What Really Happens at a Fed Research Conference
Timestamps are as accurate as they can be but may be slightly off. We encourage you to listen to the full context.
Podcast Summary
This episode of Odd Lots takes listeners inside the Boston Federal Reserve's 69th annual research conference, themed "The US Economy in a Changing Global Landscape." (05:30) Host Tracy Alloway and Joe Weisenthal provide unprecedented access to see how economic research actually develops and influences monetary policy. The conference featured papers on global trade networks, supply chain disruptions, and tariff impacts - all topics directly relevant to current policy debates. (07:00) Through interviews with economists, Fed officials, and conference attendees, the episode reveals the sometimes tense dynamics between academic research goals and real-world policy applications, showing how tomorrow's monetary policy decisions are shaped by today's academic debates.
- Main theme: The intersection of academic economic research and Federal Reserve policymaking, exploring how complex global economic relationships challenge traditional models and influence monetary policy decisions.
Speakers
Tracy Alloway
Co-host of Bloomberg's Odd Lots podcast and Bloomberg Opinion columnist specializing in markets and financial systems. She brings extensive experience covering complex economic topics and making them accessible to a broad audience.
Joe Weisenthal
Co-host of Bloomberg's Odd Lots podcast and executive editor at Bloomberg. He focuses on macroeconomic trends and monetary policy, providing insightful analysis on Federal Reserve operations and economic research.
Susan Collins
President and CEO of the Federal Reserve Bank of Boston. Former academic who taught at Harvard, Georgetown, and the University of Michigan before joining the Fed, bringing both theoretical expertise and practical policy experience to her role.
Key Takeaways
Academic Research Directly Shapes Federal Reserve Policy
The episode reveals how research conferences like Boston Fed's annual event serve as the intellectual foundation for monetary policy decisions. (06:30) Research director Yigon Sukrycek explained that when Jerome Powell makes statements about tariffs and inflation, these assertions are backed by academic research developed at conferences like this. The research presented today becomes the policy framework of tomorrow, with Fed officials actively participating in these discussions and incorporating findings into their decision-making process.
Traditional Economic Models May Underestimate Global Interconnectedness
Multiple papers presented challenged the conventional view that the US economy is relatively insulated from global shocks due to low trade shares. (13:34) Economist Shebnam Kolemli-Ozkan's research on global networks demonstrated that when accounting for supply chains, financial networks, and production connections, the US becomes much more vulnerable to global disruptions than traditional models suggest. This finding has significant implications for how policymakers should respond to international events.
Supply Chain Disruptions Have Amplifying Effects on Inflation
Tommaso Monicelli's research revealed that supply chain uncertainty doesn't just create direct price pressures - it fundamentally changes how other shocks affect the economy. (23:00) Even small disruptions like the Ever Given container ship blocking the Suez Canal can create cascading effects lasting months. The research suggests that during periods of supply chain stress, central banks should be more reactive to energy price shocks than during normal times, as these shocks get amplified through disrupted supply networks.
The Academic Publishing System Creates Tension with Policy Relevance
A recurring theme was the conflict between producing policy-relevant research and meeting academic publishing standards. (34:07) Economist Shebnam Kolemli-Ozkan described this as "the story of my life," explaining how academic journals value narrow, specialized research while policy problems require interdisciplinary approaches. This creates a dilemma for researchers who want to influence real-world policy but also need to advance their academic careers through prestigious publications.
Research Conferences Function as Intellectual Battlegrounds
The episode showcased how economic research develops through sometimes heated public debate and peer review. (25:54) The discussant system, where each paper gets an official critic, ensures rigorous examination of methodology and conclusions. While the profession has moved away from the old days of senior professors publicly humiliating junior researchers, the process still involves intense scrutiny that can make or break research careers. This dynamic tension ultimately strengthens the research but requires thick skin from participants.
Statistics & Facts
- Omar Barbiero's tariff research involved tracking approximately 400,000 individual product codes multiplied across many countries, resulting in millions of data points to analyze US business exposure to import tariffs. (03:45)
- The US has traditionally been viewed as relatively closed economy with exports representing 10% of GDP and imports 14% of GDP, leading to assumptions about limited global exposure. (12:28)
- This was the 69th annual Boston Fed research conference, making it one of the longest-running economic research events in the Federal Reserve system. (04:35)
