Advice for scientists from a central banker

The Washingtonian is the capital city’s glossy monthly. When I first moved to Washington, DC, in 1990, the magazine seemed obsessed with real estate, lawyers, and the local ecosystem of politicians, lobbyists, and journalists.

Recently, however, the magazine has broadened its scope. One issue this year even had a profile of Chris Monroe, a physicist at the nearby University of Maryland who measures and exploits the quantum properties of cold atoms.

I haven’t finished perusing the November issue, so I can’t tell you if it includes any physics, but it does have an interesting interview with Donald Kohn , the former vice chairman of the Federal Reserve.

The interview mostly covers Kohn’s role in, and views on, the US economy during his long tenure at the Fed. He served under Paul Volker during the stagflation crisis of the 1970s and under Ben Bernanke during the current financial crisis. But I found his answer to the anonymous interviewer’s final question to be the most thought-provoking. I reproduce it here in full.

To expect the unexpected. One of the difficult things is to recognize what you don’t know. One of the traits I would advocate for policy makers is flexibility. I’m sure this is true in foreign policy and elsewhere, but it’s certainly true in economic policy. Our understanding of the systems that we’re interacting with, people’s behavior, is very partial. We should expect to be surprised quite often.

One of the very hard things to know is, when incoming data on the economy isn’t going the way you expect it to go, does that suggest something really has changed or that it’s just a blip in the data? Sorting out the signal from the noise is very hard. You’ve got to be ready to ask tough questions of yourself, of your colleagues, of your data.

You’ve got to be creative in thinking about current situations and how to respond to them. That all starts with, in my mind, humility about what you know.

Expecting humility from physicists might be too ambitious, but we should all be skeptical and flexible when it comes to our own data, theories, and computer models. The list of discoveries that grew from anomalous blips is long.

If Arno Penzias and Robert Wilson had stuck with their first explanation—pigeon droppings—for a blip in their microwave data, they wouldn’t have gone on to discover the microwave background and win a Nobel prize.