The following article first appeared in the INOMICS Handbook 2022.
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Professor Marcel Fratzscher, esteemed macroeconomist and president of the DIW Berlin, once again asks questions about economics and life in general to a peer in the 2022 edition of the INOMICS Handbook Questionnaire. This time, he has the pleasure of being joined by renowned economic historian Adam Tooze, who generously agreed to take the hot seat in this exchange. Thus, the back-and-forth has been dubbed Fratzscher vs. Tooze, as is tradition. What follows is a dive into the beauty of wild places, the gender bias still present in economics, the link between policy makers and central banks, the limits of the search for perfect causality in the social sciences, and even more. Tooze’s perspective is unique and fresh, and is sure to be an interesting read you won’t want to miss.
The titular economic historian, Adam Tooze, was born in London, spending parts of his childhood in England and in Heidelberg, Germany. He earned his BA in Economics from King’s College Cambridge in 1989, and then began his postgraduate studies in Berlin. He received his PhD from the London School of Economics in 1996. From then until 2009, Adam taught at the University of Cambridge. He was then appointed to the Barton M. Biggs Professorship at Yale University. Adam joined his current position in Columbia University’s history department in the summer of 2015. He is well-known for his economic histories (including The Wages of Destruction) which have won him several awards, including the Wolfson History Prize and the Lionel Gelber Prize.
Marcel Fratzscher: What is your favorite place on earth?
Adam Tooze: I thrive on the intensity and hustle of New York City. I love the cultural density of Europe. But my favorite place right now is a lagoon – “The Cut” – between two of the outer islands of the Abacos in the Bahamas. It’s an extraordinary place. Ravishingly beautiful. Creole. Wild. A bit dangerous. The infrastructure is fragile. Sharks and barracudas in the water. Extreme weather. The historic hurricane Dorian which made landfall on the islands on 1-2 September 2019 wiped out the homes of practically everyone else on the island, including a cottage we called our own. We have rebuilt a house in its place.
MF: Outside of economics, what occupation would you have if you could be absolutely anything?
AT: I left economics to become a historian. So that is part of my answer. As a boy I wanted to be a mechanical engineer. If I had the talent I would wish to be a visual artist.
MF: What is the virtue you appreciate the most?
MF: Your all-time favorite figure in economics?
AT: John Maynard Keynes.
MF: Your # 1 economics blog?
AT: In the new substack universe it is Matt Klein’s Overshoot. Amongst the earlier generations of blogs Timothy Taylor’s Conversable Economist is indispensable. In Germany I like Makronom.
MF: Your ideal student?
AT: Someone who has a profound inner drive, but also has a sense of humor, is open and receptive intellectually to other people and other ideas.
MF: What should be done to address a gender bias in research in economics?
AT: This is an urgent question for economists. I say this as a man who left economics in large part because of the toxic masculinity to which I was subjected during my training. I found it intellectually unproductive and I didn’t like what it was doing to me. So I got out. I admire both women and men who decide to stay and fight. I worry about what it costs them. I hope they are right that it is possible to change economics from within. When I want encouragement I put my historian’s hat on and remind myself of the truly gigantic transformation that we are collectively undertaking with regard to the gendered division of labor. Two of the academic places which shaped me went co-ed only fifty years ago. In my current department at Columbia in history we are, I believe, at full parity even in the professorial ranks. And there is no reason that it should stop there.
MF: What is the most misguided research agenda in economics?
AT: I don’t like laying down the law in a negative sense. I avoid zero sum trench wars for intellectual space. I know this is to a degree naive, given the constraints of funding, jobs and who gets the mic matters. So let me give you a reluctant answer: I was profoundly at odds with the Real Business Cycle movement. And I also regret the narrowing effect that the preoccupation with causal identification has had across the social sciences. Like many people I feel that the search for truly water-tight causal demonstrations often leads to triviality. Of course no one would deny the significance of supply-side shocks and the problem of precise causal inference are of abiding interest, but to make either of them into the gold standard is narrowing. I’m afraid that my pluralism doesn’t make me the best warrior for “plural economics”.
MF: What is the most promising current research field or issue in economics?
AT: I am sure there are many, but the one I know best is macrofinance. Personally, it has been my point of re-entry into economics. Driven by the shock of 2008 and the Eurozone crisis, it is a field that is open to an unusually wide variety of interested folks.
MF: Where does economic research have the most influence on policy-making?
AT: I observe this as an outsider, but the area of interaction that I am most closely involved with is central banking where, for better and for worse, the boundary between research and policy practice seems very porous indeed. Even someone who is deeply interested in economic history, like Ben Bernanke, can become a top decision-maker. The risk is that the central banks dominate the field of monetary economics to such an extent that it becomes an echo-chamber. To that extent I appreciate the arrival on the central banking scene both of “heterodox” schools of thought and of pragmatic, lawyerly, political types like Jerome Powell and Christine Lagarde.
MF: On what issues should policy listen more to economists?
AT: Answering this questions depends on a judgment both about policy and economics. Given my policy preferences and my doctrinal preferences in economics, which group of economists would it be safe and beneficial for policy-makers to listen to? In the area of climate change, I tend to think that economists have been listened to too much. Policy makers have also listened to the “wrong” economists too often with regard to fiscal policy. The group of economists that I think it would be safe and beneficial for policy-makers to listen to more are economists in macrofinance. As I say, that is a subfield that was developed to address financial instability and crisis, to bridge the divide between finance and macroeconomics.
MF: What is your career advice to a young economics researcher?
AT: Take care of your mental health.
The above article first appeared in the INOMICS Handbook 2022, which you can download on our site.