By Diane Alexander
Why did the Federal Reserve Bank of Chicago hire a health economist? Aren’t they just interested in macroeconomics? Does the Bank allow you to work on health care topics? These are questions I often get when I tell people that I study health care, and that I am an economist at the Federal Reserve Bank of Chicago.
There are several ways that I answer these questions, depending on my mood. I often say that health care is a macro topic, since health consumption expenditures make up nearly 20 percent of US GDP. But what I could also say is that we have an excellent micro group at the Chicago Fed, and that there are many great economists working on applied micro topics within the Federal Reserve System.
In most ways, being a health economist at the Chicago Fed is the same as being a health economist at a university. The bulk of my time is spent on my own research projects, and the Fed has no interest in directing the topics that I study. The goal of our department, as in a typical Economics Department, is that the economists conduct high quality research which publishes in top journals. As research is my favorite part of the job description of “economist”, the primary reason I like working at the Chicago Fed is that I have a lot of time for my own work, and that the department is very supportive of my research.
The main difference between my job and that of a professor is that besides research, the primary claimant of my time is policy work, rather than teaching. The exact nature of and amount of time spent on policy work varies across the Fed system. My policy work comes in two flavors. The first and more regular part involves briefing our bank president on the state of the economy before he goes to FOMC meetings in DC. These meetings happen eight times per year, and most of the research department is involved with writing a series of briefing memos on different parts of the economy before each meeting. The second type of policy work is ad hoc, and involves writing memos on specific, always changing topics. These assignments are based on the expertise of the economist, and so I generally get any topic which relates to health care—for example, how repealing the ACA could affect the economy, or investigating a change in health care inflation.
There are also some cultural differences between that of a typical university department and my department at the Chicago Fed. One of the biggest differences, and one that I appreciate, is that there is a lot of interaction between economists in different groups (our four groups are micro, macro, finance, and regional). We bring in external speakers for seminars several times a week, and there are nearly always people from each group in attendance—whereas in Economics Departments based at universities, often just the macro people will attend seminars by macro speakers, and vice versa for other fields. I’ve found that having a mix of fields in attendance generates more interesting questions and discussions, as people bring a wider variety of backgrounds, interests, and expertise into the seminar room.
At the end of the day, besides substituting teaching for policy work, being a health economist at the Chicago Fed is very similar to being a health economist in a typical Economics Department. The difference that I value the most is that interactions with my colleagues in other groups, as well as the nature of the policy work, keep me broad as an economist. I study health care in my research, but I do not have the tunnel vision that can develop when all time is spent on one specific topic. Through seminars and policy, I am also in touch with what is going on in other fields, as well as in the US and world economy.
Diane Alexander is an Economist at the Federal Reserve Bank of Chicago. She has a Ph.D. from Princeton University.