Bringing Gravity to Global Economics

Dr. Joshua Lewer knows the earth is round, yet he also thinks it’s flat. “I tell my students the world is flat and fast,” he said. “Flat because it’s easy to ship goods anywhere. There are few physical barriers. People and financial assets can move anywhere. And fast because the goods move fast.”

Lewer is more than a bit curious about how the world’s goods — and the people who create and consume them — move from place to place. Studying these issues has become his life’s work. “International economics is the study of how the world uses its scarce resources to maximize global welfare. It involves wealth and poverty, labor and the environment — the big issues of our age.”

He remembers how his research started: “The questions that intrigued me were, ‘What makes countries grow? Why are there so many people living in impoverished developing countries?’ So, I focused on international trade; specifically, does it matter what a country exports and imports?”

Themes of Globalization

  • It’s an engine of growth, but it creates risks.
  • The losers are clear and evident; the winners are not.
  • It’s a fragile process.
  • Openness brings people together and promotes peace.

To begin, he used a formula derived from mechanical physics — the Newtonian gravitational model. “It’s a workhorse theory,” he said of Sir Isaac Newton’s law stating that the gravitational force between two planets is a function of their relative masses and the distance between them. Often adapted for research in the social sciences, the gravitational model is so useful to Lewer that it has become the heart of his research when studying a variety of factors in international trade and immigration.

“There was a hole in the literature trying to explain trade between any two countries,” he said. “We know that about two-thirds of it is a function of the countries’ relative sizes and the distance between them (as in the gravitational model). By adapting the model, we hoped to ‘test around the margins’ to explain the remaining one-third.”

For example, he has studied whether international trade is affected by a shared religion or language or by a stock of earlier immigrants from the same country. Lewer’s specialty is macroeconomics, the part of economic theory that deals with the big picture of an economy’s health — aggregates such as national income, total employment and total consumption. A recent analysis, co-authored with Bradley professor of economics Dr. Bob Weinstein, explored the effectiveness of macroeconomic policies implemented during two recent U.S. recessions.

‘The Key Is Assimilation’

After using the gravity model to explain aspects of global trade, Lewer applied it to immigration. His research has yielded some novel conclusions, including the reasons certain countries are more attractive to immigrants.

“The ‘Western offshoot’ countries — Australia, New Zealand, Canada and the United States — are seen as newer, less entrenched, more welcoming,” he observed. “Immigrants like to move to where they’ll fit in. The key is assimilation: the ability to resume their daily routines.”

Photo Courtesy of Myrna Carlebur

Talks with Lewer ‘An Essential Introduction’

Although economist Brian Biggs ’08 (above) never took a class from Dr. Joshua Lewer, they interacted often. “He joined the Bradley faculty during my senior year, when I was taking my upper-division electives,” Biggs said. “We spent a lot of time debating the merits of measuring societal progress via gross domestic product growth and discussing practical aspects of empirical economic research.”

In the spring of 2008, the senior economics major was awarded the Davies-Jackson scholarship to St. John’s College at Cambridge University in England. The scholarship for postgraduate work is awarded annually to an outstanding senior at a liberal arts college in the United States who is the first in his or her family to graduate from college. After earning a master’s degree at St. John’s, he went to work at Bloomberg LP and Europe Economics in London before taking on his most recent role as a research analyst at Grosvenor Group.

His frequent discussions with Lewer helped inform his research techniques — and thus his career, Biggs said. “Dr. Lewer showed me in a practical way how to conduct empirical research. Talking to him about the good, the bad and the ugly of working with real-world data and statistical software was an essential introduction to the ideas and methods I use every day.”

The gravity model of trade and immigration taught by Lewer, Biggs commented, provides a “template” students can use to begin to understand empirical economics. “It’s extremely intuitive,” he said. “Not only does it draw comparisons with a familiar idea from physics, but it’s also common sense.”

Another attraction for immigrants is the presence of others from their countries of origin, he added. “We call that a ‘path-dependent’ variable. Others have already emigrated and made a place for them.”

Some aspects of life in the source country make it more likely that a resident will leave. These so-called “push” factors include a large population, poor economic prospects and high unemployment. However, Lewer studies the other side of the coin, too: “pull” factors such as a common language, historical ties and/or a large population (thus, a strong need for additional workers) in the destination country.

At its best, Lewer believes globalization fosters peace. “It’s the universal economic doctrine: Isolation causes conflicts; openness brings people together.” Yet, he explained that the process of globalization is fragile, citing periods in U.S. history when war or other issues prompted the imposition of tariffs to protect jobs or industries.

Lewer also noted that globalization increases risks — interdependence, the potential for job loss, the spread of disease, and negative environmental impacts.

‘A Numbers Guy’

Lewer, the McCord professor of executive management development, has taught economics at Bradley since 2007. Also a research fellow for the Institute for the Study of Labor in Bonn, Germany, he earned his Ph.D. in economics from the University of Nebraska-Lincoln. In addition to having published several dozen refereed journal articles, he is the author or co-author of two textbooks: Principles of Macroeconomics and International Trade and Economic Growth (with Hendrik Van den Berg).

At Bradley, few of Lewer’s students are economics majors. He calls his classes “service based” — designed to give business majors a grounding in the discipline.

“I want students to understand the economic forces occurring all around them and be able to apply economic methodology to improve the environment in which they work and live.”

Lewer has heard his chosen field called difficult, complex — and boring. “I tell my students, ‘This isn’t your parents’ economics class. This isn’t the one in Ferris Bueller’s Day Off, where everyone is sleeping.’ I try to keep classes interactive, with content revolving around current macroeconomic issues,” he noted.

He is proud of his calling. “Many of my family members are in the medical field. My dad’s a dentist. Once, he asked me why I was interested in studying economics,” Lewer explained, then paused. “Now, I’m a numbers guy. I like trends and numbers, and it just kind of fit into what I was. But, it’s more than that.”

He added, “I told my dad what [economist and former longtime chairman of the Federal Reserve] Alan Greenspan told his father: We economists hope we can do some good for the human condition. We study how people use their scarce resources to help each other. It’s a noble study, a noble field.”

By Mary Brolley
Photography by Duane Zehr