Top Economists of 2012

Election years seem to be challenging for economists, although many seem to make the most of them.  Economic analysis is generally quite complicated and often starts out with the words, "It depends."  These answers are terrible in the segmented world of television and radio.  The general public wants concise answers that say this is good because blah blah blah and this is bad because blah blah blah.  On the one hand 2012 was great because so many people are interested in talking about topics that economists study, but on the other hand most people still just want the headline rather than the story.

 

Paul Krugman (photo: Zé Carlos Barretta)

Part of this task is determining who is an economist and who is not.  I have made an editorial decision not to include economists that were most famous for being elected politicians.  There are other dilemmas, such as central bankers.  I have decided to leave them in as they are often also academic economists, and while there are political aspects to the job, it is inherantly an post concerned with monetary economics.  The other major dilemma this year is Nate Silver.  He had a spectacular surge in popularity based on his election prediction blog with The New York Times and has a new book out called The Signal and the Noise.  He is often referred to as a statistician because he uses those skills frequently in his writing, but he majored in economics at the University of Chicago.  I've decided to include him, but he blows out my stats on the other economists.  What a year he's had!

Top Economists of 2012:

 

rank.  name, institution (rank last year)

 

1.   Nate Silver (NR)

2.   Paul Krugman, Princeton University (1)

3.   Ben Bernanke, Federal Reserve Board of Governors (4)

4.   Amartya Sen, Harvard University (5)

4.   Thomas Sowell, Hoover Institute (9)

6.   Mario Draghi, European Central Bank (3)

7.   Joseph Stiglitz, Columbia University (9)

8.   Alan Greenspan (7)

8.   Robert Reich, University of California - Berkeley (9)

8.   Walter Williams, George Mason University (9)

11. Daniel Kahneman, Princeton University (NR)

11. Nouriel Roubini, New York University (7)

13. Mark Carney, Bank of England (NR)

13. Simon Johnson, M.I.T. (16)

13. Robert Lucas, University of Chicago (18)

13. Jeffrey Sachs, Columbia University (16)

17. Brad DeLong, University of California - Berkeley (23)

17. Peter Diamond, M.I.T. (19)

17. David Friedman, Santa Clara University (19)

17. Robert Merton, M.I.T. (19)

21. Dean Baker, C.E.P.R. (NR)

21. Gary Becker, University of Chicago (25)

21. Mervyn King (19)

21. Greg Mankiw, Harvard University (25)

21. Raghuram Rajan, University of Chicago (NR)

21. Robert Shiller, Yale University (23)

21. Vernon Smith, Chapman University (NR)

21. Lawrence Summers, Harvard University (14)

29. Daron Acemoğlu, M.I.T. (NR)

29. Olivier Blanchard, I.M.F. (NR)

29. Tyler Cowen, George Mason University (25)

29. Esther Duflo, M.I.T. (NR)

29. Steven Levitt, University of Chicago (25)

29. Thomas Sargent, Seoul National University (NR)

29. Michael Spence, New York University (29)

 

The rankings were calculated on December 31, 2012.  Elinor Ostrom was removed from this list due to her death this past June.  She will be missed and remembered.  There are also (as ever) a number of great economists that unfortunately have names that are not the number one or obvious google search.  That list includes John Taylor, Kevin Mitchell, Robert Hall, Justin Lin, and others.  Please feel free to add more names in the comments.  To acquire the rankings, I simply used the Google Trends website.  Although Nate Silver was first, I used Paul Krugman and Mark Carney as the base individuals and ran all the economists I could think of.  I'm sure I missed some good people.

Will Unemployment Factor into the Presidential Election?

President Obama recently stepped into some political hot water when he described the private sector economy as "doing fine," which caused Governor Mitt Romney to ask if he was out of touch.  President Obama was speaking at a press conference on the European debt crisis, and was referencing private sector versus public sector job creation.  It hardly matters in the world of politics, but on the matter that he was speaking, he was correct.  While I don't have jobs numbers, private consumption as a component of real GDP is up 1.9%, private investment is up 0.81% and it is government consumption that has become the current drag on real GDP with -0.78% in the first quarter of 2012 (Bureau of Economic Analysis).

The real story in the U.S. is still unemployment, which has not been fine for three years now. The current unemployment rate is 8.2%.  Will this persistently high unemployment cost President Obama a second term?

Nate Silver is a statistician with the New York Times who is famous for predicting 49 of 50 states in the 2008 Presidential election and all 35 Senate races.  On his website, he is stating that President Obama has a 62.6% chance of winning.  He also notes which states are most contestable; and because of our electoral system, those outcomes are the most important.
Will any potential changes in the unemployment rate because of Europe or an overall weakening American economy affect the upcoming election?  Here are some maps of key states (according to Mr. Silver) along with their unemployment rate difference year over year from April 2012.  Darker colors are improving unemployment numbers; click on the maps for greater detail.

Bureau of Labor Statistics

Mr. Silver is predicting Virginia, Ohio, Colorado, and Nevada to be won by President Obama.  He is predicting Florida and North Carolina to be won by Governor Romney.  Nevada and Ohio are especially looking like they are experiencing pretty significant job slumps in the past year or so, but will that matter?

I ran regressions on previous election years to see if it has mattered in the past.  They showed little correlation between difference in the three month employment change, or the unemployment rate generally and incumbent party win or loss.  With the year over year change in unemployment, they did show a r = 0.3734 which is still pretty weak, but much better than the other two.

These correlations are very low, and some basic transformations that I attempted did not help their r's at all.  It does seem that election year changes in unemployment have had a low impact on imcumbent election outcomes since 1948.  This is likely due to the multitude of different factors that voters must evaluate potential Presidents based on.  Many years economic factors are not even the most important ones.  Could this also be evidence supporting Bryan Caplan's idea about the myth of the rational voter?