Postgraduate Lives: 'I hope my work is useful'

Gonzalo Varela, 26, is to start a PhD in international economics at Sussex University
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The Independent Online

I have always liked economics. At first it was an opportunity to try out a fantasy I had about helping to solve world issues like poverty, although you realise the scope for this is so much less than expected once you start studying. I come from Uruguay, where the state of the economy is a big issue, as it is in all of Latin America. You read about it all the time, unlike in the UK, and people are very concerned about it.

I have always liked economics. At first it was an opportunity to try out a fantasy I had about helping to solve world issues like poverty, although you realise the scope for this is so much less than expected once you start studying. I come from Uruguay, where the state of the economy is a big issue, as it is in all of Latin America. You read about it all the time, unlike in the UK, and people are very concerned about it.

I did my BSc in economics in Uruguay and worked for the government for a year. I was then awarded a Chevening Scholarship by the British Council to do my Masters in the UK. British universities are regarded as the best research centres in the world, and here in Sussex it is an open-doors department where you can pop in to see a faculty member at any time. I finished my Masters in international economics in 2004 and I really enjoyed the academic environment so I decided to stay for a PhD.

Put simply, macroeconomics is about studying issues such as changes of income as well as unemployment and inflation. It is about how monetary or fiscal policies are decided: for example, how much a government spends and how much it raises in taxes, and also exchange rates. The question I'm posing - and I still don't know the answer to - is whether it's a good idea to co-ordinate macroeconomic policies in some South American countries and to have, for instance, a single currency in Mercosur (a customs union formed by Argentina, Brazil, Uruguay and Paraguay). The European Union co-ordinates macroeconomic policy, for example through having just one currency in most of the EU. I want to analyse how good that would be for Mercosur countries. I will analyse the links between the countries' economies. If they are strongly linked then one institution making centralised decisions could be a good thing.

When Mercosur was formed in 1994 one of its aims was to work towards co-ordinating macroeconomic policies, but this was never implemented. But it was not until the Argentinian economic crisis in 2001 that I really started to be interested in this topic. In 1999, Brazil devalued its currency; its products became much cheaper and so it imported less from Mercosur countries which lost a big market. That generated a big recession in Argentina and Uruguay; many factories closed and the unemployment rate increased. This affected a lot of people I knew. Two years later Argentina devalued its currency as well, which led to a crisis in Uruguay, where one out of five people were unemployed. What if the four countries had co-ordinated their decisions? Could the crisis have been avoided?

After my PhD my ideal would be to go back to Uruguay and work in academia. I still hope my work gets to be really useful. I love my research, although being a postgraduate means you work 24/7. In the evenings and at the weekend you go on working. I live with postgraduate students and it's non-stop working. We have fun doing that, but it is exhausting.

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