
The authors
ALVIN BIRDI
DIRECTOR OF THE ECONOMICS
NETWORK AND UNIVERSITY
OF BRISTOL
CAROLINE ELLIOTT
DEPUTY DIRECTOR OF THE
ECONOMICS NETWORK AND
THE UNIVERSITY OF WARWICK
I
n the July 2020 newsletter,
we wrote about the move to
predominantly online teaching
and assessment. In the months
that have followed, academics
have worked long hours to rede-
sign teaching and assessment
materials appropriately for online
or blended delivery. Few will supporting academics in this great
have had time to reflect critically online pivot over the past year.
on the collective achievement of For many, the Economics Net-
these developments. work is synonymous with the Some 450 delegates
We hope that in the coming training opportunities we provide, attended these sessions,
months there will be time for predominantly – but not exclu- from 25 countries
reflection on the nature of these sively – for economists in the early
individual and departmental-level stages of their academic careers.
successes. There include new com- Until 2020 this training had taken
petencies in the additional tech- place in face-to-face workshops.
nologies required to prepare online Early last summer we recognised variety of online tools, with addi-
teaching materials, to make large that supporting colleagues with tional asynchronous materials pro-
and small online classes engaging the move to online teaching and vided to participants in advance
and interactive, as well as recon- learning would itself need to be and after sessions. The themes
ceiving assessment to work online. facilitated online. We took the covered Engaging Students and
The Economics Network has opportunity to recast these work- Academics with Online Learn-
been busy supporting colleagues shops, both as online training and ing, Teaching with Data Online,
across the UK and beyond in what as real-time demonstrations of Teaching Economics with Excel
has been a profound rupture not how engagement can be fostered in Online and Adaptable Assessment.
just to teaching, learning, and online environments. Some 450 delegates attended these
assessment, but also in student We began the summer with our sessions, from 25 countries, and
support and sense of belonging. first online symposium, consisting feedback was very positive. Mate-
Here we take stock of our activities of four themed live events using a rials from the symposium can be16 THE ECONOMICS NETWORK
accessed from the Economics Net-
work website.
The Early Career Academic
(ECA) and Graduate Teaching
Assistant (GTA) workshops fol-
lowed quickly after this symposium
in early autumn 2020, and again
took place virtually. There were 20
ECA attendees and 72 GTA attend-
ees with an additional 20 attendees
for the extra module offered to
experienced GTAs who had previ-
ously not taught online. Again, the
feedback was very appreciative,
and attendance healthy both for the
core modules and the optional mod-
ules on Games and Experiments,
Creating Learning Communities,
Inclusive Teaching and Facilitating
Effective Group Work.
We welcomed seven new Asso-
ciates to the Network in January
2021, from the universities of
East Anglia, Loughborough, Not-
tingham Trent, Portsmouth, Stir-
ling, Strathclyde and Warwick.
These new recruits join existing
associates to make up our 51 asso-
ciates around the UK. Together
with a senior Executive Board of
twelve members, the Network’s
activities are undertaken by a
large number of contributors, to
whom we are always grateful. We
have been striving to make the
Network increasingly diverse and
are pleased that contributors and
senior staff are now relatively We hope to hold this year’s
well represented across various DEE conference from September
dimensions, including gender, 1st-3rd at Heriot-Watt University,
country of birth, ethnicity, and potentially incorporating a hybrid
These developments may
university type. mode of delivery that includes both result in longer-term shifts in
Our associates and Executive face-to-face and online elements. economics teaching
work across six workstreams However, depending on circum-
that represent the breadth of our stances, we may have to follow
activities. As well as the Training the lead of conferences such as the
group, there are groups devoted RES and SES, earlier in the year
to research and data analysis; than ours, and move fully online.
publications including the Eco- Unfortunately, it seems likely that
nomics Network Handbook, the the hopes of some Executive mem-
International Review of Econom- bers for a ceilidh after the confer-
ics Education, and the Economic ence dinner will be dashed. But as
Review magazine aimed at A-level always, we expect the conference
students; website and communica- to be as welcoming, supportive,
tions; recruitment; and conferences and productive for the teaching
and symposia encompassing the community as in previous years.
biennial Developments in Econom- We have been pleasantly sur-
ics Education (DEE) Conference. prised by the sharp rise in theTHE ECONOMICS NETWORK 17
ities by noting that this intense
period of effort has resulted in a
number of ways of teaching we
Many of us have discovered hope will be articulated, evalu-
some advantages of online ated, consolidated, and retained as
teaching the pandemic eases.
For example, many of us have
discovered some advantages
of online teaching, such as a
reduced nervousness of students
Departments, have faced finan- giving presentations online,
cial uncertainty in the current and an increased willingness to
academic year. This has given ask and respond to questions
rise to delays in receiving annual using the ‘chat’ options (even if
subscriptions from contributing they can be reluctant to turn on
departments, and some depart- their cameras). We have seen a
ments struggling to cover the cost move towards more applied and
of their subscription. Given the research-based assessments, and
savings made from having online a reduction in those that rely
rather than face-to-face training heavily on “memory-work”. There
workshops, we are temporarily is also hope that teaching prepa-
offering lower departmental sub- ration may be somewhat easier
scription costs to those depart- for the forthcoming academic
ments needing assistance. Please year, given banks of pre-recorded
contact Ashley Lait, the Economics lecture materials that can be
Network Manager, for details. re-used or adapted, especially
Looking to the future, the Eco- where they were designed with
nomics Network has started work- future use in mind.
ing closely with the Education We are hopeful that these devel-
Committee of the European Eco- opments may result in longer-
nomic Association to ensure that term shifts in economics teaching
we provide complementary support towards more active modes of
to Economics colleagues across learning, such as the flipped-class-
Europe. Similarly, we are working room approach, and away from
with the RES Education Com- more inactive modes such as the
mittee and exploring the kinds of delivery of lectures, where students
support that would be welcomed attend with little prior knowledge
number of colleagues willing to by more experienced teaching of the topic to be covered.
share their experiences of the move staff. We are also linking up with Certainly, in the Economics
to online teaching, learning, and the employment-focused site Inom- Network, though we have sorely
assessment by writing advice for ics, so that both organisations can missed face-to-face interaction
others, which we have published provide more comprehensive infor- with our colleagues and the wider
as Teaching Case Studies on the mation to academic economists teaching community, we are con-
Economics Network website. Since thinking about their careers. All fident that training will always
the huge success of ‘Assessment in of these new liaisons have occa- retain large elements of the new
the Time of Pandemic: A Panic-free sioned a redesign and update of modes of teaching and learning
Guide’, written by Tim Burnett and our website to ensure greater ease that we have learned over the
Stefania Paredes Fuentes and pub- of navigation around a richer set past year.
lished on the website in June 2020, of resources, and a focus on more
we have published a further 29 up-to-date and topical materials as
case studies, making this the busi- the pandemic begins to wane. Visit www.economicsnetwork.ac.uk
est year for the publication of case Inevitably, there has been a to access Economics Network
large opportunity cost in terms of resources and find out more about
studies. We are incredibly grateful
its events and other activities. You
for everyone who has made time research effort and other activities
can also sign up on the website to
to contribute a case study despite that this vast increase in teaching
receive the Network’s newsletter,
their other work pressures. workload has imposed on aca-
where a modified version of this
We are very aware that univer- demic and professional staff. But
article will appear.
sities, including their Economics we end this update on our activ-18 COMMENT
Comment and debate
Is economics always politics?
R
The author oger Backhouse’s and James to support. Quasi-scientific ration-
Forder’s defence of History alisation of a political endeavour
JAN TOPOROWSKI of Economic Thought in the may be an effective propaganda
PROFESSOR OF ECONOMICS last Newsletter (‘Rediscovering weapon; yet… is in a democratic
AND FINANCE, SOAS the history of economic thought’, setting almost always inhibitory
UNIVERSITY OF LONDON issue 192, January 2021) would be and disintegrating.’
stronger if it recognised the politi- A result of this confusion,
cal factor in determining which the- according to Myrdal, is that eco-
ories are academically respectable, nomics does not progress from one
and hence worthy of canonization, theory to a better theory: ‘In eco-
and which theories are deemed to nomics, on the contrary, all doc-
be too idiosyncratic to win entry trines live on persistently.’
to textbooks. As Gunnar Myrdal Nearly a century later, Myrdal’s
observed in The Political Element view remains worthy of consid-
in the Development of Economic eration. Once we recognize that
Theory, ‘We must look upon the economic theories rise to pre-em-
majority of modern economic doc- inence because they meet a par-
trines as modified reminiscences ticular political conjuncture, the
of very old political thinking… case for the history of economic
political speculation has permeated thought, to pick up ideas that
economics from the very beginning’. lost their political conjuncture,
Myrdal went further. He pointed or perhaps never met a congenial
out that economics has always been one, becomes much stronger. We
a political enterprise to influence should not delude ourselves that
government policy. only logic and evidence have elim-
Attempts to suppress this polit- inated the theories of the past.
ical aspect of economics, accord- Those who know only the latest
ing to Myrdal, lead to confusion fad in economics know little of
between normative and positive economics. And I wonder if the
economics that makes econom- current embarrassment of our
ics unscientific and, ultimately, profession about the history of
defeats the legitimacy of economic economic thought arises because
argument: ‘expressing political any historical consideration of the
attitudes only through the medium most fundamental economic doc-
of purportedly objective arguments trines, as opposed to mere chron-
and scientific theories is probably ological listing, exposes the origin
in the long run highly injurious to of those doctrines not in economics
the actual policy that one wishes but in politics.
Attempts to suppress this political aspect of economics, according
to Myrdal, lead to confusion between normative and positive
economics that makes economics unscientificYou can also read
