Tom Cunningham | Executive Profile | ATLANTA TREND

An Economist’s Work Is Never Done
By Karen Rosen

After more than three decades analyzing the economy and gathering insights into the labor force, Tom Cunningham has drawn an undeniable conclusion about his own job.

An economist is never off the clock. 

“You meet people at a party,” Cunningham says, “And you ask, ‘What are you doing? Why are you doing it that way? Are you hiring more people? Why? Why aren’t you automating? How are you doing on refinancing your house?’ It never ends.”

His wife Rosemary is also a Ph.D. economist, so she understands.

Cunningham recently retired from the Federal Reserve Bank of Atlanta, where he spent 30 years, and is actively exploring opportunities in both the public and private sector.

A specialist in open economy macroeconomics and regional analysis, Cunningham is used to looking at the big picture.

In his last role with the Fed, he was Vice President, Senior Economist and Regional Executive.
Cunningham traveled the state talking to groups and individual businesses to “gather economic intelligence from around the district in a systematic way to help inform policy.”

This data, collected in real time, helped the Fed with its forecasting.

Cunningham says the Sixth Federal Reserve District, which comprises Georgia, Alabama, Florida, parts of Louisiana, Mississippi and Tennessee, is quite representative of the nation as a whole in terms of its economic composition.

As an economy, the Southeast is about the size of Italy or Canada. It is engaged in trade with the rest of the world, although in its case the rest of the world is mostly the rest of the United States.

According to its website, the Fed’s mandate is “to promote sustainable growth, high levels of employment, stability of prices to help preserve the purchasing power of the dollar and moderate long-term interest rates.”

Recently, Cunningham says the Fed has been especially interested in labor market dynamics. With a lot of jobs being created, but not a lot of wage pressure, the Fed is trying to understand why that is happening. Raises are holding at about 2 to 3 percent.

Another current issue involves the exchange rate as the dollar appreciates with respect to other currencies, including the Euro, which has fallen dramatically.

The exchange rate has a direct impact on firms that are importing and exporting, as well as an indirect impact on firms competing against those engaged in foreign trade.

A consistent theme in Cunningham’s interactions with the business community was that the economy has gotten better since the recession. “Even firms that are not recovering robustly are still saying, ‘It’s not great, but there’s certainly a lot more confidence out there than there was a couple of years ago,’” he says, “so that’s a good thing.”

When interpreting anecdotal data in the context of a forecast, he adds, “The question is, ‘Which model best corresponds to reality or how should we be shading our narrative in view of what we’re hearing?’ The problem with doing hardcore econometric forecasting -- and the Fed is really good at that -- is you really don’t get a feel for what’s happening until a long time after the event has occurred.

“The numbers tell you what happens, but don’t give you motive, and motive can be really important.”

Growing up in Reedley, California, in the San Joachin Valley, Cunningham originally wanted to be a lawyer. However, an economics course at California State University, Fresno changed his mind.

“I just thought that that was the way the world worked,” he says. “I became an economics major and haven’t looked back.”

He was fascinated by economics because it is “a systematic set of tools for thinking about choice -- both at a macro and micro level -- to allocate scarce resources. Economics gives you a lot of tools for thinking about how to make those sorts of choices under constraints, whether it’s your own time and money or whether it’s a nation’s output.”

Cunningham graduated summa cum laude and went on to Columbia University, where he earned a master’s degree, a master’s of philosophy degree and a doctorate in economics. The sponsor for his dissertation, "The Asset Side of Money Liabilities,” was Edmund S. Phelps, the winner of the Nobel Prize in 2006.

Cunningham met his wife in Manhattan. After finishing their degrees, they went on the market together, accepting offers in Atlanta.  Rosemary Cunningham is now the Hal and Julia T. Smith Chair of Free Enterprise at Agnes Scott College. The Cunninghams live in Decatur with their 16-year-old daughter and have an older son who is married.

When Cunningham joined the Fed in 1985, he was the youngest economist in the department.
“If you want to do monetary theory or macroeconomics, the Fed’s a great place to be,” Cunningham says.

Over the last 30 years, he had exposure to and experience with different divisions in the department. Cunningham, who attended the Executive Development Program at the Wharton School in 1994, even ran the department on an interim basis.

Before being named Regional Executive, Cunningham was associate director of research. He has also been vice president in the research department, where he was responsible for the regional and Latin American research teams.

Cunningham served on the Bank's Personnel, Information Technology, and Risk Management Committees and was a member of the Federal Reserve System's Information Security Group and Technology Services Council.

Stepping outside his usual area of expertise, Cunningham accepted the role of acting director of the Bank's Center for Real Estate Analytics.

“That was actually a lot of fun,” Cunningham says. “Learning new stuff is pretty cool and I interacted with all these people all the time anyway, so in that sense, it wasn’t a wild divergence from what I was doing. It’s just that in administrative terms, you’ve got to be a lot sharper on those issues than you were if you were just sitting across the table from some person listening to them talk.”

He also served as interim head of the finance group. Cunningham enjoyed being “the face of the Fed” on his travels and also in giving more than 650 public speeches and conference presentations.

“Getting out and interacting with the public is really a good idea and fruitful,” he says. “I say, ‘Here’s what we’re trying to do and why we’re trying to do it.’ Explaining that in a forthright way to the public is a really good thing.”

For example, Cunningham had been talking to various firms in Brunswick for a while before going down to the coastal city last month to follow up. “What we like to do is go back and ask them the same questions and see how their answers change,” he says. “It’s a standard joke in teaching economics that you only need to write one test because the questions never change, but the answers always do.”

Cunningham’s experience in front of a classroom has carried over to his full-time job. He taught at Barnard College, Columbia University, and at Iona College, during graduate school. While at the Fed, he was a visiting assistant professor in the economics departments at Emory University and Agnes Scott.

“The comments I’ve heard is that I can make things understandable,” he says. “That’s really a valuable contribution to be able to let people see where they are in relation to the larger economy and how to think about developments in the economy and the way they are going to impact their businesses.”

Cunningham’s conclusions after synthesizing the information his team gathered went to Dennis Lockhart, the president of the Atlanta Fed, who could then choose to bring them up at the Federal Open Market Committee.

“There’s always this process of balancing various parties’ interests and making appropriate policy and that’s hard. Whoever is coming out on the short end of that will complain and whoever is on the long end of that will not. The people that are better off aren’t holding rallies out in front of the building.”

Though Cunningham is no longer inside that building, he’s still an active economist.
While mulling his future options, he’s traveling with his daughter to fencing competitions, where there are always new people to meet and learn about their lives.

And what does Cunningham do when he’s not talking about the economy? “Sleep.”


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