2 minute read
Bring in the Scientists: Economics Prof. John Friedman
John Friedman, Brown University Economics Professor
Tracking the economic impacts of COVID-19 in real time
public database reports daily statistics on spending, employment and other key indicators
THE APPLIED MICROECONOMICS work of economics professor John Friedman involves analyzing huge amounts of data. “When the pandemic hit, we lost access to some data sets,” Friedman said, and progress on his work was greatly slowed. But before long, he said, “We were trying to think about what we could do to be helpful.”
Friedman does much of his research through Opportunity Insights, a nonprofit that he is a codirector of and which is dedicated to using “big data” to turn its findings into policy change.
He brainstormed with his fellow directors, Raj Chetty and Nathaniel Hendren of Harvard, and soon a new idea came up: to develop a real-time economic activity tracker.
During the pandemic, they believed that businesses and others would especially want the most up-to-date statistics on income and spending to help make policy decisions and adjustments.
By May 7, the database, Opportunity Insights Economic Tracker, was in operation and publicly available, following successful negotiations with many private companies to allow use of their data on an anonymous basis.
“It has been quite a bit of work on our part but a testament to the public-mindedness of these companies,” Friedman said.
A month later, Friedman and his colleagues published a major research paper based on the tracker, showing its ability to document—faster than had been done before—consumer spending, business revenues, employment rates, and other key indicators.
By tapping into private companies’ data, important information and insights that previously were not available for months through usual government sources were now possible within days or a few weeks. Government websites became among the users of the data from Friedman and his team.
The response to the tracker was tremendously positive. Policymakers started using it, as did private companies and other academics. Media around the world wrote about the tracker and its results and used the newly public data to do their own analysis. Friedman and colleagues started briefing U.S. senators and House members using the tracker.
At first, it was “an all-hands-on deck moment,” Friedman said. After a couple of months, he and others have been able to get back to other research, but the tracker has continued to be a major project.
He thinks the tracker is headed toward “changing things in a few different ways for economic research and policy.” The idea of a real-time tracker had been talked about in the past, but never accomplished.
“What we capitalized on here was that we are in a pandemic,” he said, “and it motivated companies to do things they wouldn’t ordinarily do. Now this is a tool that is out there for policymakers.”
Friedman added, “This is going to affect the way policy is made,” explaining that real-time data could allow for more targeted decisions, including by government.
“We’re not going to give up on thinking about long-term upward mobility,” which had been Opportunity Insights’ previous largest research niche, “but we will keep going on this. This is a space we are going to continue on.”
