Macroeconomics is the branch of economics that studies the integrated process of allocating scarce resources in human societies. To do this, macroeconomists analyze the factors of production, the set of goods and services, rates of growth and unemployment, as well as the level of prices and other aggregates (including the impact of public policies on social reality), to “identify the main determinants and how they affect each one of the phenomena that it analyzes.” (Roca, 2015). But before delving into the topic, here is a short video [in Spanish] to understand it better:
Recently, in matters of macroeconomics, the Society for Economic Dynamics is at the forefront of thought. It was founded by Thomas Sargent in 1990 and is based on the premise that the field of economics needs a rigorous scientific approach that requires essential categories. Such as the theoretical framework of dynamic economics, which follows in the footsteps of Michael Kalecki and his influential work published by the Fondo de Cultural Económica in 1973.
That study on the determinants of investment and their effect on the boom and bust economic cycles outlined a theoretical model for the future, but, as Douglas C. North, Nobel Prize for Economic Sciences in 1993, pointed out:
We have no such theory. Rather, it provides the initial scaffolding of an analytical structure capable of increasing our understanding of the historical evolution of economies, as well as a necessarily rudimentary guidance for a policy to be pursued in the present task of improving economic performance. The analytical framework is a modification of neoclassical theory. What it retains is the basic assumption of scarcity and therefore competition, as well as the analytical tools of microeconomic theory. What it modifies is the assumption of rationality, what it adds is the dimension of time (p. 568).
The Society for Economic Dynamics (SED) recovered that research legacy and linked it to the interests and needs of the community of economists, first in the United States, and then throughout the world. Even more importantly, that driving group set out to convert its magazine and its annual meetings in an open door for young people seeking to make their own contributions to economic science.
For this reason, the SED launched the Review of Economic Dynamics in 1998, which, together with its annual meetings, has become a platform for academic discussion, recognized in the disputed field of economic debate. Finally, the dynamics of the business cycle can only be understood from a precise knowledge of the past and present processes which define, in essence, the same evolution of the economy.
That is why in 2015, and during the SED Warsaw Congress, ITAM, with the support of the Bank of Mexico, applied to host the annual meeting. On that occasion, the organization selected Edinburgh to be the host, but a year later the Mexican site was proposed again at the Toulouse congress. This time it was accepted. Three years later, the Río Hondo campus hosted hundreds of economists ready to present and discuss the results of their research.
Macroeconomics, SED, and Academic Debate
The Society for Economic Dynamics (SED) is one of the most important academic societies in the field of macroeconomics. As a prestigious scholarly network, today it involves university students from around the world and its annual meeting is becoming a benchmark for all those who want to know the progress in this fruitful field. A quick glance at the parallel sessions that took place at ITAM between June 27-30, 2018 allows us to understand the wealth of these contributions:
This is the second time that ITAM hosts this important congress, but this time the scale was much greater, said Dr. Diego Domínguez, ITAM’s Economics Department Chair and member of the organizing committee. Compared to the 150 attendees in 1996, 650 were registered in 2018. Over three days, 168 lectures were delivered through simultaneous sessions (up to 14 at a time) that allowed presenting three publications in each one. It was a record in participation and debate.
Macroeconomics in Mexico City: Joseph Altonji, Nancy Stokey, and Enrique Mendoza
The inauguration of SED 2018 took place on June 27 with the participation of ITAM academics, Bank of Mexico officials, and the virtual participation of Tom Sargent, Nobel Prize in Economics in 2011. The founder of SED and professor at New York University won the renowned award for another fundamental macroeconomic problem, the cause and effect relationship between economics and politics, that is, between interest rates and public spending.
The objective of this event was for members of the public and academic sectors to exchange ideas on the most important and current issues in macroeconomics. Later, there was time for discussion in more than 70 of the official sessions and other parallel ones that took place in many corners of the Río Hondo campus.
The next day, academics from around the world gathered at ITAM. Among the members of our faculty who presented a paper are Marina Méndez, Carlos Urrutia, Felipe Meza, Alexandros Fakos, Felix Wellschmied, and Tiago Tavares, as well as Tim Kehoe, who has been a visiting professor at our institute on several occasions.
In addition to the simultaneous sessions, three plenary conferences were held in the ITAM gymnasium. Enrique Mendoza, economics professor at the University of Pennsylvania, presented a method to explain and prevent financial crises in developing countries. Nancy Stokey, a leading economist at the University of Chicago, spoke about the spread of technology and its adoption in different settings. Jose Altonji, professor at Yale University, presented his perspective on the evolution of the income of families and marriages, as well as on the dynamics and distribution of wages over time.
The Best Logistics for the Best Macroeconomics Forum
Dr. Diego Domínguez and Dr. Germán Rojas, ITAM professors who participated in the organization of the event, mentioned that the annual SED meeting would not have been possible without the enthusiastic participation of the students who volunteered to take part in the logistics. It is worth mentioning that at the end of June the semester had already concluded and, therefore, the students who collaborated did so outside school hours. Their commitment to the institution was rewarded with the opportunity to participate in some sessions, attend the presentations of the researchers, and even go the gala dinner that took place at the Interactive Museum of Economics (MIDE).
It took three days of intense logistical work to get the classrooms ready, prepare meals for the attendees, and attend to all their needs. It can be said that the Society for Economic Dynamics Annual Meeting 2018 was a success and the guests were very pleased. Among them were members of the organizing committee for the next edition, including SED acting president Ellen McGrattan. That meeting will take place in St. Louis, Missouri, in the United States. The Federal Reserve System (FED) and the University of Washington will be its co-organizers.
Something we do not want to leave out. They are economists, but they are also human beings. And man does not live by reason alone. So, during the World Cup, there were screens to watch the international soccer games.