Due to global challenges such as the COVID-19 pandemic, supply chain disruptions, and geopolitical tensions, the United States is once again adopting explicit industrial strategies.  This follows a long period where free-market policies were primarily favored instead. With the passage of the CHIPS and Science Act and the Inflation Reduction Act (IRA), the National Science Foundation (NSF), the Commerce Department, and other federal agencies are receiving billions of dollars to support the nation’s competitiveness in critical industry sectors and seeking academic expertise to help them spend it wisely. Columbia University’s Initiative for Policy Dialogue (IPD) was launched in 2000 by Nobel Prize winner Joseph Stiglitz. It is a global network of economists, political scientists, and research centers whose mission is to produce high-quality research and translate it into practical guidance for policymakers.  The IPD now has specific plans to establish a high-profile program for novel research on industrial strategy. One prominent IPD expert is Co-PI Eric Verhoogen, who is evaluating the impacts of different types of industrial strategy – to incentivize product innovation; to increase exports; to improve the allocation of government grants for startups; and to encourage the adoption of energy efficient technologies – through ongoing large-scale experiments . Another is Co-PI Martin Guzman, the former Minister of Economy in Argentina, who serves as IPD Co-President alongside Stiglitz.  Together, Stiglitz, Verhoogen, and Guzman will run an academic program to answer foundational questions about why, when, and how to use industrial strategy. Other major grant activities include two international conferences as well as training new experts in this previously neglected field.

The pandemic has only underscored how caregiving systems lack resilience, affordability, or even just staff, and how that lack holds people back from achieving their dreams. The result is renewed policymaker interest in the U.S. care economy, as evidenced by President Biden’s April 2023 executive order to improve access to care and support care workers and New Mexico’s landmark decision to offer free childcare to most families in 2022. Designing and implementing cost-effective, evidence-based policies crucially depends upon rigorous empirical analysis coupled with theoretical models of care. Yet care relationships are well-represented by neither canonical economic models nor traditional economic indicators like GDP. A new research program on the “Social Science of Caregiving” at Stanford’s Center for Advanced Study in the Behavioral Sciences (CASBS) aims to help rethink the philosophical, biological, political, and economic foundations of care, and consider how to translate those insights for policymaking. The project’s two-pronged approach involves developing a research program on the cognitive economics of care, and coordinating and disseminating the findings of a broad, interdisciplinary research effort. Alison Gopnik, Professor of Psychology at UC Berkeley, and Margaret Levi, Professor of Political Science at Stanford, are leading the project. So far, they have organized multiple workshops convening economists, psychologists, political scientists, neuroscientists, computer scientists, and policy experts, among others, to outline a preliminary research agenda and produce a general scientific understanding of care. Topics include studying how humans conceptualize care; the ways in which new AI technologies affect our understanding of care; and the economic consequences of cultural assumptions about gender roles in care. Sloan funding will support research led by Gopnik on the cognitive economics of care; virtual and in-person research meetings; the recruitment and convening of an interdisciplinary Advisory Board to ensure that the program’s basis research meets the needs of economists and applied social scientists; and the dissemination of the project’s research outputs to broad audiences through a variety of academic and non-academic channels.

Cognitive Economics studies how people make practical decisions in practice. Like Behavioral Economics, it acknowledges that choices do not always follow the rational patterns posited by traditional theorists. But whereas Behavioral Economists are often content to describe, classify, and try to 'nudge' away these anomalies, Cognitive Economists seek explanations for how, why, and when making mistakes might actually make sense.   PI Andrew Caplin has been pursuing this goal through the 'Sloan-NOMIS Program on the Attentional and Perceptual Foundations of Economic Behavior.' Under its auspices, an active community conducting research on decision-making has developed new concepts and approaches that now need testing in the real world. Caplin therefore plans to work with distinguished researchers in psychology, labor economics, and artificial intelligence on experiments that specifically address important workforce questions, too. Cognitive Economics starts with the notion that, in real life, there are costs that constrain decision-making other than monetary ones. Gathering, processing, storing, and analyzing information about the choices available are tasks that take time, effort, and attention. Though harder to measure, cognitive costs can be estimated and included in economic models to show why, how, and when it may make sense to make mistakes. This requires different kinds of analysis performed on different kinds of data. Specifically needed are datasets about what people would have done under other circumstances since the notion of a decision-making error can hardly even be defined otherwise. Having obtained such information about workforce decisions, and having obtained considerable conceptual progress with previous Sloan support, this project will test how well Cognitive Economics can actually answer practical research questions of significant current concern, including how cognitive costs affect individuals’ managerial skills, career trajectories, and ability to work with artificial intelligence. Besides producing novel research, Caplin’s team will organize workshops and conferences, develop new resources that make Cognitive Economics more accessible to students and researchers, and convene a broader Steering Committee to provide coordination among the many research groups and disciplines now affiliated with the field.