This 22-minute podcast was released June 29, 2020.
“There’s really a lot that you can do in a field with a background in econometrics, in forecasting,” says Kathleen Navin, an economist and director at IHS Markit. She talks with Mary Suiter, assistant vice president and economic education officer at the Federal Reserve Bank of St. Louis, about the challenges of economic forecasting during unprecedented times, like the COVID-19 pandemic.
Mary Suiter: Hello, I’m Mary Suiter, and you’re listening to the Women in Economics Podcast Series from the Federal Reserve Bank of St. Louis. Today, I’m joined by Kathleen Navin, economist and director at IHS Markit. So, Kathleen, thanks so much for joining me today.
Kathleen Navin: Yes, thank you so much for having me.
Suiter: I’ll just start off by asking, how did you choose economics?
Navin: I love getting this question. I actually learned pretty early on, I was interested in it. So when I was in high school as a senior, I was interested in a lot of different fields. I thought I might want to be an engineer. I even took a women in engineering course at my high school, which was an all-girls’ high school, and they were really kind of promoting that at the time.
Also, I was very interested in government and politics. And that actually led me to take a politics course when I was a senior in high school. We actually covered a lot more than just government and traditional politics that you kind of think about. We actually did a little economics. We read some excerpts from Wealth of Nations by Adam Smith. We read The Lexus and the Olive Tree by Thomas Friedman. And that was really my first exposure to economics.
But what really got my attention was, we did a stock paper. And through the assignment, we selected a couple of companies that we followed their stocks. And then, we had to analyze what was happening with those stock figures. We would look at events that were happening, policy changes, and how that affected the stock price. I think I stayed up all night just researching and researching what was happening, you know, the news of the day, how it affected these companies. It was really that understanding of how an event or a policy decision has that effect on the broader economy, how these things connect to one another. And you know, at the end of the day, really, how they affect people’s behaviors, and, you know, me as a high school student, my family, it was really that that really caught my interest.
So I went to University of Missouri, and I was undeclared at first in arts and science. My first course was in intro to micro, and I liked it. But it really when I took my intro to macro course, where, you know, that first experience in high school with the stock paper, you know, then building on learning more about macroeconomics, that’s when I knew that was the major I wanted to pursue. Even though it was a 500-student lecture, the professor would make it a point to reach out to the students who she could see were really doing well on exams, and participating a lot in the breakout sessions three times a week to ask, “Have you thought about majoring in economics?” And so, even though I had pretty much made that decision, it just kind of solidified that that was, you know, a good decision that I was making, and I was really excited to learn more.
Suiter: Oh, that’s great. It’s exciting to know that you had a woman macro teacher who reached out and tried to engage students to select economics as a major. That’s exciting. And it’s good to know that your high school program really piqued your interest in economics, as well. That’s great.
So you talked a little bit about your education. I know then, you’ve got your bachelor’s degree from Mizzou in economics. But you went on to pursue a master’s degree, correct?
Navin: Yes, that’s correct. So at the University of Missouri, they have a wonderful opportunity where I could do a five-year program, where essentially, I was able to start my master’s courses as a senior. So I still finished with my undergraduate in that four-year time, but I was able to get a jumpstart on the master’s coursework. And so then, I stayed one additional year to finish up the master’s, also from University of Missouri.
Suiter: That’s a great way to get your master’s degree. Really tightens up the timeline for students. So that’s terrific. So, you had a woman macro teacher, and that was important to you. Who were your other mentors in your college career?
Navin: Yeah, so she played a pivotal role in my entire college career. Because in addition to being my Intro to Macro professor, she was also my undergraduate academic advisor. And she was really the best mentor I could’ve asked for at such a young age. She continually encouraged me, helped me figure out the best coursework to take. I had really thought about pursuing a Ph.D. That was definitely an option that I considered for quite some time. So she made sure that I was taking the appropriate mathematics, and statistics, and higher level economics courses so that I could, if I chose to consider that. And always just a really big advocate for me, ensuring that I was taking advantage of just different opportunities that would come up. There was the opportunity to tutor through the department. Also, I loved teaching from a very early age, and she helped me become a teaching assistant through the department. So I did that my senior and graduate year. And she was really just always in my back corner, so it was wonderful to have that support.
I also had, in addition to her, I had a wonderful undergraduate thesis advisor who really helped me develop my research skills, which as we know is really critical for a lot of careers in economics. So between those two, I really just had a great support system that helped me through, both my undergraduate, and then, even during my master’s year we were constantly in touch, and they were really great mentors.
Suiter: That’s wonderful. And so, you left, obviously, left with your master’s degree. Can you talk a little bit about your work experience in economics?
Navin: Yes. So when I was a teaching assistant at Mizzou, I did the courses macroeconomics, and then also money and banking. So through that, you know, in addition to taking the courses themselves, but also teaching them, I really found a love for macroeconomics and also monetary policy. So really my goal after studying was that I wanted to work for the Federal Reserve System. I was so interested in monetary policy, and I actually was able to join the research department at the Federal Reserve Bank of Kansas City as a research assistant in the Department of Macroeconomics and Monetary Policy.
So really just being able to pursue those areas that really interested me, learning from the incredible economics research staff at the Federal Reserve Bank of Kansas City. It was a really wonderful opportunity right out of college too to work there.
Suiter: So talk a little bit more about that RA experience for those who might not know what an RA does.
Navin: Yes, so it’s a great job in economics. Coming out of college and then kind of seeing how what we learned in school can be applied to the real world. We do a lot of research. So the typical situation is that a research associate may work for a few or may do support for a few economists. I had a very unique role in that I was known as the policy research associate, where I would help prepare the presentations for the staff outlook and pre FOMC meetings.
And that was really eye opening for me because I was very interested in monetary policy. And being able to look at what are the data series that the economists are looking at to get a sense of how the economy is evolving. And I was able through that role to work with pretty much the entire macro and monetary policy staff. And that’s really when I became interested in forecasting, which is more what I do now. Because I saw how important it was to get a sense for where the economy is, where it might be going, and how that could influence the appropriate path for policy.
Suiter: So after you completed your RA at the Kansas City Fed, then did you move into your current position or did you have another?
Suiter: So could you talk a little bit about your current position?
Navin: Yes. So I, you know, as I mentioned earlier, when I was in school, I really considered doing a Ph.D. in economics. That’s why I pursued the degrees that I did with the additional master’s so that I would be ready for if I decided to do that. But as I worked at the Federal Reserve Bank, I loved the day-to-day, I loved having the data come in in the morning analyzing those data series and what it meant for the outlook.
And so, I decided instead to apply for a position at the time Macroeconomic Advisers. So it was a company that did forecasting. It forecasted the U.S. national economy. It also would look at current topics and what that meant for the economy. So it was really just, again, my interests were just, I just had to apply. And it worked out very well. And, so, yes, that, I have been here now for 10 years, and it is now part of IHS Markit. So that is my current position, and, yes, so that’s how I ended up in this forecasting role.
Suiter: You’ve expressed your love for forecasting. So what are some of the tools that you learned in your college career that really help you in your day-to-day forecasting work? Or things you learned in your role as an RA, as well?
Navin: Yeah, so the very interesting part about my position is that I do use a lot of the coursework that I learned in school. So sometimes you’ll hear, maybe a position maybe it’s the foundation of learning how to research, or you know, just learning different approaches to your work that help. But really, I’m using that macroeconomic theory and also the econometrics coursework that I took in my undergraduate and graduate on a regular occurrence.
And one of the things that I really enjoy about it is we have a macro model, where we are able to look at the U.S. national economy and really analyze the situation. So, if you have a stock market decline, what does that mean for consumer spending, for households? If you see movement in the unemployment rate, what does that mean for income and households? And so, being able to do that modeling work is really just kind of, at the end of the day applying those tools I learned in school through my macro and my econometrics courses on a day-to-day level.
Suiter: That’s exciting because as you, I think, mentioned, so it’s so often students are asking themselves, why, what did I learn that has anything to do with the work I actually do. But in your case, it really does.
Suiter: So that’s exciting. What are some challenges in the forecasting field that you see?
Navin: The one I would say mostly is that there is a lot of uncertainty in forecasting. As we’ve learned in the last few months with the COVID-19 outbreak, things can change very quickly. However, at the end of the day, it’s also what keeps it interesting and a constant challenge to really be learning from these new experiences.
I think at the end of the day, those challenges are what keep us going, and trying to find new ways to understand the economy that maybe this new event allows us to see some insight that we didn’t have before. But it definitely is changing very quickly, and there is a lot of uncertainty, which will definitely keep forecasting challenging.
Suiter: So what are some rewards you see for people pursuing a career in this area?
Navin: Well, one of the things I love about it is that the techniques that we learn, they’re really fundamental techniques, and you can apply them to a lot of areas of economics. So I think, you know, there’s really a lot that you can do in a field with a background in econometrics in forecasting. So I think by pursuing those areas, you really are able to, you know, broaden kind of the field that you can work in by having a good foundation in forecasting.
Suiter: And as a woman in economics, what kind of challenges have you faced, and how have you overcome them?
Navin: Well, I’ve actually been very lucky in my work experience. There’s not really an event that I can point to. But I will say when I first started out, I was doing, in my undergraduate coursework, working with my adviser, knowing that perhaps I would want to go into a Ph.D. in economics or research, I knew that it was important for me to have a really strong math background. And I was majoring in a bachelor of science in economics.
And I would always get comments about, “Oh, I don’t think you meant to do that. I think you meant to do the bachelor of arts in economics because, you know, this one has all the math. So I don’t—did you realize that?” And these comments would just always surprise me, because, yes, I was aware [Laughs] of my major and what it would entail.
And it was just kind of experiencing that for the first time was a little eye opening. But I really just had to move through it, basically ignore those comments, and know and be confident in my decision that, yes, I was pursuing a math-oriented career. And that was something I was excited about. So, basically, just not letting those comments influence my decision. And looking back, I’m so happy, because I can’t imagine if I had changed my major, and you know, I wouldn’t be able to pursue the work I’m able to do now.
Suiter: It’s wonderful that you persevered, and that you had the confidence to continue, and to ignore those comments. That’s so important for other young women to hear that people might make those types of comments, and you have to persevere, and have confidence in what your choices are related to your field of study. So that’s great that you did that. Congratulations, that’s really terrific.
Navin: Thank you.
Suiter: So you mentioned this. You know, right now, we’re in a really unique time in the world with the response to COVID-19 outbreak, and you mentioned the uncertainty this presents in forecasting. Are there other things related to COVID-19 or other aspects of this change that have affected your work?
Navin: Yes. So kind of going back to what I mentioned before the forecast completely changed in a very short period of time. As we saw, the unemployment rate, for example, went from a 50-year low to the highest rate since the Great Depression in a span of about two months, I believe. So, you know, it really meant rethinking the entire forecasts, rethinking that new baseline. But also, thinking about different alternatives, if things were to be a little bit better or worse. And given the higher uncertainty overall, those alternatives become a lot more important.
But the other area that’s actually been very interesting is the amount of data that we’re now looking at has really increased. So just trying to get a handle on what’s happening in real-time, we’ve started looking at data sources like Open Table, for example, the app that I think a lot of us have on our phones. You actually can look at that data and get a sense for, are people dining out, are people making reservations, and then dining at a restaurant gives us a sense of, how is consumer spending in that area doing right now.
Also, we’ve been looking at things like TSA checkpoint numbers. Gives us a sense of air travel. And so, those are ways where we’re looking at a lot more data sources, and that we weren’t really looking at before. And it’s, really just to get ahead of that traditional government data that’s going to come out with a little bit more of a lag. So that we can, make sure that our GDP forecasts and our sense of the downturn and the recovery, we’re able to update them more and more in real time. So kind of learning about those additional data sources has been a really interesting part of this experience.
Suiter: And so, those new data sources, I know, you just mentioned two, but there are probably more. As you see us returning to normal, whatever normal is, but as you see us moving back to a more significant group of people being actually out of their homes and moving about in the economy, do you think you’ll continue to integrate those new sources of data into your forecasting?
Navin: Yes, definitely. There’s been, other areas looking at credit card data, and that’s just something that’s really going to help make our forecasts overall better. And I think that it’s been an important thing to learn about these additional data sources, and that we will continue to look at them to make sure that our forecasts, you know, incorporate as much information as really we’re able to look at.
Suiter: I know, you encourage young women to consider economics as a major. Why do you think that’s so important that we have more women and underrepresented minorities enter the field?
Navin: Well, one of the biggest areas, especially in the type of economics that I’m looking at is really policy oriented. So whether it be monetary policy, or fiscal policy performed at the state and local level. So just knowing that those decisions are being made by economists, people that are looking at the economics behind these decisions, I think that’s a really key reason why it’s important to see more women and minorities involved in making those policy decisions. Allowing those policy actions to reflect a broader range of people and perspectives, in my view, can only make it help that policy be more effective.
Another thing I always think about too is even though I don’t do a lot of long-term research, that is a huge area of economics, especially at the university level. And so, you know, it’s very common that an individual’s background is going to influence the type of questions that they want to answer, the research they end up doing. So if you have a more diverse group of economists in economic research, you know, the hope is that we’ll see a much broader wealth of knowledge coming out of the field. Again, that’s going to help policy decisions. And we love information. So the more that we have is really helpful. And then kind of the last thing that I like to think about is just the more women and minorities that we see represented in economics I love the idea of having more role models for younger students, and that maybe they’ll see someone that they can relate to. And maybe that’s the difference in their decision to pursue a career in economics. And again, I think that just helps broaden the profession.
Suiter: So could you talk a little bit about how you mentor women in economics, and how you try to draw young women into the field?
Navin: Yes, so the, I’ve had wonderful experiences in the last few years with the Women in Economics Symposium. I was able to participate in the two years hosted by the St. Louis Federal Reserve. And that was a wonderful experience because I was able to meet with young women that were either studying economics, or thinking about economics, and just share my story. And be able to be a contact for them if they had questions, or once they decided to enter the job market, they would have someone they could reach out to. So that has been a wonderful experience.
Also, I think as I mentioned earlier, I went to an all-girls’ high school here in St. Louis. And they actually have a day where the students are actually all off, but they choose to learn about different careers that may be of interest to them. And one of the sessions is a day in government. And it’s actually the same teacher who first introduced me to economics through that politics course, who is the teacher that chairs the day in government event. And they come down to the St. Louis Federal Reserve, and they start the day learning about economics.
And I love that because a lot of these young women are interested in government, they’re interested in making a difference. And I think, we’ve talked about this before, but you know, economics is a great way to do that. And so, being able to teach them about monetary policy, about forecasting, about the importance of kind of understanding how the economy is evolving, and making those policy decisions, and that that’s a field they may not have even known about.
And so, that is a wonderful event that I’ve really met a lot of inspiring young students. And, you know, I really learn a lot from them. It also kind of helps remind me why I love economics, and why I got into the field. So I think, through those events, the last few years, I’ve been able to get out there a little more. But it never feels like quite enough. I’d love to be doing even more than that. So always looking for opportunities to perhaps make a difference.
Suiter: Well, we certainly appreciate what you do. Thank you. We appreciate you being involved in Women in Economics Symposium. We do have another one scheduled in February of 2021, so we’ll be reaching out to you about that. And we appreciate your support of the high school program, as well. So thank you for all that you currently do. And I agree, your enthusiasm and your ability to articulate your love of economics and the value of economics for young women is something that we should capitalize on more. To engage young women who want to change the world and help them understand that economics is a way to do that. So thank you for all that you’re doing there.
Navin: You’re welcome.
Suiter: Is there anything else you’d like to discuss about women in economics?
Navin: I have had such a wonderful career so far. I’m able to work in something that I find interesting. And I really think it’s important. It contributes to a field that helps determine policy. You know, it’s something I’m excited about every morning when I wake up. And so, I think just given that I would just love to see more young women learn about this as a potential career. I think podcasts like this one are awesome because you are able to learn economists aren’t just one type of research. There isn’t one job in economics.
It is a very, very diverse field. And so, it’s very likely that there’s an area of it that, if you already have an interest in applied math, if you have an interest in government and making a difference, that there’s probably going to be an area of economics that you would find interesting. So I think that by just kind of getting the word out about how great this profession is, and what you can do with it, that hopefully we’ll start to see those numbers for women in economics start to increase in the future.
Suiter: I hope so. That’s certainly a goal of our podcast series, and our symposium, and other work we do so. I certainly support that idea.
To hear more from the Women in Economics Podcast Series, visit StLouisFed.org/WomenInEcon. That’s one word, StLouisFed.org/WomenInEcon. You can also stream Women in Economics on Apple Podcasts, Spotify, or Stitcher. Or ask your Amazon device, “Alexa, play Women in Economics from TuneIn.”
Thank you so much, Kathleen, for joining us. I really appreciate it. Thanks for taking the time to be with us. And as I said before, thanks for all of the things that you do to encourage and support young women who might be seeking careers, helping them to choose economics.
Navin: Yes, thank you so much for having me. This has been a wonderful experience.