Are there any early experiences that influenced you to become an economist?
Politics was always talked about at the dinner table when I was growing up. From a very early time, I made the connection between politics and economics, and I liked making those connections. I was 10 during the time of Nixon’s wage and price controls. It was a very big topic that affected everybody. It was a time when economics really mattered to people.
Isn’t that the case now?
Yes, it’s a tumultuous time, which makes it a great time to teach economics, especially macroeconomics. You have students’ attention much more readily when things are going poorly. You’re able to bring in issues that students are seeing on The Daily Show and on the web, like the presidential election, and give them some kind of context for them. Of course, sometimes what I’m teaching in class contradicts what the candidates are saying.
What is macroeconomics?
It’s the big picture: looking at different market structures, how money is created, and how a change in the money supply affects the economy. Micro is about real world issues like the earned income tax credit, welfare programs, or the proposed ATT and TMobil merger.
How are students feeling about the economy?
When these students were younger, we were not in a recession. Economists call the mid-90s the Great Moderation. There was low inflation and low unemployment. It seemed to them that it would always be like this. Now they have parents and siblings who have lost jobs, and they’re concerned. It has an immediate effect on them.
When students come here, what do you see as their level of financial literacy?
Professor Lalonde and I wrote a paper using Saint Anselm students to look at this issue. The numbers are not that great in terms of what they know. They’re very uninformed, which isn’t a surprise. For most of them, their parents are paying for college. Many have worked summer jobs and are familiar with paying taxes, and they have credit cards; but they don’t really understand what it means to have $20,000 in loans or how the monthly payments will affect them when they graduate. Professor Romps teaches a personal finance course. I think there should be more emphasis on this in high school.
What would you like students to leave with?
I’d like them to understand the idea of opportunity cost. Even if there’s no money transaction involved, an action has a cost. Buying a Prius may cost more, even when you take into account savings at the pump, but part of what you’re buying is the ability to make a statement. On a larger scale, you can look at the cost to society when companies are able to pollute for free. What’s an acceptable price to pay for biodiversity, or clean air? Looking at opportunity cost is important whether you’re making a purchase or a career decision or a law.
Can people in your profession, economics scholars, help the economic situation?
Some economists say the government should let everything fail and let the market take its course; others thought the stimulus package was too small. There is no agreement at a time of crisis. It’s disappointing, an embarrassment, how little unity there is. It doesn’t give much guidance to policy makers. There’s still a lot for us to learn.
Who manages your household finances?
I do, although my husband and I are both trained economists. He’s a microtheorist: the history of economic thought. If you think what I do is esoteric…!
What question do people most often ask you when they hear you’re an economist?
It used to be “what are interest rates going to do?” These days it’s “where are jobs going to come from?”
Where are they going to come from?
I don’t know. But I like to point out that 40 percent of the jobs we have now are types that didn’t exist in 1960. We have so many computer based jobs. No one saw that coming—which is why governments can be so deficient in planning an economy. In the late 1880s, no one knew the influence the auto industry would have. We’ve always been surprised at what the growth industries are. So I tell people I have a lot of confidence in innovation. Just because we can’t name the jobs now doesn’t mean they won’t exist. But it’s scary not being able to point to them.
What are your views on the Occupy Movement?
Well, they’re correct; there is more income inequality than ever. It hasn’t been this large since the 1920s, and there is the most inequality of any industrialized country, by far. It is a concern. They have been effective at bringing the message into mainstream culture, but they don’t have a plan or a proposal. I don’t see where it goes from here.
Are you good at saving money?
My colleagues will tell you that I very rarely pay for a hotel. I have a Hilton honors credit card and use the points to save money on our vacations. I don't take a lot of risks. I'm frugal in some areas and willing to spend in others. As we’ve increased our income, my husband and I have never really increased our standard of living. We’ve done that consciously. We have a three-bedroom house, an unpaved driveway and no garage.
What do you read?
I read a lot of nonfiction. But lately I’ve been reading — or listening to — classics like A Tale of Two Cities and Anna Karenina. There’s so much economics in them: issues of poverty and excess, and the debate about freeing the serfs. When I read, I always have my economist hat on.