From Senior Thesis to Publication

One of the most challenging and rewarding aspects of my job at Haverford College is advising senior theses. At Haverford, every student in every major writes a senior thesis (or equivalent capstone project). I co-teach the senior thesis course in the fall with two or three colleagues, and advise thesis writers in the spring. In the fall, students work on choosing a topic and research question, conducting a literature review, and developing a research proposal. In the spring, they work one-on-one with an advisor to see the proposal through.

Every completed thesis is an achievement, and we celebrate all of our seniors with a champagne reception on the due date. But today, for the first time, one of my advisee's theses has successfully made its way through the peer review process and is published!

Samantha Wetzel, Haverford College class of 2018, excelled both as an economics student and on the basketball team. We published "The FOMC versus the staff, revisited: When do policymakers add value?" in Economics Letters. (This link should provide temporary free access to the published version; here is the SSRN working paper version.)

The thesis, and this letter based on it, follow up on Romer and Romer's (2008) similarly-titled paper. Here is the abstract:

The Board of Governors staff and the Federal Open Market Committee both publish macroeconomic forecasts. Romer and Romer (2008) show that policymakers' attempts to add information to the staff forecasts are counterproductive. In more recent years, however, policymakers have improved upon staff forecasts. We show that policymakers' value-added is greater when economic conditions are unfavorable or uncertain.

For other undergraduate researchers hoping to write a successful, potentially publishable thesis, I have a few bits of advice based on this advising experience. First, start early if possible. Samantha came up with her thesis topic during junior year, when she read Romer and Romer (2008) in my course on the Federal Reserve.

Second, ask a well-defined question. This may be the hardest part. Your thesis (like Sam's) will probably be much longer than the 2000 word limit of Economics Letters, with a longer literature review and more robustness checks etc., but you should be able to easily explain what you asked, what you found, and how you found it in a few pages. Your thesis is far more likely to be successful if you have a primary hypothesis that you can precisely state. (Even if you think you can state it, write it down to be sure!)

Third, come up with a plan so that you can make progress each week-- use your advisor to help you decide on a timeline for key goals and to hold you accountable. For student athletes like Samantha, this means thinking in advance about when key games and travel will be, and planning accordingly.

Macro in the Econ Major and at Liberal Arts Colleges

Last week, I attended the 13th annual Conference of Macroeconomists from Liberal Arts Colleges, hosted this year by Davidson College. I also attended the conference two years ago at Union College. I can't recommend this conference strongly enough!

The conference is a response to the increasing expectation of high quality research at many liberal arts colleges. Many of us are the only macroeconomist at our college, and can't regularly attend macro seminars, so the conference is a much-needed opportunity to receive feedback on work in progress. (The paper I presented last time just came out in the Journal of Monetary Economics!)

This time, I presented "Inflation Expectations and the Price at the Pump" and discussed Erin Wolcott's paper, "Impact of Foreign Official Purchases of U.S.Treasuries on the Yield Curve."

There was a wide range of interesting work. For example, Gina Pieters presented “Bitcoin Reveals Unofficial Exchange Rates and Detects Capital Controls.” M. Saif Mehkari's work on “Repatriation Taxes” is highly relevant to today's policy discussions. Most of the presenters and attendees were junior faculty members, but three more senior scholars held a panel discussion at dinner. Next year, the conference will be held at Wake Forest.

I also attended a session on "Macro in the Econ Major" led by PJ Glandon. A link to his slides is here. One slide presented the image below, prompting an interesting discussion about whether and how we should tailor what is taught in macro courses to our perception of the students' interests and career goals.

Thoughts on Angrist and Pishke's "Undergraduate Econometrics Instruction"

Joshua Angrist and Jörn-Steffen Pischke, coauthors of "Mastering 'Metrics," have just released a new NBER working paper called "Undergraduate Econometrics Instruction: Through Our Classes, Darkly." They argue that pedagogy has not kept pace with trends in economic research in the past few decades:

In the 1960s and 1970s, an empirical economist’s typical mission was to “explain” economic variables like wages or GDP growth. Applied econometrics has since evolved to prioritize the estimation of specific causal effects and empirical policy analysis over general models of outcome determination. Yet econometric instruction remains mostly abstract, focusing on the search for “true models” and technical concerns associated with classical regression assumptions. Questions of research design and causality still take a back seat in the classroom, in spite of having risen to the top of the modern empirical agenda. This essay traces the divergent development of econometric teaching and empirical practice, arguing for a pedagogical paradigm shift.

The "pedagogical paradigm shift" they call for would include three main components:

One is a focus on causal questions and empirical examples, rather than models and math. Another is a revision of the anachronistic classical regression framework, away from explaining economic processes and towards controlled statistical comparisons. The third is an emphasis on modern quasiexperimental tools.  

Since I am relatively new to both teaching and economics-- I didn't major in economics as an undergraduate, and did my Ph.D. from 2010 to 2015-- the first economics course that I designed and taught at Haverford quite naturally adhered to many of Angrist and Pischke's recommendations. The course, which I taught in Fall 2015 and Fall 2016, is called Advanced Macroeconomics, but is essentially an applied econometrics course on empirical macroeconomic policy analysis. The students in the course are typically juniors and seniors who have already taken econometrics.

On the first day of class, we read excerpts from the 1968 paper "Monetary and Fiscal Actions: A Test of Their Relative Importance in Economic Stabilization" by Andersen and Jordan. The authors want to test whether "the response of economic activity to fiscal actions relative to that of monetary actions is (1) greater, (2) more predictable, and (3) faster." They use very simple regression analysis, essentially regressing changes in GNP on changes in measures of monetary and fiscal actions. This type of regression is now called a "St. Louis Equation," since Andersen and Jordan were at the St. Louis Fed. I ask my students to interpret the regression results and evaluate the validity of the authors' conclusions about policy effectiveness. With some prodding, the students come up with some ideas about potential omitted variable bias and data concerns. But they don't think about reverse causality or the idea of a "controlled statistical comparison." I introduce the reverse causality issue, and much of the rest of the course focuses on quasiexperimental tools.

The course has no textbook, but we use "Natural Experiments in Macroeconomics" by Nicola Fuchs-Schundeln and Tarek Hassan as the main reference. The course has four units: consumption, monetary policy, fiscal policy, and growth and distribution. In each unit, I assign natural experiment or quasiexperimental papers as well as other papers that attempt to achieve identification via other means, to varying degrees of success. The reading list was influenced by Christina Romer and David Romer's graduate course on Macroeconomic History at Berkeley, which introduced me to the notion of identification and ignited my interest in macroeconomics.

Angrist and Pischke also argue that "Regression should be taught the way it’s now most often used: as a tool to control for confounding factors" in contrast to "the traditional regression framework in which all regressors are treated equally." In other words, the coefficient of interest is on one of the regressors, while the other regressors serve as "control variables needed to insure that the regression-estimated effect of the variable of interest has a causal interpretation."

This advice on teaching regression resonates with my experience co-teaching the economics senior thesis seminar at Haverford for the past two years. Over the summer, my research assistant Alex Rodrigue read through several years' worth of senior theses in the archives and documented the research question in each thesis. We noticed that many students use research questions of the form "What are the factors that affect Y?" and run a regression of Y on all the variables they can think of, treating all regressors equally and not attempting to investigate any particular causal relationship from one variable X to Y. The more successful theses posit a causal relationship from X to Y driven by specific economic mechanisms, then use regression analysis and other methods to estimate and interpret the effect. The latter type of thesis has more pedagogical benefits, whether or not the student can ultimately achieve convincing identification, because it leads the student to think more seriously about economic mechanisms.

Macroeconomics Research at Liberal Arts Colleges

I spent the last two days at the 11th annual Workshop on Macroeconomics Research at Liberal Arts Colleges at Union College. The workshop reflects the growing emphasis that liberal arts colleges place on faculty research. There were four two-hour sessions of research presentations--international, banking, information and expectations, and theory--in addition to breakout sessions on pedagogy. I presented my research in the information and expectations session.

I definitely recommend this workshop to other liberal arts macro professors. The end of summer timing was great. I got to think about how to prioritize my research goals before the semester starts and to hear advice on teaching and course planning from a lot of really passionate teachers. It was very encouraging to witness how many liberal arts college professors at all stages of their careers have maintained very active research agendas while also continually improving in their roles as teachers and advisors.

After dinner on the first day of the workshop, there was a panel discussion about publishing with undergraduates. I also attended a pedagogy session on advising undergraduate research. Many of the liberal arts colleges represented at the workshop have some form of a senior thesis requirement. A big part of the discussion was how to balance the emphasis on "product vs. process" for undergraduate research. In other words, how active of a role should a faculty member take in trying to ensure a high-quality final product of a senior thesis project versus ensuring that different learning goals are met. What should those learning goals be? Some possibilities include helping students decide if they want to go to grad school, teach independence, writing skills, econometric techniques, the ability to for an economic argument. And relatedly, how should grades or honors designations reflect the final product and the learning goals that are emphasized?

We also discussed the relative merits of helping students publish their research, either in an undergraduate journal or a professional journal. There was a lot of lack of clarity about how it affects an assistant professor's tenure case if they have very low-ranked publications with undergraduate coauthors, and a general desire for more explicit guidelines about whether that is considered a valuable contribution.

These discussions of research by or with undergraduates left me really curious to hear about others' experiences doing or supervising undergraduate research. I'd be very happy to feature some examples of research with or by undergraduates as guest posts. Send me an email if you're interested.

At least two other conference participants have blogs, and they are definitely worth checking out. Joseph Joyce of Wellesley blogs about international finance at "Capital Ebbs and Flows." Bill Craighead of Wesleyan blogs at "Twenty-Cent Paradigms." Both have recent thoughtful commentary on Greece.