How to Improve Your Standing in the Financial Economics Club

VoxEU has a new paper based on network analysis called , which seeks to identify who is in what amounts to a club. The authors make clear that a major aim of the piece is to give career advice to younger scholars.

A key section:

The flow of information within the profession will likely be determined by the structure of the social network of informal collaboration rather than the pure co­-author network. Our network captures a dimension that Oettl (2012) terms helpful­ness. Commenters spend time to review a paper, comment and make suggestions.

Two things seemed interesting about the results. One was that despite the wide-spread stereotype of women being “helpful,” being female was negatively correlated with all the network rankings the authors looked at. So the authors confirm that it would be better for your career in economics if you could manage not to be female.

The second was that the authors looked at an economics department ranking versus the amount of influence suggested by the network measures. Members of the NBER (which is mixed ideologically but has left-leaning academics in its ranks) and CEPR (which is center left) was correlated well with formal influence, but negatively correlated with informal influence. Does this point to subtle or overt bias among which papers get published, since the network analysis was based who was thanked by authors of articles in top finance journals? Given how the paper discusses the importance of the dissemination of “new” ideas through theses informal networks, when most “new” ideas in economics are old wine in new bottles. Thus these informal networks appear likely to be venues for introducing and propagating what I’ve called “leading edge conventional wisdom,” which is the most attractive set of views to be touting at any point in time.

By Co-Pierre Georg, Senior Lecturer at the African Institute of Financial Markets and Risk Management, University of Cape Town; Research Economist, Deutsche Bundesbank and Michael E. Rose, PhD student at the African Institute of Financial Markets and Risk Management, University of Cape Town. Originally published at

Informal collaboration is an integral part of academia. Studies of academic collaboration have mostly focused on formal collaboration, as measured by co-authorships. This column instead constructs a network of informal collaboration in financial economics, exploiting acknowledgements of assistance appearing in published papers. Three rankings of financial economists are constructed based on acknowledgement occurrence and centrality. Being helpful is not found to predict centrality in the informal collaboration network.

While annual economics job market conferences like the AEA or AFA can be forbidding to fresh graduates anxious to secure their dream job, they also pose great opportunities to engage with colleagues about your research. Competition to present a paper at these conferences is tough and discussants are often leading experts in their field. How important is this informal collaboration for authors to learn about new developments in their field, or how a research paper is received by their peers?

With few notable exceptions, the existing literature studies formal collaboration – that is, co-authorship only. But co-authorship is less prevalent in economics compared to other disciplines such as biology (Laband and Tollison 2000). Consequently, when writing a research paper in economics and finance, most collaboration is informal, for example, through commentary from colleagues, back during seminar presentations, discussions of the paper at conferences, or even during the referee process after submitting a paper to a journal.

In a recent paper, we collect acknowledgements of 2,782 research papers published in six journals in financial economics (Georg and Rose 2015). The Journal of Finance (JF), The Review of Financial Studies (RFS), the Journal of Financial Economics (JFE), the Journal of Financial Intermediation (JFI), the Journal of Money, Credit & Banking (JMCB), and the Journal of Banking and Finance (JBF). We look at two points in time: an early sample from 1998 to 2000, and a late sample from 2009 to 2011.

Looking at the raw figures, the intensive and the extensive margin of informal collaboration increases with the impact factor of the journal. For instance, the average JF article in 2011 acknowledged more than 12 scholars, the JBF counterpart acknowledges less than four; in 2011, every JF article acknowledges social informal collaboration, but only nine out of 10 JBF articles. The global trend between 1998 and 2011, however, is to acknowledge more informal collaboration. After manual consolidation and cleaning, we are left with 3,919 authors (of which about 50% are also acknowledged) and an additional 5,542 commenters. We connect two academics in the undirected social network of collaboration with a weight of 1 whenever they co-author a paper and additionally with a weight of 1/n whenever one acknowledges the other on a paper with n authors.1

The flow of information within the profession will likely be determined by the structure of the social network of informal collaboration rather than the pure co­-author network. Our network captures a dimension that Oettl (2012) terms helpful­ness. Commenters spend time to review a paper, comment and make suggestions. For this reason the social network of informal collaboration contains more than twice as many researchers as a pure co-author network. Interestingly, only half of all authors are ever acknowledged, while only one out of four commenters authors a pa­per in our dataset. The network also connects more academics. In the late sample 98% of all economists are connected in an uninterrupted series of links in the social network of informal collaboration, while an uninterrupted path exists only for 20% of all authors in the co-author network.

Links in the general interest journals (JF, JFE, RFS) typically form the core of the network, while links in field journals (JFI, JMCB, JBF) typically connect researchers in the periphery. Figure 1b shows the giant component of the social network of informal collaboration for the late sample. The roughly 34,000 links are colour-coded. Links from general interest journals are red, links from field journals are blue, and the few links occurring in both types of journals are purple.

The network is heterogeneous. Some academics are much more central than others. Network centralities provide insights on the role specific individuals play in the transmission of information or the influence they exert on neighbours (Jackson 2014, Ballester et al 2006). Examining co-author networks in economics, Ductor et al (2014) write, for example: “Communication in the course of research collaboration involves the exchange of ideas. So we expect that a researcher who is collaborating with highly creative and productive people has access to more new ideas. This, in turn, suggests that a researcher who is close to more productive researchers may have early access to new ideas. As early publication is a key element in the research process, early access to new ideas can lead to greater productivity.” The two most prominent centrality measures are ‘betweenness’ and eigenvector centrality. Both are related but distinct – betweenness centrality measures the importance in the transmission of information, while eigenvector centrality points to the best connected group (i.e., opinion leaders) in the network.

Figure 1. Social networks using published research articles, 2009-2011

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26 comments

  1. craazyman

    the only reason I’m reading this is, at this hour, is I’m on a train.

    Those are nice graphics. At the very least the image could make good wall art. It almost brings Cy Twombly to mind.

    I’m not sure how to interpret the eigenvectors. What’s the matrix and how is the data gathered? maybe I missed that since it’s so early. This all could be hand waving. It’s very hard to tell. Also, if your giving credit where it’s due, what about the long-suffering wives and girlfriends who have to listen to their economist man talk about this stuff. Are they in there anywhere? Or are they like extras in a Cecil B. Demille movie

    1. craazyboy

      I think they are saying it’s a 3,919X3,919 matrix and the blue lines are the footnotes you have to read to understand the publication. Not real sure what we can conclude about that, other than it explains why I don’t recognize a single economist’s name in the top 25 lists. But now that this article is published, the wives and girlfriends can use the eigenvalues to figure out who the alpha-economists are and trade up.

      1. craazyman

        I wonder if females rank low because they instinctively realize what nonsense the entire discipline is and can’t fake it very well, or whether that’s too naive an interpretation.

        The cynic in me thinks you may be right about the trading up.

  2. athena1

    Members of the NBER (which is mixed ideologically but has left-leaning academics in its ranks) and CEPR (which is center left) was correlated well with formal influence, but negatively correlated with informal influence. Does this point to subtle or overt bias among which papers get published, since the network analysis was based who was thanked by authors of articles in top finance journals?

    Peer review “rigging” is a well known phenomenon in medical science. For example:

    Does anyone here know how the peer review process works in economic journals?

  3. Steve H.

    Perhaps economists have finally looked at their error rates and realized they cannot lay claim to being engineers but must own up to being social scientists. Since social scientists have a kneejerk response of ‘define your terms’ (which Walls Street doesn’t as long as their side of the equation has a ‘+’ sign), the economists can no longer restandardize their factors to show short-term correlations. To maintain mathiness they must return to 1940’s network analysis, and since the only consumers still incentivized to believe them are themselves, they are now their own subject, following the path worn by journalism.

    But I may be overgeneralizing…

    1. diptherio

      At least so far as the mainstream of contemporary economic though goes, I think it is more properly referred to as an “anti-social science.” Just sayin’.

      1. Steve H.

        I can’t find the paper correlating sociologists with Asperger’s and Holland scores. Or maybe is was sociologists correlating Asperger’s and Holland’s. I guess it doesn’t matter since Asperger’s has been un-diagnosed and you can’t correlate with zero.

        The practical, figurative substrate is probably overcompensation, like a minister with dyslexia. The theoretical treatment demands understanding something by investigating the complement, i.e. to understand individual loneliness you must understand social interaction, thus sociology. There is an excellent methodological treatment here:

        How To Deconstruct Almost Anything

        fudco.com/chip/deconstr.html

        1. diptherio

          Thanks for that.

          This bit describes contemporary mainstream economic thought just as well as it does post-modern lit crit:

          The language and idea space of the field have become so convoluted that they have confused even themselves. But the tangle offers a safe refuge for the academics. It erects a wall between them and the rest of the world. It immunizes them against having to confront their own failings, since any genuine criticism can simply be absorbed into the morass and made indistinguishable from all the other verbiage. Intellectual tools that might help prune the thicket are systematically ignored or discredited.

  4. jfleni

    It looks like “Nut-boy” Larry (you know who) fixed his nutty ideas to the profession some years ago, and all the other nuts are still in thrall to him!

    1. craazyman

      i don’t know why I find “Nut-boy” Larry so hilarious. I’m cracking mysef up like a drooling moron just thinking about it. To be perfectly honest, I’d be secretly pleased if somebody paid enough attention to what I said to call me “Nut-boy” — even in real life! I guess I actually call myself a variation of that, here. I flatter myself, thats for sure. I’m younger than Larry Summers but I’m old enough that being a “Nut-boy” is kind of good. It’s like when some basketball owner in a barb of repartee a few years back called legendary head coach Phil Jackson somebody’s “boy toy”. Coach Jackson said that was very flattering for a man his age, i think he was in his 60s then.

      1. craazyboy

        The Patriots put down KC, not so surprisingly. Brady went 300+ yards…so much for that KC defense.

        My Cardinals are next! Will they punish the Pack again?? I think so. Got my 4 pack of Russian Imperial Stout. I’m ready.

        1. craazyman

          well my dearly beloved ‘Skins got run over last weekend, and i actually thought there for a few drives they had a chance. I saw the end of the Pats game and, maybe ’cause of my New England family roots, there’s an atavistic rooting for them. Deflate gate and all. Aren’t we all Tom Brady in our minds? it used to be Walter Mitty but that was thhen and this is now

          1. craazyboy

            Sh*t. It’s halftime and AZ is barely ahead, but GB looks like they are playing better. Now I’m worried.

  5. diptherio

    How to improve your standing in the financial economics club: find a bunch of poor people to stand on?

  6. flora

    hmmm…. yes…. This is really groundbreaking work. /s

    Their conclusion is: Being a member of the right financial old boys club (graduating from a high ranked university and not being female) determines one’s standing in the larger financial economics club.

    Well, that explains Larry Summers.

    1. flora

      The paper does have the value of showing the supposed meritocracy and objectivity in the economics profession is still unrealized.

    2. flora

      Summers has revealed much about how the powerful ‘clubs’ work. An indiscretion on his part. But instructive. Per an Elizabeth Warren retelling:

      ‘ After dinner, “Larry leaned back in his chair and offered me some advice,” Ms. Warren writes. “I had a choice. I could be an insider or I could be an outsider. Outsiders can say whatever they want. But people on the inside don’t listen to them. Insiders, however, get lots of access and a chance to push their ideas. People — powerful people — listen to what they have to say. But insiders also understand one unbreakable rule: They don’t criticize other insiders.” ‘

      Does Summers ever wonder if the “powerful people” listen to the “insiders” not because the insiders ideas are objectively correct, but because the insiders repeat ideas that confirm the “powerful peoples” economic biases?

  7. kevinearick

    Wyle E Coyote: Hunting the 1%

    Like everything else in the empire, the 99% argument is a bait and swap. The mob of hysterical monkeys turns on the ape, and shoots you, conveniently brought in for the purpose, the sh-show. If you know the monkeys are going to take your children, tax you at 100% and confiscate all your assets for non-compliance, do you comply, react in shock or prepare?

    If you reduce the resistance in parallel, the positive back frequency blows up the load in the short, creating an open. You don’t need a resistor and it doesn’t take much, with all that excess wiring lying around. If the market goes up by 2% and falls, you don’t want to be the buyer; if the market goes down 2% and rises, you don’t want to be the seller; and the increasing frequency locks the system into a black hole.

    There’s a reason why that trophy buck appears right before you, just when you don’t have a gun. It’s not about the money; it’s about destroying the money. That’s History, for the 99%, grown to collect natural resources in one generation, process them efficiently in another, and then watch it all collapse as nature refills the battery, in rotating overlays, swapping the polarity of Family Law for misdirection, a 7 generation cycle.

    When I took the test to get into the elevator union, I correctly answered every question, which had never been done before, and the first thing the ape did was show the monkeys our test scores, like I’ve never seen that one before. I could have easily chosen to error on any subset of questions to fit into any number of groups. The first step to solving any problem is to understand that all problems are a variation of the same problem, not to be efficient.

    It’s not about the elevator; it’s about the people you meet along the way, which is why the arbitrary algorithm hidden in all that wire never works, especially for the kids who see right through it. Having spent decades on university campuses, I can tell you that it is always the kid on a bike that shows up at the machine room, seldom a university student, and never the professor leading the students up stairs. Of course they are going to eliminate please and thank you, common decency, from public education.

    As a young person, you will travel many phases, but when you retire and your children are gone, you don’t need a big house with ten layers of backup, to counter thieves with ten layers of backup, to bring the economy to a dead halt. Take what you need and leave the rest for others, learn the difference between what you really need and sur, and keep your distance from those who can’t. Turn around and you will find what you are looking for, which never left.

    Most people just want an elevator to go where they were told to go. Some want an elevator programmed to take others to them. And some couldn’t care less where the elevator goes, so long as it is somewhere new.

    Funny, how you can immediately tell which is which, while others are summing you up, to fit into their box, telling you that you are stupid until you join the group, at the back of the line. Stupid isn’t something you are. Stupid is something people do because they don’t know what else to do, but say one thing and do another like everyone else they see.

    I do stupid all the time, and I’m supposed to be smart. The trick is not accepting false assumptions to prove other people’s theories so they can sit in judgment of you, rather than learning for yourself. A community cannot raise a child because the community itself is a convenient myth, built for the purpose of replacing parents.

    Empires are in the business of building prisons to ensure war among the inmates. The empire has no way of measuring productivity so it measures consumption, in the past, a narrative it can control. Welcome to California, being replicated wherever you are; you don’t have to teach your children about stupid because stupid will surround them wherever they go.

    “Fifty years ago the emphasis was on labor as a cost; today it is increasingly on human beings as a resource – and the scarcest, most important and most productive resource, at that.” Debt was designed for investment, not consumption.” Public healthcare and public education is an investment in consumption, what government does best, act as a counterweight.

    Under the US Constitution, yet another dress over Family Law, global feudalism, the real estate industry builds social prisons with artificial scarcity, public health breeds economic slaves and public education programs them, and Family Law orders sterilization for non-compliance, with no due process of law. Why would you accept that contract by voting for the operators from among your own, which the majority does, unless you were chosen and programmed to do so?

    The Law is not applied to capital, and cannot be legally applied to labor, no matter how many morons are manufactured by capital to vote for equal rights under the law, and robots aren’t the answer, except as a means for the middle class to replace itself. A closed system is a virus, not an economy, and the ivory tower economists, physicists, and technologists from Harvard, MIT and Stanford are participating morons, surprise. Voting is stupid, willful ignorance, enforced right out of the birth canal by parents who place their trust in Government.

    California bonds can only implode, and no matter how fast the HFTs get at rolling them over, they can only increase the damage. “If your friends jump off a bridge….” An effective repairman is not so well paid and hard to find by accident, this country needs a lot of them as quickly as possible, and I am probably wasting my time, no more than 10%, telling you so.

    They cannot maintain their infrastructure and they cannot finance new. Men cannot have babies and women cannot replace men, but keep trying with equal pay for make-work in a race to the bottom. Welcome to best business methods practiced by government, best as the enemy of better.

    Marriage for the purpose of raising independent children is the shunt capacitor, which you wouldn’t expect unless you were looking, for a needle in a haystack. A meter, built for the purpose, is your best friend. Choose life, instead of knowledge, at every intersection created by empire.

    If you haven’t noticed, the polarity of Family Law is being switched, but remains irrelevant to labor. Procrastination is power, for single people pretending to be married, chauvinists and feminists privileged by feudal birth, paying themselves in the debt of others to talk about the symptoms, but not for you as a follower, unless you want to live in a gold-plated ghetto. “I’ll gladly trade my good money for your bad money, which was my good money” has been around since George Washington, and thousands of years before that.

    The only remaining question is whether the critters burn down RE and are the first to rebuild, or start WWIII, burn down RE, and get in back of the line. Gee Whiz; they keep making the lottery harder to win, sucking in more regressive taxes. History is something you leave behind, not something you apply to its present symptoms, unless you are a politician, paid to waste other people’s time with make-work.

  8. susan the other

    my first comment got lost in the cloud. So just to regather my thought – this post about male-dominated economix professional matrices. It’s like alotta religion – a system of control even tho’ the gospel doesn’t function in reality. It’s probably not just a male thing because I have to admit I’ve known almost as many women who are wardens of the system. But economix is so like religion – “I don’t care what you and your atheist friends think, my dear, I’m going to damn well to to heaven – and until then I’m going to make a heaven right here on earth.” Nevermind that it doesn’t work. I wonder what those hilarious graphs would look like if circular affirmation actually made a system work? Would there be any indication?

    1. greg

      Like religion, the flaws of economics are based in its assumptions, assumptions which cannot be questioned. The builders are only paid to add ornament to the top of the tower, not to grub amongst the foundations, however shaky the the tower may be. Like religion. Grubbing is frowned upon, even penalized.

      Economists think what they are paid to think, and no one is paid to rock the boat, or even to look for leaks.

      In this they have produced an ideologic reflection of the real economy, an increasingly tall and precarious burden on an ever deteriorating foundation. Money follows the money, because that is where the profit lies, and not the need.

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