Can Investors Ride the Market Waves?

What myths do markets generate and what mistakes do investors make under their influence? Dmitry Muravyev, a professor at Michigan State University and NES graduate, discussed these questions in an episode of the "Economics out Loud" podcast. Just before it was recorded, the continuos rally at the US stock market was interrupted: August proved its reputation of being one of the worst months of the year, and the market turned bearish. Is it possible to predict a decline after such growth? And is it worth trying to seize the moment and try to enter and exit the market on time? GURU shares a summary of the podcast episode.


How Data Deceives Us, and Theories Let Us down

The confidence revolution has dramatically improved the quality of economic and political decisions. Hypotheses and theories can now be supported or refuted by data. In a column for GURU, Assistant Professor of Economics at NES Gerhard Toews talks about the data-related opportunities that have recently opened up – and that are not always made use of. 


On Erdogan’s Journey

In his column for GURU, NES Professor Ozgur Evren talks about the recent presidential elections in Turkey, discusses the results of Erdogan's rule and shares some expectations from his new presidency.


Will Artificial Intelligence Replace Economists

Looks like that not now. Anyway, the popular chatbot ChatGPT failed an economics exam at NES. The experiment conducted by GURU showed what the chatbot is capable of, how it makes elementary mistakes, how it solves tasks, and how it deceives, guided by the advice of one of Shakespeare's heroes: "Your bait of falsehood takes this carp of truth."


How GURU and NES Gave ChatGPT an Exam

GURU editors and NES Professor Olga Kuzmina decided to test ChatGPT's knowledge of economics. The results of the experiment are available here. And for those who would like to learn all the details, we have written the article below.


How Сan We Improve the Quality of Justice?

The judiciary acts as a critical check over the other two branches of government – legislative and executive. This, however, can only be secured by its independence. How can this be achieved in countries without strong and well-established democratic institutions? According to NES Professor Sultan Mehmood, the first step should be the establishment of a proper system of the selection and appointment of judges. In a column for GURU, he talks about the centuries-long dispute about different approaches to select judges. He then provides evidence that uses a unique natural experiment to bring to bear the answer to the question of judicial selection.



The "Panic of 1825" as a Model of Financial Crises

The boom of financial and technological innovations, market euphoria and bubbles, the explosive growth of financial intermediaries, rising raw materials prices and blind investor trust instantly turned into panic. This is not a description of the dot-com crisis or the global financial crisis of 2008, but of the events that took place 200 years ago. The crisis of 1825 became a template for future shocks and at the same time led to changes in monetary policy and regulation that are still in place today.

This is the first article, opening a series of texts about economic and financial crises – their causes, consequences and the lessons that we should learn from them. From these articles on GURU, you will learn the history of capitalism – how it got sick and how it recovered.



Quality of Justice: Impact of Religious Rituals on Court Decisions

How can the quality of judges’ decisions be improved and what factors influence them? NES Professor Sultan Mehmood suggests an unusual answer to this topical question. Together with co-authors Avner Seror (Aix-Marseille School of Economics) and Daniel L. Chen (Toulouse School of Economics), he examined millions of cases and thousands of judges across the Muslim world to show the effect of Ramadan observance, one of the major rituals in Muslim countries, on judicial decisions. The quantitative analysis concludes that Ramadan observance, that is associated with austerity in food and drink, paradoxically, makes judges more lenient. In this column for GURU, Sultan Mehmood talks about this paper.



How to Avoid Eye Tricks in Statistics?

We often find surprising coincidences in statistics, for example, the correlation between the US budget expenditure on science and the number of people committing suicide by hanging themselves, or between movies with Nicolas Cage and the number of people that drown in pools. There is nothing mystical in this. Assistant Professor of Economics at the Duke University and NES graduate Anna Bykhovskaya explained in a new episode of the "Economics out Loud" podcast where these senseless correlations come from and how to avoid them. She also talked about the capabilities of models designed by economists and cases when models become useless. GURU shares a summary of the episode.



How Often Do Economies Enter Inflationary Spirals?

2021 and 2022 turned into a true inflationary shock for the world economy. Developed countries have not seen such a spike in prices since the 1980s. At the same time, the situation on the labor market was changing: the economies were recovering after the Covid pandemic, the demand for labor was growing, but supply was falling behind, which contributed to the growth of wages.


What Makes Oil Price Forecasting Similar to Billiards?

There is a saying that economists are trying to predict oil price movements so that meteorologists do not feel ashamed of their work. However, there is a grain of truth in this joke. NES visiting professor Alexander Malanichev who has been studying commodity prices for 30 years, talks about forecasting methods, accuracy of forecasts and ways to improve it. Spoiler: the most important thing is to consider fundamental factors and to listen to the market signals.



The Lessons of the 1970s Help the World in the 2020

The world is experiencing "the first truly global energy crisis," International Energy Agency Executive Director Fatih Birol said on the release day of the new episode of the "Economics out Loud" podcast with NES Visiting Professor Alexander Malanichev. By coincidence, he talked about the current energy crisis. There are many similarities between the shocks of the 1970s and the present day. For example, expensive oil and gas have become fuel for accelerating inflation. The rise in energy prices is fueled by political confrontation. Finally, Western economies again intend to come out of the crisis renewed and with smaller dependence on former suppliers and non-renewable energy sources in general. 

What will Europe face this winter? How will the oil and gas markets change? Will the West manage to deprive Russia of at least part of the petrodollars, and will Russia manage to redirect its oil and gas exports from Europe to Asia? What lessons can we learn from the 1970s? These questions were discussed in the podcast.