Economics may take scarcity for granted, but there seems to be no shortage of brilliant minds working in the discipline.
“In a sense,” the economist John Maurice Clark wrote
in 1923, “knowledge is the only instrument of production that is not subject to diminishing returns.”
The John Bates Clark Medal, established in 1947 to honor pathbreaking economists under the age of 40 and named in honor of John Maurice Clark’s father, is a testament to the unbounded nature of knowledge.
On Wednesday the American Economic Association announced
that Emi Nakamura, an economist at the University of California, Berkeley, had become the latest winner of the annual award—and only the fourth woman to claim the distinction.
The John Bates Clark Medal, awarded to scholars living in America, is widely considered the most prestigious honor in economics outside of the Nobel Prize. Past winners include Milton Friedman, Paul Krugman, and Steven Levitt, co-author of Freakonomics
A macroeconomist by trade, Nakamura, 38, distinguished
herself early in her career by her empirical approach to research, often compiling and then using detailed datasets to shed light on questions that have long puzzled economists and frustrated policymakers.
One long-standing debate in macroeconomics is the extent to which government spending can stimulate economic activity in the private sector, especially during a recession. Because of the difficulty of sussing out cause and effect in the real world, economists have struggled to measure the amount of output generated by each dollar of government spending, known as the fiscal multiplier
. To overcome this problem, Nakamura, along with her frequent coauthor Jón Steinsson, used data
on regional military spending financed by the federal government to study the impact on local economies.
Nakamura’s clever research methods have extended the field of monetary economics, as well, giving policymakers at the Federal Reserve better insight into the interplay between markets and monetary policy. In a 2018 paper
, Nakamura looked at changes in bond prices in the first thirty minutes after a number of Federal Reserve announcements going back to 2000 to understand how the Federal Reserve influences perceptions of the economy. In another paper, she and her coauthors challenged
the claim that forward guidance, an approach used by central banks to stimulate economic activity by setting expectations about the future, is a useful tool for central banks.
lauded contribution to macroeconomic research, Nakamura and Steinsson undertook the laborious task of painstakingly extending a highly granular dataset of consumer prices, maintained by the Bureau of Labor Statistics, to cover the 1970s and early 1980s. The new data allows economists to study in more detail the impact of monetary policy on prices across the economy.
Nakamura’s interests in economics extend far beyond fiscal and monetary policy—she’s authored papers on the Chinese economy, women in the labor force, and housing.
Nakamura is the first
macroeconomist to win the award since 1992, when former Harvard University president Lawrence Summers took home the honor.