- [Christina] The most important thing
that I try to pass on
is the sense that economics
is an empirical field,
then if you get
new empirical evidence,
you're going to have
to change the way
you think about the economy.
I think being open to that
is the most important thing
for a young economist to know.
Economists -- not a group
with a lot of Marys,
Natashas or Juanitas,
and that's caused
a lot of controversy.
However, what's often overlooked
are the actual female economists
who are pushing economics forward
by addressing real-world issues.
Welcome to Women in Economics.
♪ [music] ♪
I grew up in a family
where public policy
was discussed a lot.
I was planning to be a lawyer,
so I was going to major
in Government.
And as part of the Government
major at my college,
you had to take
a year of Economics.
I was about three weeks in,
and I was hooked,
like the government major's gone,
the lawyer's gone,
I was in an Economist.
Christina Romer
is a macro economic historian.
She takes the tools
of modern economics,
statistics, and data
and applies them
to historical questions.
- [Narrator] Christy's researcher
agenda throughout her career
has focused
on a course set of topics
about economic fluctuations
and business cycles.
She's been asking and answering
fascinating questions
about our economy,
starting with her dissertation
as a graduate student at MIT.
There, she changed
her understanding
of how the economy
has grown over time.
I think the questions
that came to me
were about monetary policy
and business cycles
and the Great Depression.
- [Narrator] It was widely believed
that government policies led to
less fluctuations and unemployment
after World War II.
However, the data before
World War II was unreliable.
- [Nancy] But Christy came up
with the ingenious insight
that while you couldn't clean up
the historical data,
you could fuzzy up
the more modern data,
and that's exactly what she did.
And when she did it, lo and behold,
all these differences
basically collapsed.
- [Narrator] Amazingly,
if she applied
the old techniques to the new data,
the pose WOrld War II economy
looked just as volatile
as the pre-World War economy.
This contradicted the consensus
on the role of government
stabilization policies.
Her research rattled
the economic community.
It made a splash.
I remember one of the prominent
economist MIT,
his first reaction was,
"Well, I'd be very upset
about this if I believed it.
So I'm not going to believe it."
Throughout her academic career,
Christine continued to challenge
her understanding
of the Great Depression.
As just one example,
most economists believed
the Great Depression ended
because of higher
government spending
and investment in public works.
She showed that the impact
of those policies
were relatively small compared to
the monetary policy
changes taking place.
- [ ] Starting as soon as Roosevelt
took the US off the gold standard
when he took office in 1933,
over the next decade,
there's just an enormous increase
in money supply.
What he showed was that
that is what caused
the very rapid growth that we had.
- [Narrator] Christina's research
has often focused on the effect
economic events have
on people's everyday lives.
- [ ] It's tough to manage to have
new ideas on the same thing
again and again and again.
One of the remarkable things
about Christy and David's
research program
is that they have done that
very successfully.
- [Narrator] Over 35 years,
Christina has done
meticulous research,
frequently, with her collaborator
and husband, David Romer.
- [David] We'll have her paper,
and I think it's almost done.
We've worked really hard on it,
and each do one last read.
She says, "You know,
I think there's a logical tension
between where we end up
in Section 4b
and how we set out
what we're going to do in Section 2a.
And I'm thinking, "Oh,
no one's going to notice."
And we spend weeks more
on the paper because she's right.
And the paper gets much better.
- [ ] One of the remarkable
things about her work
is the coherence that spans
literally her graduate school days
and her work on her dissertation,
and connects up to some
of her most recent work
on thinking about
ways of identifying
turning points in the economy.
- [Narrator] Christina's work
would be put to the test
during the devasting crash of 2008,
when the US economy
was in free fall.
- [Christina] We often
describe the economy
as at the edge of a cliff.
Well, the truth is, we're not only
at the edge of a cliff,
we were headed down.
Financial markets were plunging,
and the risk of contagion
from the US to the global economy
was v ery real.
- [ ] Even people who'd see a lot
were really worried
about what was happening.
Just as the nation was turning
to President-elect Obama
to confront the economic crisis,
a mysterious email
showed up in Christina'a inbox
with the subject line:
"Obama Transition."
- [ ] And I will take a little bit of credit here
because Christina was just about to delete it,
and I said, "Why don't you at least google fitst."
And she discovered that he was the head of the economic side of the transition.
The Obama administration wanted to meet with Christina as soon as possible.
- [ ] On the next day, she was on a plane to Chicago to meet with the President-elect.
- [Narrator] Christina was asked to chair the Council of Economic Advisers.
The council wa sset up to bring academics into the policy-making process
and make recommendations to the President.
- [Christina] I was taking to Rahm Emanuel, and I said,
"So tell me again, how did I get this job?"
And he said, "You were an expert on the Great Depression,
and we thought we might need one."
- [Janet] She's tried to understand what caused the Depression,
what ended the Depression,
what role monitoring and fiscal policy oculd play
and no one could be better positioned to know what the right strategy woulf be.
- [CHristina] We were talking to bankers,
we were talking to employers,
we were talking to the people that where collecting the statistics.
- [Marrator] Christina'a research revealed
that the economy was even more of a perilous position
than previously thgoutt.
SHe got on the phone with Obama to give him the bad news.
- [Christina] Saying, you going, this is terrible.
We've lost three-quarters of a million jobs.
I'm just going on like this, and finally he stops me
and he said, "Christy, it's not your fault... yet."
- [ ] The challenge that CHristy and her team members on the Economic Advisory Team confronted
was how large a stimulus the US economy needed
in order to right the ship
and trying to calibrate that depended critically on the estimates
of how much bang for the buck you get
when you use fiscal policy as a tool
and try to then inflate the economy.
- [Marrator} CHristina helped design a fiscal package
that she thought was necessary to get the economy moving.
- [Gabriel] The American Recovery and Reinvestment Act
is a piece of legislation that was signed in February of 2009,
and it was a combination of direct government spending,
so think of repairing highways,
transfers to State governments,
transfers to individuals and tax cuts.
And the rationale for it was for the time when households were spending less
and busniesses were spending less --
that's a time when it's appropriate for government to spend a little more
to fill in that gap.
The recessions leave long scars,
and people who lose their jobs during recession
and they're unemployed for a while --
even ten years later, often are earning less
than they were before the recession occurred.
So by making the case,
both in acaedemic research, and then as a policymaker,
the government could do more to mitigate recessions
that really has an impact probably hundreds of thousands of people
kept their jobs during the Great Recession
because hse had become an expert on the behavior of the economy,
on the effects of fiscal policy.
- [ ] And she was realy passionate about the role that she played
after the financial crisis and the Great Recession