CERGE-EI recently participated in the ‘Week of Science’ (Tyden vědy) of the Academy of Sciences. The Week of Science is the most extensive scientific festival in the Czech Republic with over 500 events and activities across the whole country.
CERGE-EI participated in the festival by inviting young Czech students to take part in an economic experiment. The experiment allowed the students to experience the scientific research being done on human decision-making.
While in the CERGE-EI computer lab, the students took tests of short-term memory and learned basic information about the significance of short-term memory for everyday life and human intelligence.
The second part of the experiment was devoted directly to human decision making, with the students solving concrete logical problems. Subsequently they were presented with the correct solution to the problem and learned about the decision making steps required to reach the answer.
The students also got familiar with the concept of the “Keynesian beauty contest,” which illustrates the difference between valuation on the basis of personal preferences and on the basis of perceived popularity in society. The aim of the experiments was to help the pupils understand how experimental economic research is done while also learning the basic role of human decision-making in economic theories and everyday life.
Education in economics is one of the least reformed areas in the post-communist world. University classrooms across the former Soviet bloc severely lack motivated and professional economic instructors. Poor instruction engenders future thinkers, voters, and leaders with distorted or no understanding of modern economic principles. Young people are robbed of a quality education that can aid them in thinking critically about the problems facing their societies. This subsequently impedes the prospects for greater openness, growth, and prosperity in this important part of the world.
CERGE-EI Teaching Fellowship Program supports dedicated young men and women who enter undergraduate classrooms across the region to teach modern, market-based economics to the next generation. Teaching with novel methods and modern textbooks, fellows introduce new ways of thinking. Beyond their strong impact in the classroom, the fellows demonstrate best practices to other faculty members, raising quality throughout their host institutions.
Tomáš Miklánek, a CERGE-EI PhD Student from Slovakia, wanted to make a contribution to the future prosperity of the region and decided to join the Teaching Fellows Program to teach a course. Teaching in the classroom is never an easy thing, but Tomáš had his mind set on an even bigger challenge. Rather than teach in his native Slovakia (or in the Czech Republic, a close cultural and linguistic cousin), Tomáš decided to teach in Voronezh, Russia, a remote city in Southwestern Russia.
Why did he choose Voronezh? What experiences and impact did he have there? Watch the brief video interview with Tomáš to learn more!
Corruption undermines democratic institutions, slows economic development and contributes to governmental instability. An endemic problem across the developed and developing world, corruption poses a major challenge to policy makers and governments worried about maintaining legitimacy.
So how do we fight corruption? The answer is far from clear. As David Ondracka notes, you close one hole only to discover that two new ones have opened.
That’s why on Thursday, November 21st, leaders of government, civil society, and the private sector came together at CERGE-EI to discuss innovative anti-corruption solutions and lessons learned.
See the speakers and watch the full event (including lecture slides) in the link below!:
In his new book, ‘Economic Elites, Crises, and Democracy,’ Andrés Solimano thoughtfully examines the main challenges to global capitalism, including the rise of economic elites, the increased frequency of financial crises, and rising public discontent with the status-quo.
During his CERGE-EI visit on November 19th, Professor Solimano presented data showing the rise of rich economic elites and the fragmentation of the middle class. He warned that these trends, combined with the weakening of the traditional working class and marginalization of labor, are a common feature of capitalist societies all over the world and together constitute a major threat to the stability of the system.
He also noted that financial crises have increased markedly since the 1980s, and have recently reached the ‘core’ economies of the world system. All this has led to fractionalization and public disenchantment with democracy, which manifests in social protests and the rise of extreme politics.
Solimano forcefully argued that these trends threaten to undermine the global capitalist system unless new approaches are adopted in order to solve the world’s acute social problems. He briefly discussed potential approaches, including redistributional tax policies, reclaiming and redefining public ownership, and giving labor and the middle class more voice in austerity programs.
Given the brief time available, Professor Salimano could not go into great detail about such an ambitious topic. Lucky for us, the detailed information can be found in his book, which is available for purchase here!
Over the course of his long career, George Psacharopoulos has made a deep impact on the way education is viewed from the perspective of economics. During his CERGE-EI Public Lecture on November 4th, Prof Psacharopoulos gave an interesting overview of the evolution of this research. He walked the audience through years of evolving theories and empirical evidence on the importance of education as both a personal and public investment, sharing a number of revealing facts and thoughtful insights.
See the full lecture with accompanying slides here:
The CERGE-EI Foundation recently completed a generous grant made possible by the generous support of the American people through the United States Agency for International Development’s (USAID) the American Schools and Hospitals Abroad program (ASHA). ASHA provides assistance to schools, libraries, and medical centers outside the United States that serve as study and demonstration centers for American ideas and practices. ASHA’s grants help these institutions train future leaders in a wide variety of disciplines, support local and regional infrastructure to foster development, and cultivate positive relationships and mutual understanding among citizens of the United States and other nations.
The grant was awarded to the CERGE-EI Foundation to support the world-class CERGE-EI library in Prague. The ASHA grant supported the purchase of library commodities such as books, manuscripts, and electronic resources including journal subscriptions and databases. The grant provided $400,000 over two years, from October 2012 until the end of September 2014.
These resources are accessible to CERGE-EI students as well as all our affiliates and even the general public. With the help of ASHA, the CERGE-EI library is a crucial resource for researchers in economics and related fields who need full access to the best and most current knowledge in the field, as well as a large archive of previous publications. Investing in digital subscriptions and e-books has allowed the CERGE-EI library to extend its reach all over the world.
CERGE-EI is very grateful to ASHA, USAID, and the USA for their support of the library. With ASHA’s help, CERGE-EI is pushing forward with its mission to educate economists in modern economic theory, create an intellectual environment that emphasizes Western ideals of free and open inquiry, and serve as a model and resource for the reform of economic education and scholarship in the post-communist transition economies.
The U.S. Agency for International Development administers the U.S. foreign assistance program providing economic and humanitarian assistance in more than 80 countries worldwide.
The contents are the responsibility of CERGE-EI and the CERGE-EI Foundation and do not necessarily reflect the views of USAID or the United States Government.
Do you want to study at a leading economics institute in the region? The CERGE-EI Open Day is a chance for masters and bachelor students to explore and learn more about CERGE-EI. The Open Day includes:
Presentations on PhD and Masters Programs
Opportunity to meet students, faculty, and alumni
Classes open to visitors
Come to find out more about studying at CERGE-EI. Explore our campus in the center of Prague, meet your future faculty, get to know the students, and hear what alumni have to say about CERGE-EI enhancing their career.
The following article was written in Czech by Kateřina Surmanová for Hospodářské Noviny on September 29th. The original article can be found here.
CERGE-EI maintains that it ranks among the best economic institutes in the world. Recently CERGE-EI cooperated with Oxford University in organizing an academic conference focused on the connection between psychology and economics. The prestigious English university specifically requested CERGE-EI’s cooperation in organizing and participating in the conference, and CERGE-EI researchers were given the job of choosing who to invite.
“It’s quite common for individuals to attend academic conferences abroad. But for one institution to invite an entire other institution is quite an honor,” said Filip Matejka of CERGE-EI, who has been specializing in the special topic of the conference (the theory known as ‘Rational Inattention’) since his time as a PhD student at Princeton University.
CERGE-EI Economist Filip Matejka
CERGE-EI already earned a good name for itself two years ago when it organized the first annual ‘Rational Inattention’ conference in Prague. Twenty top economists took part in that conference, including Christopher Sims, who is the 2011 winner of the Nobel Prize in Economic Sciences and a long-time research collaborator with Matejka. “We have managed to convince our international colleagues that we know how to organize a top-level conference and that we have research expertise in the field,” mentioned Matejka.
Unemployment is a major source of misery in modern society. It is also plainly a waste of resources. So it is perhaps no surprise that macro and labor economists are obsessed with explaining the phenomenon. But are they searching in the wrong place for answers? Professor Andrew Oswald (Warwick University) said at his public lecture at CERGE-EI that he thinks they are, and that he may have found a key.
According to Oswald, economists have typically looked for answers “too close to the source.” Standard explanations have focused on the impact of trade unions, over-generous unemployment benefits, and inflexible labor markets. Yet policies meant to address these issues have made only minor dents on unemployment levels.
Professor Oswald ventured to propose a radically different explanation for the persistent unemployment we observe across developed countries. According to his research, the level of homeownership within an economic area can largely explain the level of unemployment. Few economists have explored this rather unintuitive notion, but as Oswald noted, it is typical for experts to overlook deep structural forces in favor of more immediate explanations.
But how does homeownership negatively impact employment? Oswald considers three possibilities. The first is that higher homeownership lowers geographical mobility. By reducing the flexibility to move between locations, homeownership reduces workers ability to relocate to places where their knowledge and skills may be put to better use. The second possibility is that homeownership contributes to urban sprawl and lower-density housing. Long commuting times and congestion hamper economic activity and efficiency.
Finally, Oswald points out that homeownership directly relates to the ‘Not in My Back Yard’ problem (NIMBY). Homeowners often oppose new productive development projects because they perceive the projects as having negative external effects on their neighborhood. Residents can often team up in homeowners’ unions to block projects from being realized. Even though they often agree that those developments are needed in society, they do not want the development to take place in their ‘back yard.’ As such, NIMBY blocks productive economic activity and development from taking root.
Pondering how a lake becomes filled with water, primitive man would have concluded that it collects the rain falling from the sky. He could not have imagined that hidden streams of water deep underground are the true source. Andrew Oswald’s proposition—that homeownership is the underlying cause of long-term unemployment—is also hidden from sight, but that certainly doesn’t mean it’s not there.
The CERGE-EI Public Speaker Series invites leading international scholars to Prague to present their ideas and engage in public discussion. Learn about upcoming CERGE-EI events here.
