Or, while reading “Republican Senate candidate Blake Masters links Fed diversity to economic woes”:
figure 1: Top panel, “Misery Index,” calculated as the sum of year-over-year CPI inflation and unemployment, % (blue); Bottom panel: Breakdown of Federal Reserve System directors.Source: BLS via FRED and author’s calculations, and Nickel (2021).
Racial diversity in the Fed system was not seen in the “good old days.”Lest one thinks that everything was clumsy from 1914 to 1971 (the first non-white director was appointed in 1972), here is a graph of the pain index, using NBER’s Macro Historian (via FRED).
figure 2: Above, the “Misery Index” is calculated as the sum of year-on-year CPI inflation and unemployment, % (blue) [official statistics]. Source: BLS via FRED, NBER Macro Historian via FREDNBER and author’s calculations, and Nickel (2021).
During the period when we have data, the so-called golden age, the pain index is higher. During times when we don’t have data, we know that recessions are more frequent.
Therefore, my argument that increasing diversity of race, gender, or gender orientation is the cause of the challenges of current macroeconomic conditions lacks any intellectual content. This is self-evident, but I think it will be useful to document these correlations – until someone explains how increasing diversity across several socioeconomic dimensions impairs the implementation of economic decision-making.
