Bringing Financial Geography into Economics Education

Author: Dr. Stefanos Ioannou, Senior Lecturer in Economics, Oxford Brookes University; email: sioannou@brookes.ac.uk  

For the past five years, I have been teaching economics at Oxford Brookes University, including a module on finance and economic development for third-year undergraduate students. This module has provided me with a platform to show students how financial geography enriches economic analysis.

At the start of the module, I cover basic economic development models, such as the Harrod Domar model. Following, I delve into topics related to the real world, including theories of financial crises, global currency hierarchies, financial centres, FinTech (financial technology), and offshore finance. 

Financial geography offers a unique angle for each of the above topics. In some cases, it even forms their founding premise. The topic of financial centres is the most straightforward example to point out. It would hardly be possible to talk about Amsterdam, London and New York without discussing the forces that drive people to locate in near proximity in a given urban space.

Financial geography does not only enables the understanding of a topic but also offers insights extending to others. Using geography to understand financial centres, for example, is at the same time beneficial for a deeper comprehension of global currency hierarchies. There is no US Dollar without New York, and no New York without the US Dollar. 

Offshore finance is another example of a topic fundamentally underpinned by financial geography. Some of the questions we cover in my course explore how offshore finance differs from international finance, what the common characteristics of offshore centres are, what the interconnectedness among them is, and how do they rank in financial secrecy. Drawing on insights from my co-authored book Atlas of Finance, I begin with Caribbean offshore centres before bringing the topic closer to home to demonstrate the offshore features of London itself. (Have you ever wondered how many properties in central London are owned by firms registered in British Virgin Islands?)

Teaching financial geography to economics students is not just about the topics; it is also about introducing them to alternative research methods (from the point of view of economics), such as fieldwork research. Having survived the various courses on statistics and econometrics (which are, of course, part of the economics curriculum for a good reason), students are often surprised to find out that one can study familiar topics without getting lost in the dark world of standard errors, cointegration and heteroskedasticity. In my lecture on financial centres, for example, I use evidence from my own fieldwork research on Latin America, to highlight the value of tacit knowledge in finance. Likewise, on the topic of FinTech, I include insights from interviews with regulators to describe their own expectations of the impact of FinTech.

Teaching practice is unavoidably bounded by curriculum constraints and, perhaps rightfully, one could expect economics to provide a narrow space- if any- for financial geography. After all, economics has tried hard, and for a long time, to build a reputation of an insular discipline, with a pretence of an ability to explain all facets of human behaviour (see here for what I find as one of the most unfortunate examples).

Nonetheless, my economics colleagues are generally welcoming to financial geography. Despite the intellectual insularity of economics, the actual people on the ground are often curious about geography’s insights for both teaching and research. This is not to say that economics does not deserve its reputation, but only to draw a separation between economics in the abstract/ intellectual sense and economists as human beings. While there will always be a steady supply of intellectually arrogant economists, I find that the majority of economics colleagues are generally open to engaging with geography, such that the main barrier is not intellectual resistance, but a limited awareness of what geography stands to offer.

To be sure, these reflections are shaped by my own positionality. I do believe, however, that I am not the only one to have experienced a welcoming stance towards financial geography. Awareness of what geography has to offer is the main challenge, as I see it. One might find this statement a bit naïve. I prefer, however, to see the optimism in it.