In late 2021, a Bank of England working paper described the role of economics news journalists as a relatively simple piece of optimization. When reporting the actions of central bankers, the paper said that journalists needed to trade off the ease of simply paraphrasing the words of officials against the potential benefits of writing news that is more satisfying to their readers.
Having worked as an economics reporter for over twenty years, I am faced with many trade-offs and choices, but this has never been one I have encountered. While seeking an easy life has its attractions, parroting the words of central bankers does not generally bring the good times with minimal effort.
Instead, the incentives that journalists deal with every day in economics news are rather more complicated. It is trivial to say journalists would want to maximize returns from delighting readers for minimal effort, but much more important is to describe what that entails. To deliver valuable economic news, journalists use all the following techniques. We report, analyze, explain, opine, challenge, and even, sometimes, entertain.
The one overriding question that determines our effort and the economics news value is simply put. It asks, “So what?”
The essential principle of economics news writing is that if you cannot easily answer the “so what” question, you should not be writing the article. In the US, journalists often talk of the “nut graph,” meaning the context paragraph in a news story that tells readers why the content is important and gets to the heart of the issue. In rather coarser UK journalism, this phrase has been literally translated to “bollocks par,” but the meaning is identical.
We need to answer why anyone should care that the world economy is projected to grow 3.4 percent next year. We need to explain why it matters when statistics show inflation is falling or that the distribution of income has become more unequal. We need to examine the costs and benefits of subsidizing energy and outline them clearly to readers.
In short, writing news articles about economics is little different from the tasks facing economists more generally. It is the audience that differs. Economics journalists can assume less prior knowledge than economists generally, and this also differs between publications. But the issues under investigation are the same.
Naturally, economics news lends itself more easily to macroeconomic questions and the reporting of statistics and events in this field. Some of this is practical—the data are published regularly and policymakers make decisions, such as on interest rates, on a planned schedule. News events therefore exist.
Sometimes, I have heard academic economists complain that such events get coverage far too easily compared with their detailed examination of economic policy. I tend to reply that I once worked on an econometric evaluation of a change to the UK's in-work benefit, family credit, only to have the results correctly described by a senior Bank of England official as something like “rather less significant than one month's unemployment figures.” Important economic work always gets coverage.
What matters to people is a sense of whether they are living in an economy that is doing relatively well or badly. This will determine their living standard and whether they are facing pleasant or nasty surprises. Cost-of-living issues can also be important for indirect reasons, as they can affect the quantity and quality of public services and the levels of taxation required to pay for it.
But it is not just pocketbook issues that make economics news. Readers care about politics, and a core determinant of who is in charge within a country is often the party that can persuade a plurality that they would competently manage the economy. On a wider level, geopolitics is inextricably linked to economic power and its distribution around the world. That, ultimately, is why it matters whether the global economy is growing at a rate of 3.4 percent and which countries are performing most strongly.
The job of the economics journalist is to explain and analyze these issues, remembering what matters to readers is key. If no one reads your article, it has no impact.
The above may sound rather Panglossian about economics news writing. I am describing best practice and am not remotely naive that this is not universal. Economics is frequently badly reported. This happens most often either when journalists have directions or inclinations to report from a particular political angle or when they are required to provide “expert” voices to both sides of an economic argument despite the profession sitting almost entirely on one side.
The 2016 Brexit referendum is, sadly, a clear example of the failure of economics news reporting to reflect the profession to the public. This arose as a result of both excessive even-handedness among some outlets, including importantly the BBC, and explicit bias against the EU in others. Opinion surveys showed that the public believed Brexit would improve the long-term prospects of the UK economy despite very few economists sharing that belief. Reporting clearly failed.
But the reporting of the economics of coronavirus provides a strong counterpoint to the view that all economic events are badly explained in the media. The pandemic was of huge importance to readers, and the essential economic insight was generally well explained and formed the basis of policy on lockdowns and opening up in most countries. This was that there was no huge trade-off between health and wealth when the world had no vaccine, but a massive one thereafter.
Coming into journalism with two economics degrees and seven years of professional experience at the Institute for Fiscal Studies in London, I have found that there is a huge advantage in having a serious background in the subject. It means I can read academic papers and (mostly) understand them. More important, I can spot bullshit, whether it comes from a politician or a professor. I have a keen interest in looking for the incentives behind people's actions and want to know the movements in underlying supply or demand pressures, not just changes in price.
Most important, coming into journalism with an economics background gave me a sense of perspective on economics issues. I know what is big and what is small, and I am not afraid to report that.