Roberto Bande: «Collaboration between different areas of knowledge is essential to respond to society's challenges»
Today, scientific progress cannot be understood without interdisciplinarity, an innovative approach that promotes collaboration between different academic disciplines and that allows us to cross established boundaries.
This concept, which forms the foundation of Campus Terra, is based on cooperation, communication, and the creation of new perspectives to find solutions to the complex problems facing our society.
At the heart of this lies economics, a field of knowledge with a symbiotic nature that has demonstrated its innate ability to integrate into the knowledge structures of different academic realms for many years.
In order to get closer to this fascinating world and understand the mechanics that govern it, we spoke with Roberto Bande Ramudo, researcher and professor in the Department of Fundamentals of Economic Analysis at the University of Santiago de Compostela, dean of the Faculty of Business Administration and Management at Campus Terra, and president of the Galician Association of Regional Science.
-You have more than 25 years of experience in teaching and research. How has your approach to teaching economics at the university evolved?
-University teaching has undergone substantial changes since I began teaching in 1998.
At that time, classrooms were still overcrowded, and it was easy to find groups of more than 150 people. Teaching in that context prevented the use of methodologies that allowed students to participate more dynamically and interactively in class. Fortunately, we evolved towards a less crowded model in which contact with students is more direct.
However, many years ago, I began incorporating small elements that are now commonplace in class but which were very novel at the time, such as the use of role-playing games to explain how the interbank market works and the role of the central bank in determining the money supply; video recording of classes for later use on the virtual campus by students; and the use of macroeconomic simulators to solve complex economic policy problems.
This year, I began introducing gamification, although there is still much to learn in that regard. The important thing is not to get stuck and to keep trying new things.
-From your experience as dean of the Faculty of Business Administration and Management at Campus Terra, what are the main challenges you see in training future economists?
-More than in training, which I believe is adequate and comparable to the training given to economics or business administration students at any prestigious university in the world, the fundamental challenge is for them to be able to apply all the theoretical and practical tools to real contexts, such as public policy management or business management.
From the teachers' point of view, many of us need to delve deeper into the use of case studies, simulations, and teacher-guided group work, among other approaches. In other words, a range of methodologies will enable students to understand how to apply the knowledge they have acquired to solve specific problems.
-Throughout your career, you have worked on consolidating the Economic Analysis and Modeling Group (GAME), a European benchmark. What do you consider to be the group's main contributions in recent years?
-We have made great strides in many areas and fields. Over time, we have specialized in applying impact assessment techniques, whether for public policies or specific actions. This is quite possibly our greatest strength as a group.
Among the most important contributions, I would highlight the local impact analysis of the Camino de Santiago, commissioned by Turismo de Galicia, which opened up many sub-lines of work, and the economic impact analysis of the Campus Terra in the province of Lugo, commissioned by the USC itself, which demonstrated the importance of our university for the surrounding area.
We have also produced the economic and social impact report for the Low Emission Zone in Ciudad Real, which is, incidentally, one of the few LEZs that was not overturned by the courts, precisely because of the quality of the technical report we produced as a group.
We have developed projects on social policies, rural tourism, employment policies... In short, we are a European benchmark in the application of these techniques across various contexts.
-You have also participated in research projects that address high-impact issues such as climate change in aquaculture. What challenges does integrating economic analysis into such interdisciplinary areas present?
-The work I did with Professor Gonzalo Rodríguez and his research group shows that collaboration between different areas of knowledge is essential in order to respond to the challenges facing society.
In the work you refer to, we worked closely with researchers from the CSIC's Marine Research Institute, with whom we developed a project that analysed the impact of climate change on the incidence of red tides and the effect on mussel production.
Using productivity data per raft estimated by biologists as a consequence of the increased incidence of red tides, we economists analysed the impact on purchase prices and, therefore, on the profitability of the farms.
In other work, we analysed the integration of aquaculture and wild fish markets through price behaviour. All of this demonstrates that these collaborations are crucial in providing more comprehensive answers from science to the various problems facing society, such as climate change and global warming.
-In the European ReFist project on the design of financial systems in Europe, you contributed to the development of SVAR models. What key lessons did you learn from this work in the post-2008 crisis context?
-The most important lesson is that the design of the financial and institutional framework is essential for a successful response to a crisis as significant as that of 2008. I believe that governments have learned from the experience that the response to COVID-19 and the energy crisis resulting from the war in Ukraine have demonstrated that the approach we formulated at the time of that project was sound. I would like to think that part of the success in responding to these crises is due to our contributions.
More specifically, this project initiated a very interesting line of research, focusing on the macro-level relationship between unemployment, consumption, and economic growth, which served as the basis for developing subsequent projects.
-In your research, you delved into topics such as precautionary saving. How important is this behaviour in today's economy, especially in contexts of uncertainty?
-Uncertainty is the greatest enemy of economic agents, as it prevents them from making appropriate decisions, such as consumption or investment decisions. In a context in which the trade war triggered by the US, aggravated by the US attack on Iran, is introducing uncertainty into all areas of life, I am concerned about the impact this may have on consumption/saving decisions and, therefore, on the economy's ability to finance investment, especially in a context of record public debt.
Uncertainty may lead to an increase in household savings, resulting in lower consumption (and lower aggregate demand). However, the greater availability of financial funds does not necessarily mean that they will be channelled into private investment, given the high public debt ratios, which may end up absorbing all these savings, especially if military spending increases. I hope not, but there may be a slowdown in global economic growth.
-One of your recent projects analysed the economic impact of the Campus Terra in the province of Lugo. What were the main findings, and what role do you think the university should play in regional development?
-As I mentioned earlier, in this project, we analysed the economic impact of the campus in the province of Lugo. We demonstrated, using extensive and well-established techniques, that a small university campus with six faculties is capable of generating a very strong return in terms of economic output and employment.
What the study shows is that society must take care of the campus, ensuring it functions properly and has the necessary resources to develop. The presence of students in the city has an enormous return, which extends throughout the province through indirect and induced effects.
The USC's joint activities also have a very significant impact. The USC plays an essential role in regional development. Mind you, it's not just the economic return. There are things that we couldn't calculate due to a lack of data. For example, what is the impact of graduates on the economy through their professional activity? On campus, we train professionals capable of performing complex tasks in cutting-edge sectors, which is something that should prompt us to reflect on the real dimension of the campus for the province.
-You once led studies on the regional effects of monetary policy in Spain. From your perspective, do regions respond uniformly to the European Central Bank's decisions?
-This is a question that is still being debated in the literature, and I intend to revisit it in the coming months. It is well known that a single monetary policy does not work for all the countries that make up the European Monetary Union (the well-known “one size does not fit all”) and that, therefore, there are asymmetries in the response of economies to changes in monetary policy, which is logical when the EMU is not an optimal currency area according to long-established academic standards.
Our contribution goes a little further. The response within a country to a monetary shock can be highly asymmetrical across different regions, not only due to the varying sectoral composition of production or differences in per capita income but also because certain fiscal policy mechanisms may hinder a correct adjustment.
Our idea is that fiscal policies should be coordinated with monetary policies in order to achieve objectives more efficiently. This coordination is necessary because region-specific monetary policies are not feasible, given the high degree of financial market integration.
-Your research combines traditional macroeconomic analysis with advanced time-series econometric techniques and panel data. How important are these tools in modern economic research?
-Economic theory plays a crucial role in advancing our understanding of how an economy functions. Starting from assumptions, we develop models, which are simplified representations of reality, and then test them empirically using econometrics.
Models are becoming increasingly complex mathematically, and econometric techniques utilize the extensive computing power of today's computers. Therefore, if we want to validate models, we have no choice but to bring these two areas of economics together, which is precisely what I have been doing for the last 25 years.
Pure data analysis, for example, big data techniques, is not very useful if there is no script behind it to interpret the results. A statistician can find patterns in economic data, but we need “glasses” to understand those patterns and give them a coherent explanation.
This is not very different from what happened 50 years ago. Today, the advantage is that thanks to the power of computers, it is easier to perform complex statistical and econometric analyses; however, we still need an economic model to guide us.
For example, in another project, I am analysing the determinants of workplace accidents based on accident reports from 2001 to the present. I have almost 7.5 million observations, which now need to be refined, filtered, and made coherent, thanks to economic theory.
-In recent years, you have coordinated innovative projects in education, such as the macroeconomic simulator in Excel and participation in European transnational education projects. How do you assess the integration of technology in the teaching of economics?
-The university cannot afford to shy away from technology. But neither should we fall into the trap of thinking that the use of technology is indispensable. To learn to write, you need a pencil and a piece of paper, not a quantum supercomputer.
To learn economics, you need to draw graphs, solve optimization problems mathematically, make strategy tables... Once all this has been discovered, technology opens up a spectacular horizon of methodological possibilities. Still, the basics (pencil and paper) will continue to be fundamental tools for learning economics and many other disciplines.
-Finally, looking to the future, what lines of research do you consider a priority for understanding the changes that the labour market will face in the next decade?
-There are undoubtedly three challenges that we will have to face from a research perspective.
Firstly, the impact of automation on job creation. The apocalyptic visions of a few years ago have become more optimistic in light of recent developments in the labour markets, but there is still much to analyse.
Secondly, the challenge of aging and how we will finance a pension system in the context of general population aging, without a clear replacement, and in the context where machines are replacing workers.
Thirdly, the debate on reducing working hours and its impact on productivity is another major issue we will need to address in the near future.