Guido Tabellini is Full Professor in Economics and holds the Intesa Sanpaolo Chair in Political Economics. He has been Rector of Bocconi University from 2008 to 2012. Professor Tabellini began his studies at the University of Turin, and later earned a PhD from UCLA. He received the first Premio De Sanctis per le Scienze Economiche in September together with Raffaella Sadun.
What does it mean for you to have received a prize that is named after to one of the greatest Italian literary critics, Francesco De Sanctis?
Clearly, the most immediate reaction one can have is to feel honored. Moreover, this edition of the prize was the first dedicated to economic sciences, which certainly adds to the prestige, and represents the culmination of a life of research in my chosen field. This prize also reflects the interdisciplinary direction that economics is taking, given that it is also awarded in other areas of knowledge.
Do you think you deserve a prize in some other field? Rather, does an economist also have time for other activities?
I am very passionate about sailing, and I know that many Bocconi students are too; I sometimes have the occasion to meet them in the water.
So, the next prize will be a regatta, won’t it?
It would be wonderful!
Talking about young people: what book would you recommend to an economist in the making?
Economics is such a broad field that it is difficult to commit to a specific book. I’d rather suggest something that is not economic in nature, but that inevitably has repercussions for the sector: “The WEIRDest people in the world”, where weird stands for Western, educated, industrialized, rich, democratic (written by Joseph Heinrich, editor’s note), explores the peculiarities of the societies many of us were born in with respect to the rest of the world. It is closer to anthropology than economics but is a fascinating read.
What are suggestions you can give to young economists?
Economics has shifted its paradigm immensely in the past decades, going from being purely theoretical to having a strong empirical basis. Hence, although mathematics is sometimes not fully appreciated, students of economics are required to have a solid empirical foundation. And yes, this also means computer science!
Isn’t there a risk of becoming too mathematical, turning us into physicists?
As it often occurs with knowledge, there is a need for balance. One should never disdain theory, and should be well prepared in it, but the theory must always be consistent with mathematics. Overall, my suggestion is to never take shortcuts: be equally solid in macro as well as in micro.
Compared to physics, isn’t economics “inadequate”?
No, economics is not inadequate: it’s just that the questions change. This means that new questions may carry with them more uncertainty, but at the same time more precision. Uncertainty does not necessarily conflict with progress. And the advancements we can hope for with artificial intelligence and computing may allow us to quell this uncertainty further. The pendulum swings constantly from one side to the other, whether it is theory and empiricism, certainty, and uncertainty. Clearly, though, the most important innovations are interdisciplinary.
What are your thoughts after the Italian elections? Are there proposals you find impossible to sustain?
Generally, the situation is difficult due to the combined problems of debt and interest rate rises. This puts inevitable pressure in a country like Italy given our levels of debt (around 160%, editor’s note). And there is a ripple effect on electoral proposals. For instance, a pure flat tax is impossible to implement, given that it is only seen in Eastern European countries where government spending is low. Similarly, while the Reddito di cittadinanza may have a legitimate premise, which is that no one should starve in an advanced economy, its implementation is much more debatable. Another very delicate issue is that of pensions because we simply spend too much.
Overall, my hope is that there will be no significant falls or mistakes, even though many things I believe should be done are not in the programs of most political parties: we must reinforce competition and strive for a healthy meritocracy. Also, we must not disdain some constitutional reforms. Anyhow, I think that political leaders are at least somewhat aware of this.
Outlook for the future?
The future is particularly uncertain now due to the Ukrainian war, the Russo-Chinese axis, and the risk of pandemics. On a more positive note, I believe the country is more aware of these challenges after the difficult pandemic years. We certainly have more tools, but it is undeniable that the challenges that await are of immense difficulty. For this reason, there is a need for a unified Europe that can confront these hardships and I think that common sense will prevail.
The fact is that the war creates a higher degree of uncertainty, but Europe has the necessary tools. We must not forget that changes brought on by challenges can be positive and of capital importance: just think of the advances in the medical field of the past few years. So, while I cannot deny that there are enormous challenges, I think that the rapid progress we have made can offset these. We must always remember that democracies are much more resilient and vital than some wish to convey.