Dear Professor Reid, how did the onboarding and your first weeks at TU Darmstadt go?
I felt very welcomed considering how little real contact I have with people due to Covid. Everybody has been very friendly when I have asked for help and I look forward to being able to integrate a little bit more to learn what other people are doing. That is a bit more difficult right now because normally you would have seminars or bump into someone and have informal discussions. Now everything has to be planned. So I choose to come in once a week to the university just so I can have some connection with people who are there.
In your CV you wrote about yourself that you began your career as a „monetary economist with a strong interest in institutions, policy and public behaviour“. Would you still consider these as your research interests?
As you learn more, the clarity with which you follow things changes a little but actually I have been very fortunate that the sort of work that I followed in my master’s thesis moved quite clearly into my PhD. There were of course small differences, in my master’s thesis I was focusing on inflation expectations but I focused on financial markets. That’s natural for an economist because there is lots of data to work with – high frequency, easy data. However, I became more interested in the general public so I moved into different kinds of data sets – survey data – which is a bit more “messy”. So what changed is that the more I’ve focused on the general public since my PhD and I became interested in psychology and interdisciplinary work that can help me explore behaviour and communication more deeply. Because as economists, we don’t tend to have data on that level of human interaction and so we sometimes don’t study things as deeply because we don’t have data, not because we believe it’s not important.
So I started to think of different ways to create data and this led me to interdisciplinary work. But my focus on institutions and monetary policy are actually still the same, it’s just become a bit more diverse and the methods I use to go about my research have broadened.
Can you tell us about your current research projects or anything interesting ahead that you are planning to research?
I am still working on different ways of thinking of inflation expectations but I moved more into central bank communications, which is a tool to manage expectations. The central bank uses communication to coordinate their beliefs about inflation with that of the public. Moreover, I’ve started thinking about the survey questions and how they are designed because many countries survey inflation expectations but they actually ask the questions slightly different. This can lead to differences in how we measure it and so I’ve become quite interested at the moment in thinking about how the question could change the answer and whether we are actually getting the information that we think we are. This can also differ depending on whom you ask the question – if you ask financial analysts that understand the jargon of the financial markets then you can ask in a very technical way and they will give you a very clear answer. If you ask even business leaders who know a little bit about business but maybe not the technical terms, we already find that there’s quite a big difference. As soon as you move to households that are very interesting to research and very important for different reasons phrasing the question becomes quite difficult. If you ask them what the percentage of inflation in the next quarter will be, there may be so many terms they don’t understand. So it’s quite hard to decide how to ask the question appropriately and to decide whom to survey.
I’ve also been concentrating on textual analysis, qualitative and computer-assisted, to create data. A lot of information about what the business sector and financial analysts believe is written down in the form of text so you may not need to survey them to get information. You could use computer-assisted textual analysis which has a number of advantages. But when we tried to automate this we found out the algorithms weren’t working so well because the text material was not long enough. So there’s also qualitative methods that I have used when looking at how financial journalists write about inflation. To better understand aspects of communication there is scope to work with specialists in data science as well as some of the humanities.
I read that you did collaborative projects with social scientists and data scientists. Are you planning interdisciplinary collaborations in the future, maybe at TU Darmstadt?
The qualitative work mentioned before required me to work with social methodologists whereas the computer-assisted work I tended to work with data scientists. It’s all about creating data out of text that we have to tell us what people believe, but also to give us an idea how they come to that belief, what information they’re using to determine their beliefs.
I definitely like collaborating. I have broad interests but I don’t always have deep skills in specific areas. Collaboration works especially well across disciplines because you are not an expert in all of these fields. One of the interesting things for me is that central bankers today believe that communication is a very important monetary policy tool but economists are not known for being experts in communication. It’s interesting for me that they don’t often collaborate with social scientists who would typically be best a this. We tend to collaborate with data scientists, that is somewhat natural, but certainly, I am looking for opportunities and to learn what other researchers at TU Darmstadt are working on. I enjoy working in interdisciplinary teams so I am looking forward to finding those opportunities.
I am also working on a newer project with a civil engineer and microeconomist, where we are designing an infrastructure index for South Africa. We hope to use textual analysis to extract information from specialist media reports about the quality and quantity of infrastructure across South Africa. This index could then be compared with 5 yearly reports from specialists in the field as well as other sources of information to check the validity of our index. Our index will hopefully offer higher frequency data about infrastructure needs. We hope if the project develops as planned to include a data science specialist on the project and to interact with private sector engineering institutions to improve the validity of the index. There may be a possibility to include a student from TU Darmstadt on this project.
This new project may seem quite unrelated to my previous research agenda, but my experience thinking about the role of the media in communication is a common thread.
Did you already have the opportunity to collaborate within the department? With which chairs would you be interested to do research together?
I have not yet collaborated with any of the staff from within the department. First, I still have the limit that I don’t know many of them well yet. However, I am very interested in working together if a common research question interests us. At least two economists work on topics that are related to my own research. Volker Nitsch has worked on central bank governance and central bank communication and Michael Neugart is a specialist in political economy, which is very helpful to understanding institutions. Beyond the potential for collaboration, I am also just interested in learning from those that are taking part in inter disciplinary research successfully. In the department I worked for previously true interdisciplinary research was fairly rare and this can be challenging.
It is also possible that a student who chooses to study one of the economic policy courses at TU Darmstadt may be interested in contributing in a smaller way to one of the projects I am busy with.
You have lots of experience in teaching. What is your goal regarding teaching at TU Darmstadt?
I’ve enjoyed the fact that I have always taught economists so it’s an interesting experience to me to teach students that don’t have a typical economics background. I enjoy the different kind of questions I get.
My aim would be to give them an idea of the kind of context within which we work. So in my courses I try to give a historical perspective before I begin with any of the details. We all know a little bit about the challenges that are around us, after the global financial crisis and the European debt crisis, but we often don’t know the history and how we formed the institutions we have today. We built up a lot of theory and empirical, historical experience this semester and at the moment we are specifically looking at the institutions today, speaking about the challenges they have, and the choices that we have going forward. So that when they hear politicians and policy makers speaking about these choices, they know that we have a number of tools that we can use to make those choices. One of them is history, another one is theory and empirical analysis. I try to expose them to these three ways of judging the current situation.
In the beginning of my lectures I try to speak a little bit about the news or some kind of topical question that I see academics speaking about to introduce the students to places where they can find good quality short analyses. I hope they see that the questions that we are talking about really are relevant today.
Thanks for the interview, and all the best for your start at the department, Professor Reid!
The interview was conducted by Ann-Kathrin Braun.