Well-known economists make many assumptions.
In fact, the whole of social science is built on the crucial assumption that people are rational and, for example, will not buy more than a certain commodity if the price goes up.
But in their study, economists for too long have assumed that race doesn’t affect individual outcomes, to the point where the racism people experience on a daily basis barely exists in the study. economic research, chief economist William Spriggs of the AFL-CIO said at a council on Tuesday. race and economics are chaired by the Federal Reserve System.
“There seems to be no evidence that economists have to admit: yes, there is discrimination, and yes, that’s very important,” said Spriggs.
‘There seems to be no evidence that economists have to admit: yes, there is discrimination, and yes, it matters’
The seminar is the latest in a series organized by all the Federal Reserve System District 12 Banks to look at how structural racism “threatens” the economy and “limits mechanisms. Economic Association for people of color ”.
The series takes place when black Americans suffer a disproportionate proportion of both the health and economic impact of the coronavirus pandemic. Meanwhile, the US has engaged in a national dialogue about racism since the murder of George Floyd by a Minneapolis police last year.
It was Floyd’s killing that inspired Spriggs, a professor of economics at Howard University, to write an open-ended paper. letter to their fellow economists, prompting them to rethink their assumptions about race, especially as it relates to policy.
“Seeing George Floyd’s gut-wrenching murder made them think about the bigger problem than what was really wrong, because training like economists has allowed them to shut up. quietly accept so many ‘gifts’ that they understand should not be speculated, and that ‘chons’ really matter, ”he wrote in July letter.
‘Their training as economists has let them silently accept a lot of’ giving ‘that they understand now should not be said to be zero, and in fact’ for ‘that’
Spriggs says race is the variable “where economists are lazy”.
Importantly, the research that economists present, which often does not take into account race, often introduces policies that are intentionally or unintentionally detrimental to people of color in practice, Spriggs says.
San Francisco Fed President Mary Daly, who censors the board to which Spriggs spoke, said she found his letter “startling”.
“It changed the way I approach things,” she added. She notes that in the study she published shortly after receiving her Ph.D. in economics, she did exactly what Spriggs advocated against in her letter by turning race into a controlled variable, yes. that is, it cannot affect the results of her research.
Sendhil Mullainathan, an economist at the University of Chicago who also spoke at the seminar, said he admired the way Spriggs’ sincere letter contrasts with the “clinical nature” of most economic papers. .
Although Mullainathan, like most economists, processes large datasets day in and day out, he says he makes a conscious effort never to lose the truth behind each. Data point is a person.
Mullainathan and co-researcher Marianne Bertrand learned How fictitious job applicants with “white-sounding” names go against applicants with the “black-sounding” name. Research shows white applicants “get 50% more callback for interviews”.
“One element of this work is that we must remain neutral, and we must maintain a number of clinical exclusion,” Mullainathan said. “But I worry that we’ve let in too much of that and we’ve lost our basic humanity a bit in the process.”
There is no quick fix, Spriggs says, to fix the emerging racism in economics. But a good place to start the cleaning process would be to invite more people of color into the “room where it happened,” he mentioned. a song from the musical “Hamilton”.
Daly suggested that economists could be more aggressive in questioning the status quo.
“We all lived a year where we couldn’t turn our backs on it,” Daly said. “We’ve seen disparities in health disparities, economic opportunity and as a result a disparity in your safety, ability to go home without a crash. As a profession, we are still passive observers of these things – sometimes taking notes without challenge. “