 and everyone. I hope you're all keeping safe and well. My name is James Dooley and I'm the auditor of this year's UCD Economics Society and I'm joined here today by our events officer, Dave Fitzgerald. Hello. So before we start, I would once again like to thank PWC for their continued support in supporting the society throughout the year. Today we have a very special guest for our members. As you all know, the society looks to present the Thomas Cattle Award for outstanding contribution to economics and public policy and despite being in Ireland's third extensive lockdown, this year will be no different. Last year's recipient of the award included the Nobel Prize Laureate Professor Joseph Siglitz and other recipients of the award include Peter Sutherland, David McWilliams, Jeffrey Sachs and Bob Geldof and today I am very excited to announce that we are including Mr Philip Lane to this distinguished list. So Philip Lane's list of achievements and academic credentials are both numerous and distinguished and if it is okay with you Philip, it will be my best interest to enlighten our members of some of these. As former professor of international macroeconomics and director of the Institute for International Integration Studies at Trinity College Dublin, Philip was elected a scholar in economic and social studies in Trinity before receiving a doctorate in economics at Harvard University in 1995. He was a research fellow of the Center for Economic Policy Research and had been a visiting scholar at the International Monetary Fund and the Federal Reserve Bank of New York and a consultant to the European Commission. Philip has previously served as governor of the central bank and currently is a member of the executive board of the ECB since June 2019 and is among the top 5% of economists in the world according to the research papers in economics. So on behalf of the UCD Economic Society I would like to add one more honor to this distinguished list and congratulate Mr Philip Lane on being awarded the Thomas Kettle Award for 2021. I would now like to invite Mr Lane to offer a few words to some of our listeners listening here today. Thank you, James. So indeed I'm honored to receive this award. Tom Kettle was the first professor of economics at UCD at this point over 100 years ago but of course the Irish economics profession is quite small so to have that connection to one of the founding fathers of economics in the Irish University system is indeed an honor. Let me maybe point out as well with Tom Kettle that in fact he had a mixed career so he was obviously had his academic career. He was also involved in politics, in journalism. He was a poet and he was very involved in the policy debate and maybe again to some extent, to the extent I like some of your previous recipients have mixed academic work with policy work I think it's indeed that that's a strong connection back to Tom Kettle. So thank you James, thank you David, thank you to the Society for this award. Cool so if we we'll kick on with the first question so that we have for you today Philip. So according to many of the economic commentators worldwide the fiscal policy mistake 10 years ago suggests that austerity was a big mistake so in your opinion do you think in light of the pandemic austerity will make a comeback? Okay so that's a big question to start off. I mean behind that and again it's important to I think avoid too many labels in this discussion. I mean I think what is universally agreed is essentially the fiscal multiplier is larger than was believed 10 years ago and that is maybe connected to two issues. One is in the low-interest rate world that essentially the historically sometimes at fiscal policy could have been if you like offset by monetary policy so if there is too much austerity you know an easing of monetary policy by the central bank might have meant that the macro impact would have been neutralized but in a low-interest rate world the central banks can only do so much so that's one basic reason. The other reason is basically it's turned out that our beliefs about the labor market have needed revision. So again 10 or 12 years ago the unemployment rate that would have triggered inflation was a project to be much higher than it actually turned out to be. So you see that in the U.S. I think you see it in Europe is that in fact the ability of the economy to respond to fiscal policy is a lot larger than was expected. So then the final part of your question going back to austerity will come back. I mean I think what's important to think about after this pandemic is we know that debt ratios will have gone up they are going up and I do think we will at some point face a situation of we're going to need fiscal policy to support a reduction in the debt ratio. So if you want to put a label of austerity on that then that conversation will be needed and that is the kind of circle of fiscal policy. In order to allow the fiscal policy we've seen on this occasion very large deficits you need in if you like in normal times to rebuild that capacity. So I think in your very general question as you can see from my answer there's quite a lot underneath that as opposed to a simple yes no situation. Perfect. If I could just jump in there for a second. Do you Philip believe that Ireland and Europe has positive prospects for economic growth following this pandemic or informed of high household savings and big corporate savings in Ireland. So do you think consumer spending will rebound strongly and have a business spending and business investment with that rebound strongly. So I think that's mostly true. So with the pandemic the cause of the recession has been the virus and once we contain the virus through vaccinations and other medical solutions there should be a fairly strong bounce back in the economy. But what is true is whether you get a 100 percent full recovery depends on on confidence and you know it's it's not so clear it remains a debate for consumers about when will they be fully confident and in the European context when we've had a very large period of stagnation after the global financial crisis the narrative which is probably already in the U.S. of a strong recovery may take time for that to happen. On business investment let me make a two-parter there. One of course Ireland has a lot of multinational firms and a lot of these firms are in sectors which have been doing well like pharmaceuticals and technology. So you know I think there will continue to be strongly. And then after that for those of you studying economics investment is very much driven by the overall economy to the investment accelerator view. So in other words investment is not really a separate kind of dimension. If the household spending comes back if there's a strong consumption demand then that'll be reinforced by investment. Equally if the consumer does not come back the case for investment in the domestic economy will also be weak. So in the end I think the debate is about whether the recovery will be 100 percent or 95 percent. So most you know it's but for those five percent percentage points make a big difference. And maybe the other point is one with with what we've seen now at with working from home. There will be questions about different sectors of the economy. So whether the same demand for city center office blocks will be there. But under the hand for for investment in suburban locations in working from home technology may be reinforced. And then the other issue which is a coincidence of timing is at the carbon agenda. The climate change agenda is increasingly strong. And as you know with a lot of the European recovery plans it's centered on accelerating investment in a in a green recovery. That needed to happen anyway. But maybe that will also provide another engine for for investment. So we might see more public investment than normal until the private investment sector comes back. Okay. Unreal. Yeah. Two very insightful answers there Philip. Thanks so much. So moving on to more towards the role of the ECB. How can it what is the role of the ECB in funding member states' recovery from the pandemic? So I mean I've used the phrase confidence a couple of times there. And in fact you know here we are basically nearly exactly one year since we had to intervene in a big way with with the PEP program. The pandemic emergency purchase program. And at that time it was natural that many investors were quite nervous. What would be the impact of this pandemic? So we had private investors around the world the dash for cash. So looking basically to avoid holding any kind of long day to the asset. So the first step of the ECB was to basically by saying look we are here we can be provide a lot of liquidity to the markets. That had a big stabilizing effect. So true that kind of a stabilizing effect. And that's to me the dominant role is if the world knows we are here we are a backstop then then you as an individual investor can return to the bond markers. Because the kind of instability has been ruled out. Now on top of that we had already been in QE and now we've been doing more QE. And essentially when we take bonds out of the markets and put them into our balance sheets and how does that work? It means it drives down interest rates and by driving down interest rates all types of borrower. So whether it's has those looking for mortgage firms needing to fund their working capital or longer term investment or governments as you say can find it easier to do that. Let me make an important point is that this time by and large government deficits have been financed essentially by the household sector. Whereas as you know in the global financial crisis the big problem was when countries like Ireland or Greece or Spain owed a lot of money to foreign investors. So and that's not part of what's happened this time. And so what we have now is essentially within the same economy. I want to say the same economy. I mean the era economy. It's an internal transaction. It's not and from that point of view it's much less of macroeconomic concern than we saw in 2008. Brilliant. You know you talked about quantitative easing there. I wondered how fast do you think we can bounce back from in Ireland to be our current structural deficit which is a 22% of GDP and what tax regime do you think will be deployed over the coming years in Ireland. I suppose more generally in Europe as well and once the recovery begins it begins from the pandemic. It's an interesting point. So we think most will just be kind of automatic. So the I mean right now the management of what is a structural deficit versus what is a cyclical deficit is kind of a bit complicated because there's all sorts of special schemes like the pandemic unemployment payment that supports to firms. So they are if you like structural they're not automatic stabilizers but equally you know the government will be able to withdraw those or cancel those when the economy improves and the pandemic is controlled. So a lot of the measures will automatically go into reverse when the pandemic is contained and you know what is left at that point in a couple of years from now goes back to what I highlighted earlier on. You know we will have a higher debt ratio across the world and the big question is is it okay to leave these debt ratios at a high level or should you run some kind of modified fiscal policy including as you say maybe some new taxes to bring debt levels down to a lower level and you know I think it's important to emphasize is that it's again it's not like before I mean before here and elsewhere there was a kind of gap to close new taxes were needed or spending cuts were needed right on this occasion the deficit gap will close by itself but what will remain is a high debt level and it will be a big political issue about how much and what kind of measures to take to get that that ratio down but that's you know I think in the medium term distance it's not an immediate issue. Very good okay thanks Amil Philip. So following on from that question more towards the Brexit side of things and we just have a couple questions for you in respect of both Brexit's repercussions on benefits we can expect to see over the coming years. So in your opinion Philip how is ardent positions to benefit from Brexit at all or do you think any sectors will boom over the coming years? So collectively of course when we introduce a more difficult trading relationship with the UK that's collectively it's bad news you know so there's no getting away from that. Now having said that there will be a differentiated effects so many small businesses in Ireland if they are if they were exporters primarily they were exporting to the UK and that door is going to be a lot more difficult even under a free trade agreement. But you know in terms of reorganizing reshaping the Irish economy as you can read every day there's a reorientation of logistics so having more shipping direct from the continent into Ireland to avoid the UK to be reorientation of what's interesting maybe retail is maybe more willingness to use local retailers because of the headaches and admin headaches of trying to buy something from a UK website now. So there might be some local winners and then also in financial services of course over the last year or two there has been a degree of relocation towards Dublin from the UK to provide financial services in the EU but I would say it's definitely Ireland that is uniquely shaped by this but again maybe from the point of view of you and your student colleagues what's very important is Ireland is unique in retaining the common labour markets. So the fact that Irish people still have access to UK labour markets is very different to the situation on continental Europe. Perfect and we have one last optional topic which is which is actually James's question so I think I'll let his baby so I think I'll let him ask it but do you have do you have time Philip is that okay? Yeah yeah yeah that's right yeah go ahead. You far away David you can take it already. Perfect okay well I think this is actually quite a good question so I'll read it off so James has noted that a lot of our student members watching this interview are deliberating over what career routes per se are to pursue after they finish their college colleges are always placed great bias on encouraging students to complete master's degrees or PhDs however some students prefer taking a gap year or doing an internship and going straight into the workforce. I myself plan on doing an internship next year before goes well in the interview process however I'm completely unsure of what to do in the future so my question to you Philip is do you think there is much benefit to be taken from pursuing a master's degree or a PhD and furthermore where do you see good employment opportunities nowadays for business and economic students? Okay so that's an interesting question and of course in my time in Trinity I would have tried to answer that question many times to students who might come and see me and ask a similar question so you know of course as you might guess in the end your individual circumstances your own ambitions will dominate everything else but let me make a few points one is you have to think about your whole lifelong career not just that you know one step I will say you know 20 years from now 25 years from now as you become more senior in different organizations depending on the organization having a master's degree will make often makes a difference it often makes a difference it's one way to kind of filter out does this person have the kind of range and breadth of experience and education needed for the most senior levels now what that doesn't answer is whether you should do it immediately or whether you because often and of course the universities have many part-time options for doing a master's degree side by side with your career so I would say if you don't take one on immediately keep in mind that many employers will help you and find a study leave and even help with fees at some point I would say as you get older you know your learning capacity does diminish over time the brain cells start to erode so there is a case for doing it sooner rather than later and of course at the same time I mean if you get a very good job offer you know at you know at the work experience is also super important so you know I think there's no one answer on that keep your options open I mean I would say in terms of economics so again you're the economic society so I'll focus on economics what's at two points to make one is mostly to be a professional economist it is a PhD so that that is but again it's possible and the art universities are customized for that to do a part-time side by side with the job in the future and maybe the big big differentiator compared to maybe 20 years ago now is any big data firm loves economists for two reasons one is if you've studied the econometrics and statistics and you've you know studied some coding along the way that's basically the foundation for a lot of what any big data firm does so whether it's amazon google facebook they all hire a lot of economists these days and then second also the actual microeconomics working at pricing demand and supply it's very important for coding you know algorithms of different types you know so so the kind of big data world economics is a very good entry point into that and so I would say you know if you are studying economics at undergrad or post-grad level in terms of the combination of that with data skills and learning to code is very useful I would say in economics whether undergrad or post-grad there's such a huge range of what people end up doing I mean from my time many years ago now like 30 years ago actually this 91 we graduated 30 years ago my kind of student colleagues are all over the world doing all sorts of different occupations so it really has many pathways and then of course going back to further education there's also different professional qualifications of course many people with an economics background might go into accountancy or another interesting one is law so the combination of economics and law can be very powerful as well so David I don't know if that answers your question I would say for PhD it takes a while so you really want to love the subject so see you need to have a vocational love for a three-year subject whereas for a master's degree it can be more calculated because the extent only takes a year or two years depending on the course and I do know the global data show a master's degree has a high rate return going from a master's degree to a PhD that's not so clear so you'd want to love actually the knowledge and the kind of sense of satisfaction from doing a PhD as opposed to trying to think it's going to maximize your your monetary income and then maybe the other point is with all of these if the opportunity comes up to do your master's overseas having that especially if coming from a small country like Ireland again not so much immediately but 10 years from now 20 years from now having international experience of some sort is extremely helpful especially when we live in a very small country so I hope that answers to some extent. Yeah it certainly does thank you that there's certainly a return on investment for a master's degree anyway it's how it's leading right okay that's that's perfect that's all our questions and I think we're kind of wrapping up perfectly just just fine. I mean again it's a pity but of course that's the world we're in that we couldn't couldn't do this in person but but again thank you so much. Yeah if we get the opportunity next year well we'd love to have you in even just to physically present you the award. Yeah okay we can do that yeah. Yeah hopefully James do you want to take it away? Yeah I was just going to add exactly say what David was mentioning there obviously we would love to have you in and present it in front of the student domain but clearly we're still all glued to our laptops at home so nothing's changed in the past year but hopefully anyway we can get it presented to you next year or hopefully sooner anyway but thanks so much for joining us today Philip and we really appreciate your time. Okay thank you so much. Okay good morning. Bye snap.