"Being Argentine, I lived with financial crisis, with inflation, since I was a kid," says UCLA graduate student Alejandro Simone. "That makes you interested in economics."

Argentina suffered two periods of hyperinflation in 1988 and 1989. Alejandro was 15 and 16 years old then. In 1994, when Argentina was undergoing a deep recession triggered by the Mexican financial crisis, he was studying economics at Universidad Di Tella in Buenos Aires. With Argentina's financial woes regularly making headlines in recent years, Alejandro has been at UCLA, working towards a PhD in Economics and hoping for a career helping Argentina and other developing countries to prevent crises in the future.

His dissertation research is focused on that goal. Doctoral students in economics may choose to write essays on three separate topics, rather than the more conventional one-topic dissertation. Each of Alejandro's essays asks a question related to the dispersal of financial crises across national borders. First, can financial crises, like contagious diseases, spread from country to country, even to sound economies? Second, what internal problems contribute to a country's vulnerability to international financial crises? Third, is there anything that governments can do to help protect their countries from these disruptions?.

His answer to the first question-that essay is already written-is that it is very unlikely. Countries where internal economic conditions are sound usually do not find themselves "catching a crisis." Now examining the second question, Alejandro believes that international financial links coupled with domestic financial sector weaknesses contribute strongly to the spread of crises. When banks or institutional investors experience trouble generated by a financial crisis in a developing country, they look to reduce the risk of their portfolios by withdrawing investments from the relatively weaker developing countries and putting the money in more conservative assets. Weak economies experience a reduction in capital inflows or capital flight that exacerbates their financial sector problems and crises are triggered.

But developing countries "are mostly responsible for what happens to them," as Alejandro sees it. "When you lead a disordered life, you have a higher propensity to get sick." What countries need, like Argentina needed in 1994, is strengthening their financial systems with rules and structures that minimize resource misallocation and discourage excessive risk taking. A policy recommendation in this direction would be improving accounting standards so that proper monitoring of bank balance sheets allows regulators and economic agents to assess accurately their financial health.

"A financial crisis is no joke for a developing country," Alejandro says. During his youth, he saw the effects of economic disruption firsthand: deep recessions, high unemployment and high inflation. Studying Economics was the way of gaining a deeper understanding of these serious problems.

Alejandro's father, an Oxford graduate in Economics, knew the group of Top US universities PhDs who founded Universidad Di Tella in 1992 and recommended it to his son. "I was the first student to enroll in the university," Alejandro says.

UCLA was Alejandro's choice for graduate studies. As an undergraduate at Di Tella, he became familiar with the work of Carlos Vegh and Arnold Harberger, both on the faculty in economics at UCLA. "To come here was a wonderful opportunity," Alejandro says. He hoped to work with Professor Vegh, who is now his dissertation adviser. "Alejandro has been an excellent student, as he combines a very perceptive analytical mind with a superb understanding of the real world," Professor Vegh says. "He has done some very interesting empirical work on financial contagion."

When that interesting work is formalized in a dissertation and filed-by October, he hopes-Alejandro looks forward to helping solve the problems he's been describing. His goal is a job with the International Monetary Fund, a Washington, D.C.-based organization that works with developing countries to help them resolve their economic problems. "What better place could I go?" he asks.

At least for the moment, universities are not on his list of potential employers, although he likes teaching and worked as a teaching assistant at Universidad Di Tella and-for nine quarters-at UCLA, winning his department's certificate of teaching merit. Professor Harberger, who is also a mentor, says that Alejandro dresses quite formally when he teaches and "infuses his lectures and presentations with such enthusiasm he has everybody on the edge of their seats."

Alejandro says he is particularly encouraged when students in his basic undergraduate classes "come to say thank you and to tell me they learned something useful," he says. "That's one of the greatest rewards of teaching-changing the way people think, perhaps even influencing their career directions by showing them that economics is a fascinating science they may want to study."

Nevertheless, at the moment, Alejandro is looking for a hands-on experience. "I've been doing academic type of work for many years," he says. "It's time for a change, influence how economic policy is carried out, and hope that what I learned will help me make a difference."

Published in Winter 2002, Graduate Quarterly