wumbotarian

When doing a regression, we examine the effects of an independent variable (controls or "right hand side" variables) on dependent variables ("left hand side" variables; in this case, wages).

It is very important that the independent variables are indeed independent. They're not caused by anything else. They're "exogenous". If an independent variable is itself dependent (called "endogenous"), we need to control for that dependent nature with its own independent variables. Otherwise we get fundamentally incorrect results.

Occupational choice is not independent (no choice variable is independent). We can see that the choice of a job would be dependent on preferences for, say, job time flexibility. Or the pay someone gets. If pay is unequal between men and women in a given industry, women will choose based on that pay gap.

Therefore, it is not disingenuous to leave out occupational choice (or other endogenous right hand side variables). You simply cannot do any accurate analysis with dependent right hand side variables. It's not slight of hand done by feminists or anything. It's akin to pointing out that 2 + 2 != 5.

I'll note this is an issue for any wage regression. We know education impacts your wage. but how much education you got is a choice. We need to control for the control, which is hard to do!

Active trading on open markets already prices stocks where the "professionals" think it should be priced, so what advantage do you think active fund managers have?

Who do you think prices those stocks? Active fund managers.

There will always be active managers so long as there is a return to pricing in information into stock prices (Grossman-Stiglitz). There will always be an equilibrium quantity of active managers that is non-zero (though may not necessarily be large).

Because historically, it's been none.

There's a difference between investor results and managerial skill. See: Berk and van Binsbergen 2017.

Thank you so much for your time today Mr. Sumner. I have to say personally you've had a big influence me as someone with a BA in economics and a passion for macroeconomics. My question:

While you fight hard on the internet to push NGDPLT and Market Monetarism in general, there are a lack of models and academic papers associated with a Market Monetarism - a group that is about 7 years old now. When will the Market Monetarist DSGE model be published? Are there economists pursuing your ideas in an academic fashion? While you have obviously pushed people towards NGDPLT, do you think that developing a model would get more academic support behind NGDPLT?

Thank mr trousers