Parallel Paths

• Author: Atish Rex Ghosh

Parallel Paths Finance & Development, March 2017, Vol. 54, No. 1

Atish Rex Ghosh profiles Kristin Forbes, who straddles academia and policymaking

Deworming children seems an unlikely interest for economist Kristin Forbes, who has spent most of her professional career straddling academia and policymaking. But the professor at the Massachusetts Institute of Technology’s (MIT’s) Sloan School of Management has been willing to tread unlikely paths as well.

Forbes, who is also an external member of the Bank of England’s Monetary Policy Committee, has focused on such international issues as financial contagion—that is, how economic problems spread from country to country—cross-border capital flows, capital controls, and how economic policies in one country have spillover effects in others.

But when presented with evidence by colleagues that one of the most cost-effective ways to keep children in developing economies in school was to rid them of parasitic worms, she helped form a charity aimed at deworming kids.

Still, academic research and policymaking absorb most of Forbes’s time—whether at MIT, the World Bank, the Bank of England, or the US Treasury Department, among other places.

Yet her path was not predestined—and more than once, luck or coincidence played a crucial role. Growing up in Concord, New Hampshire, she developed a passion for the outdoors and attended a public high school. Though it was hardly a low-performing school (about half of the class would go on to college), most of her classmates set their sights on the University of New Hampshire. Forbes’s counselors were bemused when she aspired to more prestigious colleges, such as Amherst or Williams. But in an early instance of forging her own path, Forbes did indeed end up going to Williams College.

A wealth of choices At Williams, Forbes was confronted by a wealth of choices and wound up in courses on astrophysics, religion, psychology—and economics. She credits her Econ 101 professor, Morton (“Marty”) Schapiro (later, president of Williams College) with inspiring her interest in the subject—mostly by applying basic economic concepts to everyday life. He spoke of the diminishing, and eventually negative, marginal utility of consuming too much beer (not an irrelevant example on college campuses). Still, she dithered between economics, history, and political science (enjoying the interplay between the subjects), but finally majored in economics and graduated summa cum laude.

After graduation, Forbes pondered what to do next—vacillating between law or following in her father’s footsteps and becoming a doctor—but ended up in Morgan Stanley’s investment banking program. Though she learned about markets (knowledge that would later come in handy for her economics research), Forbes soon realized that investment banking was not for her. And then she caught a lucky break—Richard Sabot, one of her professors at Williams, put her in touch with Nancy Birdsall, who was finishing up the World Bank’s 1993 study of how nations in East Asia achieved economic success and was looking for a researcher to help apply its insights to Latin America.

So Forbes went to the World Bank for a year—and got her first taste of policy-oriented research. Working with Birdsall and Sabot inspired Forbes to...