IAS Chatroom

Think Macro, Act Micro

A Chat with Prof Rachel Ngai on Economics, Research and Life

Born in Sichuan in China, Prof Ngai moved to Hong Kong with her family when she was six.
In 1993, Prof Ngai won a scholarship to enter HKUST as an undergraduate.

IAS Visiting Fellow Professor Rachel Ngai is the Associate Professor of Economics at the London School of Economics and Political Science (LSE), focusing on the research in macroeconomics. Born in China and raised in Hong Kong, Prof Ngai received her primary and secondary education here and obtained her BSc at HKUST. She then went to the University of Pennsylvania to pursue her PhD degree.

Prof Ngai is enthusiastic to share her insights on research and life experience by returning to HKUST as a Visiting Associate Professor of Economics in 2010, and now as a Visiting Fellow at IAS.

IAS

As an economist teaching at a world-class university, you have been focusing your research on economic growth and structural change. Could you share with us why you chose this particular field of study? How do you approach a question in research?
 

Rachel

My research is driven by observation. I was born in China and moved to Hong Kong when I was six. The first time I noticed the striking differences in the economies of different places was in high school. I was a tutor in Hong Kong and my salary was HK$100 an hour, which was so much higher than that of my father, who was a pharmacist earning HK$300 a month in China.

When I went to the US to pursue a PhD, I saw another big jump in the development level and income difference. A number of influential studies in economics have documented that the income gap between the top 5% of developed countries and the bottom 5% of undeveloped countries is about 40 times. In terms of work hours, laborers in poorer countries have to work for a whole year to earn the same amount as those in richer countries earn in a month. This inspired me to seek a more in-depth explanation, and that finally became my dissertation, in which I argued that poorer countries are undergoing a huge transition. Later on, when I started working at LSE, I shared my ideas about structural transformation with Professor Sir Christopher Pissarides. From then we started our joint project on structural change and economic growth. We found that the key process associated with economic growth is that a country transforms itself from an agricultural to a manufacturing and then a service economy. This has occurred in all developed countries, and developing countries such as China are experiencing it.

I would say that I am an applied macroeconomist, because I am always motivated by macroeconomic facts. My approach to a question in research is to look at the facts, think about the key reasons, write down a model, test the model against real data, and then check if the model can predict something that is meaningful.

IAS

Do you think democracy is also one of the conditions for a country to achieve economic growth?
 

Rachel

There has been a long debate on whether democracy promotes economic growth, and the answer until today is still ambiguous. Democracy means that people are free to choose and decide what is best for their own country. They have the right to vote and the freedom to express themselves. To some extent, this forms the foundation of an open government and the basis for welcoming new ideas, which may favor economic growth. However, some countries have experienced rapid economic growth without democracy in the usual sense, which is true in China.

IAS

When you left HKUST for the US to pursue PhD studies, did you experience any cultural shock? How did you adapt to the lifestyle in the States?
 

Rachel

I did my undergraduate study here at HKUST from 1993 to 1996. In my generation, students were still very obedient. We respected teachers and believed in everything they taught us. We did not challenge teachers or textbooks.

When I went to the US I still got good grades on exams and even received an award for being the best student in my first year, despite not knowing how to ask questions. However, I faced problems from the second year on. I was not as assertive as other students, as I only knew how to answer questions, not how to ask questions. I was intimidated by this realization. It took me a long time to rebuild my confidence and master the skills of critical thinking. Asking questions is essential for a researcher, as you need to develop your own viewpoints.

Started as an exchange student at the University of Pennsylvania, Prof Ngai ended up finishing her postgraduate studies there with a fellowship.

IAS

As a full-time faculty member and mother of a toddler, how do you balance work and family?
 

Rachel

To be honest, I still haven’t achieved that balance. It is a constant struggle. Either you sacrifice some of your career ambitions or sacrifice the time you spend with your child. For me, trying to avoid those sacrifices means that I give up all my leisure time, and even sleeping time. However, I have to say that I am very happy with such chaos. I feel blessed that I can pursue my career but still have a very close bond with my son. Naturally, I wish there was a better balance. Right now, I am still in search of that equilibrium.

Apart from work, Prof Ngai devotes most of her time to her family, especially her 5-year-old son while she is still striking the balance between work and family.

IAS

You have been connected with HKUST for a long time. First as an undergraduate student, then as a Visiting Associate Professor some years back, and now as a Visiting Fellow of IAS. Do you see any change in the learning environment and students’ attitudes over the years? Where do you see your alma mater being in 20 years, with IAS playing a pivotal role in driving research excellence?
 

Rachel

The local students have become more confident and independent. I think it is a result of having a nice blend of local and foreign students. When I was teaching courses here at HKUST, I could see the local students, mainland students, and overseas students influencing each other positively by bringing in different approaches to thinking. This interaction helps local students to observe and explore the world with a wider perspective.

In addition, compared to my generation, students now are more proactive in asking questions and raising new ideas. They are also very capable of presenting their ideas. I asked them to read some research papers and give presentations, and they all did a great job. Their English proficiency is much higher these days as well.

I joined IAS in 2011, and I see that IAS has been growing very fast and in a very good direction. IAS is acting as an effective engine for the development of research in different fields through organizing research seminars and guest lectures and by bringing in top-notch scholars to arouse students’ interest in research.