I write an economics newsletter for the Opinion section of the New York Times. It comes out Mondays, Wednesdays, and Fridays. I get to range widely. Topics in the last couple of months have included (in alphabetical order) Army recruiting, artificial intelligence, bank failures, Black Wall Street, cost-of-living adjustments, the dollar's strength, electrification, fertility in the pandemic, hoarding, housing, humility, inflation, the Jones Act, Charles Kindleberger, Elon Musk, Theodore Roosevelt's antitrust policy, and Xi Jinping.
I'm grateful that I get paid to do something I love, which is to learn new things and then explain them to others in a clear and, I hope, entertaining way. Nearly everything I know about economics, I have learned on the job. I took just one year of economics in college. Fortunately I have had some excellent teachers over the past four decades. Central bankers, Nobel laureates, newly minted PhDs—all have generously and patiently answered my questions as deadlines approached. I thank them.
It's not an easy job. For one thing, the reality we're supposed to reflect is hard to identify. Economists don't just disagree about what will happen next; they disagree about what has already happened. I'll get a different explanation for, say, the latest recession, depending on whether I talk to a monetarist or an Austrian or a new classical economist or a post-Keynesian or a modern monetary theorist. Adherents of the various schools seem to be in no hurry to resolve their differences. It's as if there were many contending Virgils in Dante's inferno, each tugging us journalists in a different direction down there in the dark.
Another thing that's hard about covering economics is that we often participate in the action we're covering. That makes us different from sportswriters, theater critics, or police reporters. If we write that inflation seems to have been caused by supply-chain bottlenecks, or fiscal stimulus, or whatever the explication du jour is, we're “doing” economics, albeit crudely. If we run a chart of the labor force participation rate in an article about wage growth—well, that's doing economics too.
Imagine if a sportswriter were handed a baseball bat and told to step up to the plate in the World Series. That's what it can feel like when a piece I'm writing requires me to understand, explain, and possibly take sides in a dispute between famous economists. Adding to the pressure, takes on the economy by journalists can be as influential on policy as the research by the credentialed economists themselves.
I told Tiago Mata that I would offer some advice based on my forty years of covering business, finance, and economics. So here goes.
Almost every story is an economics story if you squint hard enough. I'm not saying that economics is the only valid lens for looking at the family or sports or politics or agriculture, or even the best lens. But economists have interesting things to say about all those fields and more.
Common sense can lead you astray in covering economics. For example, common sense says that if families should tighten their belts when there's a recession, so should the government. In reality, of course, government deficits soften the recession by supporting demand. The moral: when writing, don't just go with your gut.
Because economists disagree with one another, avoid phrases such as “according to economists.” There are precious few declarations that all economists would assent to.
Journalists have license to be economically eclectic, but it's good to at least be aware when two or more schools of thought that you're quoting from contradict each other.
The standard journalistic approach of getting to the truth by pitting experts against one another doesn't work well in economics. It's hard to get economists of different schools to engage over their disagreements because their differences run so deep.
I like to think of life as a river and journalism as a hydroelectric power plant. We journalists extract energy from the flow of events and turn it into an energetic product—the news.
I'm constantly on the lookout for ideas for my newsletter. I read constantly but shallowly. If something looks like it has potential, I stop on it and go deeper.
I read research that's way over my head. I zoom in on bewildering phrases that reappear. I grasp enough to realize which bits I need to understand. Then I ask the authors for a layperson's explanation, which they're usually happy to supply.
I get ideas from National Bureau of Economic Research working papers, the Social Science Research Network, IDEAS/RePEc, VoxEU, Bruegel, Project Syndicate, other websites, and the mailing lists of various think tanks, universities, banks, investment houses. Not to mention newspapers and magazines I read, Twitter (still!), blogs, and press releases. I also get great suggestions from readers and the people I interview. One newsletter tends to spawn another.
Early in my career I developed the incorrect idea that journalists shouldn't reveal too much to their sources about the articles they were working on. Now I tell people exactly what I intend to say and ask them to tell me if anything sounds remotely wrong. I want to fix things before publication, not after.
While journalists can learn from economists, economists can also learn from journalists. Reporters are out every day talking to real people. If the behavior of people quoted in news stories doesn't match economic theory, it's the theory that needs to change, not the people.
One difference between journalists and economists is that we don't use tests of statistical significance. We look for enormous effects that are indisputably meaningful: The growth of the Federal Reserve's balance sheet. The COVID recession of 2020. The leap in prices of used cars. If as a journalist you can't find that an effect meets the eyeball test of being obvious in a simple line chart, keep looking. Subtlety is not a virtue.
Economists appreciate theory more than journalists do. I love a speech that Fed Chair Jerome Powell (not an economist) gave in 2018 at the annual monetary policy conference in Jackson Hole, Wyoming. He said that steering the economy with reference to concepts such as r-star and u-star (the neutral real rate of interest and the natural rate of unemployment) is like celestial navigation at sea—steering by the “stars.” The problem, he said, is that “the stars are sometimes far from where we perceive them to be.”1 Paul Romer, the Nobel laureate in economics, struck a similar but harsher note two years earlier with a paper that likened “imaginary causal forces” in the economy to outdated notions such as phlogiston and caloric.2
We journalists ask economists to tell us what they know or believe about r-star, u-star, pi-star, and of course phlogiston (kidding). Our job is to digest what they say, line it up against what we see, and figure out what to write. We're the sportswriters who suddenly have to step up to the plate and face big league pitching. That's both exhilarating and daunting.
Jerome H. Powell, “Monetary Policy in a Changing Economy,” speech, “Changing Market Structure and Implications for Monetary Policy,” symposium sponsored by the Federal Reserve Bank of Kansas City, Jackson Hole, Wyoming, August 24, 2018, https://www.federalreserve.gov/newsevents/speech/powell20180824a.htm.
Paul Romer, “The Trouble with Macroeconomics,” speech, Commons Memorial Lecture of the Omicron Delta Epsilon Society, January 5, 2016, https://paulromer.net/the-trouble-with-macro/WP-Trouble.pdf.