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The Jackson Hole Economics Symposium

What Is It?

“Each year since 1978, the Federal Reserve Bank of Kansas City has sponsored a symposium on an important economic issue facing the U.S. and world economies. Symposium participants include prominent central bankers, finance ministers, academics, and financial market participants from around the world. The participants convene to discuss the economic issues, implications, and policy options pertaining to the symposium topic. The symposium proceedings include papers, commentary, and discussion.”

– Federal Reserve Bank of Kansas City


This year’s theme was “Re-Evaluating Labor Market Dynamics”.

Specifically, the Symposium detailed “how central bankers and macroeconomists think about the persistent effects of the Great Recession in the labor market that justify continued zero interest rate policies that have lasted nearly six years and possibly may finally come to an end next year.”[1]

Among the key participants/speakers at this year’s conference were:

some of world’s top central bankers:

  • Janet Yellen, Chair of the Board of Governors of the Federal Reserve
  • Mario Draghi, President of the European Central Bank
  • Haruhiko Kuroda, Governor of the Bank of Japan
  • Ben Broadbent, Deputy Governor for Monetary Policy of the Bank of England
  • Alexandre Tombini, Governor of the Central Bank of Brazil

and economists:

  • Steve Davis (University of Chicago) and John Haltiwange (University of Maryland) who “presented a paper demonstrating how reduced U.S. labor market fluidity has become in the past twenty-five years, pointing to reduced job reallocation rates in the most recent recessions, particularly in the Great Recession.” [1]
  • Giuseppe Bertola (EDHEC) who “presented a paper aimed at identifying reasons behind why labor markets across OECD countries react sluggishly to macroeconomic downturns.” [1]
  • Till Marco von Wachter (UCLA) who “presented a paper that refutes the idea that the Great Recession generated a persistent decline in the employment rate compared to past recessions by using measures of long-term nonemployment rather than measures of long-term unemployment.” [1]
  • David Autor (MIT) who “presented a paper on labor market polarization between high-education/high-wage jobs and low-education/low-wage jobs as well as the machine displacement of human labor, arguing that commentators often overstate the extent of machine substitution for human labor, ignoring strong complementarity between technology and human labor).” [1]
  • Karen Eggleston (Stanford), David Lam (University of Michigan), and Ronald Lee (UC Berkeley) who in a panel “addressed how population demographics underlie many of the changes in the macroeconomy such as the recent fall in the labor force participation rate driven in large part by baby-boomer retirement.” [1]

[1] = Hartley, Jon. “Highlights from Jackson Hole 2014.” Forbes. Forbes Magazine, 23 Aug. 2014. Web. 26 Aug. 2014.

For a solid summation of the 2014 Jackson Hole Symposium events, I’d recommend Jeff Kearn’s and Simon Kennedy’s Jackson Hole Theme: Labor Markets Can’t Take Higher Rates Bloomberg Article

Further information about this year’s symposium can also be found at: http://www.kc.frb.org/publications/research/escp/escp-2014.cfm


Why Should We Care?

  1. For us, students of economics, the Jackson Hole Symposium is something that we should closely follow as the event provides valuable insight into the key and current economic issues that are being faced and debated both in academia and outside. The Jackson Hole Symposium is one of the two large world-renown economic conferences that are held annually (the other being the World Economic Forum Meeting held in Davos). It is to economists something equivalent, if not larger, to what the Coachella Festival is to music enthusiasts. The bottom line is the Jackson Hole Symposium, in the economics world, is “BIG”. And rightly so; after all, economics history has been made at this conference in the past.
  1. Given its largely academic character and sleepy conclave in the Teton Mountains, the Symposium often gives the impression of being quite removed from Wall Street and the everyday financial markets. This impression could not be farther from the truth; it is “closely followed by market participants, as unexpected remarks emanating from the heavyweights at the Symposium have the potential to affect global stock and currency markets” (Investopedia). With the exception of this year, there is in fact a noticeable crowd of Wall Street attendees/participants.
  1. The (Evolving) Role of Central Banking.

“Central bankers, a group of largely independent technocrats, wield more power over the fates of politicians, investors and regular folk than ever before. In the absence of government action, they are bearing most of the burden of supporting economic recoveries in the U.S. and Europe. With their bond purchases and other unconventional policies, they have become a major force holding up financial markets around the world.”

– Mohamed E. El-Erian, chief economic adviser at Allianz SE, chairman of President Obama’s Global Development Council, Financial Times contributing editor, and the former CEO and co-CIO of PIMCO (excerpt from his Why You Should Care About Jackson Hole Bloomberg Article).

Given this fact, the significant presence of central bankers at the economic conference alone is enough to make the annual Jackson Hole Symposium noteworthy.

 

Further information about the symposium in general can be found on the Federal Reserve of Kansas City Official Jackson Hole Symposium page and The Federal Reserve of Kansas City – The Jackson Hole Symposium_In Late August.

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