Why I left physics for economics

I recently decided to abandon the rules that govern nature for the rules that govern
people and markets: economics. Why would I do such a thing?
Arthur Turrell
Thu 22 Jun 2017 06.30 BST

1,760 26

I
love physics. Brick by brick, you can build new theories from established ones and know that they
will apply not just on Earth but throughout the entire universe. The upsides are incredible: I worked
on the theory and simulation of plasmas (the stuff stars are made of) for nuclear fusion. If nuclear
fusion succeeds in its objectives, it could mean the end of our reliance on fossil fuels, the end of
climate change, and energy security for at least millions of years. The experiments in fusion push the limits
of nature. Every time Lawrence Livermore National Laboratory’s Ignition Facility in California fires its
fusion laser, the world’s most energetic, material is heated from 18 degrees above absolute zero to hotter
than the centre of the sun in just a few nano-seconds. The work was as exciting and intellectually
rewarding as you might expect.

But recently I decided to abandon the rules that govern nature for the rules
that govern people and markets: economics. Why would I do such a thing?
As quantum Scientists are among the most trusted groups in society. Economists
mechanics brought meanwhile … well it isn’t good news, as shown in polls by YouGov, for
down classical example. Worse still, economics is frequently confused with finance, banking,
mechanics, the the short-term ups and downs of the stock market, or just a desire to make as
financial crisis has led much money as possible. Even the Queen seemed to blame economists for the
to a reappraisal of financial crisis. Respect for economics as a profession is very low, and outreach
macroeconomics efforts have been woeful compared with science communication.
 Net trust in various professions. Data from YouGov.

The first reason I thought about changing subject is that all is not well in science research. Precarious
short-term contracts seem to be the norm even for researchers with as much as 10 years’ experience.
Higher Education Statistics Agency (HESA) data show that 34% of all existing jobs in higher education are
temporary and a Royal Society report from 2010 found that as few as 3.5% of those obtaining PhDs go on
to get permanent positions at universities. Even prestigious short-term positions such as junior research
fellowships look increasingly like extravagantly titled post-docs with little chance of progression. None of
this encourages researchers to stay in science. And although the UK has very low science spending per
capita for a G8 country, this isn’t a UK problem: it’s elsewhere, too. Even if it weren’t, opportunities in
other countries can be difficult to take up in practice if you have a partner or family. For my colleagues and
I this meant very difficult choices. Much as I loved physics, it just couldn’t commit.

Meanwhile, I was starting to develop feelings for economics. Rather than the rules that
govern the behaviour of particles, it is concerned with the rules that govern the
behaviour of people; in many ways a much more complex problem. I began to learn
that, just as working as a physicist had taught me to see the world in a revelatory new
A new CERN
experiment targets way through the lens of the laws of nature, so economics could reveal a new vista: one
even higher in which the conduct of people is explained by their incentives. Economics can tell us
energies
how to make everyone better off, for instance through trade, how to change incentive
(eventually)
structures to get better outcomes for organ recipients, and, less importantly but just as
Read more
interestingly, why popcorn is so expensive at the cinema. All of this means that
economics can do a huge amount of good in improving people’s lives. We usually point
to science, technology, engineering and medicine as the drivers of what is good about the modern world,
but I think economics has a role to play that is every bit as important: while the laws of the natural world
are fixed, social laws are not, and economists can shape policy to best serve the interests of humanity. And
while the lack of trust in economists is troubling, I see it as an exciting challenge rather than a reason to
steer clear of the subject.

So, on 5 October 2015, I stood in front of the Bank of England on my first day of becoming a researcher in
economics, ready to switch particles for people. The Bank of England was expressly created in 1694 “to
promote the publick Good and Benefit of our People”. Working at a central bank means that the
policymakers who can steer the course of the economy are just down the hallway, and are eager to put the
best research into practical use for the public good. The kinds of questions occupying central banks right
now are some of the big questions of the age: How does the interconnected and global economy work?
How can we design economic systems to be more robust and to deliver better outcomes for everyone? How
might the rise of the robots affect jobs, or climate change affect financial stability?

These are also truly unprecedented times for macroeconomics. While the financial crisis is over, my
generation is likely to bear the scars of higher unemployment rates, lower wages and lower rates of home
ownership for the rest of our lives. The post-crisis period has been distinctly unusual: interest rates are the
lowest they have ever been in recorded history, the UK has seen the most sustained drop in real wage
growth since the 1800s, and UK productivity growth over the last decade has been negative.
 Annual mean real wages for the UK. Source: Hills, Thomas and Dimsdale, “ Three Centuries of Data v2.3”; ONS

These facts matter. A lot. As Nobel memorial prizewinner Paul Krugman quipped, “productivity isn’t
everything but in the long run it is almost everything”. Robust economic growth may not sound as sexy as
hitting things with giant lasers but higher GDP tends to mean that we can afford more research,
healthcare, welfare and education, that more people are able to find gainful employment, and that firms
are better able to invest and innovate.

Just as I hoped economics would be good for a scientist, so I think scientists can be good for economics.
While historically economics has been insular, with few authors per paper, and a low number of citations
to outside disciplines in research papers, change is afoot. Macroeconomics’ most
highly respected practitioners have been calling for new perspectives since the financial crisis. Some
macroeconomists naively called the period before the great financial crisis the “great moderation”, a term
with echoes of the complacency of scientists at the end of the 19th century who thought they had reached
“the end of physics”. Just as quantum mechanics brought down classical mechanics and started a
revolution, the great financial crisis has led to a re-appraisal of some of the core assumptions of
macroeconomics.

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With this reappraisal has come the willingness to adopt techniques, ideas, and even people from other
subjects. In my team at the Bank of England I work with a neuroscientist, a linguist, physicists,
mathematicians, econometricians, data scientists, computer scientists and, yes, even economists. Subjects
such as network science, psychology, behavioural science, evolutionary theory, agent-based modelling (a
field that can trace its origins back to plasma physics) and computer science are being incorporated into
the macroeconomic mainstream. Some of this interest in outside topics existed well before the crisis, but
the crisis has acted like a catalyst, speeding up the adoption of new ideas. Just as inter-disciplinary
approaches have borne great fruit in the natural sciences, so I believe economics will benefit from being
more collaborative. There’s even been progress on outreach. An exciting twist is that there is more
economic data available than ever before. Macroeconomic theories have always been impossible to test in
controlled experiments but more data mean that theories can more easily be tested and refined by natural
experiments: not only are there more scientists in macroeconomics, there’s more science too.

We live in interesting times shaped as never before by the complex set of dependent trades, relationships
and incentives that we call the global economy. Research in economics can help us to understand it.
Moreover, being in a central bank means that important research finds its way directly to policymakers. All
of which means it’s a great time to be doing economics research, and a great time to be doing it in a central
bank. So I’m sorry, physics: I still love you and always will, but I’m happy that I left you for economics.

Arthur Turrell is a researcher in economics at the Bank of England, and a visiting scientist to the plasma
physics group at Imperial College London.