In response to a critical comment, I have decided to actually read the article which I stopped reading when it said the Journal of Monetary Economics was a must publish journal for young economists.
Ryan Grim asserts that economists don’t criticize the Fed because the Fed has bought control of the economics profession.
I have three general impressions. First the sourcing is very odd. There are fairly few academic economists quoted and two of them firmly contest Ryan Grim’s thesis.
Second it is assumed that the Federal Reserve System is a centrally controlled disciplined organization. Grim explicitly includes regional Federal Reserve Banks. Thus he assumes that the Federal Reserve Bank of Minneapolis is identical to the Federal Reserve Bank of Boston. This is a bold assumption. Finally, he is convinced that the economists who might comment on the FED are “monetary economists.” I have met macroeconomists and economists who work on money banking and credit, but I don’t recall ever meeting a monetary economist.
I have no idea how much influence the Fed has on the debate in the profession (really) and certainly agree that the economics profession is dangerously in bred and that it is much much much better for an economist to be conventionally wrong than unconventionally right (but it’s gotten better in the past 20 years).
More detailed comments after the jump.
OK editorial standards. Grims list of the journals that he considers important follows
The Huffington Post reviewed the mastheads of
the American Journal of Economics, the Journal of Economic Perspectives, Journal of Economic Literature, the American Economic Journal: Applied Economics, American Economic Journal: Economic Policy, the Journal of Political Economy and the Journal of Monetary Economics.
The list does not appear to include the American Economic Review which is a bit more important than the American Journal of Economics. It also doesn’t include the Quarterly Journal, Econometrica, The Review of Economic Studies, The Journal of Economic Theory or, well, any of the really top journals except for the Journal of Political Economy.
The Journal of Economic Literature is mainly an index of articles. It contains review articles and book reviews (partly I think so that it can be shipped with the special rate for journals). The journal of economic perspectives doesn’t really publish research exactly — articles are meant to be easily understood so its role is, in very large part, divulgative.
Grim attempts to explain why economists didn’t warn of the financial crisis before it hit, in part, by having interns google members of the boards of
the American Economic Journal: Applied Economics, American Economic Journal: Economic Policy
I quote from the Wikipedia
American Economic Journal is a group of four peer-reviewed academic journals published by the American Economic Association. The names of the individual journals consist of the prefix American Economic Journal with a descriptor of the field attached. The four field journals which started in 2009 are Applied Economics, Economic Policy, Macroeconomics, and Microeconomics.
it is a bit harsh to blame the editors of journals which started publishing in 2009 for the failure to warn of the events of September 2008. I think normal courtesy would compel someone to wikipedia a journal title before having interns google its board of editors.
On lumping regional banks in with the board of governors, Grim argues that Bernanke controls the JME partly by noting that many editors of the JME are affiliated with the Federal Reserve Bank of Minneapolis. This is not a joke.
Now as to the universe of critics the Fed might want to buy off. Grim assumes that it consists of “monetary economists” who are distinct from macroeconomists of finance economists. I don’t think there is such a group of people (name one).
Yet oddly, he considers many people who are not monetary economists valid critics of the Fed. He quotes Joshua Rosner, a Wall Street analyst, James Galbraith (who sure knows what he’s talking about but probably doesn’t “list ‘monetary policy, central banking, and the supply of money and credit,’ as either their primary or secondary specialty,” (I will write “not monetary” below) Robert Auerbach, a former investigator with the House banking committee, Jane D’Arista, a Fed critic and an economist with the Political Economy Research Institute at the University of Massachusetts (not monetary) Robert King (who contests his thesis and is I’d guess not monetary), a letter from Milton Friedman (OK he’s got one monetary economist who criticizes the Fed), Economist Rob Johnson (OK maybe two), Ahmed Ehsan a self described monetary economist who disagrees with the thesis, and Paul Krugman (not monetary).
The thesis is that the Fed (including regional banks who take orders from the chairman evidently) controls most people who have standing to criticize the Fed. Journalistic integrity requires checking if the critics of the Fed whose standing Grim considers adequate are on his list of people who have the standing to criticize the Fed. I’d guess that at most one does (Friedman is, sadly, no longer a member of the AEA).
The economics profession is a very large very slow moving target, but it is possible to miss.