Economics and Journalism Seminar with Rachana Shanbhogue – Student Review

Text reads: Student seminar review, Economics and Journalism seminar with Rochana Shanbhogue. Background image shows Bank of EnglandUndergraduate Economics student, Hugo Figueiredo provides a review of the recent Bristol Talks seminar with Rachana Shanbhogue – Finance Editor at The Economist.

The seminar began with Rachana detailing her academic and professional career path, where she detailed her Masters in Economics at Cambridge, working for the Bank of England, House of Commons and, most recently, Finance Editor at The Economist.

It was particularly evident that her time at the Bank of England was significantly shaped by major economic events; the 2008 Financial crisis and Brexit referendum in 2015. It was comforting to myself (and I’m sure many other Economics students) to hear about the real-world application of economic concepts and how relevant our degree really is within the world around us, something that can often be lost sight of in the fog of mathematics and data crunching.

A discussion between Tim (EFM Society President) and Rachana presented lots of interesting questions and responses, of which some are detailed below…

1. “There has been a fair amount of talk on negative interest rates recently, particularly in the media. Do you think it could happen, and what would be the consequences of this policy?”

Rachana’s response was mixed. She detailed that there is evidence that it could work and that banks have been able to lend more in countries such as Japan. However, she also expressed her concerns about the policy being unpopular for both banks and the public, where the political fallout could be too extreme. She suggested that banks would likely continue to increase QE, rather than to introduce negative rates.

2. “How do you think the long-term effects of Covid-19 and the lockdowns will affect the labour market?”

Rachana’s response described the geographical restructuring of the labour market, where demand for labour has shifted somewhat out of big cities. She remarked on the closure of many shops near her work in central London and how there has been a real focus on a local labour supply in recent months. She was somewhat sceptical on how permanent this shift would be, however.

3. “How important is the role of data within Economic journalism?”

Rachana spoke about how extensively The Economist focuses on data presentation and stressed how important the role of a visual data journalist is within The Economist team. She emphasised the importance of presenting complicated and heavy data in a format readable for everyone and detailed how The Economist tries to do this.

Q & A Session

1. “How do you think Governments will approach their unprecedently high levels of borrowing after the crisis? What do you think the potential political ramifications of schemes aimed to reduce the massive debts could be?”

Rachana was keen to note that she believed that there had been some lessons learnt about the public hatred of Austerity, particularly under a Conservative government since 2010. Whilst she stressed that retrenchment is most likely inevitable, she also noted that governments could try to stoke inflation as an alternative method to relieve some of the burden of expanding balance sheets.

2. “The lockdown measures have resulted in massive attainment gaps (such as the GCSE and A – Level results day fiascos) as well as the lost teaching time for students; how do you think these skill/education gaps will present themselves in the next few decades?”

Rachana expressed that this issue was larger than the question initially presents. She commented on how children in higher income families are more likely to have coped better during lockdowns and how a rise in income inequality is inevitable. She suggested that governments should target upskilling, encouraging apprenticeships and ‘on-the-job’ learning to bridge skill gaps.

3. “Did you find it difficult to keep your morals and economic principles true to your heart when working in the heavily politicised environment of parliament?”

She noted that this environment presented many challenges and largely involved day-to-day government operations rather than deep economic thought. This formed part of the reason for moving back to the Bank of England after 2 years working for an MP in the shadow cabinet. That said, it was clear that the experience was invaluable, despite the long hours and intense nature of the work.

4. “What do you think the effect of this pandemic would be on global fertility rates? How would the possibility of a baby boom exacerbate socioeconomic inequalities between different people across the world? Would productivity levels of countries change.

She noted that it would be reasonable to expect a baby boom in countries where contraception is harder to obtain than others and detailed an article in The Economist which looks at this issue. Without heading too much into the maths of productivity levels, she commented on how changing levels of automation would likely be more of an impact on productivity, rather than a baby boom or bust.

5. “Leading on from the question about the change in government fiscal response to the economic crisis. Would an independent fiscal policy help to make sure that fiscal stimulus is appropriate?”

She noted that there was no real precedent of this and detailed the difficulty of removing politics from fiscal policy. Taking power away from elected officials and giving it to an unelected fiscal would inevitably cause major political fallout. She suggested a compromise could be found in governments setting rules, much like the policy of forward guidance and others of the like.

6. “How do you think the role of cash within the economy will change in the coming years? With the rise of card and mobile payments, what effect do you think this could have on the shape of the economy in the coming years?”

She noted that Covid-19 has merely sped up a cashless society, noting that this was inevitable. Whilst she commented on the issue of private companies holding all your money, she also presented the idea of new alternatives in cryptocurrencies. She referred to an article written in The Economist in July on China’s crypto innovation and recommended the Bank for International Settlements as a source of information on a cashless society.

On behalf of EFM, thank you Rachana for attending and giving us a valuable insight into a career path that many of us are interested in following.