Interviewer: Today I'm speaking to Sebastian Mallaby, Paul A. Volcker
Senior Fellow for International Economics at the Council on Foreign Relations,
on the role of economics in setting government policy and the implications of that for business.
Mr. Mallaby, thank you for sparing the time today.
Sometimes, we in business think of ourselves as mice
being studied by behavioral scientists, by that I mean the economists.
Unlike white mice in the lab, we're reading and listening to what the economists say and write,
and changing, or not changing, our route through the maze as a consequence.
You've written extensively on the triangular relationship of economics,
government policy, and business.
My question is: who in government is listening, or not, to which schools of economists,
and with what implications for business?
Mr. Mallaby: That's a very interesting question to start with,
obviously the answer has changed over time.
Famously in the 1960s, the head of the US Federal Reserve,
which after all today is thought of as a bastion of professional economics,
joked that he had a handful of economists and he kept them
in the basement, because that's where they deserved to be.
One of the stories of the ensuing half-century has been that economists