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Research With Relevance
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ust three years after getting his doctorate in economics from Stanford University, Assistant Professor Korok Ray was analyzing data and making economic policy recommendations that would reach the ear of President George W. Bush. In 2007, Ray joined the Council of Economic Advisers (CEA) as a senior economist, serving under his former thesis adviser, Edward P. Lazear, then CEA chair. Since its establishment in 1946, the council has offered independent policy analysis to the White House. Ray covered financial markets — normally a quiet area, because the White House traditionally does not intervene in the financial markets.
The financial markets were not so quiet during Ray’s year at CEA. “What I saw was essentially a recession happening in slow motion,” Ray says. At its beginning, the recession was invisible to the general public, but the distress calls — from lobbyists and industry groups in real estate, bond markets, and finance, among others — began to add up to something bigger. Ray and colleagues analyzed proposed solutions and crafted policy recommendations, from programs designed to help troubled homeowners to Bush’s January 2008 tax cut, a precursor to other stimulus initiatives. Ray’s time in the White House, which ended in 2008, left him with more than just great stories to tell students in class. It left him with the desire to craft research that would directly influence policy. In deciding his next step, he opted not to return to the University of Chicago, where he had taught 12
from 2004 to 2007. Instead, he moved to where policy is born and joined the faculty at Georgetown University’s McDonough School of Business. “I wanted to do research on financial regulation,” Ray says, “and I wanted my research to be more policy relevant. Georgetown is the best place for that.” In the wake of the recession, Ray’s research has focused on regulation and standards. “I came to this in the White House,” he says of this timely focus. “People were saying, ‘We have a huge regulatory collapse. The system has failed, so let’s create a universal regulator.’ That was the knee-jerk response. So I am asking, does that actually make sense?” Ray has tackled the regulatory question by focusing on accounting standards. In a working paper, “One Size Fits All? Costs and Benefits of Uniform Accounting Standards,” he examines the two
Korok Ray
msb.georgetown.edu