Economist Discusses Unemployment and Inflation
This past Wednesday, Sept. 26, economist William T. Dickens addressed one of the most important and debated topics in his field – the relationship between inflation and unemployment – in a lecture sponsored by the Economics Department.
Dickens’ talk, which was based on collaborative work with George Akerlof and George Perry, suggested a relationship between higher average inflation and lower average unemployment.
“His work could have major implications for human happiness,” noted Visiting Associate Professor of Economics Jonathan Lipow, referring to the impact Dickens’ work could have on lowering unemployment. “It may be an important piece in understanding what controls joblessness in industrial economies.”
However, Oberlin Danforth-Lewis Professor of Economics Ken Kuttner points out that Dickens’ research from 1996 is “controversial, as it implies a ‘long run’ tradeoff between unemployment and inflation.” Kuttner contends, “There is no solid evidence [of such a tradeoff].”
Though he has sparked debate in macroeconomics, Dr. Dickens has not limited his research to this area. Dickens’ recent work applies the precise models employed by economists to psychology, a practice he felt was lacking from the latter field.
Dickens has added to the psychological debate of race and intelligence, arguing that genetic variations can influence intelligence within the same ethnic group, but that social conditions mostly define the differences in early childhood success between races.
Dickens used the example of a group of boys with equal height playing basketball with a boy who is slightly taller. At a young age, the height advantage makes it easier to shoot so the taller boy will be rewarded early for his talent and given specialized training to improve passing and dribbling.
Being taller doesn’t make him an inherently better basketball player but it does explain why he has developed into one, argues Dickens. He applies the same reasoning to younger students with, for example, longer attention spans. They will be rewarded early and encouraged to learn more by their schools and parents. In this case, intelligence is made, not born.
“I’m a product of the ’60s and ’70s,” remarked Dickens casually. “I fell in love with economics as a way to systematically analyze social problems.”
When asked what motivated him to integrate psychology and economics, Dickens responded, “I was frustrated [in graduate school] by the way members of the profession approached economics with blinders on.” He noted that economics often fails to take into account the human aspects of productivity such as procrastination and motivation.
Reflecting on his graduate school days and the constant critiques of his Massachusetts Institute of Technology professors, Dickens added jokingly, “It seems much easier until you actually do the work yourself.”
Dickens received his undergraduate degree from Bard in 1976 and his PhD from MIT in 1981. He has written numerous papers dealing with broad topics, from cognitive abilities and IQ gains to labor market policy. He also spent 16 years as a professor of economics at the University of California, Berkeley.
Dickens is now directing the International Wage Flexibility Project: an expanding 13- nation research team dedicated to painstakingly gathering and analyzing data funded by the European Central Bank. Dickens presented the IWFP’s work to the economic world in a paper published in the spring 2007 issue of The Journal of Economic Perspectives and again to Oberlin students on Wednesday. He is currently working on compiling the IWFP’s findings into book form as well as tackling the more theoretical problems raised by his research.
Dickens was brought in to chat and eat mushroom and sausage pizza with students and faculty as part of the economics department’s Danforth-Lewis Speaker Series. The series will host five more speakers in the fall semester.