A Nobel laureate sat in the glass-encased hallway just outside the Becker Friedman Institute offices, sipping coffee and avidly chatting with a young econometrician about his work to better assess the distributional effects of a policy change on social welfare.
James J. Heckman, the laureate in question was the discussant for Maximilian Kasy’s paper at the institute’s Interactions conference in September, and he had more to say about the research than could be contained within his scheduled session.
“He seemed to have found interesting, as I did, the connection between tools from continuum mechanics and the evaluation of the distributional impact of policies,” wrote Kasy, reflecting on their exchange. Over lunch, Kasy gladly took note of Heckman’s feedback before the assembled econometricians and applied microeconomists reconvened in the lower level of Saieh Hall.
Bringing these two groups together was the point of the conference, which is why organizers Azeem M. Shaikh and Stéphane Bonhomme titled the event “Interactions.” The title reflected their aim of gathering both established and up-and-coming scholars from the theory side and the applied side to learn from one another and re-shape and refine each other’s work.
This is the motivation behind many Becker Friedman Institute conferences, and it was particularly evident in 2013-14. It’s the essence of what the institute offers as an intellectual destination for scholars: differing perspectives, coming together at one common point to tackle big problems.
“Conferences are often very specialized, and don’t really transcend fields,” explained Shaikh. “We were trying to put theoretical econometricians together with people who might be applying the econometric techniques, or might be interested in applying more sophisticated techniques to answer particular, substantive questions of interest.”
Inviting multiple generations of econometric minds was their attempt to “signal that a new generation of econometricians and applied economists should reach out to one another,” said Bonhomme.
Shaikh and Bonhomme felt the conference was a success because these exchanges brought a broad range of backgrounds to analyze both well-established econometric problems—the differences in differences between treatment groups, for example—as well as new challenges like the dependencies that arise when exploring data in a network structure. New approaches could be tested, and old problems could be rethought using updated methods.
Heckman and Kasy’s exchange proved out the logic of the organizer’s approach.
“Jim really saw the ambition in the project—he might not have liked every aspect, but he saw the potential,” said Shaikh.
In a later session, Chuck Manski, an expert at examining the intersection of real-world data through fine-grained statistical frameworks, leveled a harsh critique of work from Arun Chandrasekhar on network formation models, which actually became a broader dialogue between himself, the attendees, and the emerging literature on network models of data that bring very different types of analysis against public policy.
“I’m sure Arun walked away with a lot of interesting things to think about, and maybe Chuck did too.”
Ethics and Economists
UChicago economics workshops have long been known for their famously vigorous discussion and debate that can shade over into dissention. This crucible has forged enduring ideas, but for scholars from other fields and research environments, it can be simultaneously daunting and beneficial.
The institute’s multi-day research conferences extend this rigorous but rewarding workshop experience to diverse groups scholars from far beyond the UChicago campus. Participants see new styles of exploring familiar substance; they hear different perspectives that highlight intellectual complementarity.
Case in point was an October 24-25 conference that brought together very different groups—ethicists and welfare economists. Glen Weyl and Itai Sher organized a series of joint presentations on various themes where the work of philosophers and economists overlaps and intersects, taking on questions of justice, freedom, virtue, taxation and equality.
Philosophers regularly scrutinize the values and ethical principles that shape policies aiming to achieve these social goods — and why societies have determined these things are good. Economists, in contrast, tend to take these social goals as a given, and focus on analyzing the efficient means of achieving them. They are less inclined to ask the normative question—what should our policy be?
But each side can benefit from hearing the other’s perspectives and perhaps applying some of their tools, Sher and Weyl said. On that front, the conference succeeded well beyond their expectations.
“I enjoyed the ten minute discussion we had in Kristi [Olson, a philosopher from Bowdoin College] and Matt’s [Weinzieri, a Harvard economist] session on tagging and meritocratic taxation, where she challenged his methodologies,” Weyl said.
“One positive thing about this conference was attention to tradeoffs,” said Sher. Economists are accustomed to quantifying values; philosophers, when assessing competing normative considerations, wonder whether all considerations should be aggregated or whether some should be excluded. What Kristi was saying was that you had to think about the things you can and can’t trade off, explained Sher. “Are you trying to weigh conflicting considerations or to choose between them?”
In practice, this made for a series of discussions with wildly different perspectives creating complimentary dialogues on the topic at hand. Weyl’s own presentation on distributive justice made the case that addressing inequality at the global scale might bear the cost of increased inequality within individual nations; Christian Barry advanced a moral case for why we might elect to bear that cost anyway. The two advanced their arguments in tandem, alternating between frameworks for economic choices and their philosophical underpinnings.
The economics of everything
Mashups of differing perspectives and approaches distinguished most of the institute’s programming in 2014. In July, a conference in the relatively nascent field of market design gathered theoretical economists, game theorists, computer scientists and others to discuss how differing fields are teaching this topic. The conference was a unique start toward formalizing the key concepts and methods in an emerging scholarly discourse on the shape and functionality of markets.
A conference on media and communications had theorists who study media effects trading notes with those examining historical and present day means of media production, covering both the demand and supply sides of communications from entirely different approaches and backgrounds.
Even our scholars working in ongoing research initiatives endeavor to bring together differing perspectives to broaden the scope of their discussion. In September, scholars from the University of Chicago Law School and the Booth School of Business continued an ongoing conversation about how economics and the law of corporate governance apply differing views to the holders of debt and equity. They debated the ways that creditor covenants resemble or even eclipse conventional institutions for shareholders to influence companies in which they invest.
Ongoing research groups examining macroeconomic and financial modeling and macroeconomic fragility held several meetings in 2014, each inviting a mix of graduate students, early career and tenured scholars, and policymakers from central banks around the world.
This interdisciplinary spirit flows in no small part from Gary Becker, the institute’s former chair and namesake, who passed away in early 2014. An October 30 conference memorialized his vast contributions with an appropriately wide range of new work.
More than one participant pointed out that at a conference for Becker, one could safely present on almost any topic and still be in the realm of his influence. Thus presentations included work on family structure, labor trends, the economics of persuasion and of crime,from macro- and microeconomic perspectives as well as sociology and law. Becker’s scholarly spirit lives on in the way that the institute gathers these differing views together.