Advice for Grad Students

Because there appeared to be much interest in the advice I offered undergrads in a previous post, let me provide the same service for graduate students in economics.

But rather than doing the work myself, I will outsource the task to some of my colleagues in the profession:

• Don Davis gives some guidance about finding research topics.
• John Cochrane tells grad students how to write a paper.
• Michael Kremer provides a checklist to make sure your paper is as good as it can be.
• David Romer gives you the rules to follow to finish your PhD.
• David Laibson offers some advice about how the navigate the job market for new PhD economists.
• John Cawley covers the same ground as Laibson but in more detail.
• Kwan Choi office advice about how to publish in top journals.
• Dan Hamermesh offers advice on, well, just about everything.
• Assar Lindbeck tells you how, after getting that first academic post, to win the Nobel prize.

Updates: Matthew Pearson explains how to survive the first year of grad school. Hal Varian explains how to build an economic model in your spare time. Jonathan Shewchuk offers tips on giving an academic talk.

Signaling at the AEA Job Market

If you are an econ grad student about to go on the job market, this post is for you.

A PhD candidate from the University of Michigan sends me an email:

Hi Greg,

As a possible blog idea that would be well received by many econ grad students around this time each year, perhaps you could offer some thoughts as to the econ job market. How to best go about it, how to reduce noise in the process, how to sell oneself appropriately, ... Some insight as to the new signalling system offered by the AEA would also be most welcome! The latter is raising some real questions in my neck of the woods among this year's outgoing cohort (of which I'm one). Some like the idea as helping to reduce noise in the process by identifying some individuals' strong preferences. Others fear the inevitable interview question: "Why didn't we get a signal from you?" which can best be avoided by not sending any signal!

We'd all your insight on this whole process!

Best,
[name withheld]

On the job market in general, please see the links in a previous post.

Before receiving this email, I didn't know anything about the new AEA signaling system. I guessed (correctly, it turns out) that my Harvard colleague Al Roth would have something interesting to say. I emailed Al and got this in reply:

Hi Greg:

Indeed, I'm the chair of the AEA ad hoc committee on the Economics job market that put the new signaling mechanism into effect. (Last year we introduced the "scramble" web page in March, which will also operate this year.)

Just as the idea of the scramble was to add some thickness to the late (March-April) part of the market, the idea of signaling is to reduce some of the congestion in the thick, January interviews part of the market.

(Incidentally, Muriel Niederle is giving a seminar on it this Tuesday, in the behavioral/experimental seminar. She is on the committee too, and is doing some related theoretical work with Peter Coles.)

In terms of advice, we wrote the (attached) document, which also appears on the web now. [See the first link given above.] I'm also enclosing the scramble document which appeared last year and which isn't now on the web, but a revised version will reappear later in the market.

The basic idea of a signaling mechanism is that there is a big part of the market in which departments, in allocating scarce interview slots, have to form an assessment not only of how promising a student looks, but also of how likely that student is to be interested in them. (Harvard doesn't spend a lot of time worrying about that, but at Pitt, where I spent many happy years before coming to Harvard, we definitely factored that into our decisions.)

Of course students can send any signals they want in their cover letters, but because every cover letter expresses interest, that may be of limited help to departments in separating the signals from the noise. To some extent that may also apply to information in emails and letters from advisors. Those channels can all convey valuable signals of interest, of course. The new signaling mechanism is just a supplement to the traditional ways of signaling interest, and may be of most help to students who are interested in places to which they don't have other reliable means of conveying their interest. Because they can send a maximum of two signals through the AEA mechanism, the signals may convey some information.

So, what information should students try to convey? In our "advice to applicants" paragraph, we said

"The two signals should not be thought of as indicating your top two choices. Instead, you should think about which two departments that you are interested in would be likely to interview you if they receive your signal, but not otherwise (see advice to departments, above). You might therefore want to send a signal to a department that you like but that might otherwise doubt whether they are likely to be able to hire you. Or, you might want to send a signal to a department that you think might be getting many applications from candidates somewhat similar to you, and a signal of your particular interest would help them to break ties. You might send your signals to departments to whom you don't have other good ways of signaling your interest."

Basically we don't think students will often want to signal MIT or Princeton or Stanford or Chicago or other very competitive departments very often, because those departments can somewhat safely presume that they'll have a reasonable chance of being attractive to any students they interview. And we expect that departments will understand that they may not get signals from applicants who can demonstrate clear interest in other ways. So, in our advice to departments, we wrote

"Applicants can only send two signals, so if a department doesn't get a signal from some applicant, that fact contains almost no information. (See advice to applicants, below, which suggests how applicants might use their signals). But because applicants can send only two signals, the signals a department does receive convey valuable information about the candidate's interest.

A department that has more applicants than it can interview can use the signals to help break ties for interview slots, for instance. Similarly, a department that receives applications from some candidates who it thinks are unlikely to really be interested (but might be submitting many applications out of excessive risk aversion) can be reassured of the candidate's interest if the department receives one of the candidate's two signals."

If you wanted to give a very toy model of why signaling might be useful, you might want to start with the two-firm, two-applicant example in which on one even cares who works for whom, but each firm has only one interview slot, and can only hire someone they have interviewed. Then the symmetric equilibrium involves randomization (each firm randomly chooses one applicant to interview), and there is coordination failure half the time (when both firms interview the same applicant, so only one hire is accomplished). But if applicants can first send one signal, then even if they randomize to whom they send the signal (since they don't care in this simple example), then coordination failure is cut in half, if each firm adopts the strategy of interviewing the applicant whose signal they get in case they get exactly one signal. (Now, coordination failure is only a possibility when both applicants signal the same firm, in which case both firms randomly choose who to interview, which is the situation that existed in the absence of any signal...)

Al Roth

Thanks, Al.

On the Ethics of Advising

A book review in the NY Times contains this thought-provoking passage on Milton Friedman:

Friedman’s association with Gen. Augusto Pinochet, the Chilean dictator, was indeed the worst stain on his career. His defense that his economic advice to Pinochet was no different from what a doctor might give a government on how to deal with an outbreak of AIDS is not very persuasive.

The problem is that the reviewer fails to then explain why it's not persuasive. He seems to assume that the explanation is obvious. But to me, it is not obvious at all.

Here is the basic problem. You are an expert working at an American university. A dictator calls you up, says his nation is facing a problem, and wants your help solving it. Many people, not just the dictator, are suffering because of this problem. What do you do? Does it matter whether the problem is an economic problem or a medical problem? If so, why? (If you want my opinion, here it is: I have no idea. Fortunately, I have never gotten any calls from dictators.)

[As an update, let me be more pointed: You are a professor at Harvard Medical School and the world's expert of deadly disease X. The head of a nation experiencing an epidemic of a new disease similar to X calls you for advice. You know how to make a cheap vaccine for this new disease, and you are the only person in the world with this knowledge. Do you offer the secret recipe unconditionally? If not, what conditions have to be met? If the nation head is a tyrannical dictator, would you refuse to help, knowing that letting the epidemic run its course might cause more suffering than the dictator ever did?]

Similar, but somewhat less emotionally charged, ethical issues arise in the context of advising democratically elected leaders. For two years, I worked as an adviser to George Bush. Now I am an occasional, unpaid adviser to Mitt Romney. To my constant surprise, some letter writers and some commenters on this blog presume that I must agree with, or be responsible for, every position they take. That is a deeply silly assumption.

Presidents and candidates have to make decisions on a multitude of issues. It is unreasonable to expect any adviser to agree on every single issue. Indeed, politicians listen to many advisers with different points of view. An adviser cannot resign in protest every time a decision fails to go the way he advised. The system could not function if people acted in such a self-centered way.

Consider: Should an economist who believes abortion is murder refuse to advise Barack Obama on tax reform? If this economist chooses to become an Obama adviser and Obama wins, is she then complicit in all the abortions that result from President Obama's pro-choice policies? If her advice on tax reform is only partially followed, should she resign her position as adviser? If she continues as an Obama adviser, is she then responsible for all policy positions that Obama takes? Is she even responsible for Obama's tax-reform proposal?

My answers are NO, NO, NO, NO, and NO. In my view, the adviser is responsible for the advice she gives, and Obama is responsible for the positions he takes.

Maybe I am being too easy on economic advisers, like Milton Friedman, myself, and my hypothetical Obama adviser. But I worry about what happens when sanctimony leads people to put too high of a moral "tax" on advisers from academia. Most academics avoid politics altogether, preferring the relative comfort and better compensation of life in the ivory tower. The uglier the world of politics becomes, the fewer academics will venture forth with their input, and the poorer everyone will be as a result.

An engineer seeks career advice

A graduate student in engineering emails me to ask for some advice about his educational plans:

Hi Dr. Mankiw,

I've been reading your blog for a while now, and since you seem to be so wonderful about responding to email asking for comments and advice, I thought I'd give this a try especially after reading your post about how you ended up as an economist and not a lawyer.

I'm an engineering student, currently one year into graduate studies. I suppose I was one of those people who applied to grad school "by default," without thinking enough about what it was I really wanted to do with my life. One semester in, I realized I'd made a big mistake, that although I was still interested in academic research, engineering wasn't for me. I almost quit, but decided to stay with it until I either finished a Masters or decided what else to do. So right now (to the unfortunate detriment of my thesis research) I'm looking at a few other options.

I've always been interested in economics, and I'm beginning to think it might be the right fit for me. I believe I naturally think like an economist, and I have a very strong math and stats background to go with my interest. I've also done a lot of reading on the subject (including your wonderful macro textbook). The only problem is I have absolutely no formal education in economics--not even a single course, since I thought the first year economics courses I had the prerequisites for in undergrad seemed a little too basic to spend my precious electives on.

Do you have any advice for someone like me who wants to transition into graduate studies in economics from another field?

Keep up the great blogging,
[name withheld]

In your situation, I would recommend applying directly to graduate schools in economics. As an engineer, you have the necessary background in math and statistics. If you have done as much econ reading as you say, my guess is that admissions committees will forgive you for not having taken formal economics courses.

Admissions committees for econ PhD programs are often more forgiving of a weak econ background than a weak math background. That might seem odd, but it is easily explained. As economists, we think we can help you catch up if you need help in econ. After all, econ grad school is all about studying econ. But if you have a weak math background, you will start behind and have a harder time catching up.

Another option, instead of applying directly to an econ PhD program, is to apply to a master's program, such as that at the LSE. With a master's under your belt, a subsequent application to PhD programs will look stronger.

I have met several students in the Harvard econ PhD program with stories like yours. They were "refugees" from technical fields like engineering and physics who discovered late in life their interest in economics. It was not too late for them to switch, and it is probably not too late for you. Your education may end up taking a year or two longer than it would have if you had figured out your interests earlier, but that is a small cost to pay compared with the cost of ending up in the wrong field.

Advice for New Junior Faculty

A reader emails me:

I've read your "Advice for..." blog posts with interest. They're truly helpful. But now I've finished the job market and I have a tenure-track position at a research university. Can you post an "Advice for Junior Faculty" next?

Okay, here goes:

• Your focus should be on getting papers published in refereed journals. Everything else is secondary.
• Do not be a perfectionist. It is tempting to keep revising your dissertation chapters until you are completely satisfied with them before sending them off to a journal. The problem is that you may never be completely satisfied. Meanwhile, the editorial review process is unconscionably long, and your tenure review is approaching. So don't delay. If you just got a job as an assistant professor at Bigshot University, aim to send your dissertation research to journals before you arrive at Bigshot to start teaching.
• It pays to be a good teacher and a good citizen in your department: Your senior colleagues will be more likely to want to keep you around. But don't deceive yourself into thinking that great teaching or citizenship will make up for a paucity of published research.
• For women and minorities: Be especially wary of invitations to sit on university committees. I have noticed that deans and other university administrators like to promote diversity on their committees. They never seem to figure out that, as a result of this "tax" on women and minorities, we white males are left alone with more time to pursue our research.
• Attend conferences and give seminars at schools to publicize your work and yourself. The people in the audience may one day be in a position to hire you or write letters of evaluation about you.
• Tenure review committees give a lot of attention to where papers are published (perhaps too much, in light of this work by Andrew Oswald). Give each of your papers a shot or two at the top journals, such as the AER, JPE, or QJE. Even if you are not confident in the paper, it is worth a try for two reasons. First, as author, you are not in the best position to judge its quality; some people are too fond of their own work, and some are too hard on it. Let the editors decide. Second, the editorial process is highly imperfect. (Again, see Oswald.) The bad news is that some of your best articles may end up getting rejected from the top journals. The good news that you may get lucky, and some of your so-so articles may end up published in top journals simply because they hit the editor's desk when he is in a good mood.
• Do not get discouraged by rejection. It is part of the process. Learn what you can from the editors and referees and then take your paper to another journal.
• Be on the lookout for good coauthors among your colleagues and students. See My Rules of Thumb for more discussion of this topic.
• Avoid activities that will distract you from research. Whatever you do, do not start a blog. That will only establish your lack of seriousness as a scholar.
• Remember that you got into academics in part for the intellectual freedom it allows. So pursue your passions. Do not be too strategic. Be wary of advice from old fogies like me.

Milton Friedman

We lost a great human being today. Here is what I wrote about him in 1998.

The Economist of the Century
By N. Gregory Mankiw

Anyone who thinks that ideas matter (and who doesn't?) naturally takes an interest in people who generate more than their share. Milton Friedman is one of them. As he approaches his 86th birthday, Friedman remains one of the world's most influential living economists.

Fans of this great intellect are in for a treat: Friedman and his wife, Rose, have just published their memoirs, Two Lucky People (University of Chicago Press, $35). The Friedmans take turns telling their story as they trace their lives from humble childhoods in Rahway, N.J. (Milton), and Portland, Ore. (Rose), through a lifetime of teaching, research, and policy controversies.

The Friedmans are best known for their articulate and unwavering defense of the free market. Their policy objective is, simply, "the promotion of human freedom." This goal, they tell us, "underlies our opposition to rent control and general wage and price controls, our support for educational choice, privatizing radio and television channels, an all-volunteer army, limitation of government spending, legalization of drugs, privatizing Social Security, free trade, and the deregulation of industry and private life to the fullest extent possible." Milton and Rose were libertarians--aggressively vocal libertarians--before libertarians were cool.

Their campaign for a freer society led them into the confidence of some of the great political figures of our times, including Barry Goldwater, Richard Nixon, Ronald Reagan, and Margaret Thatcher. The authors don't shy from judging these leaders: we are told, for instance, that Reagan's choice of George Bush as his Vice President was "the worst decision not only of his campaign but of his presidency."

The Friedmans' political involvement came with its share of controversy. Most notably, in 1975 Milton spent six days giving lectures on public policy in Chile and had one brief meeting with right-wing dictator Augusto Pinochet. The result was a firestorm of protest. When Friedman won a Nobel Prize the next year, public objections came from all directions, including previous prize-winners David Baltimore and Linus Pauling.

Friedman was--and is--unrepentant. Of course, he did not endorse the dictatorship. But, he wrote, "I do not regard it evil for an economist to render technical economic advice to the Chilean government to help end the plague of inflation, any more than I would regard it as evil for a physician to give technical medical advice to the Chilean government to end a medical plague." He also notes that years later, when he offered similar economic advice to China, there were no similar protests, even though the left-wing Chinese dictators were no less oppressive than Pinochet.

Friedman's politics may have generated public controversy, but his scientific contributions yielded a consensus of admiration among his professional colleagues. When students today are taught about the determinants of consumer spending, the history of monetary policy, or the relationship between inflation and unemployment, they owe much to the intellectual legacy of Milton Friedman. Legend has it that economist George Stigler once called Friedman "the best economist in a bad century." Stigler may well have been right that Friedman doesn't quite measure up to the 18th century's Adam Smith or the 19th century's David Ricardo--economists, like many of the things that they study, are subject to the law of diminishing returns. But Friedman runs a good race against such 20th-century luminaries as Paul Samuelson and John Maynard Keynes, and that is no mean feat.

The book does drag at times, especially when it lingers over the minutiae of the Friedmans' home life. (How much detail do we really need to know about Friedman family vacations, for example?) But overall, it's charming. It's almost like a letter from a couple of old friends--a couple of old friends who had a long, compelling intellectual journey, came to know some of the great world leaders of this century, and had 60 years of happy, supportive marriage. After reading Two Lucky People, you really can't help but agree with the title.

Update: Here is the NY Times obituary.

Perhaps the Worst Advice Ever

Daniel Drezner recounts some truly terrible advice he received as a young academic:

When I was an assistant professor at the University of Chicago, a senior colleague once told me his secret to academic success: One bad article equals five great ones. His point was that the worst thing a scholar can do is to publish too much, as opposed to too little. Any substandard publication creates a black mark that is difficult to erase.

This sounds like a smug senior professor aiming to paralyze a junior colleague's creativity.

The truth is that producing bad papers is one of the costs of producing good papers. When you swing for a home run, you are more likely to strike out. The only way to avoid the occasional strike out is to quit the game.

Here is my advice to a young academic: You will be judged by your five to ten best papers. Your bad papers will be mostly forgotten. So be willing take risks, if there is a reasonable chance of a big payoff.

Advice for Aspiring Economists

A student from abroad emails the following question:

Do you have some hints for me, how to become a good economist?

Here is some advice for, say, an undergraduate considering a career as an economist.

1. Take as many math and statistics courses as you can stomach.

2. Choose your economics courses from professors who are passionate about the field and care about teaching. Ignore the particular topics covered when choosing courses. All parts of economics can be made interesting, or deadly dull, depending on the instructor.

3. Use your summers to experience economics from different perspectives. Spend one working as a research assistant for a professor, one working in a policy job in government, and one working in the private sector.

4. Read economics for fun in your spare time. To get you started, here is a list of recommended readings.

5. Follow economics news. The best weekly is The Economist. The best daily is the Wall Street Journal.

6. If you are at a research university, attend the economic research seminars at your school about once a week. You may not understand the discussions at first, because they may seem too technical, but you will pick up more than you know, and eventually you’ll be giving the seminar yourself.

You may find some other useful tidbits in this paper of mine.

Updates: Here is some advice from Susan Athey about applying to grad school in economics.  And here are the criteria a top economics PhD program uses in determining admissions.

Some Advice on Tax Planning

I don't normally give advice on personal finances, but in light of the fiscal situation we are facing, I will pass along one tidbit.  Consider converting some of your retirement savings into a Roth IRA. Over the past few years, I have converted all that I can, which is about half of my retirement savings. 

To make the best of a Roth conversion, you need liquid assets outside of retirement accounts to pay the resulting tax liability.  But if you can do this, you will shelter more of your savings from capital taxation, and you will avoid required minimum distributions when you turn 70 1/2, which means tax-free accumulation for a longer period of time.

To read more about this option, click here.

Good Advice

Here is some advice on giving an academic talk. Thanks to Newmark's Door for the pointer.

Advice for College Freshmen

Click here.  Produced for Princeton students, but lots of good advice here wherever you are enrolled.

MBA vs PhD

A blog reader asks for advice:

Hello Professor Mankiw,

I am a second-year economics student at the University of California, Davis. I was wondering if you could share your opinion on the career options provided by a Ph.D in economics compared to those of an M.B.A., particularly with regards to earning potential. Historically I have preferred business school for its good "bang for the buck," but lately I have thought that immediate graduate school might be my best option, given the relative strengths and weaknesses of my track record (i.e.,stronger academics than work experience). Could you tell me which option you would prefer in my position? You don't have to make any sort of absolute, unequivocal statement, but I appreciate any advice you can offer. Thank you very much for your time.

Sincerely, [name withheld]

I believe that from a purely financial standpoint, an MBA is a better investment than a PhD. An MBA is only a two-year program, whereas a PhD is typically four to six years. The extra time for a PhD will probably not yield the extra income needed to make it a good investment of your time. A typical Harvard MBA gets a starting salary a bit over $100K; the typical econ PhD does not start much higher than that. But the issue is not entirely pecuniary. The question you should be asking yourself is what kind of job you want to have when you conclude your education. A PhD makes sense if you want to consider the possibility of being an academic. You may pursue a PhD and then decide along the way to pursue a different path than being a professor. That is okay: Many PhD students leave for the private sector when they are done with their degrees, and they get very good jobs there. But if you are sure from the beginning that you want some kind of private-sector job, then the MBA is probably the better route.

Ranking Economics Departments

In a previous post, I offered some advice for those lucky duckies who were admitted to PhD programs in economics at both Harvard and MIT. I noted that if you use the standard REPEC ranking and look at the top 50 economists, you will learn that MIT has 3 and Harvard has 12.

I ran into an old friend at the Brookings conference yesterday, and he told me he distrusted that particular REPEC ranking. He said he preferred one based only on citations.

Okay, so for my friend and anyone else who might be interested, here is a recount: Using the REPEC citation ranking, MIT has 2 of the top 50 economists, and Harvard has 11.

Alternatively, one might look at the institutional ranking based on total citations, where (ignoring the think tanks) one gets this ranking of schools:

1. Harvard econ
2. Princeton econ
3. Chicago econ
4. NYU econ
5. UC Berkeley econ
6. London School of Economics
7. MIT econ
8. Chicago GSB
9. Harvard Kennedy School
10. Oxford econ
11. Columbia econ
12. Columbia Business School
13. Boston University econ
14. Harvard Business School
15. UC San Diego econ

Of course, none of these rankings is perfect. But they provide a starting point for students trying to figure out which school to attend. And remember: subjective judgments of quality are imperfect as well.

Update: David Autor of MIT emails me:

Dear Greg,

Because I chair recruiting for MIT, several folks have contacted me about your blog entries on Harvard v. MIT. As one of our grad students has pointed out, there is a an irony to the department rankings that your blog overlooks:

a. On the list of top authors by rank score, 13 of the top 50 were educated at MIT (yourself included, of course) and 10 were educated at Harvard.

b. On the list of top authors by citations, 14 are MIT Ph.Ds and 11 are Harvard Ph.Ds.

I suppose you could argue that it matters more [where] these "home-runners" sit now than where they were trained. But the evidence doesn't really bear this out: the attached paper on department rankings, forthcoming in the ReStat, uses graduate student placements to rank departments. Over the past 40 years of data, Harvard slightly out-places MIT. Using data since 1990, MIT slightly out-places Harvard.

So, if you want to keep your readers well informed, you might point out these facts as well.

- David

Let me conclude by repeating advice from my original post on the topic of Harvard vs MIT: Don't sweat it. You will get a great education at either place.

David Friedman's Slippery Slope

A blog reader directs me to economist David Friedman, who tells us why, in response to global climate change, he is not in favor of carbon taxes:

If I were dictator of the world, the answer would be fairly obvious. Impose a tax on activities that create greenhouse gases designed to reflect the marginal cost they create. That's the standard economic solution, due to Pigou, for problems of negative externalities. Since the tax brings in additional revenue, combine it with a corresponding reduction in whatever taxes currently have the largest adverse effects.

I do not, in fact, support such carbon taxes. The reason is that I do not believe that, if imposed, they would fit the pattern described above. To begin with, they would not be based on a realistic estimate of the marginal costs; insofar as they would be based on anything, judging by the ongoing arguments over Kyoto and similar proposals, they would be based on some target level of emissions. If, as seems likely, the level of taxes needed to substantially slow global warming was much higher than the marginal damage done, the result would be to buy lower temperature at a price much higher than it was worth, making the net situation worse, not better....

Furthermore, I think it unlikely that income from carbon taxes would be used toreduce other taxes. The clear evidence here is the repeated pattern with regard to wars. New taxes are introduced as an emergency measure for a war, retained long after the war is over; there is always some politically profitable way to spend themoney. In the case of carbon taxes, I am confident that they would be used as an additional source of revenue, perhaps with the argument that the money was needed to ameliorate the effects of whatever global warming continued to occur.

This is a classic slippery slope argument: X may be good policy, but if I endorse X, Y will soon follow, and Y is terrible, so the government is better off doing nothing. For example, "Ideally, the government should prohibit people from shouting 'fire' in a crowded theater, but once the government starts regulating speech, we will lose all first-amendment rights and will soon be living in a police state." This form of the argument is popular among the anti-government crowd. Hayek's book, The Road to Serfdom, is one long slippery slope argument.

Now you might say that Friedman's slippery slope argument makes more sense than my shouting-fire example. But be careful. As Eugene Volokh points out,

If you accepted this slippery slope argument, then you’d end up accepting the next one and then the next one until you eventually slip down the slope to rejecting all government power (or all change from the status quo), and thus “break down every useful institution of man.”

Personally, I do not see how, in a world of climate-change extremists, advocating no policy is a more tenable solution politically than advocating a moderate policy of a modest carbon tax. Ultimately, policy is set by the median voter. When smart economists like David Friedman reject the first-best moderate policy to advocate the do-nothing position, he loses credibility among moderates, and that makes it easier for climate-change extremists to convince the median voter that we need to do something extreme.

Note that David's position seems very different from Milton's advice to put "politics aside" when giving economic advice. Maybe it's one of those father-son things.

For new econ PhDs only

If you are an econ grad student about to go on the job market:

• Here is the link for the AEA signaling mechanism.
• From last year, here is some advice from Al Roth about the mechanism.
• Here is advice that new Harvard PhDs are getting.

Career Advice from David Brooks

NY Times columnist David Brooks writes:

One of the best pieces of career advice I ever got is: Interview three people every day. If you try to write about politics without interviewing policy makers, you’ll wind up spewing all sorts of nonsense.

Brooks was not talking about economists in particular, but this piece of wisdom can be taken as a critique of much of the economics profession. Many economists who write about policy rarely, if ever, encounter actual policymakers. Instead, they prefer to sit in the comfort of their ivory tower offices. (I know I do.)

I wonder how different the economics profession would be if economists were expected to do a year of service outside of academia or, at the very least, if university hiring committees rewarded a year of real-world experience as the equivalent of, say, a couple of academic publications. My conjecture is that the profession would be less creative but more useful.

Should grad students teach?

A student emails me a question:

Dear Prof. Mankiw, 

I am in the first week of my PhD in economics. I follow your blog and I have read the advice you have posted for graduate students. 

I have heard competing hypotheses about whether PhD students should teach during their studies. On one hand, teaching is a great experience and a CV-builder for hopeful future academics. On the other hand, teaching is a lot of work, and the opportunity cost of time for any PhD student is high. 

Do you have any advice about how a PhD student (and a big fan of your blog!) can reconcile these points? 

Cheers,

[name withheld]

Teaching is not necessary while pursuing a PhD, but it is usually a good idea for several reasons.

1. Grad students can usually use the money, and teaching is often a good way to make some.
2. Teaching improves your oral presentation skills, which will be crucial when you go on the job market.
3. You will learn whether you enjoy teaching. If not, you might consider alternatives to an academic career.
4. When you apply for jobs, teaching experience will be a plus for many schools that might hire you.
5. Teaching will help remind you why you fell in love with economics in the first place. That can be useful during those inevitable days when your dissertation research is not going well.
6. Teaching will provide greater variety to your day than if you are solely focused on research. The personal interaction with students will often lift your spirits.
7. When you are teaching, you can be confident that you are making positive contributions to society, and that feeling is also good for your mental health.

Let me also mention one risk: If you enjoy teaching, you might use it as a distraction from getting your dissertation done. The key is moderation. Teach some, but not too much.

Advisers to the next POTUS? A Quiz

Can you guess which presidential candidate is getting advice from Berkeley economists Christina and David Romer? Click here for the answer.

And who is listening to Stanford economist Michael Boskin? Find out here.

If you got those right, try a harder one: Which candidate is getting advice from Boston University economist Larry Kotlikoff? Click here for the answer.

I assume you all know where I stand.

Some Advice for the GOP

In the current debate over fiscal policy and the debt ceiling, Republicans have drawn a line in the sand: No tax increases.  But I fear they have lost sight of a key issue: As I discussed in this column, the distinction between spending and taxation is often murky and sometimes meaningless.

My advice: Amend your line in the sand to NO INCREASES IN TAX RATES.  Be willing to give up on tax expenditures if we simultaneously make current tax rates permanent--or, better yet, if we lower rates, as the Bowles-Simpson commission suggested.

Addendum: A phase-out of deductions for high-income taxpayers would count as an increase in tax rates, as the Wall Street Journal notes today on its editorial page.

Good Academic, Bad Human Being

Mike Moffatt considers the question:

"What real world experiences should I have to be a good academic economist?"

He answers:

I'd say none. Academia, by necessity, is about focusing your concentrations on very isolated and unique problems. I've noticed the people who succeed in graduate school tend to have fewer outside interests to distract them from their focus, not more.

A lot of economics professors I know would agree with this answer. Indeed, I have heard similar advice given many times. But I am inclined toward a different judgment.

It all comes down to the definition of "good academic economist." If your goal is to maximize the probability of winning a Nobel prize, or at least to climb up as high as you can on citation rankings, then this advice is correct. Real world experiences and outside interests are a distraction. Don't take time off from academic pursuits for a job in public policy. Don't ever work on Wall Street or do any consulting. Don't engage in the broader societal debate by writing op-eds or working on political campaigns. All of that takes time away from getting papers published in academic journals.

But don't stop there. If you have this objective, then it is best not to have hobbies, or read novels, or go to the movies. Don't spend time teaching well or mentoring students, except the very best students who can help you with your research. Don't get married or have friends, unless your spouse and friends are PhD economists and can coauthor papers with you. Whatever you do, don't have children--boy, are they a time sink! And if you make the mistake of having children, make sure you spend as little time with them as you can.

In other words, if you want to be the best academic you can be, get ready to be a miserable human being.

Alternatively, you might decide that, at the end of your life, Saint Peter will not judge you solely by checking the Social Science Citation Index. If so, maybe you should make life choices using a broader objective function--one that encourages you to sacrifice some degree of academic success narrowly construed for a more diverse, more satisfying, and more noble life.