Ligia Vado, Ph.D., brings more than 20 years of economic and financial policy research to her role as senior economist at Credit Union National Association.
As the newest member of CUNA’s research and policy analysis team, Vado uses data to support CUNA’s advocacy efforts.
Vado recently spoke with Credit Union Magazine about her career path, her new role, and the state of the economy.
Ligia Vado: My educational background is mostly in economics and finance, and my first job out of college was as a financial auditor at Pricewaterhouse Coopers. While studying for a master’s degree in agricultural and applied economics in Texas, I started working on U.S. Department of Agriculture-funded policy research projects.
As a Ph.D. student, I continued working on research on U.S. economics and agriculture. At the same time, I consulted for the World Bank Group, providing technical and policy assistance on multiple initiatives in risk financing and insurance on a global scale.
The common denominator throughout my career has been an interest in understanding longstanding and puzzling questions related to economic development and economic inequality, and in shedding light on these issues to formulate effective policy solutions.
A: Credit unions’ and CUNA’s mission of “people helping people” is in complete alignment with my mission to bridge the gaps that market forces can’t address by themselves. I believe the spirit of cooperation founded in love and equipped with the power of knowledge can provide a solution to assist the underserved and break inequality and poverty cycles.
One of my primary roles is to inform credit union leaders about national and international economic trends that might directly or indirectly affect the credit union landscape in the U.S. Another function is to support analytics projects conducing to a more data-driven advocacy strategy to enhance and elevate credit union advocacy.
The goal is to support the continued growth and success of the credit union movement by reaching wider sectors of the population and providing financial access and well-being for all.
A: The major global economic questions revolve around the extent to which countries will recover pre-pandemic economic growth and employment levels amid persistent risks of COVID-19 flare-ups, economic shocks emanating from the Russian invasion of Ukraine, and persistent worldwide inflationary pressures.
The International Monetary Fund in 2022 projected the global economy would slow from a projected real gross domestic product growth rate of 6.1% in 2021 to 3.6% in 2022 and 2023. It projected adverse effects would be larger in developing countries and emerging economies than in advanced economies, reflecting more limited policy support and lower vaccination rates.
It is worth noting that the spectrum of downside risks associated with this global economic forecast is wide and ranges from the worsening of the war to the possibility that a more virulent strain of the coronavirus emerges and triggers a new wave of generalized lockdowns.
On the other hand, the global inflation forecast for 2022 is 5.7% for advanced economies and 8.7% for emerging markets and developing economies. Although most of the pandemic-induced inflationary factors have eased, much uncertainty surrounds inflation projections stemming from war-induced supply and demand imbalances and increased commodity prices.
The extent to which war shocks will transmit to local economies will depend on trade and financial linkages with Russia and Ukraine, exposure to commodity price increases, and the magnitude of the prewar inflation surge.
A: The biggest economic concerns for the U.S. right now are centered around the convergence of the lingering effects of the COVID-19 pandemic and the impacts of Russia’s invasion of Ukraine on the U.S. economy.
A 40-year-high inflation rate is of particular concern not only due to its erosive effect on consumers’ real disposable income, but also due to rising inflation expectations and the triggering of price-wage dynamics, which can further fuel price increases.
Even though most of the primary drivers of last year’s inflation—such as pandemic-induced surging demand and supply destruction, supply chain bottlenecks, reduced labor supply, and expansive fiscal and monetary policy—have abated or reversed, the war in Ukraine is adding extra inflationary pressure by increasing energy and food prices, and creating new supply chain disruptions.
In this context, the Federal Reserve is tightening monetary policy more aggressively to tame inflation by more determinedly raising its federal funds target rate and shrinking its balance sheet. The biggest economic question in the U.S. is whether the Fed will be able to skillfully “soft land” its contracting monetary policy.
In other words, will the Fed be able to cool inflation without causing a recession?
A: The U.S. is a resilient country. I am optimistic that the economy will rise even stronger and more even than ever.
My hope is that the pandemic will teach us lessons that will stay ingrained in our culture in terms of work-life balance, flexibility, and a better integration of wellness in the way we do business.
Also, the pandemic has made evident that some segments of the population are significantly more vulnerable to economic shocks, namely women and minority groups.
My hope is that, as the progressive country we are, we move toward the creation and strengthening of a safety network for women and minorities to support their efforts for self-realization and financial stability.
A: Reading and listening to podcasts. I also love taking care of my plants. During the pandemic I became an amateur gardener.
I also love reading about spirituality and metaphysics.
A: I love living in Madison, Wis. I have lived in six states, but in all the previous states I was always a student or in transition. Madison gave me the ability to grow roots and a sense of belonging.
I enjoy getting away during winter to warmer places, like visiting beaches in Latin America.
This article appeared in the Summer 2022 issue of Credit Union Magazine. Subscribe here.