LINDAU, BAVARIA — Organizations extend their influence by involving the young. Science fairs, the Model United Nations, central banking competitions for college students: all are designed to encourage young leaders eager to succeed.
Something of the sort went on last week in this little nineteenth-century summer resort at a corner of Switzerland and Germany, where the Lindau Foundation gathered some 460 young economists to rub elbows for three days with eighteen Nobel laureates in the economic sciences. Mark Thoma, of the University of Oregon, proprietor of Economist’s View, was among those flown in to witness the proceedings. So was Economic Principals.
“Stay up late, you only get to do it once, unless you plan to win a Nobel prize yourself,” one alumnae advised the current fledglings. That equally improbable things have actually happened may have been the thrill she sought to convey. Who doesn’t remember the photograph of eighteen-year-old Bill Clinton thrusting himself forward at a Boys Nation assembly in 1963 to shake the hand of President John Fitzgerald Kennedy?
The Lindau meetings had their beginning in 1951, part of a wave of post-war reconciliation, when a handful of laureates in physics and chemistry first met with German graduate students under the sponsorship of a branch of the Swedish royal family with local connections. The meetings evolved slowly over the years. Leadership of the Bernadotte family passed from an old count to a young countess. A foundation was created in 2000. Economics laureates joined the rotation in 2004, their entry furthered by Paul A. Samuelson.
Since then, the economics sessions have expanded their network of nominating institutions to include more than 200 universities, scientific organizations and central banks around the world. Thousands of applications are winnowed down to around 450 invitations. Fund-raising goes forward non-stop, but a series of breakfasts were as close to the students as corporate sponsors such as UBS, SAP and Mars, Inc. were able to get. German Chancellor Angela Merkel opened the meetings with an address. Literature laureate Mario Vargas Llosa spoke one evening in the Lindau City Theater, Even the farewell dinner in the Inselhalle was a good Süd-Deutsch approximation of the real Stockholm version. But the most telling evocation of the real thing appeared to be the re-engagement of the laureates themselves: treated like royalty during the day, returned to graduate student life by night.
Seventeen of the thirty-seven living laureates in economics showed up to give talks (all now posted as videos on the Lindau Meetings website) and exchange views privately with students. Included were Lars Peter Hansen Alvin Roth, Edmund Phelps, Christopher Sims, Vernon Smith, Joseph Stiglitz, Eric Maskin, Finn Kydland, Reinhard Selten, William Sharpe, Robert Merton, Daniel McFadden, James Mirrlees, Edward Prescott and Peter Diamond. The talks showed the laureates, without exception, to be still hard at work; even Selten, at 83, described a technical paper on how cooperation is learned. Talks from the fourth meeting, in 2011, stepped down in such a way as to appeal to high school students, appeared earlier this year as a polished book, Economics for the Curious: Inside the Minds of Twelve Nobel Laureates (Palgrave Macmillan), edited by Janice Murray and with an introduction by Robert Solow.
The sorts of young economists who attended varied widely. Most were graduate students; some were post-doc; there were even few junior faculty. More than ninety young ecnomists came from Germany; seventy-eight from the United States; forty-eight from the United Kingdom and seventeen from China. South America and Africa were under-represented. Several central banks, including the Federal Reserve Board, sent two apiece. More than a quarter of te group were women.
There are other summer opportunities for which the brightest young economists compete. The Jerusalem School in Economic Theory, for example, is probably more likely to produce future Nobelists. But the Lindau Meeting seems to have won a secure place on the calendar. Everybody seemed to have a good time.
Secular stagnation caused a stir when Lawrence Summers, of Harvard University, broached the possibility at an IMF conference in late 2013. Now it has an e-book of its own. Secular Stagnaion: Facts, Causes, Cures was published earlier this month, in a free down-loadable version, by Vox EU, a policy portal of the Centre for Economic Policy Research.
A lead chapter by Summers is quickly seconded by Paul Krugman, of The New York Times and City University of New York. Gauti B. Eggertsson, of Brown University, and Neil Mehrotra, of Columbia University, describe their formal model of a slow-growth trap. Robert Gordon, of Northwestern University, distinguishes his “one-big-wave” theory of technological slowdown from the stagnation hypothesis, and Joel Mokyr, of Northwestern University, reiterates his technological optimism.
Barry Eichengreen, of the University of California at Berkeley, notes “The idea that America and the other advanced economies might be suffering from more than the hangover from a financial crisis resonated with many observers.”
Vox editors Coen Teulings and Richard Baldwin write that “while it is too early to tell whether secular stagnation is going to materialize in the US and Europe, economists and policymakers should start thinking hard about what should be done if it does. Doing so is a no-regret option.”
More in due course!