Macroeconomists Can't Keep Ignoring Race and Gender

The models that researchers build to understand the economy tend to be blind to race and gender, as if macroeconomic policies typically affect blacks the same as whites and women the same as men. Increasingly, that's looking like the wrong way to go about it.

Academic macroeconomists get a lot of flak for using models that oversimplify the world -- for example, by having one "representative agent" stand in for all consumers. This is more than a bit unfair, because they have been studying models in which people differ in important ways for at least 30 years. This vital research agenda has looked at such things as the distributions of income, wealth and employment, seeking to understand how they change over time and through the business cycle.