What Really Happens at a Fed Research Conference

Summary

Odd Lots – Summary

Episode Title: What Really Happens at a Fed Research Conference
Podcast: Bloomberg Odd Lots
Hosts: Joe Weisenthal, Tracy Alloway
Date: January 5, 2026

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Episode Overview

This episode takes listeners inside the annual flagship research conference of the Boston Federal Reserve (the “Boston Fed”), offering an insider’s perspective on how economic ideas and preliminary research papers are debated, challenged, and shaped. Joe and Tracy describe the unique culture and dynamics of such conferences, discussing the interplay between academic work, policymaking, and professional advancement. Through interviews with economists, presenters, discussants, and Boston Fed president Susan Collins, the episode demystifies the path from research paper to real-world monetary policy implication.

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Key Discussion Points & Insights

1. Inside a Fed Research Conference

• Conference Environment:
  • The setting is the Boston Fed’s 69th annual research conference, themed “The U.S. Economy in a Changing Global Landscape,” with topics like tariffs, geopolitics, and AI shaping U.S. growth and inflation.
  • Unlike high-profile venues like Jackson Hole, reporters were allowed into the discussion rooms for the first time (04:52).
  • Conferences are where “the macro ideas actually collide with real world data,” serving as the first public drafts of (future) policy debates (06:13).
• Format:
  • Researchers submit papers on pre-selected themes, present findings, and are publicly critiqued by an assigned “discussant” and open Q&A (04:22).

2. The Making and Purpose of Research Conferences

• Choosing Themes and Contributors:
  • Egon Sikrajek, Boston Fed Research Director, explained selecting timely, relevant topics amidst rapid global change. “We’re grappling with monumental change and we lack models, we lack theoretical frameworks…” (07:16).
• Bridging Theory and Policy:
  • Conferences are intentionally more policy-relevant than typical academic workshops, designed to spark ideas and debates, not just fill journals (10:17).
• Conference Culture:
  • Academics write what they want, and papers often deviate from the initial theme “with a bit of a gentleman-like distance…” (07:44).
  • Presentations are less technical, avoiding excessive equations to remain accessible (10:17).

3. Noteworthy Research Papers & Debates

a. Networks and U.S. Economic Exposure

Presenter: Shebnam Kalemli-Ozcan (Brown University)

• Main Idea:
  • Challenges the view the U.S. is insulated from global shocks due to its size and the dollar’s dominance. Shows that when you account for global trade, production, and financial networks, the U.S. is more exposed than conventional models admit (11:58, 13:15).
• Quote:
  • “When you have this type of a comprehensive view of the network… U.S. becomes very vulnerable to global shocks and global risks.” — Shebnam Kalemli-Ozcan (14:59)
• Policy Relevance:
  • Implications for how the Fed assesses international risk. What appear as insignificant trade flows may mask chain-reaction vulnerabilities.

b. Supply Chain Uncertainty, Energy Prices, and Inflation

Presenter: Tommaso Monticelli (Università Bocconi)

• Main Idea:
  • Investigates how supply chain shocks (and the uncertainty they cause) amplify and prolong inflation. Minor disruptions can cascade — like the Suez Canal blockage — much like a single delayed hub flight leads to system-wide delays (18:37).
• Key Insight:
  • It's not the size of the initial supply shock, but the volatility and “uncertainty” that matters most (21:11).
• Quote:
  • “…even the same original oil or gas price shocks… can have very different amplified effects on inflation depending on whether the state of supply chain is disrupted or not.” — Tommaso Monticelli (21:37)

c. The Crucial Role of Discussants

• Role:
  • Discussants are assigned to critique presented papers — summarizing, translating, questioning, and sometimes harshly criticizing the methodologies or implications (15:53, 23:11, 24:42).
• Styles Vary:
  • Some discussants are constructive; others “pick apart papers and kind of come across as a little bit destructive rather than constructive…” — Ludwig Straub (24:42)
• Memorable Moment:
  • Ludwig Straub tactfully critiqued reliance on a volatile shipping cost index in Monticelli’s supply chain paper, noting the lack of robustness (26:34).

d. Debates, Awkward Moments, and Academic Culture

• Public Criticism:
  • Presenting at such conferences can invite direct, sometimes uncomfortable, questioning. Tommaso Monticelli: “You have to filter the reaction of the audience and get the good and the bad signals…” (27:11)
• Changing Culture:
  • The era of senior academics publicly humiliating junior presenters is fading, with greater awareness about fostering a “civilized climate” for critique (28:34).

4. Policy Transmission and the Value of Research

• From Conference to Policy:
  • Susan Collins, Boston Fed President, stressed how networked research and broader theme-setting inform real policy. Ideas filter through formal and informal networks, not just in email attachments (36:37, 38:20).
• Quote:
  • “We may, historically, with simpler, more traditional models have underestimated the potential for larger, more persistent effects of different kinds of shocks.” — Susan Collins (36:37)

5. The Incentives for Academics: Policy vs. Publishing

• Tension:
  • Academics face a classic dilemma between publishing narrowly for journals versus producing “policymaker-relevant” interdisciplinary research (32:58, 33:03).
• Quote:
  • “Unfortunately, academia publishing values very narrow research and very tightly defined, specialized research. And that’s why economists are in silos.… The problems are linked… I’m an optimist… maybe these are the times, people now coming together, writing with each other more…” — Shebnam Kalemli-Ozcan (33:03)

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Notable Quotes & Memorable Moments

• On conference anxieties:
  • "I think the profession is built on trust. And if you lose that trust, it’s… quite bad.” — Omar Barbiero on presenting research (01:44)
• On conference value:
  • "It’s where the first serious drafts of tomorrow's policy debates are aired." — Tracy Alloway (06:13)
• On heated debates:
  • “I would disagree that we do want to understand how the sausage made so that we can do better.” — Shebnam Kalemli-Ozcan, countering Paul Antrus (30:55)
• On the academic incentive trap:
  • “I think these are the times, people now coming together… I’m hopeful.” — Shebnam Kalemli-Ozcan (33:03)

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Important Timestamps

| Time | Segment Description | |-----------|-----------------------------------------------------------------------------------------| | [04:02] | Setting: Inside Boston Fed Conference, annual flagship event | | [07:16] | Egon Sikrajek explains conference theme/purpose | | [11:58] | Shebnam Kalemli-Ozcan presents global risks/network paper | | [13:15] | Shebnam explains network economics and U.S. exposure | | [18:37] | Tommaso Monticelli introduces supply chain/uncertainty research | | [21:24] | Interplay between oil shocks and supply chain disruptions | | [23:11] | Ludwig Straub breaks down the discussant process | | [27:11] | Tommaso on handling criticism and conference dynamics | | [28:34] | Tommaso on changing norms: “days of public humiliation” are fading | | [30:55] | Debates between presenters and discussants spill onto the conference floor | | [36:37] | Susan Collins (Boston Fed President) on takeaway messages and policy relevance | | [38:20] | Susan Collins on how research papers filter into Fed policy decisions | | [41:09] | Joe reflects on learning the sociology of economic policy work |

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Flow and Tone

The hosts bring an engaging, conversational tone, blending humor (“The Keynes Chair at the Mises School would be an interesting mix” 11:38) with wonky curiosity and honest observations about the conference’s culture (“it was a sociology trip”). They give voice to both the tension and camaraderie of academic life, as well as the nerve-wracking public nature of Fed conferences.

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Summary Takeaway

This Odd Lots episode provides a rare, approachable look at the inner workings of a central bank research conference. The hosts demystify how academic economic research is tested and refined—through lively, sometimes critical, but increasingly civil and constructive debate. The episode reveals the vital (though sometimes messy) process whereby conceptual models meet data, policy leaders absorb new ideas, and the incentives of academia occasionally clash with the needs of the real world.

For further reading or to watch the conference, links to the Boston Fed’s website are mentioned in the episode for full presentations and research papers.

Transcript

[Joe Weisenthal]

Markets move fast.

[Tracy Alloway]

Get the insights you need in 10.

[Elahe Izadi]

Minutes with Barclays Brief, a podcast from Barclays Investment Bank. Each week, our experts analyze market themes.

[Tracy Alloway]

Helping you anticipate what's next.

[Elahe Izadi]

Listen to Barclays Brief wherever you get your podcasts. When I listen to the news, here's what I want to know. Why this story matters, who's at the center of it, and how the reporters uncovered it. And as a journalist, I want to make sure that's what you get, too. I'm Elahe Izadi, co host of the podcast Post Reports. Every weekday, my colleagues and I at the Washington Post give you the context you need on the biggest stories. Health care tariffs, artificial intelligence. We've got you covered. Look for Post Reports wherever you listen.

[Tommaso Monticelli]

To podcasts.

[Joe Weisenthal]

Bloomberg Audio Studios, Podcasts, radio news.

[Tracy Alloway]

Okay, so thank you all.

[Omar Barbiero]

The next paper is going to be.

[Tommaso Monticelli]

Presented by Omar Barbiero.

[Omar Barbiero]

US firms exposure to import tariffs. A comparison of the 2018 and 2025 episodes.

[Tracy Alloway]

Can I ask a personal question? When you present a paper like this at a research conference like this, Boston Fed one, do you get nervous? And then I guess adjacent to that, like, what's the best outcome for you when you present the paper? And what's the sort of nightmare scenario? Would it be someone, like, finding some fundamental error in the methodology and like, standing up in the middle of the conference and being like, there's a serious problem here?

[Omar Barbiero]

Yeah, I mean, many, many nightmare scenarios.

[Ludwig Straub]

Sorry.

[Omar Barbiero]

Just clicking randomly. And then we went. Okay, all right. I would say the, the worst thing that can happen is that you just say something wrong that sounds dishonest, almost like you're trying to hide something. Like, there's clearly a data flaw. And then you don't highlight it or you don't. You say in public, no, no, no, this is not a problem. And everybody knows that. No, no, it's, it's a problem. Kind of. That, That's. I think the profession is built on trust. And if you, if you lose that trust, it's, it's, it's quite bad.

[Tracy Alloway]

That's Omar Barbiero, a senior economist at the Federal Reserve bank of Boston. He's, he's getting ready to stand up in front of a room full of other economists, journalists, academics, and his employer and present a research paper tracking the exposure of US Businesses to import tariffs.

[Omar Barbiero]

This is a paper written jointly with Slavic, Hilary and Alvaro, who are there. There happened to be in the room our excellent research assistants, Sophie and Lilia. Also, who helped us with this paper. We wrote it for the conference. It's still quite preliminary, and therefore we really value your comments on this.

[Tracy Alloway]

How many individual pieces of data would you say were involved in this particular study?

[Omar Barbiero]

Okay, product code, they were around 400,000, I would say. And then you have to multiply that by many different countries, and so you have to keep track of that matrix. The supply chain data set was also quite fun because it's kind of a network of companies and it gets big very, very fast and you have to track it over time, I have to say. I mean, we have excellent. I mean, I have excellent co authors, we have excellent research assistant, we have excellent, you know, computing power. Thank God that can, can help us with that. And I don't know, I. Hundreds of thousands.

[Tracy Alloway]

Millions.

[Omar Barbiero]

Yes, millions.

[Joe Weisenthal]

We are at the Boston Fed's annual flagship research conference. This is the 69th year of the event. And the theme for 2025 is, quote, the U.S. economy in a changing global landscape. So focusing on how things like tariffs, geopolitical tensions, industrial policy, AI, et cetera, are reshaping US Growth, inflation, and the overall financial system.

[Tracy Alloway]

Clearly that is a very rich vein to mine for research. And the format is a classic central bank research conference. Economists and other researchers are invited to write a paper for the event. They're assigned an official discussant, and then they publicly present to a room full of their peers. A while the audience gets a chance to ask questions or sometimes critique.

[Joe Weisenthal]

Yeah, you say it's a classic central bank research conference, but we've never actually been to one, I don't think.

[Tracy Alloway]

Right.

[Joe Weisenthal]

It felt like a totally new environment.

[Tracy Alloway]

Yeah, it's true. We have gone to Jackson Hole for the past few years, which is probably the most famous Fed research conference, but it's famous because the Fed chair usually makes a speech and that gets all the attention. We've never actually been in the room at Jackson Hole where they discuss the research papers being presented because the Fed only allows a certain number of journalists into the room.

[Joe Weisenthal]

The room.

[Tracy Alloway]

The room.

[Joe Weisenthal]

The room. Also, I think it's unfair. Kansas City Fed gets to hold their conference in the most beautiful place on.

[Tracy Alloway]

Earth instead of Kansas City, middle of August.

[Joe Weisenthal]

And then the Boston Fed, I mean, it's their choice, but the Boston Fed has theirs in Boston, which is lovely. We both had a great time, but November, it.

[Tracy Alloway]

It was very cold. Well, the upshot is that this time we were actually in the proverbial room. So for the first time we got to really experience and learn what an economic research conference actually is.

[Joe Weisenthal]

Yeah, this is actually very key because if you sort of like wonder. So, okay, Jerome Powell says something about, you know, the expected relationship between tariffs and inflationary. But where did these ideas come from? Where are these assertions, predictions and so forth? It comes from academic research. It comes the research backing that up. These conferences are where the macro ideas sort of actually collide with real world data.

[Tracy Alloway]

Yeah. Another way of thinking about it. It is where the first serious drafts of tomorrow's policy debates are aired. And we're going to give you a front row seat to experience what those initial drafts and debates are actually like.

[Joe Weisenthal]

Welcome TO the Boston Fed 69th annual flagship economic Conference.

[Egon Sikrajek]

You do research at the regional bank, at the board or at the bis. You do policy. By policy, we mean, you know, you advise your principals. In our case that Susan Collins, the President and CEO of the Boston Fed, preparations for the FOMC meeting for public engagements.

[Tracy Alloway]

That is Egon Sikrajek, he's director of the research department at the Boston Fed and he's the one who actually puts this event together.

[Joe Weisenthal]

And he's Omar's boss.

[Tracy Alloway]

Yeah, and he's Omar's boss. Right. He also gets to choose the broad theme of the conference.

[Egon Sikrajek]

We've lived in a particular global order, rules based international system, globalizations, trade integrations. We just took those things for granted for decades and, and we're now grappling with monumental change and we lack models, we lack theoretical frameworks to understand these changes. You've heard many debates about this. Data is no good. This is the sausage, don't eat it.

[Joe Weisenthal]

Right.

[Egon Sikrajek]

And how does one go about it? So I think it's just, it's just really, I mean, it's an exciting time for researchers because we have great questions. But I think it also underscores of just how little we really know and how challenging it is then to make policy recommendations in the period of such change. The way a conference like that comes together is we sit together, my team of researchers, we try to pick a topic that would obviously be timely, relevant to policymakers. We confer with Susan and so forth, we look and so forth. So once we kind of zero in on what the topic is, we then have to identify the contributors to this. We have a certain idea of what we want different sessions to be. Then we get either academics or, you know, contributors to write papers for this. But you know, academics, researchers write what they want to write. So sometimes there's a bit of a, you know, so say, you know, gentleman like distance between the blurb and the ultimate paper that gets written. But that's all right. We've always seen this. This is very, very standard. And you know, the idea is then is to the discussants, the role of a discussant then is to kind of bring that paper and provide some context and, you know, try to try to, you know, fit it into the general theme.

[Joe Weisenthal]

So this particular conference, the theme has changed.

[Ludwig Straub]

Right.

[Joe Weisenthal]

And one of the things we keep saying, but I think it's true, is we are living through capital H history here. We have the tariffs from the Trump administration, the reversal of globalization, new geopolitical risks, AI, all of it.

[Tracy Alloway]

Right. And we're also still trying to fig stuff like what happened in relatively recent years, why did inflation actually spike during the pandemic. We're also in this new era of industrial policy and we're trying to figure out what that means for the economy. If we actually want to do the stuff like make semiconductors or build small modular nuclear reactors. We have to have some idea of where we're going.

[Egon Sikrajek]

And we try to really keep it, you know, I would say somewhat.

[Joe Weisenthal]

More.

[Egon Sikrajek]

Accessible, I would say a bit interdisciplinary. We try to reach a bit broader audience. Is somewhat atypical conference, you know, your typical economic research conference, which feature slide after slide of equations, graphs.

[Tracy Alloway]

So I'm laughing slightly because I saw some equations this morning and the speaker is like, oh, well, as you can see from this slide. And I'm thinking, I cannot see. No idea.

[Omar Barbiero]

Right, right.

[Egon Sikrajek]

So, you know, so this is, I would say this is very light on this. If you. This is super light on this and so forth. We urge authors to try to write something that's more, I would say, policy relevant, that touches, that can be communicated and stuff like, rather than very, very technical pieces. You know, that is what the academic journals tend to specialize. Hopefully it sparks, it sparks an idea, it sparks a new paper. You know, it says, ah, you know what, this is an interesting result, but I have maybe better data to do that. So let me actually. Or there was a. There was a testable implication that somebody, you know, brought up. Let me see if I can flesh that out because I think I can provide senses. That's how knowledge and conferences, you know, advances. It's a very organic, a bit of a messy type of affair. And, you know, to be honest, many times don't. Things don't, they don't pan out. You know, I have files and folders full of research ideas that, you know, never went anywhere but that. But you try.

[Tracy Alloway]

And if you want to get a sense of that process and the policy implications of some of this research, take a Listen to the first paper presented at the conference. It's by Shebnam Kalemley Oskin. She's the Schreiber family Professor of Economics over at Brown University.

[Joe Weisenthal]

I love economists and their, their long titles. The John Maynard Keynes Chair of the Ludwig von Mises Endowed Seat at the University of, you know, whatever.

[Tracy Alloway]

Keynes Chair at the Mises School would be an interesting mix. Anyway, here's Shebnam presenting her paper. It is called Global Networks, risks and the U.S. economy.

[Shebnam Kalemli-Ozcan]

You know, paper after paper we realize the issue with the conventional macro open economy view. What is this view? This view takes us as a relatively closed economy because of the low trade shares, exports 10% of GDP, imports 14% of GDP. And that of course combines with the fact that US is governing the world in terms of dollar dominance and deep financial markets. And on top of that, US has an amazing central bank as we are all here right now. We know that Federal Reserve acts as a global lender of last resort when things go south. The benchmark implication of this view is that U.S. has limited exposure to global risks. We would like to revisit the issue in terms of asking directly how sensitive the US economy to global risks. Once we account for full global trade, production and finance networks and really think about trade off and counterfactuals and basically revisit this issue that the fact that maybe your trade shares are low.

[Tracy Alloway]

We caught up with Shebnam after her presentation to better understand exactly what she's trying to do here.

[Shebnam Kalemli-Ozcan]

All right, so yes, we found something different because we work with networks. And let me explain what that is. When you say networks again, the traditional view, first going to think about of course the trade networks.

[Omar Barbiero]

Why?

[Shebnam Kalemli-Ozcan]

Because the trade networks to directly linked to supply chains.

[Tracy Alloway]

Right.

[Shebnam Kalemli-Ozcan]

And we already realized, you know, it is those are vulnerable. I mean, you know, shock after shock, starting with the pandemic, you know, told us that yes, maybe kind of our final goods trade or just if I focus on manufacturing, not that big, but if I look at the supply chains, value chains, then US is integrated to that and then that changes the things because that means even in the aggregate number you might not see that big of export and imports. There might be indirect exposure through all those things. Because when you think a network you are linked through trade. This is now where we also add to the traditional view. But you also have to think about the financing. So the networks to us is trade networks. Yes, countries buying and selling sectors, buying and selling firms buying and selling from each other, but also financial networks, investors investing in companies in other countries, you know, the supply chains financed by different investors in other countries and on top of that, of course, the production. Right. I mean, you know, so a product right now is assembled in one country, designed in another country, manufacturing in another country, with parts coming from many, many countries and skills and knowledge also coming from many, many countries. So when you have this type of a comprehensive view of the network, global network as trade, production and finance, then I think US becomes very vulnerable to global shocks and global risks.

[Joe Weisenthal]

So you could see why this would be an important area of research for the Fed.

[Tracy Alloway]

Right, right. And the conventional thinking has always been that the US is kind of insulated from global shocks because it's so big, because the dollar is so dominant. External factors, it's thought, don't really affect the US economy so much.

[Joe Weisenthal]

Right. And also we don't actually export that much, relatively speaking.

[Tracy Alloway]

Right. We import. So that's the conventional view. But if, per Shebnam's research, the US is in fact more exposed to global shocks than previously thought, if it's more intertwined with the network of the global economy through second order effects, then policymakers should be aware of that. Right.

[Shebnam Kalemli-Ozcan]

If this wasn't clear, this is an.

[Ludwig Straub]

Enormous body of work spanning several papers.

[Joe Weisenthal]

Hundreds of pages, all with many applications and scenarios. That is Aaron Flan, he's a principal economist at the Boston Fed and he's also the discussant for this particular paper.

[Tracy Alloway]

The discussant role is really interesting.

[Joe Weisenthal]

Yeah, this was probably one of the most fascinating sort of dynamics which I knew existed but didn't quite appreciate how it works. So basically every presenter gets paired with an official discussant whose job is just to interpret and critique, frankly, the paper for a wider audience. So those are my main comments. I just want to emphasize that what.

[Ludwig Straub]

SEVNAM is doing here is policy relevant.

[Joe Weisenthal]

Research at its finest.

[Ludwig Straub]

It's our profession working at its finest for really answering these very timely questions.

[Egon Sikrajek]

In ways that authors are very close to the paper you wrote this details and you can see in the presentations they know inside out and stuff like that, so they provide a position. Really what a discussant does is sort of essentially. Let me translate what the author does for the broader audience. Right. A good discussant's role is really to sort of reframe the paper, pull out key takeaways and then provide some constructive, you know, comments.

[Tracy Alloway]

But sometimes things get a little awkward.

[Joe Weisenthal]

Definitely awkward. But you know, everyone's still very polite.

[Tracy Alloway]

Still very polite, yes. But more on that after this break.

[Joe Weisenthal]

Today's markets move fast. Get the insights you need in 10.

[Elahe Izadi]

Minutes with the Barclays Brief, a new podcast from Barclays Investment Bank. Through Sharp dialogue and scenario based analysis, our leading experts analyze key market themes each week. So whether you're managing a portfolio or.

[Tracy Alloway]

Leading a business, the Barclays Brief podcast.

[Elahe Izadi]

Can help you make smarter decisions today. Stay sharp, stay briefed. Find Barclays Brief wherever you get your podcasts. When I listen to the news, here's what I want to know. Why this story matters, who's at the center of it, and how the reporters uncovered it. And as a journalist, I want to make sure that's what you get too. I'm Elahei Izadi, co host of the podcast Post Reports. Every weekday, my colleagues and I at the Washington Post give you the context you need on the biggest stories. Health care tariffs, artificial intelligence. We've got you covered. Look for Post Reports wherever you listen to podcasts.

[Tracy Alloway]

Let's go to another paper. This one is by Tommaso Monticelli. He's a professor of economics at Universita Bocconi, and his paper is called Supply Chain Uncertainty, Energy Prices and Inflation. And it is actually about one of our favorite topics, Joe, Supply chains.

[Tommaso Monticelli]

No, that's right, because that's exactly right. So supply chain disruptions can sort of change the state of the economy. So the environment, that's our idea, where firms make production and pricing decisions. And so the key idea is that the state of the world in which firms operate can change underlying. As economists, we say that the state of the economy changes, even starting from potentially minor events along the supply chain. We make the example of this apparently small episode, like in the Suez Canal two years ago, a ship, container, shipping, oil and other inputs got stuck for a few days.

[Tracy Alloway]

We remember it well.

[Joe Weisenthal]

Yeah.

[Tommaso Monticelli]

But the episode sort of got resolved in a few days, but I didn't have the time to show the data. But then the effect on transportation disruptions along supply chains lasted for months. The analogy here is think of an airport like a hub where a lot of flight. So now many airports function as hubs, many flights coming from different directions, and you can have a disruption like a single delay on a single flight in the hub. But then this propagates along the day and then across many different flights and amplifying the delay downstream.

[Tracy Alloway]

A cascade effect.

[Joe Weisenthal]

Yes. So at the heart of Tomas's research is this sort of very important question. Are supply chain disruptions real? Are they a real thing? Or are they simply manifestations or symptoms of excess demand, maybe caused by too much fiscal stimulus?

[Tracy Alloway]

Yeah. So after the pandemic, a lot of people criticized the government for handing out checks to people and businesses, helping supposedly to fan inflation. But actually, if small supply chain disruptions can reverberate from for longer than previously thought, through energy prices or whatever, then per Tomasa's research, they can be a pretty important source of inflation. And the important thing is that it's not the size of the supply chain shock that matters, it's the actual volatility itself, the uncertainty that matters for inflation.

[Ludwig Straub]

Right.

[Joe Weisenthal]

So again, I think, you know, you could see why this would be of interest to policymakers. Even five years after the pandemic, we're still trying to figure out exactly what, what happened. And we'll probably be researching that for years.

[Tommaso Monticelli]

Totally. Yes. So here in our research we emphasize the interaction, so the complementarity between shocks to, let's say, the price of oil that typically central banks look at.

[Joe Weisenthal]

Right.

[Tommaso Monticelli]

But they have a typical attitude. Let's say in normal times, if there are oil shocks, yes, we should monitor that those shocks don't feed the are not too persistent, they don't feed on to inflation expectations and so on. But their attitude is typically, let's look through, okay, this, oil prices jump around very much in markets. But here we are saying even the same original let's say oil price shocks or energy gas price shocks, they can have a very different amplified effects on inflation depending on whether the state of supply chain is disrupted or not. So it's really the interaction, so it's not really that we believe that we emphasize supply chain shocks. We say typical supply shocks like oil shocks or gas price shocks. They can get really amplified and in a very persistent way if the underlying conditions of supply chains are disrupted so that that state of the economy should be monitored. And in those states of the world, the central bank should be very, very reactive, way more reactive to oil shocks or energy price shocks than in periods where supply chain disruptions are minimal.

[Tracy Alloway]

So that's the basic thrust of the paper and the data seem to bear Tommaso's thesis out. But things got a little awkward when it was time for the discussion.

[Ludwig Straub]

Hi, I'm Ludwig Straub, I'm a professor of economics at Harvard. I'm a quantitative macroeconomist. So I try to build models that describe the macroeconomy and can be used for policy analysis and forecasting. I'm a discussant of a paper on supply chain uncertainty and energy shocks and how those two relate to the post Covid inflation episode.

[Joe Weisenthal]

Right. As Ludwig puts it, being a discussant is a pretty big commitment. And we should just mention here that neither the researchers normally nor the discussants are getting paid for their time. They're doing this for other reasons, obviously to contribute to policy. But there's another big motivation that we'll get into in a minute. So here's Ludwig.

[Ludwig Straub]

So not everybody has time and energy to do this. In my case, I love being at the Boston Fed and I'm close, so. So it's not a big travel to come here. And yeah, so I said yes.

[Joe Weisenthal]

And.

[Ludwig Straub]

About a month before the conference, you typically receive the paper and then you spend a significant amount of time, I'd say maybe half a week, a.

[Joe Weisenthal]

Week.

[Ludwig Straub]

Of your research time with the paper and trying to understand the ins and outs, trying to understand the empirics, the model, and then hopefully give a balanced view of the paper during the discussion.

[Tracy Alloway]

And from what we saw at the conference, it feels like discussants can have different styles. Some basically summarize the paper and explain why it's relevant, and others, others, you know, maybe pick it apart very critically. Here's Ludwig talking about the discussants.

[Ludwig Straub]

Some tend to be more like what you just mentioned, more like the latter that, you know, pick apart papers and kind of come across as a little bit destructive rather than constructive. You know, the last discussant at the conference was a lot more constructive, for example, and would be, you know, building off the author's results and showing them what they could do next with the paper. Some are very, very kind and just praise the results, which I tend to try to be in somewhere in between. I tend to shed some critical light on the author's results, if that is something that I think helps understand the paper. But I also want to be constructive and I want to be kind to the authority. So, you know, you want to kind of balance those two sides, I guess.

[Tracy Alloway]

And Ludwig did shed some critical light on Tommaso's research.

[Joe Weisenthal]

Suggestions for improvement.

[Tracy Alloway]

Right. Suggestions for improvement. Right. That's a good way of putting it.

[Ludwig Straub]

So as the economy reopened, as we had ample fiscal stimulus, and I tend to think that that means we ran up a marginal cost curve, meaning, you know, costs went up just because there was a lot of demand, and so bottlenecks emerged, ports got clogged, and I think that alone can lead to an increase in what looks like supply chain issues, even though they're not really the root cause of things now. I still think this paper has. Has a lot of merits to it, but, you know, I tend to think that not all that looks like an energy Shock is really truly a shock rather than just a con. A consequence of increased demand.

[Tracy Alloway]

Tommaso also used the Baltic Dry Index as a proxy for shipping costs, which, as anyone who has spent a bit of time on finance Twitter will tell you, is an index that gets criticized a lot.

[Ludwig Straub]

Exactly. And then if it's just one episode in that time series that kind of responsible for some of the results, then I would worry about that. Now, I don't know if that's exactly, exactly what's going on, but I did play around a little bit and it was not as robust as I was maybe hoping it or they were maybe hoping it to be.

[Joe Weisenthal]

So, Tracy, speaking of Twitter, look, both you and I are used to getting criticism, right? But even if you're used to it, I think it would be pretty uncomfortable to have your work sort of publicly criticized by one of your peers in front of a big group of peers.

[Tracy Alloway]

Yeah, I would think so too. Although Tommaso actually seemed pretty. Pretty fine with it.

[Tommaso Monticelli]

No. Okay, so that, that you learn out of experience through time, right. That you have to filter the reaction of the audience and get the, the good and the bad signals. So first of all, I had great comments, very useful. I both myself and my co author are very happy. The discussion was fantastic. I know him, he's a fantastic researcher. He's one of the best macroeconomists. I admire his researchers. I was very happy that he. They was pleased with the paper, but also the audience had very interesting comments that materially will be very useful for keeping up with the research. And again, sometimes you get some more aggressive comments. But there is an interesting role type of dynamics that happens in academic conferences that you have to internalize.

[Joe Weisenthal]

Tracy. I really do. I want to go to one of those workshops that you hear about where the, you know, the young, the young student or the young professor, maybe someone applying for a job, they're presenting their paper and then the old professor in the back of the room sort of puts on a big show and humiliates them, bring up all these points.

[Tracy Alloway]

That is a very interesting point because Tommaso says the days of older professors, professors publicly humiliating younger students are pretty much over.

[Tommaso Monticelli]

That happens sort of behind secret doors in a way. No, but especially as of late, the profession is discussing that a lot. So we now are becoming much more aware that the climate, especially in economics, much more than in other social sciences or hard sciences, that the climate during seminars, during presentations, especially within closed door seminars, might be sort of not conducive for younger researchers to actually Take risks and learn from the art. And so we are becoming way more mindful that it is very important to keep a civilized climate in research and biology.

[Tracy Alloway]

Speaking of civilized climates, we should just mention that things can get pretty heated in the public discussion too.

[Joe Weisenthal]

Right. So this is also part of it, where attendees get a chance to ask questions or often make their own points about the papers being questioned. Many, many statements in the form of a question.

[Tracy Alloway]

Yeah, lots of that. And things got a little, I don't want to say combative, but loud.

[Joe Weisenthal]

Yeah, loud.

[Tracy Alloway]

They were loud. Things got kind of loud after a paper was presented on the idea of policy trade offs. So trade offs between geopolitical risks and economic risks.

[Joe Weisenthal]

Perhaps it's too early to tell.

[Omar Barbiero]

Standard models of the type that Shemnam talked about without the nominal rigidities would also predict optimal uniform tariffs that are very high, 20, 40% range. So the current environment looks pretty good.

[Tracy Alloway]

The voice you hear is Paul Antrus. He is a professor at Harvard, giving the keynote address on the first day of the conference.

[Omar Barbiero]

And according to these models, we are in a sweet spot. I'm not so sure why? Because the standard models are models that I think have features that I think are not in line with many of the things that I see when I look at the data.

[Tracy Alloway]

His presentation, the Evolving Role of the United States in Global Value Chains, it touched on some of the same areas that Shebnam had covered earlier. And the beauty of a conference like this is that she was sitting right in the audience and she was able to weigh in right then and there.

[Shebnam Kalemli-Ozcan]

You just raised a couple issues. And then I, then I realized maybe I wasn't clear during my presentation. I fully agree on the whole firm level and how the input output data we have is kind of this sausage. But I would disagree that we do want to understand how the sausage made so that we can do better.

[Ludwig Straub]

Right.

[Joe Weisenthal]

So economists were fighting.

[Tracy Alloway]

Well, actually I asked Shabnem about this later and here's what she said.

[Shebnam Kalemli-Ozcan]

Well, actually I characterize that as a very healthy debate and a little bit also, you know, the artifact of these conferences where you have 25 minutes to present. Right. So I didn't have that much time. And then of course, because I didn't show the parts where we use the firm level data and more, you know, discipline the macro model bit more, you know, micro identified elasticities and all that.

[Tracy Alloway]

Joe, all of this raises the question of why economists choose to do this in the first place. And you know, you spend a huge chunk of time writing a paper, you probably Have a few research assistants that are working on it and they could be doing something else and then it.

[Joe Weisenthal]

Gets scrutinized in this very public way.

[Omar Barbiero]

Maybe you felt that I was, I was speaking on you. I didn't mean to do that. Now of course I take your point. Let me just push back though, in.

[Tracy Alloway]

The sense that obviously one of the motivations is the policy aspect. Economists, I think many of them want to inform policy in an accurate and useful way. That's pretty obvious. But there was also something that I didn't quite realize. Peer review and publishing people want to be published.

[Joe Weisenthal]

Yeah, look, I get it. Believe me, I get it. Researchers, yes, they want to influence policy. Who doesn't? But they also want to get their papers rubber stamped by other economists and then published in the most prestigious academic journals. And so one thing I wondered is whether there's a tension between, you know, just from the economist's perspective, is there some sort of tension between the goal of writing a paper that is actually useful for making better policy or just sort of maximizing your chances of getting into a peer reviewed journal?

[Tracy Alloway]

Yeah, I think that is a very fair question. And Shebnam talked about that too.

[Shebnam Kalemli-Ozcan]

Yes, this is the story of my life. So, because this is, this is a very serious tension and I'm hoping we will make the best use of these times now we are living in to change this because yes, unfortunately academia publishing values very narrow research and very tightly defined specialized research. And that's why economists are in silos, right? There are labor economists, there are macro economists, there are IO economists, international economists, finance economists. And generally these groups don't talk to each other much and they just do one thing. But when you want to do policy relevant research, you talk to policymakers. And then the minute you start talking to policymakers and spend time in policy institutions, you realize these problems don't come like that. Oh, here's a, you know, problem about, you know, labor. So I need labor economies. Here's a problem about like, you know, financial market. I mean the problem about multiples. The problems are linked, the problems are linked and economics profession actually is, is capable of, you know, answering those problems, creating solutions, solutions for those problems. If these insights from these different subfields come together, which is what I try to do and I'm hoping which kind of academic publishing doesn't value that much. But I'm an optimist, I'm hopeful. I think these are the times, people now coming together, writing with each other more and realizing that this more and more. So hopefully we'll go down to a better pattern.

[Omar Barbiero]

So if everything you're saying is right. So that's awesome, I would encourage you to kind of like, obviously you want to come in and give some numbers, but give us versions of the model that shut this down. And you're telling me the real model itself generates a lot of things that are not in standard models. So I'm really excited and I'd like to.

[Shebnam Kalemli-Ozcan]

And I fully agree. You can do the smoothing as little as you want. That's where the data is going to help you. You need data power. But you have to put this in a macro model. I mean, otherwise you are not going to go back to inflation, output, trade off, and all these policy questions. You have to put it in the market.

[Omar Barbiero]

100% agree with that.

[Egon Sikrajek]

All right, I will step in here. We have an iron cage in there and I have things. We'll put that on a YouTube I would have.

[Elahe Izadi]

When I listen to the news, here's what I want to know. Why this story matters, who's at the center of it, and how the reporters uncovered it. And as a journalist, I want to make sure that's what you get, too. I'm Elahei Izadi, co host of the podcast Post Report. Every weekday, my colleagues and I at the Washington Post give you the context you need on the biggest stories. Health care tariffs, artificial intelligence. We've got you covered. Look for Post reports wherever you listen to podcasts.

[Tracy Alloway]

You know, Joe, there was in fact one major policymaker in the room along with everyone else, and that is Susan Collins.

[Joe Weisenthal]

That's right. There are two prominent Susan Collins. This one is the president of the Federal Reserve bank of Boston. And she was there the whole time, sitting in the front row. Susan herself actually was an academic. She taught at Harvard and Georgetown and the University of Michigan.

[Susan Collins]

Right. There are lots of themes going on. I have to say that I'm struck by the sense that understanding some of the complexities may change traditional ways of thinking about things. So that's a theme that I'm hearing. The first paper was really, if you account for the linkages through networks that include not only trade flows, but also financial flows, and across sectors and countries, not just through countries, but add the sector component in. We may, historically, with simpler, more traditional models have underestimated the potential for larger, more population, persistent effects of different kinds of shocks. And then similarly, the second paper had kind of a similar theme that when you really focus on some of the supply chain connections, increases in uncertainty can make a shock have a bigger impact. So Putting the different things, making those connections, that's complicated work. I'm really glad that we have experts who are digging in and able to explain them and present them for us and have us ask questions and try to understand them better.

[Tracy Alloway]

So Susan mentioned ideas and one thing I'm very curious about is how the ideas being presented in these papers actually filter through into policy osmosis. Right, well, right, I'm sure, I'm sure there's some of that. But also like, do you think Susan is taking the most interesting paper and attaching it to an email and sending it off to Tom Barkin at the Richmond Fed and being like, you have to read this?

[Joe Weisenthal]

I would, hey Tom, here's something you might find interesting.

[Tracy Alloway]

Yeah.

[Susan Collins]

So there are lots of different ways. So sometimes, you know, sometimes we have the time to go to each other's conferences and it's hard. Right, because there's a lot going on. So sometimes people, sometimes my colleagues will actually be sitting in and hear from themselves. Some of their research teams are often tuning in, whether in person or virtually. Our research teams talk to each other. They're very active relationships. They co author papers, they're engaged in that way. And certainly if there are things that are really informative for me, I will share them with colleagues in a variety of different ways. Maybe not as much attach the paper. You know, we have a lot to read and to go through. I would try to distill why I'm really interested, but you know, we're always looking for important ideas, trying to be better informed. That's something that's important to all of us. And again, thank you for joining us for the 69th conference. We're delighted to have odd lots here.

[Tracy Alloway]

So that was the Boston Feds research conference, Joe, it was great.

[Joe Weisenthal]

But before we go, should tell people how Omar's presentation went.

[Tracy Alloway]

Oh yeah. So we started this episode talking to Boston Fed economist Omar Barbiero. And I feel like he was under more pressure than most because he was presenting not just in front of his peers, but in front of his actual boss. Actually multiple bosses because there's Susan Collins, but also Egon Zakarishek. So his boss and his boss's boss.

[Joe Weisenthal]

Yeah. And his was actually the last paper of the conference. I thought it went really well.

[Omar Barbiero]

Interesting insights on that. Thank you very much.

[Joe Weisenthal]

Basically what I have to say, I think it's an exciting effort. Very impressive data collection and rich set of results.

[Tommaso Monticelli]

Tommaso, I think the presentation was very interesting. I think the effort also is very important.

[Joe Weisenthal]

This is really cool to See, I have three quick.

[Shebnam Kalemli-Ozcan]

Okay, this is a great paper. And I fully agree with Andre that this is actually huge work. So you didn't even mention. But we are also now matching Panjiva to a larger set of firms.

[Tracy Alloway]

Hooray. That's a good outcome. And, you know, I should just mention, Joe, we've obviously been summarizing all these papers because we're trying to compress a day and a half of discussion into, I don't know, 40, 60 minutes. But all of these papers are available online at the Boston Fed's website.

[Joe Weisenthal]

Totally. And if you want to actually see the conference itself, if this episode, if somehow this episode was not enough for you, actually the entire conference is on video, so you can see all of the presentations and the discussants and so forth. It's all available online.

[Tracy Alloway]

But I'm so glad we went, because I feel like I have a much better understanding of how policy actually develops, how research develops, and what economists are kind of aiming for.

[Joe Weisenthal]

Totally. So when we went to Boston, you know, in my mind, I was thinking that we were there to learn more about economics, which of course we did. And there are all kinds of interesting ideas on supply chains, inflation, all the stuff we talked about. But it was also, and I hadn't appreciated this, it was a sociology trip. Like, we're learning about the sociology of how academic work works, the relationship between academic work and policy and stuff, which is just one of these things that, of course, intuitively is very important. But I don't think, like, anyone really thinks about. And when you think about, like, how economists could be under this sort of dual pressure of, like, do I want to influence policy? And is there some cost if I'm focusing on maximizing total published output, you could see some real interesting tensions that emerge in that process.

[Tracy Alloway]

Right. It's sort of a microcosm of academia, I guess, which we got to study for a day and a half. So I don't know, maybe. Maybe next year we'll be in the room at Jackson Hole. We can hope.

[Joe Weisenthal]

If anyone at the Kansas City Fed is listening.

[Tracy Alloway]

All right, shall we leave it there?

[Joe Weisenthal]

Let's leave it there.

[Tracy Alloway]

This has been another episode of the All Thoughts podcast. I'm Tracy Alloway. You can follow me at Tracy Alloway.

[Joe Weisenthal]

And I'm Joe Weisenthal. You can follow me at the stalwart. Big thanks to Susan Collins and the rest of the Boston Fed for inviting us to observe and participate in their conference. And once again, all the people who took the time to chat with us, we really appreciate them. You should go to the Boston Feds website and really check out those papers and presentations. All of it. Excellent. Follow our producers Carmen Rodriguez at CarmenArman Dash O' Bennett, who actually joined us on the trip. He's at dashbot and Kale Brooks Alebrooks. For more Odd Lots content, go to bloomberg.com odd lots we have a daily newsletter and all of our episodes and you can chat about all of these topics 24. 7 in our Discord, Discord, GG Oddlots.

[Tracy Alloway]

And if you enjoy Odd Lots, if you want to send us on more sociological trips to research conferences, then please leave us a positive review on your favorite podcast platform. And remember, if you are a Bloomberg subscriber, you can listen to all of our episodes absolutely ad free. All you need to do is find the Bloomberg Channel on Apple Podcasts and follow the instructions there. Thanks for listening.

[Ludwig Straub]

Sa.

[Elahe Izadi]

When I listen to the news, here's what I want to know why this story matters, who's at the center of it, and how the reporters uncovered it. And as a journalist, I want to make sure that's what you get too. I'm Elahe Izadi, co host of the podcast Post Reports. Every weekday, my colleagues and I at the Washington Post give you the context you need on the biggest stories. Healthcare tariffs, artificial intelligence. We've got you covered. Look for Post Reports wherever you listen to podcasts.