Thinking about something as abstract and all-encompassing as peoples' beliefs may appear to be the job of a social psychologist or perhaps a trial lawyer, but certainly not an economist.
Not so, according to Anthony Santomero.
The president of the Federal Reserve Bank of Philadelphia and a former Wharton Finance professor, Santomero explained to a room full of listeners in College Hall Wednesday night that beliefs are central in determining "economic decisions and economic policy-making."
"Economists generally talk about people's 'beliefs' in the context of their expectations about the future," Santomero said."Yet, these expectations are at the heart of virtually every economic decision people make today."
Santomero delivered a formal speech lasting about 30 minutes, then proceeded to field questions from the audience.
The crowd, composed almost entirely of faculty and community members, seemed both interested by and skeptical of Santomero's positions.
The world-class bank leader stressed the Federal Reserve's important role in establishing trust among consumers, allowing them to believe that the "Fed" will work to stabilize prices and minimize inflation.
"Stated simply, the more people believe in the existence of price stability, the more effective monetary policy will be as it tries to offset shifts in demand that deter the economy's ability to reach its potential," Santomero said.
However, not all in attendance agreed with Santomero.
"The policies of the Federal Reserve are based on history," and are not apt for the times, 1986 College alumnus Emil Nu¤ez said following the presentation. He suggested the Federal Bank was "wedded to old beliefs" and no longer had the "levers on the economy" that it used to.
Santomero seemed used to such critiques, joking that his "other speech" discussed the limits of the Federal Bank. He agreed that the bank has shortcomings in terms of "how much we can affect."
Mostly, the young and old alike in the crowd seemed appreciative of the opportunity to hear from an individual of such prominence in the Federal Reserve.
It's a "really rare chance" to hear someone who can directly speak to "the economic situation" and "job opportunities," Drexel junior Hieu Hoang said.
Peter Maran, a consultant and husband of a Penn alumna, was also grateful.
"In the business world, you don't get the depth of consideration" from individuals that one finds in "the university world," Maran said.
In the end, Santomero seemed concerned with giving people a sense of assurance in the economy and its future.
"In some ways, beliefs assume characteristics of a self-fulfilling prophecy," he said. "If people believe the economy is healthy and strong, then that belief helps to make it so."
