Most of us come to University listen to our professors teach an interesting or a somewhat less interesting topic. However, most of us do not exactly know what our professors are doing. The goal of this Professor Profile is to show a different side of our professors. By asking four questions, we hope to provide a short overview of the person and her research. Our Eighth Professor Profile is with Professor Teresa Lloyd Braga. Teresa Lloyd Braga is a Full Professor and Vice-Rector at UCP. Holding a PhD in Economics from Universidade Católica Portuguesa, her main are of research is Macroeconomic Dynamics, more specifically, Endogenous Business Cycles. We want to start this interview thanking our Professor Teresa Lloyd Braga for her spontaneous availability for this interview.
Could you shortly introduce yourself? Making sense of things, to realize how difficult it is to distinguish whether something is a cause or an effect, and to admire the beauty of the world, are things that amaze me. In Católica, where I have been since I became an undergraduate student in economics, I learned that there is more to economic science and mathematical models than I ever imagined. Enthusiastic about this and supervised by Rodolphe Dos Santos Ferreira, a university professor and researcher in Strasbourg, I developed my doctoral thesis in equilibrium cycles engendered by non-linear dynamics. At that time (1990-1995), this research topic was not yet well developed in economics, so it attracted the attention of other researchers at international conferences, some of whom I have the privilege of working with and learning. In addition, in Catolica, I was fortunate of having two colleagues and friends to develop research papers, Leonor Modesto and Manuel Leite Monteiro, and to teach some of our findings.
What does economics mean to you? Economics for me is just a possible way of understanding how life in society is (dis)organized, a way of feeling the importance of allocating and using correctly world resources, a way of showing the relevance of education and of expectations for our happiness, a way of teaching us that whatever we do has consequences on others’ welfare. As a science, economics with the use of mathematical models help us to find, in a rigorous and structured way, motives for things that seem to be contradictory and, showing our limits in proving the truth, guide us to the need of understanding different views of the world.
Could you simply describe your research? In my research works I use macro general equilibrium models to study the role of market distortions (externalities, taxation, economies of scale and market power, etc) in the existence of multiple equilibria, and in business cycles driven by self-fulfilling expectations/prophecies (endogenous fluctuations). Other related research issues are the role of fiscal and social policy, and of international trade, of capital and of labour movements, in economic welfare and endogenous fluctuations.
What is for you the most interesting finding? One of the results I find more interesting, is that real economies where there is market power can more easily generate equilibrium deterministic chaotic systems. In these systems small (hence, difficult to perceive) initial differences in economic variables have strong impacts in the near future and generate trajectories that, although deterministic, look like random. Another interesting finding is that international capital mobility may reduce world economic welfare when it is driven by differences in union power. A third one is that several different types of market distortions are equivalent in the sense that they have exactly the same effects on the local stability properties of the economic system. And the most recent one is that, if there are rigid and incompressible government expenditures, then using fiscal policy rules to promote stability of the economies may not be possible.