Economists in government

Anonymous1987

Some time ago a blog on irisheconomy.ie discussed the low number of economists in government departments specifically the department of finance. I'm just woundering has there been any move on this to expand the number of government economist? From speaking to people a lot seem to think the country would benefit from a greater number of economists employed in the department of finance so it would seem to be an opportune time for the profession to push for a greater role in policy.

Économiste Monétaire

It's difficult for economists to say, 'cut public sector numbers/wages, but hire more of us'. Clearly the DoF is lacking well trained economists. I'd like to see something akin to the Council of Economic Advisers in the U.S.; others want something larger like the U.K. GES. Take a Professor-grade economist of good standing, e.g. Philip Lane, and build a team around this person. A mixture of PhDs and promising MSc students to bring forecasting, macro simulation, and micro-level policy analysis. Even a few internships for gifted undergrads to show them the 'engineering' side.

If money is a problem, remove the ESRI's government funding and use it to set up this new body (on the condition that none of the current brigade switch over).

Slippers 2

This was on the Irish Times website in February:

"Cabinet sources expect Mr Cowen will reorganise the economic departments as part of the reshuffle to provide a stronger focus on the major problems facing the country. He is said to be considering establishing a department of economic planning incorporating parts of the current Department of Enterprise and Employment."

www.irishtimes.com/newspaper/breaking/2010/0225/breaking6.html

Don't know if it's relevant.

Something like a reduced form of GES would be great here.

Anonymous1987

Économiste Monétaire wrote: »

It's difficult for economists to say, 'cut public sector numbers/wages, but hire more of us'.

True

Économiste Monétaire wrote: »

Clearly the DoF is lacking well trained economists. I'd like to see something akin to the Council of Economic Advisers in the U.S.; others want something larger like the U.K. GES. Take a Professor-grade economist of good standing, e.g. Philip Lane, and build a team around this person. A mixture of PhDs and promising MSc students to bring forecasting, macro simulation, and micro-level policy analysis. Even a few internships for gifted undergrads to show them the 'engineering' side.

I'd be inclined to be in favour of an across the board approach like the GES but given the size and resources of the country a Council of Economic Advisors is probably a lot more feasible for Ireland.

Économiste Monétaire wrote: »

If money is a problem, remove the ESRI's government funding and use it to set up this new body (on the condition that none of the current brigade switch over).

Don't the DoF already produce macroeconomic forecasting? I wouldn't think that it would cost substantially more to replace current staff with economists and include the scope of policy research. I would be wary of cutting the ESRI funding out right, maybe reduce it instead. It is beneficial to have the ESRI macro-economic forecasts as a check on the DoF.

Flamed Diving

Anonymous1987 wrote: »

Don't the DoF already produce macroeconomic forecasting?

Kinda hard to do that with no economists.

Anonymous1987

Flamed Diving wrote: »

Kinda hard to do that with no economists.

Apparently not. I heard some where they have at least one or two economists.

Économiste Monétaire

I wouldn't be surprised if some aul fella was in a dark room solving matrices (by hand) for an antiquated IS-LM model. We already have the central bank, ESRI, DoF, CSO/Eurostat, banks, OECD, brokers like Davys, et cetera. producing forecasts, so losing one of them might not be such a tragedy.

Anonymous1987

Économiste Monétaire wrote: »

I wouldn't be surprised if some aul fella was in a dark room solving matrices (by hand) for an antiquated IS-LM model. We already have the central bank, ESRI, DoF, CSO/Eurostat, banks, OECD, brokers like Davys, et cetera. producing forecasts, so losing one of them might not be such a tragedy.

Fair point. As for solving matrices by hand, that pleasure is reserved exclusively for students! Even some lucky econometrics students.

We have a new DSGE model?

Flamed Diving

Anonymous1987 wrote: »

Apparently not. I heard some where they have at least one or two economists.

At least one or two. You make it sound like it could even be three, maybe four. Maybe a dozen! It is two, and nothing more. I knew this last night when I said "no economists", because when it comes to modelling an entire economy (and every other task that the DoF undoubtedly hands to them), it may as well be none.

Anonymous1987

Flamed Diving wrote: »

At least one or two. You make it sound like it could even be three, maybe four. Maybe a dozen! It is two, and nothing more. I knew this last night when I said "no economists", because when it comes to modelling an entire economy (and every other task that the DoF undoubtedly hands to them), it may as well be none.

My comment was no more misleading than your own as it turns out . I don't know what is required in terms of resources and staff to produce quality macro-economic forecasts but the Council of Economic Advisors that EM suggested has 15 economists that study policy across a broad range of areas.

Flamed Diving

But do the economists at the DoF produce only forecasts?

Économiste Monétaire

Deleted User wrote: »

We have a new DSGE model?

No , that was just me fantasising.

BESman

Ya thats what this country needs, economists.

Flamed Diving

BESman wrote: »

Ya thats what this country needs, economists.

Couldn't agree more.

Anonymous1987

BESman wrote: »

Ya thats what this country needs, economists.

What would you suggest?

Anonymous1987

Flamed Diving wrote: »

But do the economists at the DoF produce only forecasts?

The DoF cover a number of policy areas not just forecasting with 17 staff but I assume they are primarily concerned with administration.

Flamed Diving

Anonymous1987 wrote: »

What would you suggest?

No, it was meant to be taken literally.

BESman

Anonymous1987 wrote: »

What would you suggest?

Hey, why don't we just print loads of money??????

Flamed Diving

BESman wrote: »

Hey, why don't we just print loads of money??????

We don't have monetary discretion... dammit.

Économiste Monétaire

Économiste Monétaire wrote: »

No , that was just me fantasising.

You had me excited there for a minute..

Économiste Monétaire

Deleted User wrote: »

You had me excited there for a minute..

What would we call it? Sweden has RAMSES, Norway has NEMO (:D), IMF has GEM. Anyone here good with acronyms? BIFFO would be awesome.

BESman

ARSE model

Autonomous Rational Stochastic Equilibrium model. Essentially useless.

We have HERMES and HERMIN already though.

SPUD?

Is there any equivalent to the green book (http://www.hm-treasury.gov.uk/data_greenbook_index.htm) in Ireland?

Hasschu

Ethical behaviour was what was sorely lacking, add an over abundance of arrogance and disaster was inevitable. All the economists in the world could not save the Irish from themselves. Firmly embedded in the brain of the vast majority of the sentient Irish was the mantra "Property has never declined in Ireland.". If you pointed out to them that property booms were so scarce as to be nonexistent for centuries and that accounts for the absence of property price collapses the answer was on the tips of their tongues. Ah sure you begrudge Ireland its long awaited chance of prosperity. The gov't did play a role by catering to the lowest common denominator as is usual with political opportunists. Some economist whose name excapes me said that is impossible for a man to develop a policy that is good for society as a whole if it diminishes his own prospects. Life will go on, as the Germans say setbacks make one stronger.