The economic research policymakers actually need

Blog by Jed Kolko: “…The structure of academia just isn’t set up to produce the kind of research many policymakers need. Instead, top academic journal editors and tenure committees reward research that pushes the boundaries of the discipline and makes new theoretical or empirical contributions. And most academic papers presume familiarity with the relevant academic literature, making it difficult for anyone outside of academia to make the best possible use of them.

The most useful research often came instead from regional Federal Reserve banks, non-partisan think-tanks, the corporate sector, and from academics who had the support, freedom, or job security to prioritize policy relevance. It generally fell into three categories:

  1. New measures of the economy
  2. Broad literature reviews
  3. Analyses that directly quantify or simulate policy decisions.

If you’re an economic researcher and you want to do work that is actually helpful for policymakers — and increases economists’ influence in government — aim for one of those three buckets.

The pandemic and its aftermath brought an urgent need for data at higher frequency, with greater geographic and sectoral detail, and about ways the economy suddenly changed. Some of the most useful research contributions during that period were new data and measures of the economy: they were valuable as ingredients rather than as recipes or finished meals. Here are some examples: