How to Write a Memo to Convince a President: Walter Heller, Policy-Advising, and the Kennedy Tax Cut

Cherrier, Béatrice

doi:10.4000/oeconomia.5714

Cited by 10 publications

(5 citation statements)

References 15 publications

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“…The operation of COMPASS was underpinned by the launch of an new user interface called EASE (Economic Analysis and Simulation Environment), of a software that allowed for BoE staff to solve and estimate the various models under MATLAB, one called MAPS (Burgess et al, 2013). It paralleled the launch of a new version of DYNARE (Cherrier et al, 2023) and of the YADA software at the European Central Bank. Wallis, K. F.…”

Section: Discussionmentioning

confidence: 99%

“…Whitley (1997) advocated for this 'eclectic approach' for modelling in policymaking institutions, arguing that 'structural vector-autoregressions (VARs), theory-based optimising approaches and macroeconometric models are natural allies rather than competitors' (163). However, according to BoE executives and economists, this 'suite' was 'a complete scam', a 'rhetorical device' (Executive 1, interview) or 'an ambition, but 33 Rational expectations, although theoretically appealing for some modellers and policymakers, like King, remained too heavy a computational burden (Cherrier et al, 2023). 34 Moreover, King was sensitive to the idea that the economic context was subject to 'radical uncertainty' (Kay & King, 2020).…”

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confidence: 99%

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To change or not to change. The evolution of forecasting models at the Bank of England

Goutsmedt,

Sergi,

Cherrier

et al. 2024

Journal of Economic Methodology

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Section: Discussionmentioning

confidence: 99%

mentioning

confidence: 99%

To change or not to change. The evolution of forecasting models at the Bank of England

Goutsmedt,

Sergi,

Cherrier

et al. 2024

Journal of Economic Methodology

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“…Keynesianism's influence culminated with Kennedy's CEA, populated by Keynesian economists, and led by Walter Heller, promoting a "New Economics" (Romani, 2018). These economists were instrumental, for instance, in advocating for the tax cuts of the 1964 Revenue Act (Cherrier, 2019).…”

Section: Berman's Story Chapter By Chaptermentioning

confidence: 99%

Symposium on Elisabeth Popp Berman’s Thinking Like an Economist. How Efficiency Replace Equality in U.S. Public Policy

Chassonnery-Zaïgouche,

Goutsmedt

2023

Preprint

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Elisabeth Popp Berman’s Thinking Like an Economist unfolds a captivating and detailed historical account of the rise of economics and economists’ influence within the US Administration during the 1960s and 1970s. This transformation played a pivotal role in reshaping American policy, Berman argues. At the core of her story is the concept of an “economic style of reasoning”, inspired by Ian Hacking’s (1994) work. Berman’s “economic style of reasoning” describes a distinct approach to policy problems, one anchored in microeconomic concepts (rather than macroeconomic ones) such as incentives, externalities, and efficiency. Crucially, the “economic style of reasoning” does not designate what some economists think, but rather, a set of ideas, related to economics but not completely overlapping with it, that are used in policy—not only by economists. Throughout 230 pages, Berman masterfully traces the progressive ascension of the economic style of reasoning within US administration, from its rise in the 1960s to its relative decline during the Reagan Presidency. “Efficiency” as a policy criterion gradually supplanted other foundational values that had long justified policy actions, values such as “rights, universalism, equity, and limiting corporate power” (4). These concepts were actually loosely used by the actors Berman is interested in. Berman posits that the dissemination of this style of reasoning exerted a profound influence by eroding the legitimacy of policy propositions rooted in alternative values, notably those championed by the left-wing of the Democratic party. One strength of the book is to show how the economic style of reasoning stuck and consolidated, even in the absence of economists, and how unusual suspects—center-left technocrats, favoring government intervention—were responsible for promoting a sense of ineluctability of its use.

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“…By the end of the 1950s, however the Fed faced mounting criticisms from governmental bodies, the financial community, congress committees, and the press. 4 The Council of Economic Advisers sent weekly memos to Kennedy complaining about high interest rates (Cherrier 2018). The Joint Economic Committee of the Congress published a critical 1959 report largely authored by Otto Eckstein, and two more followed in 1960.…”

Section: William Mcchesney Martin Chairman Of the Board Of Governors Of The Federalmentioning

confidence: 99%

The Transformation of Economic Analysis at the Federal Reserve during the 1960s

Acosta

Cherrier

2019

SSRN Journal

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In this paper, we build on data on Fed officials, oral history repositories, and hitherto under-researched archival sources to unpack the torturous path toward crafting an institutional and intellectual space for postwar economic analysis within the Federal Reserve. We show that growing attention to new macroeconomic research was a reaction to both mounting external criticisms against the Fed's decisionmaking process and a process internal to the discipline whereby institutionalism was displaced by neoclassical theory and econometrics. We argue that the rise of the number of PhD economists working at the Fed is a symptom rather than a cause of this transformation. Key to our story are a handful of economists from the Board of Governors' Division of Research and Statistics (DRS) who paradoxically did not always held a PhD but envisioned their role as going beyond mere data accumulation and got involved in large-scale macroeconometric model building. We conclude that the divide between PhD and non-PhD economists may not be fully relevant to understand both the shift in the type of economics practiced at the Fed and the uses of this knowledge in the decision making-process. Equally important was the rift between different styles of economic analysis.

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How to Write a Memo to Convince a President: Walter Heller, Policy-Advising, and the Kennedy Tax Cut

Cited by 10 publications

References 15 publications

To change or not to change. The evolution of forecasting models at the Bank of England

To change or not to change. The evolution of forecasting models at the Bank of England

Symposium on Elisabeth Popp Berman’s Thinking Like an Economist. How Efficiency Replace Equality in U.S. Public Policy

The Transformation of Economic Analysis at the Federal Reserve during the 1960s

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