“just fundamentally not qualified in my mind” to be a Fed governor

That’s Senator Kevin Cramer on Dr. Lisa Cook; see the interview on FoxNews. Senator Toomey also objects, grudgingly mentioning the PhD but then noting that none of her academic work deals with monetary policy. (Senator Toomey also voted against Janet Yellen’s nomination to be Fed chair, so don’t count me terribly surprised.)  I’ll note that Peter Diamond, nominated by President Obama, also didn’t have academic work on monetary policy (but was not opposed on the basis of that point). A highly critical (and misleading) article is in the Daily Caller.

To highlight the unequal treatment meted out to Dr. Cook vs. other candidates, consider this person’s academic qualifications: BA (Princeton), MA, Political Economy. That person was Paul A. Volcker. Note also the distinction between the treatment of Governor Miki Bowman, nominated by Mr. Trump; Senator Toomey voted aye on her nomination, despite the lack of relevant academic credentials (she’s got a JD).

Brad Delong has a piece which excellently lays out why Dr. Cook’s research is important, and at the same time relevant, to the Fed’s mission. See also Paul Romer’s article.

A couple of observations:

The Fed conducts monetary policy; but it also regulates (in conjunction with other agencies) the banking system. One of the things it is tasked to regulate is redlining, the “discriminatory practice in which services (financial and otherwise) are withheld from potential customers”, usually on the basis of race. I suspect that Dr. Cook’s research is relevant to this issue (she also has research on banking as well). (Personal aside: If you don’t know the history of redlining in America, you should learn it; you would learn lots of interesting things, including why there are/were Chinatowns).

On monetary policy, it’s now widely understood that its not neutral with respect to distributional effects defined along income (e.g., Coibion et al.), class (defined in terms of income source), and hence race. So once again, it seems that if one is concerned with assessing the impact of monetary policy, one would want to have in place a governor who has some understanding of these types of issues.

Here’s a list of economists writing in support of Dr. Cook’s nomination (I’d have signed, but I didn’t get the opportunity).

So, in my view, she is extremely well qualified to serve as a Governor of the Federal Reserve. (I’m responding to several commenters’ inquiries here.)

Full disclosure: I was a classmate of Dr. Cook at University of California, Berkeley, but in different cohorts (barely overlapping as I recall). I don’t recall extensive interaction, and do not recall having communicated with her since I received my PhD in 1991.

Update:

Harald Uhlig weighs in here. If an unbalanced panel data set were an issue meriting dismissal, I think I’d be in trouble. If there was a problem with the data set compilation from primary data sources, well a *lot* of people would be in trouble. Let he/she w/o sin cast the first stone (although theorists don’t have to worry about data).