The Becker Friedman Institute for Economics (BFI) welcomed Charles Evans, the President and CEO of the Federal Reserve Bank of Chicago, and Lars Peter Hansen, the David Rockefeller Distinguished Service Professor at the University of Chicago, for a special panel discussion during the University of Chicago’s Graduate China Forum. Evans and Hansen evaluated the post-financial crisis regulatory framework in the United States, broader global economic conditions, and their interactions with U.S. monetary policy.
In addition, Lars Peter Hansen shares his reflection on the discussion below:
On April 7, 2018, I had the opportunity to interview Charles Evans, the President and CEO of the Federal Reserve Bank of Chicago since September 2017 for a special panel discussion during the Graduate China Forum. I have known Charlie for many years and have followed his career with great interest. This is the second time in recent years that I have had the privilege to interview Charlie in his leadership capacity.
I am continually exposed to the phrase of the importance of “evidenced-based policy.” Sometimes this phrase comes from governmental participants as if it is a new idea or one that can stand on its own. Of course, no one can object to the idea of bringing evidence to bear on important social questions. But evidence seldom just speaks for itself. It requires a framework for interpretation, and this is all the more important in economic dynamics. Many of the important policy questions we face are dynamic in nature and to address these requires that we place an important premium on conceptual and modeling frameworks. Evidence is an important component of informed decision making but hardly the only component.
What has been intriguing to me about Charlie’s policy-making career is it started as a PhD student from Carnegie Mellon University. Prior to his becoming a Fed President, he made some very interesting research contributions. Looking back at this research, you see both modeling advances and informative empirical summaries related to monetary policy. When he came to his policy-making position, he had already wrestled with the serious question of what models he should trust in formulating policy advice and a recognition that economists often do not have precise answers to important quantitative questions. Moreover, he has an appreciation that intelligent decisions are ones that confront the existing uncertainty in modeling and knowledge. He avoids the pretense that these uncertainties fail to exist. Of course, Charlie adds his own best judgment to policy recommendations and, as a consequence, there remains scope for disagreement.
Over the last several years, Charlie has indeed been an important player in monetary policy discussions in both discourse and in his formal role on the Federal Open Market Committee (FOMC). Thus, I was pleased to interview Charlie because of his background and appreciation for basic research and insights as they contribute to the analysis of important economic and social problems. This was an opportunity for others to see his thoughtful insights on the conduct of monetary policy.