Aeimit Lakdawala

NEW PAPER: We know household expectations show partisan bias, but do professional economists let politics cloud their forecasts too? Surprisingly, we find yes! Republican forecasters predict ~0.4 pp higher GDP growth when Republicans hold the presidency. #econtwitter

@joachim_voth I get frustration with doctors not providing (or not acknowledging lack of conclusive) data/statistics, but in this case, the argument is misguided. Statins are very safe, appear to work in reducing long-term risk, and cheap enough for lack of monetary incentives for doctors.

Classic. MDs and statistics

@TheStalwart Also want to say that many economists have spent months coming up with similar measures of "hawkishness" from speech / fomc statements. And now you just wave your wand and it's done :)

@TheStalwart Would be nice to see a scatter plot of this by asset price. This is often done in the macro-finance literature to see if markets are reacting to change in sentiment of the speeches.

PRESENTING: FEDLOCK In today's newsletter, I write about my latest vibecoding foray, wherein I attempt use LLMs -- specifically via the "LLM-as-Judge" approach -- to measuring the hawkishness of central bank communication over time. Try it here: jnathan9.github.io/fedlock/

@GautiEggertsson * frontier AI models

@GautiEggertsson Agree with this broadly. But worried that if anything, the top school monopoly will get stronger. Access to the frontier will not be cheap going forward, journal screening will get more tied to name recognition etc... But hope you're right.

AI is a game changer for economic research. We will look back and think: before and after. The junior job market used to place enormous value on technical skills — and rightly so. We wanted to pass on the latest research methods to new PhD students. But the cost of mastering frontier solution techniques has dropped dramatically. I now find myself replicating papers and experimenting with frontier methods in an evening or a few days using Claude Code. That would have taken weeks before — which in practice meant I wouldn’t have done it at all. So what does the new equilibrium look like? Some are pessimistic: ChatGPT can write PhD dissertations, they say. Maybe. But those dissertations won’t push the frontier or generate excitement. I take the other side of that bet. We are in the business of figuring out how the world works and generating new knowledge. There is plenty we don’t understand, and no shortage of questions to answer. AI just accelerates the process. The returns on conceptual thinking and original ideas are now relatively higher compared to the technical grunt work of debugging code and cleaning datasets. I think this is a great development. My guess is it will also erode the monopoly that top US schools — and a handful of others — have long enjoyed. Part of that monopoly rested on access to knowledge that didn’t travel easily. Person-to-person transmission has always been far more efficient than learning from books or published papers — which are outdated by the time they appear, given publication lags. Now knowledge transmission is nearly instantaneous. I find myself using techniques I understood in principle but could never justify the time to implement, because other methods were simply faster. That’s no longer true. The same goes for big data work. One question keeps nagging me though: how should this change how we teach?

@ATabarrok Yes! How long until we reach this? en.wikipedia.org/wiki/The_Evolu…

Research faculty are in the centaur age. Very exciting time. It won't last long.

📢 We're hiring! The Wake Forest Economics Department is seeking Visiting Assistant Professors for 2026-2027. Candidates will teach undergraduate courses including intro economics, intermediate micro/macro, and electives. Apply by 3/15 apply.interfolio.com/181254

@GregoryGivens @YanagizawaD The paper is not good. But the good news is that you can drastically reduce that "year+" timeline for yourself and write a good paper in a couple of months or even weeks. Anyways this does raise substantial concerns about how papers are going to be refereed/desk-rejected

@YanagizawaD I need to read the paper. But if it’s any good at all, this is truly horrifying. 6 total hours of work in what would’ve likely taken me a year+ to do.

I always dreamed of becoming a macroeconomist one day.

@erikbryn link is not working

Last August, @BharatKChandar, @RuyuChen and I posted our "Canaries in the Coal Mine?" paper. Since there has been an explosion of research seeking to assess the relationship between AI and employment, especially for early career workers in highly exposed occupations, where we found some of the most striking effects. While several studies have confirmed our initial findings, others have raised questions in two areas in particular: 1. Can the sharp increase in interest rates in 2022 explain the employment effects we observed better than AI-exposure? 2. Is the overall timing of the employment effects consistent with AI-exposure? We've written a note to address these questions. In brief, we find that: 1. While interest rates affect overall employment, existing evidence does NOT suggest they are a good explanation for the disproportionate decline in entry-level hiring in AI-exposed occupations. 2. We do find suggestive evidence that when you include the broadest set of controls (firm-time fixed-effects), the timing of the employment decline in AI-exposed occupations becomes significant only in 2024; some of the earlier declines are likely due to a combination of factors, not just AI. A link to our note, "Canaries, Interest Rates and Timing", with more details, is in the next post.

@JustinWolfers Corruption

What is the "crypto industry"? Like, what does it produce?

@soumitrashukla9 @Jon_Hartley_ Is this something Fed Chair can do unilaterally?

@Jon_Hartley_ An even more necessary change is organizational overhaul. You don't need 20k economists to write policy memos in the age of Claude Code. Cut stuff aggressively and align the Fed with a tiny set of priorities.

My favorite Warsh speech: "Challenging the Groupthink of the Guild", which I saw Kevin give in 2016 in DC. Prescient in many ways. It was Fed Groupthink that brought us Team Transitory & slow response to 2020s inflation. Challenging that kind of Groupthink is needed at the Fed.

@IrvingSwisher "Looks don't mean anything but he's got the look"

“I want to keep it nice and pure” Trump’s sense of humor will forever be unmatched

@JGossman78 @IrvingSwisher That level of dissent will matter if it's a close call in terms of the interest rate decision. It will not let Warsh lower rates substantially below what majority of the committee thinks is reasonable.

@aeimit @IrvingSwisher I don't believe this is true. There has been lots of dissent at the board for over a year.

10yr yields rose 4.5bps on the Warsh headlines (he was already the favorite as of this afternoon)

@KennethMRich I used to teach a related course at MSU. ec831.weebly.com the notes are all on there but obviously some of them will be outdated.

Excited to start teaching a new course on Bayesian Estimation of DSGE Models!

@alexolegimas They are so good live! Saw them when they came through NC. On the album the guitars are a bit subdued but really shine in the live performance.

The best record of 2025 was Geese, Getting Killed. This performance is spine tinglingly, mind blowing good. The kids are actually alright. youtu.be/qIol9hig2G4?si…

@arpitrage I plan to stick with research until the end... en.wikipedia.org/wiki/The_Evolu…

If AI keeps advancing the ways it does; the future of academic publishing will be the least of our problems

@isaacbaley @bse_barcelona Looks very interesting. You may find our recent work relevant: papers.ssrn.com/sol3/papers.cf…

The Hidden Beliefs of Professional Forecasters focus.bse.eu/hidden-beliefs… via @bse_barcelona

This is an important point that macro as a field needs to reckon with. Of course, it's not about Bellman equations per se but more broadly about insisting on i)micro-foundations & ii)keeping model simple/tractable that is very much necessary for publishing in a top journal today