Juan Acosta, 2018-19 HOPE Center Fellow

Juan Acosta evidently had some unfinished business in Durham, for he is here for his second stint as a fellow of the HOPE Center.

And this time, he went to Cracker Barrel, along with a few other current fellows, one of whom wondered if he should add a biscuit to his already ample plate of pancakes, scrambled eggs, and sausage.

That gave Juan his opening. “We have a saying in Colombia: If you dirty your finger, you might as well dirty your hand.”

Pass the biscuits, please?

Juan, who was born in Palmira but raised in Bogota, is researching the evolution of economic analysis at the Federal Reserve, along with the history of large-scale macro models built in the 1960s. “Both projects are related,” Juan explains, “as the Fed worked with universities to build a large-scale model, known as the Fed-MIT-Penn model.” The first version boasted more than 100 equations and its descendant is still used by the Fed.

Juan says that he had long had an interest in central bank theories, so when he had to choose a PhD topic, his advisor suggested that he look at the Italian-American economist Franco Modigliani. Modigliani was involved in the construction of the Fed-MIT-Penn model and in policy discussions, and this led Juan to the work of the staff economists at the Fed.

“My goal is to understand the role of economists and their practices in policy agencies like the Fed. As far as I can tell, those economists have been completely overlooked in conventional histories of macroeconomics.”

Juan is pursuing an interesting thesis about what was going on at the Fed. His period—the late 1950s and 1960s—saw more and more economists getting PhDs. One might therefore be tempted to conclude that work at the Fed changed as more and more economists with PhDs began joining the agency. But in a recent paper written with Beatrice Cherrier, Juan contends that it was the other way around. “The Fed was looking for PhDs because of the growing interest at the Fed in large-scale models. Those models needed PhDs.”

Juan’s research has benefited tremendously from the collections in the Economists’ Papers Archive, housed at the David M. Rubenstein Rare Book & Manuscript Library at Duke. Modigliani’s papers are there, as are the papers of other economists important to Juan’s project: Franklin Fisher, Lawrence Klein, and Charlotte Phelps.

Juan will defend his dissertation in May and is scheduled to begin a postdoc this fall at the University of Los Andes in Bogota.