What the NY FED Does with our Money

The NY FED, along with the other FEDs, have their staff economists write papers on the economy. A month or so ago we had the flap with the economist in Richmond who had all folks a twitter when he bemoaned the fact that there were people, like me I would gather, who comment on the economy sand PhD in economics.

Of course if you read this from time to time you would know my feelings about a field of study which appears to have near zero consistency in opinions amongst its practitioners and further has demonstrated zero predictive capability. Astrologers are often better, but they have been outlawed in many cities.

Now the NY FED has published a paper entitled, "Is Economics Coursework, or Majoring in Economics, Associated with Different Civic Behaviors?"

The paper states:

The number of economics courses completed is significant for five of the seven economic
attitude items, but not with the items on government deficits and smaller government.

Those who completed more economics courses were more likely to agree that tariffs reduce economic welfare and less likely to think that trade deficits adversely affect the economy. The more economics courses taken the less likely respondents were to believe that government should regulate oil prices, and the more likely they were to believe that the minimum wage increases unemployment.

Finally, the more economics courses taken the less likely respondents were to believe that the distribution of income should be more equal.

In sum, economics classes favored less regulation or government intervention affecting prices for specific goods and services, including wages and salaries. But there was notably less association between economics coursework and beliefs about the optimal size of government or government deficits – perhaps because ideology plays an even greater role on those questions....

Most previous studies that look at the link between education and civic behavior simply include a control for the amount of education a person has. This implies “being educated” influences a person’s civic behavior, but it ignores the possibility that the content of what a person is learning might also influence behavior.

Our analysis shows several statistically and economically significant associations between coursework in economics, or majoring in economics or business, and later civic behavior, including party affiliation, making donations to political parties, and volunteerism. We also find that the choice of major is a significant predictor of voting in the 2000 presidential election. We find that the labor market decisions of business and economics majors are similar. We find a similar result for civic behavior.

However, business majors are less likely than General majors to participate in time consuming activities such as voting in the 2000 Presidential election or volunteering, and when they volunteer they volunteer for fewer hours than do General majors.

Economics majors instead are not less likely than General majors to engage in these behaviors. Our estimates reveal the somewhat surprising result that the attitudes of business students on public policy are more similar to General majors than to Economics majors...

Unfortunately, we cannot say if our results reflect what individuals have learned in these courses and majors, or if the relationships identified here are due to self-selection among college graduates into different college majors and economics course taking. Furthermore, we cannot say if those in different majors perceive the costs (value of time) or the benefits of these activities differently. But our results clearly suggest there is more to the story than simply “being educated” – so that what people study in college, or what they choose to study, is associated with their civic behaviors many years after they graduate.

Interesting, but what do they contribute to society in terms of value creation. What about engineers, scientists, physicians and of course lawyers!

This is interesting but one wonders why the FED spends our money on studies like this?