Welcome to the regular Q&A feature where we shine the spotlight on our EHL research faculty and their current work. With a view to going behind the scenes to better understand the fascinating, impactful world of research, the EHL Institutional Visibility team will be regularly catching up with an EHL researcher whose work is making a difference in both classroom and industry.
Sitting down with Dr Isabella Blengini, Associate Professor of Economics at EHL, we discover what it means to be on sabbatical, her economic outlook for 2024 and her current research approach. As the recipient of EHL’s Researcher of the Year award for 2020, she earned a one-semester sabbatical during which she traveled extensively to reconnect with her research roots.
That’s a very good question, because actually I didn’t know what I was supposed to do. My first instinct was to say, ‘OK, I don't have to teach, so I have to publish’. Of course, there are some people who are very productive who publish many, many papers every year. But this is not my style.
It's like a journey and I want to do things that really represent me. And this is a bit of a struggle because, of course, you also have to demonstrate what you’re doing, your abilities. The real problem is that it is not always easy to understand in which way you can really give a meaningful contribution. I used my sabbatical to remember what I was like as a PhD student, but with more maturity. To remember why I decided to do research and to see whether that was still representing me and to see where to go next, what to do next, and so this is what I did. It was an opportunity to travel again and to meet up with people who were important during my PhD studies. It was a trip that allowed me really to go back to my values, to my friendships. It restored my equilibrium.
Concretely, I went back to see people from my alma mater, Boston College, and other people that have been meaningful to me. But of course they’ve moved around since then. Well, first I went to the UK to visit a former classmate at the University of Nottingham. Then I went to Ottawa, and caught up with a friend from the Bank of Canada. Then I went to Hong Kong where I dropped in on a former colleague now at the Chinese University of Hong Kong. I didn’t skimp on the traveling!
Since I was surrounded by hardcore macroeconomists, we thought a lot about the effects of monetary and macroprudential policies on the service industry, which is an industry that is particularly relevant for us at EHL, but also in general, given that nowadays it represents around 65% of global GDP. While in China, however, I had a full immersion in the hospitality world and I worked more on policies that could induce more sustainable behaviors at the micro-level.
Sometimes you forget why you like things. Sometimes as you go about your daily life, work becomes an obligation but if you stop a moment, you realize how lucky you are to do the job that you love. Yes, it was like being a PhD student all over again, having all this time to dedicate to research.
The common denominator in my research is the exploration of effective communication methods with what we call in macroeconomics “agents”, meaning people, consumers, and producers. I am focused on policy. So my research tries to show how to manipulate the environment, how to signal the information that you have to agents to get them to behave optimally; How can I modify the environment in a way that induces them to react naturally and go in the direction that I want? Policymakers affect people's behaviors with their actions and decisions.
Central banks have moved aggressively by, among other moves, increasing interest rates. The situation is stabilizing a lot but there still seems to be quite a lot of alarmism in the public discourse. I believe we’re moving towards a gradual stabilization of the economy.
As I was on three different continents, it’s a bit difficult to generalize or draw clear conclusions. I was with Economics professors, so we were talking about the “real world” but in very technical terms. I was kind of in the magic world of academia!
I work a lot with models, which is quite theoretical. I’d like to start doing more applied research. I’d like to conduct experiments on how people react to different stimuli. One of the topics I’m working on is called ‘market design’, which is a broad, over-arching concept. At my level I’d like to test how, for example, consumers react to stimulus from firms or policymakers.
Well, for example, I recently went to our take-out dining restaurant, the Grab’n’Go, and saw they are now charging 30 cents for a paper bag. It would be fascinating to study how this has changed the behavior of EHL staff and students. Are people really paying the 30 cents or are they bringing their own bag? Should there be a message at the cash register explaining this new policy and its goals? Maybe we could’ve tested several different solutions to maximize the desired result. So, it’s an open question; but this is the stuff I like. People might be concerned about the environmental impact or just put off by having to pay 30 cents. In economics, we sometimes call this “willingness to pay”.
Yes, or whether you have the choice or not. If I impose something on you, then you’ll be less willing to accept it. This can affect your well-being. So it’s really about the messaging. These initiatives must also be coordinated throughout the entire firm to be effective.
It was good to stop for a semester because you really come back refreshed, with many new ideas, even though there is an adjustment when you get back into the classroom. Still, it is nice to be back. I feel that I have much more positive energy. I am introducing new topics, reducing the time that I spend on some other ones. I feel like exploring new approaches and testing them on my students. I am trying to understand how to share my research interests with them. But it is not easy, because they are still very young, so I am still thinking about how to do it. The sabbatical gave me much more enthusiasm in general, also with teaching.
I haven’t done my own forecasts, but my understanding is that inflation is under control, so the normal reaction of interest rates will be to gradually go down. Then of course, there are many other shocks that can happen and you never know.
Yes, but prices have traditionally been quite high in this country, and inflation has been lower here than elsewhere. One thing that is concerning is the price of airfare. Having just done three long-haul flights, I can say they’re still really expensive. Of course, consumer preferences are shifting. Younger generations are increasingly aware of the environmental impact of long flights. Going forward, these kinds of concerns could be even more important than global macroeconomic comings and goings.