What Really Happens at a Fed Research Conference

Every year, regional Federal Reserve banks host some of the most substantive — and under-the-radar — events in the central banking world: research conferences. Behind the formal papers and dense macro models, this is where much of the Fed’s intellectual groundwork for monetary policy first starts to take shape. On this episode, we take you inside the Boston Fed's 69th annual Economic Conference to hear what the economists are actually debating, how they choose the questions that matter most, and what happens when the evidence — or egos — clash. Along the way, we talk to Fed researchers, outside academics, and Boston Fed President Susan Collins about how this kind of work influences policy in the real world. Watch all the presentations at the Boston Fed's website Subscribe to the Odd Lots NewsletterJoin the conversation: discord.gg/oddlotsSee omnystudio.com/listener for privacy information.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Joe Weisenthal?

  There are some market stories where you want every detail. Tracy and I have made quite a few podcasts on that basis, but sometimes you've only got 10 minutes and need to know what's moving markets and why. That's the Barclays Brief Podcast. Every week, experts from Barclays Markets and research get you up to speed on what matters and what to watch next. About the time it takes to grab a coffee, so search Barclays Brief wherever you get your podcasts.

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• 1:07Speaker 03

  Okay, so, uh, thank you all.

• 1:11Speaker 03

  The next paper is going to be presented by Omar Barbiero. U.S. firms' exposure to import tariffs: A comparison of the 2018 and 2025 episodes.

• 1:21Tracy Alloway?

  Can I ask a personal question? When you present a paper like this at a research conference like this Boston Fed one, do you get nervous? And then I guess adjacent to that, like, what's the best outcome for you when you present the paper? And what's the sort of nightmare scenario? Would it be someone like finding some fundamental error in the methodology? And like standing up in the middle of the conference and being like, there's a serious problem here?

• 1:49Speaker 05

  Yeah, I mean, many, many nightmare scenarios. Just clicking randomly and then it went, okay.

• 1:58Speaker 05

  All right. I would say the, the worst thing that can happen is that...

• 2:04Speaker 05

  You just say something wrong that sounds dishonest, almost like you're trying to hide something. Like there's clearly a data flaw and then you don't highlight it or you don't, you say in public, no, no, no, this is not a problem and everybody knows that, no, no, it's a problem. That's, I think the profession is built on trust and if you, if you lose that trust, it's, it's quite bad.

• 2:29Tracy Alloway?

  That's Omar Barbiero, a senior economist at the Federal Reserve Bank of Boston. He's getting ready to stand up in front of a room full of other economists, journalists, academics and his employer and present a research paper tracking the exposure of US businesses to import tariffs.

• 2:47Speaker 05

  This is a paper written jointly with Slavik, Hilary and Alvaro, who are there, happened to be in the room, our excellent research assistants, Sophie and Lilia also, who helped us with this, with this paper. We wrote it for the conference, it's still quite preliminary and therefore we really value your, your comments on this.

• 3:12Tracy Alloway?

  But how many individual pieces of data would you say were involved in this particular study?

• 3:18Speaker 05

  Okay, product code, they were, they were around 400,000, I would say, and then you have to multiply that by many different countries and so you have to keep track of that, that matrix. The supply chain dataset was also quite fun because it's kind of a network of companies and it gets big very, very fast and you have to track it over time. I have to say, I mean, we have excellent, I mean, I have excellent call authors, we have excellent research assistants, we have excellent, you know, computing power, thank God, that can, can help us with that and I don't know.

• 3:57Tracy Alloway?

  Hundreds of thousands, millions?

• 4:03Speaker 05

  Yes, millions.

• 4:11Joe Weisenthal?

  We are at the Boston Fed's annual flagship research conference. This is the 69th year of the event and the theme for 2025 is, quote, "The U.S. economy in a changing global landscape." So focusing on how things like tariffs, geopolitical tensions, industrial policy, AI, et cetera, are reshaping U.S. growth, inflation and the overall financial system.

• 4:31Tracy Alloway?

  Clearly, that is a very rich vein to mine for research. And the format is a classic central bank research conference. Economists and other researchers are invited to write a paper for the event. They're assigned an official discussant and then they publicly present to a roomful of their peers while the audience gets a chance to ask questions or sometimes critique.

• 4:55Joe Weisenthal?

  Yeah, you say it's a classic central bank research conference, but we've never actually been to one, I don't think, right? It felt like a totally new environment.

• 5:03Tracy Alloway?

  Yeah, it's true. We have gone to Jackson Hole for the past few years, which is probably the most famous Fed research conference. But it's famous because the Fed chair usually makes a speech and that gets all the attention. We've never actually been in the room at Jackson Hole where they discuss the research papers being presented because the Fed only allows a certain number of journalists into the room.

• 5:27Joe Weisenthal?

  The room.

• 5:27Tracy Alloway?

  The room.

• 5:28Joe Weisenthal?

  The room. Also, I think it's unfair Kansas City Fed gets to hold their conference in the most beautiful place on earth.

• 5:34Tracy Alloway?

  Instead of Kansas City.

• 5:35Joe Weisenthal?

  In the middle of August and then the Boston Fed. I mean, it's their choice, but the Boston Fed has theirs in Boston, which is lovely. We both had a great time, but November.

• 5:44Tracy Alloway?

  It was very cold. Well, the upshot is that this time we were actually in the proverbial room. So for the first time, we got to really experience and learn what an economic research conference actually is.

• 5:59Joe Weisenthal?

  Yeah, this is actually very key because if you sort of like wonder, so, okay, Jerome Paulus says something about, you know, the expected relationship between tariffs and inflationary, but where did these ideas come from? Where are these assertions, predictions, and so forth? It comes from academic research. It comes from the research backing that up. These conferences are where the macro ideas sort of actually collide with real-world data.

• 6:22Tracy Alloway?

  Yeah, another way of thinking about it, it is where the first serious drafts of tomorrow's policy debates are aired, and we're going to give you a front row seat to experience what those initial drafts and debates are actually like.

• 6:37Joe Weisenthal?

  Welcome to the Boston Fed's 69th Annual Flagship Economic Conference.

• 6:52Speaker 06

  You do research at the regional bank, at the board, or at the BIS. You do policy. By policy, we mean, you know, you advise your principals. In our case, that's Susan Collins, the president and CEO of the Boston Fed, preparations for the FOMC meeting, for public engagements.

• 7:09Tracy Alloway?

  That is Egon Sakrajek. He's director of the Research Department at the Boston Fed, and he's the one who actually puts this event together.

• 7:18Joe Weisenthal?

  And he's Omar's boss.

• 7:19Tracy Alloway?

  Yeah, and he's Omar's boss, right? He also gets to choose the broad theme of the conference.

• 7:25Speaker 06

  We've lived in a particular global order, rules-based international system, globalizations, trade integrations. We just took those things for granted for decades, and we're now grappling with monumental change. And we lack models. We lack theoretical frameworks to understand these changes. You've heard many debates about this data is no good. This is the sausage. Don't eat it, right? And how does one go about it? So I think it's just, it's really, I mean, it's an exciting time for researchers because we have great questions, but I think it also... underscores of just how little we really know and how challenging it is then to make

• 8:09Speaker 06

  policy recommendations in this in the period of such change. You know, the way the conference, a conference like that comes together is, you know, we sit together, my, my, my team of researchers, we, we try to pick a topic that would obviously be timely, relevant to policymakers, we confer with Susan and then so forth, we look around, you know, and so forth. So, once we, once we kind of zero in on what the topic is, we then have to identify the contributors to this. We have a certain idea of what we want different sessions to be. Then we get either academics or, you know, contributors to write papers for this, but, you know, academics, researchers write what they want to write.

• 8:53Speaker 06

  So sometimes there's a bit of a, you know, so we say, you know, gentleman-like distance between the blurb and the ultimate paper that gets written, but that's all right. We've always seen this, this is very, very standard. And, you know, the idea is then is to, the discussance, the role of a discuss and then is to kind of bring that paper and provide some context and, you know, try to, try to, you know, fit it into the general theme.

• 9:18Joe Weisenthal?

  So this particular conference, the theme has changed, right? And one of the things we keep saying, but I think is true, is we are living through capital H history here. We have the tariffs from the Trump administration, the reversal of globalization, new geopolitical risks, AI, all of it.

• 9:32Tracy Alloway?

  Right. And we're also still trying to figure out stuff like what happened in relatively recent years. Why did inflation actually spike during the pandemic? We're also in this new era of industrial policy and we're trying to figure out what that means for the economy. If we actually want to do the stuff, like make semiconductors or build small modular nuclear reactors, we have to have some idea of where we're going.

• 9:56Speaker 06

  And we try to really keep it, you know, I would say somewhat.

• 10:02Speaker 06

  More accessible, I would say, bit interdisciplinary. We try to reach a bit broader audience. Is somewhat a typical conference, you know, your typical economic research conference, which feature slide after slide of equations, graphs.

• 10:16Tracy Alloway?

  Sorry, I'm laughing slightly because I saw some equations this morning and the speaker is like, oh, well, as you can see from this slide. And I'm thinking, I cannot see.

• 10:25Speaker 06

  Right, right. So, you know, so this is, I would say, this is very light on this. If you're, you know, this is super light on this and so forth. We urge authors to try to write something that's more, I would say, policy relevant, that touches, that can be communicated and stuff, rather than very, very technical pieces. You know, that is what the academic journalists tend to specialize in. Hopefully, it sparks, it sparks an idea. It sparks a new paper, you know? It says, ah, you know what? This is an interesting result, but I have maybe better data to do that. So let me actually, or there was a, there was a testable implication that somebody, you know, brought up.

• 11:08Speaker 06

  Let me see if I can flesh that out because I think I can provide some. That's how knowledge and conferences, you know, advances. It's a very organic, a bit of a messy type of affair. And, you know, to be honest, many times, don't things, don't, they don't pan out, you know? I have files and folders full of research ideas that, you know, never went anywhere, but you try.

• 11:30Tracy Alloway?

  And if you want to get a sense of that process and the policy implications of some of this research, take a listen to the first paper presented at the conference. It's by Shepnam Kalemli Oskin. She's the Schreiber Family Professor of Economics over at Brown University.

• 11:47Joe Weisenthal?

  I love economists and their, their long titles. The John Maynard Keynes Chair of the Ludwig von Mises Endowed Seat at the University of, you know, whatever.

• 11:57Tracy Alloway?

  Keynes Chair at the Mises School would be an interesting mix. Anyway, here's Shepnam presenting her paper. It is called Global Networks, Risks and the U.S. Economy.

• 12:08Speaker 07

  You know, paper after paper, we realize the issue with the conventional macro open economy view. What is this view? This view takes U.S. as a relatively closed economy because of the low trade shares, exports 10% of GDP, imports 14% of GDP.

• 12:25Speaker 07

  And that, of course, combines with the fact that US is governing the world in terms of dollar dominance and deep financial markets. And on top of that, US has an amazing central bank. As we are all here right now, you know, that Federal Reserve acts as a global lender of last resort when things go south. The benchmark implication of this view is that US has limited exposure to global risks.

• 12:56Speaker 07

  We would like to revisit the issue in terms of asking directly how sensitive the US economy to global risks, once we account for full global trade, production, and finance networks, and really think about trades-off and counterfactuals, and basically revisit this issue that the fact that maybe your trade shares are low.

• 13:18Tracy Alloway?

  We caught up with Shebnam after her presentation to better understand exactly what she's trying to do here.

• 13:24Speaker 07

  All right, so, yes, we found something different because we work with networks. And let me explain what that is. When you say networks, again, the traditional view, first going to think about, of course, the trade networks. Why? Because the trade networks directly link to supply chains, right? And we already realized, you know, it is, those are vulnerable. I mean, you know, shock after shock, starting with the pandemic, you know, told us that, yes, maybe kind of our final goods trade, or just if I focus on manufacturing, not that big. But if I look at the supply chains, value chains, then US is integrated to that. And then that changes the tanks.

• 14:06Speaker 07

  Because that means even in the aggregate number, you might not see that big of exports and imports. There might be indirect exposure through all those links. Because when you think a network, you know, you are linked through trade. This is now where we also add to the traditional view. But you also have to think about the financing, right? I mean, so the networks to us is trade networks, yes, you know, countries buying and selling, sectors buying and selling, firms buying and selling from each other, but also financial networks. I mean, you know, investors investing in companies in other countries. You know, the supply chains financed by different investors in other countries. And on top of that, of course, the production, right? I mean, you know, so a product right now is assembled in one country, designed in another

• 14:48Speaker 07

  country, manufacturing in another country, its parts coming from many, many countries, and skills and knowledge also coming from many, many countries. So when you have this type of a comprehensive view of the network, global network, as trade, production, and finance, then I think US becomes very vulnerable to global shocks and global risks.

• 15:09Joe Weisenthal?

  So you could see why this would be an important area of research for the Fed, right?

• 15:12Tracy Alloway?

  Right, and the conventional thinking has always been that the US is kind of insulated from global shocks because it's so big, because the dollar is so dominant. External factors, it's thought, don't really affect the US economy so much.

• 15:26Joe Weisenthal?

  Right, and also, we don't actually export that much, relatively speaking.

• 15:29Tracy Alloway?

  Right, we import. So that's the conventional view, but if, per Shebnam's research, the US is in fact more exposed to global shocks than previously thought, if it's more intertwined with the network of the global economy through second-order effects, then policymakers should be aware of that, right?

• 15:46Speaker 08

  It wasn't clear. This is an enormous body of work, spanning, you know, several papers, hundreds of pages, all with many applications and scenarios.

• 15:56Joe Weisenthal?

  That is Aaron Flon. He's a principal economist at the Boston Fed, and he's also the discussant for this particular paper.

• 16:02Tracy Alloway?

  The discussant role is really interesting.

• 16:04Joe Weisenthal?

  Yeah, this is probably one of the most fascinating sort of dynamics, which I knew existed but didn't quite appreciate how it works. So basically, every presenter gets paired with an official discussant, whose job is just to interpret and critique, frankly, the paper for a wider audience.

• 16:19Speaker 08

  So those are my main comments. I do just want to emphasize that what Shebnam's doing here is policy-relevant research, you know, at its finest. It's our profession working at its finest for really answering these very timely questions in ways that...

• 16:33Speaker 06

  Authors are very close to the paper, right? You wrote this, you know details, and you can see in the presentations, right? They know inside out and stuff like that, so they provide a presentation. Really what a discussant does is sort of essentially, let me translate what the author does for the broader audience, right? A good discussant's role is really to sort of reframe the paper.

• 16:57Speaker 06

  Pull out key takeaways and then provide some constructive comments.

• 17:02Tracy Alloway?

  But sometimes things get a little awkward. Definitely awkward, but you know, everyone's still very polite. Still very polite, yes, but more on that after this break.

• 17:28Tracy Alloway?

  There are some market stories where you want every detail. Joe and I have made quite a few podcasts on that basis. But sometimes you've only got 10 minutes and just want to know what's moving markets fast. That's the Barclays Brief podcast. Every week, experts from Barclays Markets and Research get you up to speed on what's happening and what to watch next. Concise, focused, and brief. Search Barclays Brief wherever you get your podcasts.

• 17:55Speaker 09

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• 19:18Tracy Alloway?

  Let's go to another paper. This one is by Tomaso Monacelli. He's a professor of economics at Universita Baccioni, and his paper is called "Supply Chain Uncertainty: Energy Prices and Inflation", and it is actually about one of our favorite topics, Joe, supply chains.

• 19:35Speaker 10

  No, that's right, because that's exactly right. So, supply chain disruptions can sort of change the state of the economy. So, the environment, that's our idea, where firms make production and pricing decisions. And so, the key idea is that the state of the world in which firms operate can change underlying. So, as economists, we say that the state of the economy changes, even starting from potentially minor events along the supply chain.

• 20:16Speaker 10

  So, we make the example of this apparently small episode, like in the Suez Canal, two years ago, sort of a ship, a container shipping oil and other imports, got stuck for a few days.

• 20:32Tracy Alloway?

  We remember it well.

• 20:33Speaker 10

  Yeah, we remember it well, yeah. But that was, that episode sort of got resolved in a few days. But I didn't have the time to show the data. But then, the effect on transportation disruptions, okay, along supply chains lasted four months. Okay, so the analogy here is, think of a airport, okay, like a hub, okay, where a lot of flights, so now many airports function as hubs, okay, have many flights coming from different directions. And, right, you can have a disruption, like a single delay on a single flight in the hub, but then this propagates, you know, along the day and then across many different flights

• 21:17Speaker 10

  and amplifying the delay downstream.

• 21:21Tracy Alloway?

  A cascade effect.

• 21:22Joe Weisenthal?

  Yes, so at the heart of Tomaso's research is this sort of very important question. Are supply chain disruptions real? Are they a real thing? Or are they simply manifestations or symptoms of excess demand may be caused by too much fiscal stimulus?

• 21:36Tracy Alloway?

  Yeah, so after the pandemic, a lot of people criticized the government for handing out checks to people and businesses, helping supposedly to fan inflation. But actually, if small supply chain disruptions can reverberate for longer than previously thought through energy prices or whatever, then per Tommaso's research, they can be a pretty important source of inflation. And the important thing is that it's not the size of the supply chain shock that matters, it's the actual volatility itself, the uncertainty that matters for inflation.

• 22:09Joe Weisenthal?

  Right. So again, I think, you know, you can see why this would be of interest to policymakers. Even five years after the pandemic, we're still trying to figure out exactly what happened, and we'll probably be researching that for years.

• 22:22Speaker 10

  Totally, yes. So here in our research, we emphasize the interaction, so the complementarity between, you know, shocks to, let's say, the price of oil, okay, that typically central banks look at, right? But they have a typical attitude, let's say, in normal times. If there are oil shocks, yes, we should monitor that those shocks don't feed, are not too persistent, they don't feed on to inflation expectations and so on, but their attitude is typically, let's look through, okay? This oil price, oil prices jump around very much in markets. But here we are saying, even the same original, let's say, oil price shocks or energy, gas

• 23:07Speaker 10

  price shocks, they can have a very different amplified effects on inflation, okay, depending on whether the state of supply chain is disrupted or not, okay? So it's really the interac-- so it's not really that we believe, that we emphasize supply chain shocks. We say-- Typical supply shocks like oil shocks or gas price shocks, they can get really amplified and in a very persistent way if the underlying conditions of supply chains are disrupted. So that that state of the economy should be monitored. And in those states of the world, the central bank should be very, very reactive,

• 23:50Speaker 10

  way more reactive to oil shocks or energy price shocks than in periods where supply chain disruptions are minimal.

• 23:59Tracy Alloway?

  So that's the basic thrust of the paper. And the data seemed to bear Tomasso's thesis out, but things got a little awkward when it was time for the discussion.

• 24:09Speaker 11

  Hi, I'm Ludwig Straub. I'm a professor of economics at Harvard. I'm a quantitative macroeconomist. So I try to build models that describe the macroeconomy and can be used for policy analysis and forecasting. I'm a discussant of a paper on supply chain uncertainty and energy shocks, and how those two relate to the post-COVID inflation episode.

• 24:30Joe Weisenthal?

  Right, as Ludwig puts it, being a discussant is a pretty big commitment. And we should just mention here that neither the researchers nor the discussants are getting paid for their time. They're doing this for other reasons, obviously to contribute to policy. But there's another big motivation that we'll get into in a minute. So here's Ludwig.

• 24:46Speaker 11

  So not everybody has time and energy to do this. In my case, I love being at the Boston Fed and I'm close. So it's not a big travel to come here. And yeah, so I said yes. And you know, about a month before the conference, you typically receive the paper and then you spend a significant amount of time. I'd say maybe half a week, a week, you know, in your, of your research time with the paper and trying to understand the ins and outs, trying to understand the empirics, the model, and then hopefully give a balanced view of the paper during the discussion.

• 25:24Tracy Alloway?

  And from what we saw at the conference, it feels like discussants can have different styles. Some basically summarize the paper and explain why it's relevant. And others, others, you know, maybe pick it apart very critically. Here's Ludwig talking about the discussants.

• 25:41Speaker 11

  Some tend to be more like what you just mentioned, more like the latter, that, you know, pick apart papers and kind of come across as a little bit destructive rather than constructive. You know, the last discussion at the conference was a lot more constructive. For example, it would be, you know, building off the author's results and, you know, showing them what they could do next with with the paper. Some are very, very kind and just praise the results, which I I tend to I tend to try to be in somewhere in between, you know, I tend to shed some critical light on the the author's results if that, you know, is something that I think helps understand the paper. But I also want to be constructive and I want to be kind to the authors too.

• 26:23Speaker 11

  So, you know, you want to kind of balance those two sides, I guess.

• 26:27Tracy Alloway?

  And Ludwig did shed some um critical light on Tommaso's research.

• 26:32Speaker 11

  Suggestions for improvement.

• 26:34Tracy Alloway?

  Right. Suggestions for improvement, right? That's a a good way of putting it.

• 26:38Speaker 11

  So as the economy reopened, as we had ample fiscal stimulus, and I tend to think that that means we ran up a marginal cost curve, meaning, you know, costs went up just because there was a lot of demand and so bottlenecks emerged, um ports got clogged. And I think that alone can lead to an increase in what looks like supply chain issues, even though they're not really the root cause of things. Now, I still think this paper has has a lot of merits to it, but, you know, I tend to think that not all that looks like an energy shock is really truly a shock, rather than just a con uh a consequence of of increased demand.

• 27:20Tracy Alloway?

  Tommaso also used the Baltic Dry Index as a proxy for shipping costs, which, as anyone who has spent a bit of time on finance Twitter will tell you, is an index that gets criticized a lot.

• 27:32Speaker 11

  Exactly. And then if if it's just one episode in that time series that kind of responsible for some of the results, then I would worry about that. Now, I don't know if that's exactly what's going on, but I did play around a little bit and it was not as robust as as, you know, I was maybe hoping it or they were maybe hoping it to be.

• 27:51Joe Weisenthal?

  So Tracy, speaking of Twitter, you know, look, both you and I are used to getting criticism, right? But even if you're used to it, I think it would be pretty uncomfortable to have your work sort of publicly criticized by one of your peers in front of a big group of peers.

• 28:05Tracy Alloway?

  Yeah, I would think so too, although Tomaso actually seemed pretty fine with it.

• 28:10Speaker 10

  No, okay, so that you learn, learn out of experience through time, right? That you have to filter the reaction of the audience and get the good and the bad signals. So first of all, I had great comments, very useful. I, both myself and my co-author are very happy. The discussion was fantastic. I know him, he's a fantastic researcher, he's one of the best macroeconomists. I admire his research, so I was very happy that he was pleased with the paper. But also that the audience had very interesting comments that materially will be very useful for keeping up with the research. And again, sometimes you get some more aggressive comments.

• 28:54Speaker 10

  But you know, there is a, there is a, sort of, there is an interesting role, type of dynamics that happens in academic conferences that you have to internalize.

• 29:07Joe Weisenthal?

  Tracy, I really do, I want to go to one of those workshops that you hear about, where the, you know, the young, the young student or the young professor, maybe someone applying for a job, they're presenting their paper, and then the old professor in the back of the room sort of puts on a big show and humiliates them, bring up all these points.

• 29:23Tracy Alloway?

  Actually, that is a very interesting point, because Tomaso says the days of older professors publicly humiliating younger students are pretty much over.

• 29:32Speaker 10

  That happens in sort of behind secret doors, in a way. No, but, but especially as of late, the profession is discussing that a lot.

• 29:42Joe Weisenthal?

  Yeah.

• 29:43Speaker 10

  So we, we, we now are becoming much more aware that the climate...

• 29:50Speaker 10

  Especially in economics,

• 29:52Speaker 12

  Yeah.

• 29:52Speaker 10

  Much more than in other social sciences or hard sciences, that the climate during seminars, during presentations, especially within closed-door seminars, might be, might be sort of not conducive for younger researchers to actually take risks and learn from the art. And so we are becoming way more mindful that it is very important to keep a civilized climate in research environments.

• 30:23Tracy Alloway?

  Speaking of civilized climates, we should just mention that things can get pretty heated in the public discussion, too.

• 30:30Joe Weisenthal?

  Right, so this is also part of it, where attendees get a chance to ask questions or often make their own points about the papers being questioned. Many, many statements in the form of a question.

• 30:40Tracy Alloway?

  Yeah, lots of that. And things got a little, I don't want to say combative, but loud.

• 30:47Joe Weisenthal?

  Yeah, loud.

• 30:48Tracy Alloway?

  They were loud. Things got kind of loud after a paper was presented on the idea of policy trade-offs, so trade-offs between geopolitical risks and economic risks.

• 30:57Speaker 13

  Perhaps it's too early to tell. Standard models of the type that Shemnam talked about without the nominal rigidities would also predict optimal uniform tariffs that are very high, 20%, 40% range. So the current environment looks pretty good.

• 31:12Tracy Alloway?

  The voice you hear is Paul Antrus. He is a professor at Harvard, giving the keynote address on the first day of the conference.

• 31:20Speaker 13

  According to these models, we are in a sweet spot. I'm not so sure. Why? Because the standard models are models that I think have features that I think are not in line with many of the things that I see when I look at the data.

• 31:34Tracy Alloway?

  His presentation, "The Evolving Role of the United States in Global Value Chains", it touched on some of the same areas that Shemnam had covered earlier. And the beauty of a conference like this is that she was sitting right in the audience and she was able to weigh in right then and there.

• 31:54Speaker 07

  You just raised a couple of issues and then I realized maybe I wasn't clear during my presentation. I fully agree on the whole firm level and how the input-output data we have is kind of the sausage. But I would disagree that we do want to understand how the sausage made so that we can do better, right? So. The economists were fighting.

• 32:14Tracy Alloway?

  Well, actually, I asked Shabnam about this later, and here's what she said.

• 32:18Speaker 07

  Well, actually, I characterize that as a very healthy debate. And a little bit also, you know, the artifact of these conferences where you have 25 minutes to present. Right? So I didn't have that much time. And then, of course, because I didn't show the parts where we use the firm-level data and more, you know, discipline the macro model with more, you know, micro-identified elasticities and all that.

• 32:42Tracy Alloway?

  Joe, all of this raises the question of why economists choose to do this in the first place. And, you know, you spend a huge chunk of time writing a paper. You probably have a few research assistants that are working on it, and they could be doing something else.

• 32:56Joe Weisenthal?

  And then it gets scrutinized this very publicly.

• 32:58Speaker 13

  I maybe you felt that I was I was picking on you. I didn't mean to do that. Now, of course, I take your point. Let me just push back, though.

• 33:08Tracy Alloway?

  Yeah, so obviously, one of the motivations is the policy aspect. Economists, I think, many of them want to inform policy in an accurate and useful way. That's pretty obvious. But there was also something that I didn't quite realize. Peer review and publishing. People want to be published.

• 33:28Joe Weisenthal?

  Yeah, look, I get it, believe me, I get it. Researchers, yes, they want to influence policy. Who doesn't? But they also want to get their papers rubber-stamped by other economists and then published in the most prestigious academic journals. And so one thing I wondered is whether there's a tension between, you know, just from the economist's perspective, is there some sort of tension between the goal of writing a paper that is actually useful for making better policy or just sort of maximizing your chances of getting into a peer-reviewed journal?

• 33:56Tracy Alloway?

  Yeah, I think that is a very fair question. And Shabnam talked about that, too.

• 34:01Speaker 07

  Yes. This is the start of my life. So because this is this is a very serious tension. And I'm hoping we will make the best use of these times now we are living in. To uh to change this. Because yes, unfortunately academia publishing values very narrow research and very tightly defined specialized research.

• 34:30Speaker 09

  Yeah.

• 34:30Speaker 07

  Uh and that's why economists are in silos, right? There are there are labor economists, there are macro economists, there are IO economists, international economists, finance economists. And generally, these groups don't talk to each other much and they just do one thing. But but then you want to do policy relevant research. Uh you talk to policymakers and then you the minute you start talking to policymakers and spend time in policy institutions, you realize these problems don't come like that. Oh, here's the, you know, problem about the, you know, laborers. I need labor economists. Here's a problem about like, you know, uh financial market. Here's a, I mean, the problem about mother policy. The problems are linked. The problems are linked and economics profession actually is uh is capable of, you know, answering those problems, creating solutions for those problems.

• 35:16Speaker 07

  If, you know, these insights from these different subfields come together, uh which is, you know, what I try to do. Uh and I I'm hoping, you know, uh which kind of, you know, academic publishing, you know, doesn't value that much, but I I'm, you know, I'm an optimist. I'm hopeful. I think uh these are the times uh people now coming together, writing with each other more and, you know, realizing this more and more. So hopefully, um you know, we'll we'll go downward to a to a better path on this. Yeah.

• 35:47Speaker 13

  So as I consider, so if everything you're saying is right, so that's awesome. I I would encourage you to kind of like, obviously you want to come in and give some numbers, but give us like versions of the model that shut down this down. And you're telling me the real model itself generates a lot of things that are not in standard models. So I I'm I'm really excited and I'd like to see.

• 36:05Speaker 07

  Exactly. And I fully agree, you can do the smooth thing as little as you want. That's where the data is going to help you. You need data power, but you have to put this in a macro model. I mean, otherwise you are not going to go back to inflation, optimal trade off and all these policy questions. You have to put it in a macro.

• 36:18Speaker 06

  One hundred percent agree with that.

• 36:19Speaker 13

  So all right, I will I will step in in here. We have a iron cage uh in there and I have things. Uh we'll we'll we'll put that on a on a YouTube. I would have.

• 36:45Speaker 09

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• 38:08Tracy Alloway?

  You know, Joe, there was, in fact, one major policymaker in the room along with everyone else, and that is Susan Collins.

• 38:15Joe Weisenthal?

  That's right. There are two prominent Susan Collins. This one is the president of the Federal Reserve Bank of Boston, and she was there the whole time, sitting in the front row. Susan herself, actually, was an academic. She taught at Harvard and Georgetown and the University of Michigan.

• 38:29Speaker 14

  Right. There are lots of themes going on. I have to say that I'm struck by the sense that understanding some of the complexities...

• 38:43Speaker 14

  May change traditional ways of thinking about things. So that's a theme that I'm hearing. So the first paper was really, if you, if you account for the linkages through networks that include not only trade flows, but also financial flows and, you know, and across sectors and countries, not just through countries, but add the sector component in, we may historically with simpler, more traditional models have underestimated the potential for larger, more persistent effects of different kinds of shocks. And then similarly, the second paper had kind of a similar theme, that when you really

• 39:25Speaker 14

  focus on some of the supply chain connections, increases in uncertainty can make a shock have a bigger impact. So putting the different things, making those connections, that's complicated work. I'm really glad that we have experts who are digging in and able to explain them and present them for us and have us ask questions and try to understand them better.

• 39:46Tracy Alloway?

  So Susan mentioned ideas, and one thing I'm very curious about is how the ideas being presented in these papers actually filter through into policy.

• 39:55Joe Weisenthal?

  Osmosis, right?

• 39:57Tracy Alloway?

  Well, right. I'm sure, I'm sure there's some of that, but also, like, do you think Susan is taking the most interesting paper and attaching it to an email and sending it off to Tom Barkin at the Richmond Fed and being like, you have to read this?

• 40:10Joe Weisenthal?

  Yeah, I would. Hey, Tom, here's something you might find interesting.

• 40:12Speaker 14

  Yeah, so there are lots of different ways. So sometimes, you know, sometimes we have the time to go to each other's conferences, and it's hard, right? Because we, there's a lot going on. So sometimes people, sometimes my colleagues will actually be sitting in and hear from themselves, some of their research teams are often tuning in, whether in person or virtually. Our research teams talk to each other. They're very active relationships. They co-author papers. They're engaged in that way. And certainly, if there are things that are really informative for me, I will share them with colleagues in a variety of different ways. Maybe not as much attach the paper. You know, we have a lot to read and to go through. I would try to distill why I'm really interested.

• 40:55Speaker 14

  But, you know, we're always looking for important ideas, trying to be better informed. That's something that's important to all of us. And again, thank you for joining us for the 69th conference. We're delighted to have on last year.

• 41:20Tracy Alloway?

  So that was the Boston Fed's Research Conference, Joe.

• 41:22Joe Weisenthal?

  It was great. But before we go, should tell people how Omar's presentation went.

• 41:26Tracy Alloway?

  Oh, yeah. So we started this episode talking to Boston Fed economist Omar Barbiero. And I feel like he was under more pressure than most because he was presenting not just in front of his peers, but in front of his actual boss. Actually, multiple bosses, because there's Susan Collins, but also Ygon Zakrychek. So his boss and his boss's boss.

• 41:47Joe Weisenthal?

  Yeah. And his was actually the last paper of the conference. I thought it went really well. Some interesting insights on that. Thank you very much.

• 41:54Speaker 15

  Basically what I have to say. I think it's an exciting effort, very impressive data collection, and a rich set of results.

• 42:02Speaker 10

  Tomaso? I think the presentation was very interesting. I think the effort also is very important. Great. This is really cool to see. I have three quick.

• 42:15Speaker 07

  Okay. This is a great paper. And I fully agree with Andrea that this is actually huge work. So you didn't even mention, but we are also now matching Panjiba to a larger set of.

• 42:27Tracy Alloway?

  Hooray. That's a good outcome. And, you know, I should just mention, Joe, we've obviously been summarizing all these papers because we're trying to compress a day and a half of discussion into, I don't know, 40, 60 minutes. But all of these papers are available online at the Boston Fed's website.

• 42:47Joe Weisenthal?

  Totally. And if you want to actually see the conference itself, if this episode, if somehow this episode was not enough for you, actually, the entire conference is on video. So you could see all of the presentations and the discussants and so forth. It's all available online.

• 43:01Tracy Alloway?

  But I'm so glad we went because I feel like I have a much better understanding of how policy actually develops, how research develops, and what economists are kind of aiming for.

• 43:14Joe Weisenthal?

  Totally. So when we went to Boston, you know, in my mind, I was thinking that we were there to learn more about economics, which of course we did. And there were all kinds of interesting ideas on supply chains, inflation, all this stuff we talked about. But it was also, and I hadn't appreciated this, it was a sociology trip, like learning about the sociology of how academic work works, the relationship between academic work and policy and stuff, which is just one of these things that of course intuitively is very important, but I don't think like anyone really thinks about. And when you think about like how economists could be under this sort of dual pressure of like, do I want to influence policy? And is there some cost if I'm focusing on maximizing total published output? You could see some real interesting tensions that emerge in that process.

• 43:58Tracy Alloway?

  Right. It's sort of a microcosm of academia, I guess, which we got to study for a day and a half. So I don't know, maybe, maybe next year we'll be in the room at Jackson Hole. We can hope.

• 44:10Joe Weisenthal?

  If anyone at the Kansas City Fed is listening.

• 44:12Tracy Alloway?

  All right. Shall we leave it there?

• 44:14Joe Weisenthal?

  Let's leave it there.

• 44:15Tracy Alloway?

  This has been another episode of the Odd Lots Podcast. I'm Tracy Alloway. You can follow me at Tracy Alloway.

• 44:21Joe Weisenthal?

  And I'm Joe Weisenthal. You can follow me at the Stalwart. Big thanks to Susan Collins and the rest of the Boston Fed for inviting us to observe and participate in their conference. And once again, all the people who took the time to chat with us, we really appreciate them. You should go to the Boston Fed's website and really check out those papers and presentations. All of it excellent. Follow our producers, Carmen Rodriguez at Carmen Armit, Dashil Bennett, who actually joined us on the trip. He's at Dashbot, and Cale Brooks at Cale Brooks. For more Odd Lots content, go to Bloomberg.com/oddlots with a daily newsletter and all of our episodes. And you can chat about all of these topics 24/7 in our Discord, discord.gg/oddlots.

• 45:01Tracy Alloway?

  And if you enjoy Odd Lots, if you want to send us on more sociological trips to research conferences, then please leave us a positive review on your favorite podcast platform. And remember, if you are a Bloomberg subscriber, you can listen to all of our episodes absolutely ad-free. All you need to do is find the Bloomberg channel on Apple Podcasts and follow the instructions there. Thanks for listening.

• 45:54Speaker 16

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