Man With A Mission: Princeton Economist Atif Mian
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Bibliographic details
- Authors: HYUN-SUNG KHANG
- Published: September 1, 2019
Profile and background
- Author/profile: HYUN-SUNG KHANG; F&D Magazine, September 2019.
- Personal and family details:
- Age described as "The 44-year-old Pakistani-American."
- Married almost 20 years to Ayesha; two daughters aged 14 and 12; a son born "late last year."
- Education and career timeline:
- Undergraduate at Massachusetts Institute of Technology; switched from electrical engineering to mathematics and computer science.
- PhD from MIT in 2001 with a dissertation on banking and governance.
- Assistant and associate finance professor at the University of Chicago business school until 2009.
- Professor of economics, finance, and international business at the University of California, Berkeley, until 2012.
- Joined Princeton thereafter as professor of economics, public policy, and finance.
Research focus and contributions
- Core thesis:
- Excessive household borrowing reflects an economic system distorted by widening income inequality rather than mere profligacy.
- The rise of the superrich concentrates wealth, channels surplus through financial markets into credit that fuels consumption rather than real investment.
- The global economy has become dependent on credit creation to generate sufficient demand for growth, producing a "credit 'supercycle'" that may be nearing an end.
- Key research outputs and recognition:
- Coauthor with Amir Sufi of the 2014 book House of Debt.
- Named to a 2014 list of the world's 25 most influential young economists compiled by the IMF.
- House of Debt short-listed for the Financial Times 2014 Business Book of the Year.
- Empirical approach:
- Emphasis on using micro (granular) data to answer macroeconomic questions; parsing vast amounts of data to show the role of household debt in precipitating the Great Recession.
- Argument that policymakers focused excessively on the banking system and bailed out banks rather than indebted households.
Findings and statistics on household debt and inequality
- Historical debt-to-GDP trend (United States; cited as representative of global pattern):
- "At the beginning of the 1980s, debt to GDP in the United States was about 30 percent."
- "Since then, the figure has ballooned to more than 100 percent."
- Foreclosure and housing market data referenced:
- "There was no one to absorb the 4 million homes that were actually put on the market by banks."
- Mechanisms and macroeconomic implications:
- Concentration of wealth by the superrich leads to excess savings that are funneled into credit markets, enabling broader borrowing and consumption.
- Increased credit supply pushes interest rates lower; with rates at record low levels, further declines are limited, creating a liquidity trap and low growth.
- Resulting sociopolitical repercussions include growing inequality, discontent, and populism.
Policy analysis and recommendations
- Critique of crisis policy response:
- Policymakers erred by rescuing banks at the expense of indebted households during the Great Recession.
- Suggested alternatives the authors argue policymakers could have pursued:
- Facilitate bailouts for indebted households by conditioning central bank and Treasury support to banks on passing funds to borrowers: "We, the central bank and the Treasury, we are giving you free money. You must pass that on to the borrower."
- Order a moratorium on house foreclosures to avoid flooding the market with distressed homes.
- Broader policy stance:
- Advocate for considering household balance sheets centrally in future work on financial crises.
- Support for policy solutions that share the fruits of growth more widely to address unequal growth described as the "fundamental disease" behind the credit supercycle.
Intellectual partnerships and debates
- Research partnership with Amir Sufi:
- Collaboration began after a mutual introduction; shared interest in "using applied microeconomic techniques to answer important questions at the intersection of finance and macroeconomics."
- The partnership produced influential empirical work on the 2008 recession and household debt.
- Reception and debate:
- Former US Treasury Secretary Larry Summers praised the work's importance while defending policymakers of the day and critiquing academics for insufficiently understanding policy constraints.
- Mian responds that political timidity and failures to understand gravity of situations contributed to policy choices.
Advocacy and public engagement
- Inclusive prosperity:
- Founding member of "Economics for Inclusive Prosperity," one of 11 founding members, a network pledged to craft policy solutions to generate prosperity for all.
- Rationale: the "inclusive" modifier demands consideration of the interests of all people and nonpecuniary sources of well-being (health, climate change, political rights).
- Motivation summarized: "Because we are all in it together."
- Personal conviction:
- Research described as "fueled by moral conviction," with a goal of conveying what is happening and why, and addressing social costs such as child hunger, high incarceration rates among black men, and low public investment in infrastructure.
Personal anecdote and style
- Character and temperament:
- Described as mild, thoughtful, and passionate about efficiency; anecdote about "space utilization around the house" and seating arrangements.
- Wife Ayesha describes him as serious and straightforward; practical and pragmatic in early relationship, with "The romance came later."
- Public controversy:
- Appointment to Pakistan’s Economic Advisory Council by Prime Minister Imran Khan was reversed after three days of street protests due to attacks by the religious right over Mian’s membership in the minority Ahmadi community; described as a "bitter disappointment."
Profile by HYUN-SUNG KHANG, F&D Magazine, September 2019 — Man With A Mission: Princeton Economist Atif Mian
Content in this bundle
- رجل صاحب رسالة
- Hombre con una misión ● Finanzas y Desarrollo ● Septiembre de 2019
- Profile of Princeton Economist Atif Mian
- Man With A Mission: Princeton Economist Atif Mian – IMF F&D
- Люди в экономике. Целеустремленный человек – Финансы и развитие – сентябрь 2019 года
- 肩负使命的经济学家 - 经济学人物- 《金融与发展》2019年9月号·第56卷·第3期 - 国际货币基金组织季刊