Cowles director Larry Samuelson on promoting innovative economics
The Cowles Foundation, an economic research institute based at Yale, was founded in 1932 to promote the use of rigorous logical, mathematical, and statistical methods of analysis in economics and related fields.
At the time, the use of such methods in economics was relatively new. Cowles has played a key role in making them commonplace. Today, the foundation supports innovative research that influences any number of policy areas, including trade, immigration, and the environment.
Larry Samuelson, the A. Douglas Melamed Professor of Economics, has directed the foundation since 2014. He was reappointed this month to a second three-year term as director.
Samuelson recently shared his thoughts on the foundation’s work and its outlook for the future. An edited transcript follows.
What kinds of research does the Cowles Foundation support?
The foundation supports a broad range of research in economics, while retaining its emphasis on rigorous methods.
The broad range of research topics supported by Cowles is reflected in the Cowles Foundation Discussion Paper series. These feature a steady stream of contributions to economic theory and theoretical econometrics, but also applied and empirical papers on a wide range of more applied topics. Perhaps the most exciting aspect of the work is the extent to which we see papers that fall in the intersections between fields, combining theoretical models with empirical analysis, or combining ideas and researchers from economic theory and econometrics.
The broad range of Cowles activities is also reflected in this year's Cowles conferences. For the first time, we held a conference on international trade, with an emphasis on labor and migration issues. The conference on econometrics focused on networks, drawing interest from econometricians and network theorists alike. Altogether, the conferences drew a record number of participants.
Does the research performed at Cowles inform public policy?
Economic research has never been more relevant than it is today. One cannot read the news without encountering issues — climate change, international trade, globalization, budget deficits, the provision of health care, the management of information, and so on — that are at the center of current research in economics. We are fortunate that Cowles has significant expertise in all of these areas. The members of Cowles publish in scientific journals, and that is often the most visible aspect of research at Cowles, but they are also busy talking to policy makers and government officials. Addressing the important policy issues of the day will call for more and more input from economists. The research done at Cowles may initially appear to be too esoteric to be relevant, but research of this type invariably filters through to affect policy.
The route from theoretical ideas to specific public policies is indirect, and is a process rather than an event. John Maynard Keynes, one of the great economists of the 20th century and a public servant, put it very well when he said, “Practical men who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.”
You recently hosted your summer conferences, inviting leading economist from across the globe to campus. What were the highlights and why are such gatherings important?
The Cowles summer conferences bring together five groups of about 50 people each, in each of the areas of economic theory, macroeconomics, econometrics, international trade, and structural microeconomics. These conferences are distinguished by the intense and intimate atmosphere, allowing the leading figures in each field to have a two-day conversation focused on the latest research in that field. Highlights of the most recent round of conferences included the first prominent exposure of several new and exciting papers. Conferences such as this are the primary means of making new techniques and results available to others, of exchanging ideas, and of fostering collaborative research.
Cowles has a long tradition of inviting faculty from other institutions to participate in research. What impact do the visitors have on the foundation’s intellectual culture?
The Cowles visitor program is an important part of the Yale Department of Economics. Our goal is to continually bring the leading economists in various areas of research to Cowles. These visitors provide additional sources of help and advice to our graduate students, they provide a more diverse set of views and ideas in our seminars, and they are a valuable resource for our faculty. The intellectual environment in the Department of Economics at Yale is considerably richer as a result of these visitors. Instead of having to look outside the department for expertise on a particular problem or for a discussion with an expert in a particular area, at Cowles one can typically just walk down the hall. This is especially valuable in ensuring that new ideas and areas of research are represented at Cowles.
Where do you see Cowles in five years?
Recent political events have reinforced the lesson that one should be cautious in predicting the future. It is difficult to say what new techniques and ideas may appear in economic research in the next five to ten years. But whatever they are, they will surely be represented at Cowles, and I am confident the Cowles Foundation will be active in bringing new techniques and developments into economics.
What makes Yale an attractive place to be an economist?
Yale has a tremendous Department of Economics, but also a superb intellectual atmosphere, including a strong tradition of independent and critical thinking, backed up by talented and curious (undergraduate and graduate) students.
Anything else you would like to add?
I would like to mention the Cowles post-doc program. We have expanded this program, now bringing about eight new Ph.D.s each year to Cowles for year-long postdoctoral positions that allow them to develop their research programs. Our goal here is to bring the most talented new Ph.D.s in the market each year to Cowles.