Nicholas Bloom: belief

Transcript context

…Now, your dissertation was on the topic of adjustment costs. Is there a lens through which I can read a lot of your subsequent major topics as actually all being about adjustment costs — speeding up progress in science, copying management productivity techniques and why it’s so hard, the effects of uncertainty — it’s hard to adjust to it. Are you still working on adjustment costs? Yeah, it’s like my first academic love was adjustment costs. It seems strange to say that. I remember Bob Hall saying — he went to some MBR event, saying — there was a huge shouting match about adjustment costs, and he said, “How can anyone get so excited about” — you know, Bob Hall has some famous papers on adjustment costs, so it’s kind of funny — “How can anyone get so animated and excited about something so boring?” Bob and I and many others have worked in it. I realized halfway through my PhD, it was hard to excite other people about adjustment costs. I honestly stopped talking to people. Again, coming back to the public economics thing. My friends in particular — their eyelids would start drooping. I was just boring them to tears. That’s how I ended up morphing to looking at uncertainty. I realized if you have high adjustment costs — as in, it’s expensive to hire someone and fire, invest and disinvest — uncertainty is really costly because you can’t change your mind. But yeah, it has colored my thinking a lot. I was thinking about working from home. Just to be clear, under COVID, with social distancing, working from home, I think this is going to last for another, let’s say a year. It’s hard to know. If, after a year or more, we are still social distancing and working from home, we’ve been in that regime for up to 18 months. A lot of firms are going to have adjusted individuals to that process. You can call it inertia. You’d also think of it as adjustment costs, but this is why I think a lot of what’s happening now is going to stick, because of that. Yes, and in some senses, that has colored my thinking. Just you personally, relative to your level of talent — are you a person of high or low adjustment costs when you need to adjust?…

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