This top-ranked young economist tracks the impact of oil prices on the global economy

Deciphering the after-shock.

One of the biggest challenges that central banks face is how to respond to commodity price shocks – unpredictable events that can have severe and wide-reaching effects on both the global economy and consumers alike.

'These shocks are unanticipated – we don’t know when they’re going to occur, and knowing how policy-makers need to respond is still controversial,' says economist Joaquin Vespignani from the Tasmanian School of Business & Economics.

If anyone can interpret these economic shocks, it’s Vespignani. In 2017, he was named the top-ranked young economist in Australia by Research Papers in Economics (RePEc) for the second year running, and one of the top 10 in the world by year of graduation.

He specialises in applied macroeconomics, which uses economic theory to study the behaviour of whole (or aggregate) economies, and forecasts national income movements through the analysis of key patterns and trends.

It’s an area that’s held his curiosity since the earliest days of his Master’s degree in Economic Studies, which he moved from his native Argentina to Australia to complete.

Vespignani’s ability to unravel some of the most stubborn mysteries in macroeconomics saw him climb the ranks of the international banking industry. By 2010, he was the principal economist for Australia and New Zealand at Barclays Investment Bank.

Here, he was responsible for providing forecasting and advice to international and domestic investment funds, banks, and other large financial institutions.

But what ultimately attracted Vespignani to academia was that it offered him an even greater opportunity to make an impact on global policy-making than he could in the commercial sector.

'In academia, you can work on papers for years, but at the bank, you have only a few weeks to publish, so there’s less rigour,' he explains. 'I feel like I can better contribute to the field.'

After completing his PhD at UNSW in 2012, Vespignani joined the University of Tasmania as a lecturer in economics and finance.

Vespignani has since written the two most downloaded articles of the past year in the journal Energy Economics – both on the effect of oil prices on the macroeconomy.

And he suspects that the world’s deep interest in the volatile economics of this coveted ‘black gold’ will extend far beyond the proliferation of renewables in the future.

'For many, many years, most of the world’s energy has come from oil, not renewable sources, and the population has increased significantly in the past 100 years,' he says.

'It will continue growing into 2050, and that means much more consumption of energy. Even if per capita consumption decreases, the size of the global population will make it quite difficult to live only with renewables. Oil will be part of the mix for a long time.'

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