Should Economic Policy Makers Have Economics Degrees?

When Jerome Powell began his term as chairman of the US Federal Reserve’s Board of Governors in February, his qualifications for the job included time as Under Secretary of the Treasury for Domestic Finance, two years as a visiting scholar at the Bipartisan Policy Center, numerous high-level positions at private-sector financial firms, and nearly six years as a Fed governor. They did not include a degree in economics.

Powell is not the only person without a PhD in economics that US President Donald Trump has considered for a senior economic policy position: according to several news outlets, before he took office, Trump considered former CNBC commentator Larry Kudlow, who has a bachelor’s degree in history and no graduate degree, to chair his Council of Economic Advisors. Trump ultimately chose Kevin Hassett for the position and, in March, instead named Kudlow director of the National Economic Council, a job that has been held by numerous people without extensive academic training in economics.

Should such training be required of anyone occupying a senior economic policy position within the federal government? Would the skills and insights developed while earning a master’s degree or PhD in economics be indispensable assets? Or would restricting those jobs to individuals with graduate economics degrees needlessly narrow the pool of otherwise qualified candidates?

Chicago Booth’s Initiative on Global Markets polled its US Economic Experts Panel, which was divided on the question. A plurality of the panel disagreed with the statement “Restricting eligibility for senior government economic-policy posts by requiring a graduate degree in economics would reduce the chances for good public policy outcomes.” But 18 percent of the panel agreed, and 23 percent were uncertain. Moreover, some panelists noted that even if such a restriction didn’t reduce the chances for good outcomes, it wouldn’t necessarily increase those chances, either.

“This is a bit like asking farmers if farmers are important,” wrote University of Chicago’s Michael Greenstone. “Best for others to judge.”