Influencing national economic policy is not only about having the expertise, but also about being in the room at the right moment to be heard, two top economists who have served as government advisors told the audience a recent Dean’s Speaker Series event.
“I had this impression that there’s some deep thinking and careful preparation, and ultimately a bunch of guys get into a room, and later there’s a law,” said Professor Ulrike Malmendier, who in August was appointed to a five-year term on Germany’s Council of Economic Experts, which evaluates the government’s economic policies. The reality, she learned, is less concrete.
“I completely misunderstood politics and policy,” said Malmendier, Edward J. and Mollie Arnold Professor of Finance, in response to a student question. “It showed how if you are at the right place—if you can be in the room—you can help.”
Malmendier shared the stage by Professor Catherine Wolfram, who recently completed a term as Deputy Assistant Secretary for Climate and Energy Economics in the U.S. Department of Treasury. Wolfram and Malmendier were interviewed by Haas Dean Ann Harrison in a discussion titled, “In the Halls of Power: Berkeley Haas Economists on Advising World Leaders.”
Wolfram, an energy economist, and Malmendier, a behavioral economist, are internationally known in their respective fields. Both said they felt the call to step outside academia and use their expertise in the service of public good.
“Like a lot of my colleagues, I wanted to be relevant to policymakers, and I wanted to have my research influence decisions,” Wolfram said. “But I figured I really should understand what it’s like to be a policy maker and see how the sausage is made.”
Wolfram said that when Janet Yellen, a Berkeley Haas professor emeritus, was named Secretary of the Treasury in the Biden Administration, she reached out to her directly about a treasury position focused on environmental issues
“…Don’t wait for them to come to you. Life in DC is so, so hectic, they’re going a million miles an hour,” Wolfram said. “You need to raise your hand and say, ‘I’m ready. I’d like to be there.’”
“You need to raise your hand and say, ‘I’m ready. I’d like to be there.’” —Catherine Wolfram
Wolfram ended up having a front-row seat to the passage of the Inflation Reduction Act—the biggest climate bill in U.S. history—and played a pivotal role in enacting a price cap on Russian oil. Malmendier has been on the front lines of helping her home country navigate a tricky economic period roiled by inflation, the war in Ukraine, and the resulting European energy crisis.
Hear more about their experiences and their leadership advice.