The Federal Reserve dominates economics as a funder and employer

Evidence

Grim reports that every single member of the editorial board in 2009 of the Journal of Monetary Economics was or had been affiliated with the Fed, and 54 percent were on the payroll. Of the editorial boards of eight top-ranked economics journals, 84 out of 190 had been affiliated with the Fed at some point in their careers. Indeed, sometimes the connection is even more intimate, with the bulk of the offices of the economics department at the University of Minnesota essentially located to a large degree at the Minnesota Fed. Much of the early and intermediate stages of the “rational expectations revolution” were funded and promoted out of the Minnesota Fed, in a period when it was not yet conventional wisdom, or entirely welcome in some “saltwater” departments. A major pillar of support for the DSGE model (described in the next chapter) originally came from research staffs and contracts of the regional Feds. Moreover, the money, once bestowed, comes with strings. Employees and contractors must sign nondisclosure agreements, and published articles are often vetted by Fed bureaucrats. In the interests of needing to speak with one voice in monetary policy, the Fed regularly imposes the trappings of intellectual uniformity. — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 528

Categorization

• XREF: Extends the ‘thought collective’ thread from earlier chapters on the neoliberal collective; connects to Mirowski’s broader argument about the profession’s institutional capture that emerged around the DSGE discussion likely in following chapters. — connects to: The Fed employs 43 percent of US monetary economics specialists — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 525; Central bank funding blurs whose interests academic economists serve — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 524; Fed jobs serve as career consolation prizes that build an interlocking orthodoxy — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 529
• SEED: The ‘rational expectations revolution funded out of the Minnesota Fed’ is an angle for an article on how intellectual movements in economics are bankrolled by central banks before becoming orthodoxy.