What do the following people have in common:
- Ben Bernanke
- Mario Draghi
- Stanley Fischer
- Raghuram Rajan
- Philip Lowe
- Guy Debelle
- Christopher Kent (Assistant Governor (Financial Markets) RBA)
If you guessed that they are all men – you are correct and you are a misogynist.
If you guessed that they are all economists – you are correct again.
If you guessed that they are all central bankers – you are correct once more.
If you guessed that they are all PhDs in economics from MIT (Massachusetts Institute of Technology) – you are not only correct again, but you get the bonus point.
Why does this matter? Because MIT has produced a disproportionate number of central bankers. And as described in the Wall Street Journal:
The Massachusetts Institute of Technology in the 1970s and 1980s was the center of a generational shift in economic thinking that ascribed substantial influence to central banks for managing economic turbulence.
MIT, in Cambridge, Mass., became home to many “New Keynesians,” economists immersed in the real-world complexities of markets and sympathetic to government intervention. They helped modernize the work of Depression-era economist John Maynard Keynes, whose views had come under attack for advocating a strong government hand.
Managing economic turbulence. Hows that going then? And new Keynesians. Modernising the work of Keynes. Hows that going also then?
An MIT economist here or there does not necessarily a pattern make. Except …. at the RBA.
The Governor, the Deputy Governor (the only 2 RBA executives who sit on the RBA board) and an Assistant Governor are all MIT PhDs.
Of a “management team” of 7, 3 are MIT PhDs. And if you take out the business services and corporate services Assistant Governors, you get 3 MIT PhDs out of 5. Or another way, half of the non administrative reports to the MIT PhD are MIT Phds.
Fine. There is gender balance – 3 out of 7. How about some cognitive balance?
Unless of course there is unconscious bias in the recruitment systems of the RBA requiring MIT type thinking.