Rarely has an academic discipline changed as much as that of economics. While ten years ago economists were mainly concerned with issues such as unemployment, taxes, or trade, today they address global challenges such as inequality, development economics, or even the effects of climate change on the global economy. Despite the breadth of the discipline, there is one element that unites all researchers at the Department: their passion for economic research. Explore our researcher’s stories in the videos below and find out more about the evolution of economics in the interview with Ernst Fehr.
Three exciting areas, nine passionate researchers
Trade, globalization, and labor
International trade studies the economic transactions between countries and the effects of trade agreements and standards on economic growth and development.
Labor Economics analyzes the dynamics of labor markets and interrelations between labor, goods, and monetary markets and how these influence employment levels and GDP. Emily Blanchard, David Dorn, and Ralph Ossa search for answers that revolve around trade and globalization. The challenge going forward is how to, on the one hand, leverage all the benefits that trade can provide, while at the same time avoiding some of the economic and social problems associated with globalization. This also includes how to prevent trade wars, promote trade talks, and how to reform international trade organizations.
The Department of Economics at the University of Zurich plays a leading role in the academic world. Our motto is “Pioneering Economics”. With our forward-thinking attitude and multidisciplinary approach, we have entered uncharted territory. Our ambition is to find answers to the most pressing questions of our time and to offer direction to students, to leaders, and to policy-makers alike. For more information please visit: https://www.econ.uzh.ch/en.html
With (in order of appearance): David Dorn, UBS Foundation Professor of Globalization and Labor Markets, Ralph Ossa, Kühne Foundation Professorship of International Trade, Emily Blanchard, former Kühne Foundation Visiting Professor.
Behavioral Economics
Economics has adopted concepts from psychology, leading to the birth of Behavioral Economics, and the use of insights from neuroscience has led to the development of neuroeconomics.
Behavioral Economics also considers psychological, cultural, and social determinants of individuals’ economic decisions and the functioning of institutions. It therefore offers deeper and more nuanced explanations of economic outcomes. Neuroeconomics studies the biological or neurological foundations of economic decision-making by applying methods of neuroscience and cognitive science. Measuring the activity within specific regions of the brain during decision-making processes allows a better understanding of the motivations underlying human behavior. In their research, Carlos Alós-Ferrer, Anne Ardila Brenøe, and Roberto Weber cover a wide range of behavioral economics and neuroeconomics, exploring questions such as: Whom do we trust and how much does it cost? How can we measure trust? What are the cognitive foundations of cooperation? Why do not all mothers breastfeed?
The Department of Economics at the University of Zurich plays a leading role in the academic world. Our motto is “Pioneering Economics”. With our forward-thinking attitude and multidisciplinary approach, we have entered uncharted territory. Our ambition is to find answers to the most pressing questions of our time and to offer direction to students, to leaders, and to policy-makers alike. For more information please visit: https://www.econ.uzh.ch/en.html
With (in order of appearance): Carlos Alós-Ferrer, NOMIS Professorship for Decision and Neuroeconomic Theory, Anna Ardila Brenøe, Larsson-Rosenquist Foundation Assistant Professorship of Child and Youth Development with a focus on breastfeeding, Roberto Weber, Professorship of the Economics of Corporate Culture, Business Ethics and Social Responsibility, endowed by Credit Suisse.
Development Economics
Development economists study the approaches to promote social and economic development in low-income countries by improving health, education, and structural conditions.
Lorenzo Casaburi’s and Guilherme Lichand’s research concentrates on two important disciplines within development economics: education and health. The Economics of Education studies issues relating to education, including the demand for it, its financing and provision, and the comparative efficiency of various educational programs. Health Economics analyzes healthcare systems and behaviors affecting individual health by examining the interplay between the information available to individuals, physician’s actions, and government interventions. Dina Pomeranz studies how public policies work and offers specific ways to improve them. She focuses on challenges of governments in developing countries such as tax-collecting systems.
The Department of Economics at the University of Zurich plays a leading role in the academic world. Our motto is “Pioneering Economics”. With our forward-thinking attitude and multidisciplinary approach, we have entered uncharted territory. Our ambition is to find answers to the most pressing questions of our time and to offer direction to students, to leaders, and to policy-makers alike. For more information please visit: https://www.econ.uzh.ch/en.html
With (in order of appearance): Lorenzo Casaburi, Swiss Re Foundation Associate Professorship of Development Economics, Dina Pomeranz, UBS Foundation Assistant Professor of Applied Economics, Guilherme Lichand, Assistant Professorship for Child Well-Being and Development, supported by UNICEF Switzerland
Interview with Ernst Fehr: The revolution in economics
Only a minority of the economics students at the University of Zurich consider themselves to be economists in the classic sense after graduation. This is certainly an expression of the change that the field has undergone over the last decades. The methodological approach continues to be analytically and statistically based, but the questions that the subject poses have changed. Ernst Fehr, who has taught and conducted research in Zurich since 1994, was a leader in this development and even speaks of a revolution in economics.
Mr. Fehr, you are talking about a revolution. How has the research in the field changed concretely? Up until the begin of the 1980’s, the primary focus of economic research lay in the examination of macroeconomic phenomena, such as the causes of inflation and unemployment. In the middle of the 1980’s, however, there were many new and innovative impulses – in particular in the areas of experimental economic research, behavioral economics, and applied macroeconomics. This led to a basic change in the way that economists conduct research and the questions that they examine.
How is this? The questions that society – and thus also economics – poses today are considerably different than they were 50 or 60 years ago. They no longer only cover taxes, exchange rates, or monetary policy, but examine every aspect of human behavior. For example, why do so many people divorce? How can obesity be reduced, thus diminishing the later consequences for our health system? How does international competition affect our political behavior? How can we promote child development and provide children optimal future perspectives? What are the roles of trust and fairness in economics and politics?
These are all aspects that have a considerable effect on our economy and our welfare. In other words, we now look at social norms, psychological aspects, and questions that primarily used to be studied in other disciplines; these once only played a minor role in economics. Economics has thus become a broadly positioned behavioral and social science – based on a solid mathematical and statistical foundation.
Why are research results from economics particularly important in present times? When I think of the current, significant questions, for example about the investments for more sustainability, digitalization of labor markets, the unequal distribution of wealth, or (de-)globalization, I see that they all carry a strong potential for polarization. Economics as a “popular” science has the task of strengthening and uniting the economy and society with its solutions. To do this, we need research results based on solid methods that thus deliver fact-based answers. This the only way that we can credibly and effectively combat the current economic and social challenges and in particular the polarization of society.
Economics has the empirical instruments, the theoretical foundations, and an interdisciplinary perspective that can deliver this knowledge. We face this challenge at the Department of Economics at the University of Zurich by frequently questioning and redefining conventions and thought categories.
Which themes will the next generation of economists examine? Our attention, perception, and memory are imperfect, and this has large effects on our behavior. In the past, economics assumed that a person has a number of possible choices and selects the one that seems to be the best based on his or her objectives – and these can be egoistical or altruistic. However, we are unable to perceive the entirety of all of the choice alternatives that are available to us. Our attention is limited. I stand in the supermarket in front of the open refrigerator and see forty types of yogurt. I don’t know anyone who stands in front of the shelves and carefully and consciencely considers the taste and method of production of each yogurt. This knowledge is not new. But we have just begun to understand what this limited attention means for human behavior. And as limited as our attention is, so is our perception imperfect.
And which open question still keeps you awake at night? The question of how personality and human preferences are formed through norms, upbringing, and economic practices fascinates me. The economy does not only produce goods, but it also “produces” people with certain personality characteristics. The economic understanding of the formation of personality is very, very limited, even though this has enormous consequences for the functioning of economics and society.
