"The generosity of this friend of the college allows the economics and MSCS departments to sponsor one or two speakers a year who bring expertise of interest to both these departments," professor Becker said during introductions. As expected, her talk drew students and faculty from both departments interested in whether there is more than one way to grow, the topic of guest speaker Fraumeni's talk. Fraumeni's work has included special efforts to account for investments in R&D and education in the macroeconomy, with the idea that if we add in the increases in knowledge and human capital, we may get a different picture of the economy. For her extraordinary pioneering work, she was awarded a Gold Medal, the highest award given by the U.S. Department of Commerce.
In many ways her talk focused around what Fraumeni refers to as "her baby," R&D. She also delved into what she described as her areas of expertise: "measurement issues and national income accounting, human and nonhuman capital, productivity, economic growth, market and non-market accounts, investment in education and the output of government."
In explanation of her work with R&D, Fraumeni said it is her belief that, "neither education or R&D are adequately recognized in GDP [&] although each account for 6 and 3 percent respectively." According to Fraumeni, this is "a rather large slice of our economy." In expressing her concerns about the economy and tentative rumors of a recession, she said, "a lot of things are being done, some of them probably aren't going to help at all."
Fraumeni believes that the answer lies in a reconstruction of how we as society and more largely as a world view GDP. "My career goal is to change GDP," she said, regardless of whether or not she gets published. However, incorporating education as a statistic into our economy is not an easy task, she explained. "In GDP you have to come up with one number that represents all education," she said. Fraumeni stated that this process is difficult when education varies across such a large spectrum.
It seems however, that Fraumeni is up to the task, as she has put much effort into consolidating education into what she refers to as an "input index."
Even in bad times, she said, "education can make a difference, graduate school will make a big difference." Fraumeni also emphasized the importance of education in the future when R&D will be incorporated into the United States GDP. Fraumeni said that it will "change everybody's perspective on what is going on, [&] painting a more realistic picture of the economy." This is especially in the U.S., she said, "where grad school education will have huge pay-offs as a result of R&D's prominence."