Oxford University and CERGE-EI Cooperate on Economic Conference

oxford and cerge

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.

Filip Matejka
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.

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Does Home Ownership Drive Unemployment?: A Public Lecture with Andrew Oswald

Andrew Oswald at CERGE-EI

 

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.

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What’s a Good Teacher Worth? A CERGE-EI Public Lecture by Eric Hanushek

Hanushek English Poster1 small_new border

“Economic growth is a function of education, period.”  During his public lecture at CERGE-EI, Professor Eric Hanushek emphasized the enormous impact that human capital (i.e. education) has on long-term economic development.  A renowned scholar in educational research, Professor Hanushek (Stanford University) used this link between education and development to make a compelling argument for improving the quality of instructors.

Prof. Hanushek began his lecture from a distance and gradually brought the audience ‘closer to earth.’ From the furthest vantage point, he established the unambiguous link between economic growth and test scores (i.e. what students know). A graph plotting test scores and economic growth revealed a nearly perfect correlation for a wide sample of countries over the past five decades. To Prof. Hanushek, the data screams loud and clear that imparting knowledge and skills through the educational system is the most potent means by which countries successfully grow.

Growth and test scores

Unfortunately, raising test scores is not so simple. Students may be required to attend school, and governments spend a great deal to make this happen, but merely sitting in a classroom with a teacher is not enough to guarantee meaningful learning. The question, then, is how to ensure that students learn while they sit in those classrooms.

According to Prof. Hanushek, research on student achievement has identified that good teachers play the essential role. In economic terms, how much can a good teacher contribute to economic growth? He showed that a top teacher with a class of 30 students will boost the cumulative lifetime income of that classroom group by over $800,000. Of course the inverse of this relationship also exists: lousy instruction from the worst teachers will damage their students’ earnings by a similar magnitude.

Removing the worst teachers and replacing them with average ones could contribute to large gains in test scores—and as Hanushek already demonstrated, higher test scores should directly contribute to long-term economic growth. Analyzing the Czech Republic and making conservative assumptions about teacher quality, he showed that removing the bottom 5% of teachers and replacing them with average instructors could lift the country’s test scores to the level of Finland. This in turn would add 110 trillion euros to the Czech Republic’s GDP over the next 80 years (in present value worth).

Eric Hanushek Lecture

Considering the enormous impact that good teachers can have on student achievement and economic growth, the focus on improving teacher quality should be paramount. Unfortunately, solutions to improve teacher quality are often misguided and ineffective.

Rather than focus on a teacher’s educational credentials, experience, or training, Prof. Hanushek proposed solutions that work with incentives and focus on outcomes.  He suggested methodically measuring testing outcomes and rewarding teachers for achieving defined objectives. He was also dismissive of those who see technology as a silver bullet. Accountability and performance rewards can be far more effective than giving students iPads.

Check out the full lecture below:

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Moving On: Recent CERGE-EI Graduates Take Impressive Job Posts

The past three months have been busy ones at CERGE-EI. Since the beginning of June, six CERGE-EI PhD candidates have successfully defended their theses and received their Doctorate in Economic Science. This enormous personal achievement is the culmination of years of hard work, dedication, and an endless thirst for knowledge. It is the pride of the whole CERGE-EI community to recognize these newly minted alumni and commend them for their stellar work and passionate commitment to their studies. They are: Anna Bogomolova, Martin Kuncl, Gurgen Aslanyan, Pavla Vozárová, Sherzod Tashpulatov, and Dragana Stanišić.

With their CERGE-EI doctorate in hand, several of these talented young minds have already secured jobs at impressive institutions across the world:

Martin Kuncl is working as a Senior Analyst at the Bank of Canada. His post is in the Macro-Financial Studies Division of the Canadian Economic Analysis Department.

Gurgen Aslanyan has taken a post as a lecturer at the Dilijan Research and Training Centre of the Central Bank of the Republic of Armenia.

Pavla (Nikolovová) Vozárová is an Assistant Professor at the Czech Technical University (ČVUT). She is working in the Department of Software Engineering at Faculty of Information Technology.

Dragana Stanišić is working at Accenture, a multinational management consulting firm. She will work as a Research Specialist for Growth and Strategy.

Anna Bogomolova is an assistant professor at the Economics Faculty of Novosibirsk State University.

Learn even more about where CERGE-EI graduates are working here.

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Randy Filer and Gega Todua’s Ice Bucket Challenge

CERGE-EI Ice Bucket Challenge

We have been impressed by how both the CERGE-EI and ISET communities have banded together to respond to various disasters in recent years. As the ALS Ice Bucket Challenge reminds us, however, there are many disasters that occur each and every day on an individual basis, whether they be ALS, MS, Alzheimer’s, Cerebral Palsy, or River Blindness, to name a few. These affflications may be more easily forgotten because they happen every day, but they are as equally devastating to those affected as the floods and tsunamis that get the big headlines.

Therefore, we challenge both the ISET and the CERGE-EI communities, by whatever means they decide, to adopt one such cause for the next month. The rules (it’s our challenge after all) are these:

1.  Each community should organize itself in the way it chooses, but it is our hope that the effort will be student-led but widely adopted.

2. The end results should be an Ice Bucket “chain.” For example, see this link.

3. Be creative, but do NOT do anything dangerous!

4. To participate in the chain a community member must donate according to their means to the charity their group selects. It doesn’t matter if it’s only a very small amount, it’s something.

5. The event must be videoed and posted.

6. The posting deadline is 1 AM September 17 in Tbilisi or 11 PM September 16 in Prague.

7. For whichever community creates the longest chain (number of participants, not total amount contributed), Barbara and Randy will match their donation to the cause that community (CERGE- EI or ISET) selects* up to $1,000 and, since this is in response to an ALS initiative, make an equal donation to an ALS charity.

Watch a video of this challenge here.

If you want to see Gega and me getting dunked you can here:

httpv://www.youtube.com/watch?v=dDpGjkbhUcY

Randy Filer

President, CERGE-EI Foundation

*Randy and Barbara reserve the right to select a particular organization based on US tax-exempt status and our reading of effectiveness (ratio of program expenses to administrative costs).

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Cafedu: Coffee and 24 Hour Study by CERGE-EI PhD Student Iva Pejsarová

Iva PejsarovaIva Pejsarová, a CERGE-EI PhD student, has recently opened a brand new coffeehouse with a study room. She was inspired by the study rooms in library she often visited while studying in England. After her return to Prague she lacked a place where one could study undisturbed but at the same time feel cozy and engaged.

She created the Cafedu project–a coffeehouse with a 24/7 study room. Her idea attracted an investor, Karel Janeček, famous Czech businessman and philanthropist, a member of Nadace CERGE-EI. If you need to study and/or you would like to enjoy some good coffee, visit Cafedu. It’s located in Škrétova street, just opposite the National Museum and a few minutes’ walk from CERGE-EI.

See the Cafedu picture gallery and more on its Facebook profile and website.

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CERGE-EI Teaching Fellows Welcomes 15 Full-Time Career Integration Fellows for 2014-2017

tf photo textIn its devotion to improve economics education across Eastern Europe and Central Asia, the CERGE-EI Foundation runs an ambitious program to bring economic scholars into undergraduate classrooms across the region. Bring best practices and modern economic knowledge, these scholars help fight against the dismal education standards and outdated resources that propagate ignorance and misinformation in this crucial region.

Known as the CERGE-EI Teaching Fellows, this program supports both short-term and long-term teaching posts. Every year it provides longer-term ‘career integration fellowships’ for economists who obtained their PhD in the West and plan to assume full-time academic positions teaching undergraduate economics in any country in Central and Eastern Europe or the countries of the former Soviet Union.

The purpose of the fellowship is to make academic careers in the post-communist countries more attractive for such graduates by providing supplemental income that should bridge the gap between academic and private sector salaries.

The fellowship also provides a set of services designed to improve the academic environment for the fellow including remote access to CERGE-EI Library resources and the opportunity to organize research stays at CERGE-EI.

Below is a list of the 2014-2017 career integration fellows:

Vardan Baghdasharian (PhD Catholic University of Milan, Italy, 2014) –  American University of Armenia, Yerevan, Armenia

Anna Bogomolova (PhD CERGE-EI, 2014)  – Novosibirsk State University, Russia

Lukáš Lafférs (PhD Norwegian School of Economics, 2014) – Matej Bel University, Banská Bystrica, Slovakia

Hyrije Abazi-Alili (PhD Staffordshire University, 2013) – South East European University, Tetovo, Macedonia

Petra Baji (PhD University of Maastricht, 2013) – Corvinus University of Budapest, Hungary

Ismail Baydur (PhD University of Virginia, 2014) – ADA University (formerly Azerbaijan Diplomatic Academy), Baku, Azerbaijan

Paola Bertoli (PhD European Doctorate [Universities of Bologna, Hamburg and Erasmus-Rotterdam], 2010) – Prague Economics University (VŠE), Prague, Czech Republic

Daniel Horn (PhD Central European University, 2010) – Eötvös Loránd University, Budapest, Hungary

Pavla (Nikolovová) Vozárová (PhD CERGE-EI, 2014) – Czech Technical University (ČVUT) in Prague, Czech Republic

Mira Nurmakhanova (PhD Iowa State University, 2008) – KIMEP, Almaty, Kazakhstan

Yessengali Oskenbayev (PhD ZEF Bonn, expected 2014) – Suleyman Demirel University, Almaty, Kazakhstan

Esmeralda Shehaj (PhD Shaffordshire University, 2013) – University of Tirana, Albania

Petar Stankov (PhD CERGE-EI, 2014) – University of National and World Economy, Sofia, Bulgaria

Aleksandar Vasilev (PhD University of Glasgow, 2013) – American University in Bulgaria, Blagoevgrad, Bulgaria

Dmitriy Vorobyev (PhD CERGE-EI, 2013) – Graduate School of Economics and Management, Ural Federal University, Ekaterinburg, Russia

The new full-time fellows are teaching in 10 countries across the region (Russia, Bulgaria, Kazakhstan, Albania, Czech Republic, Azerbaijan, Hungary, Macedonia, Slovakia, and Armenia)

Map of Teaching Fellows

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Triumph of the City: A Public Lecture by Ed Glaeser

Ed Glaeser at CERGE-EI

httpv://www.youtube.com/watch?v=frEF0Vg6I-0

“Cities are magical,” declared Ed Glaeser to open his public lecture at CERGE-EI. “They are an excellent source of research and policy debate.” Professor Glaeser is an economist at Harvard and the author of the book Triumph of the City. His passion for cities, however, is not limited to their fertile ground for research.  Glaeser argues that “cities magnify humanity’s strengths.” They spur innovation by facilitating human interaction, they attract talent and sharpen it through competition, they encourage entrepreneurship, and they promote social and economic mobility.

More than half of humanity now lives in cities, and Ed Glaeser sees this as a wonderful achievement. He also thinks that cities should be denser and cheaper; the more people, the better. The data agrees with him, as high earners happen to live together both in the USA and Europe. He backs up his argument with statistical evidence that was strong enough to refute Mahatma Gandhi’s famous quote “the future of India is in its villages not in its cities”.

Glaeser took us on a tour of urban economics, and how urban density contributed to the birth of publishing in New York, skyscrapers in Chicago, the auto industry in Detroit and, more recently, the information technology hub of Silicon Valley.  He also reminded us of the time when it really looked like cities were dying. “It really seemed possible that all of America’s older cities would revert back to some planet of apes like wilderness,” he recollects, referring to New York on the brink of bankruptcy in the 1970s.

 All of that decline was because it looked like cities had lost their original economic reason for being: Transportation. In the early days of the United States, it cost as much to ship 30 miles over land as to ship across the Atlantic. So cities emerged as nodes on a transportation system. As transportation became cheap, industry fled. It started to look like cities were doomed. The other real problem, was urban sprawl. “Each new highway that cut into an urban core reduced the city’s population by about 18% relative to the rest of the area.” The federal government pursued a strategy that ignored the real heart of a city: the people. As Professor Glaesrer reminded us, it’s not just Infrastructure that’s needed. A picture of the Detroit “people mover” flyover gliding over empty streets supports his argument.  The variable that explains which cities came back, according to Glaeser, is human capital: the schools and average education level. It’s the well-educated people of Boston, Minneapolis and New York who have continuously found new sources of prosperity when old ones ran out.

Prof. Glaeser also took time to mention what he called the “demons of density.”  One such evil is urban poverty in the developing world. Cities attract the poor with the promise of a better life than what the countryside can offer. But while the city provides opportunities for the urban poor, it also has to grapple with the pitfalls of poverty, including public health and crime. There are other downsides to cities. Some of these problems need more than just more engineering. “If you build cars, people will drive. You can’t engineer out of that, you need to be like Singapore, which charges people for congestion.” He continuously reminded the audience that the role of the state is not to tell people what to do, but to provide the right incentives and taxes so that people pay the full social cost of their actions.

Professor Glaeser’s CERGE-EI lecture left the audience hungry for more. Through his fascinating speech, he revealed how the relatively young field of urban economics is a rich area for further exploration. As urban spaces become a more important part of the human experience, the science of understanding and improving them will become increasingly essential. Professor Glaeser’s brief lecture served as a window into this fascinating world of research and inspired the audience to learn more. On behalf of the CERGE-EI community, we would like to thank him for his visit!

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Petar Stankov’s 2014 Graduation Gala Speech

About 9 years ago, my world was my cubicle. I was relatively happy with my job at a think-tank in Sofia and I had stable career prospects. But one day I got an email from a friend saying Hey, have a look at this school, you might be the right applicant. I applied, and soon my cubicle was these awesome walls and ceilings in this historical building. But I quickly realized CERGE-EI had much more than a classic cubicle to offer. Between these walls there was substance, there was challenge, there was ambition which matched my personal drive for progress.

CERGE-EI gave me the most powerful combination of tools for personal progress: a critical mind and unmatched determination. That particular frame of mind transformed the dreamer in me into an achiever. CERGE-EI has that special talent: it transforms dreams into goals, and goals — into achievements.

My greatest achievement which I owe to CERGE-EI is that now I can spread its Western education style, spirit and work ethics back in my home country. Now that I am employed full-time in academia, I can influence the people in my department through my research and CERGE-EI has taught me how to do it. My teachers here taught me in the art of asking the right questions and gave me the methods to answer them. My colleagues and friends from here are still the smartest people I have ever met. I learned universes from them. I went to conferences I would not have dreamt of going to; I talked to economists about whom I have only read in textbooks before. Last but not least, the school administration was perhaps the most helpful staff I have ever worked with.

But perhaps even more importantly, I can spread the Western education spirit through my students. CERGE-EI is a well-known place among them. I know that in some of those students lives the same dream that brought me to Prague. They know that they can have a world-class education not so far away from home, and they can get it in a city which immediately embraces you and makes you feel at home. They know that they can shape their future and the future of their country by going West, by coming to CERGE-EI. But part of CERGE-EI’s mission also means coming back and giving your best. That is why some of my students also share my credo which CERGE-EI shaped in me: Go West, Come Back, Kick Ass. Because that’s what we do best.

I thank you all for being a significant part of my life and for being here tonight. And now I wish you one kick-ass evening.

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