Articles

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.

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 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.

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.

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.

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 is a better place to start a career – a startup or a corporation? What opportunities does each of the options open up to a junior specialist and will greater risks bring greater rewards? Four NES graduates, Dzhangir Dzhangirov (Senior Vice President, Sberbank), Nadia Kotova (Economist, LinkedIn), Dmitry Matskevich (entrepreneur, CEO and Co-Founder, DBrain) and Irina Nazarova (CEO, Evil Martians), compared the two career tracks during NES Popular Science Days. The main points of the discussion follow below. 

In a crisis, fundamental education becomes a protective asset, because it provides knowledge and tools that expand choice and help to withstand uncertainty. Recently, one of the sessions during NES Popular Science Days in memory of Gur Ofer was devoted to the interaction between universities and employers representing business. Here we publish the summarized ideas presented by the speakers: Anton Suvorov, NES Professor and Rector; Andrey Raigorodsky, Dean of the Phystech School of Applied Mathematics and Computer Science; Maria Bogomolova, Partner, Leader of the strategic HR agenda of "Technologies of Trust"; and Andrey Skorochkin, CEO of Reksoft Consulting. 

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 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.

Over the past decade, the role of China in Russia’s foreign trade has grown significantly and now, most likely, it will become the country’s main trade partner, boasting a large margin from other countries, NES Professor and Director of the Center for Economic and Financial Research Natalya Volchkova says. It is China's stance that will largely determine Russia's life under sanctions, and at the same time, it can become a window to the world economy. The main takeaways from the "Economics out Loud" podcast with Natalya Volchkova follow below.

Who Killed the Phillips Curve? is the name of a paper by the US Fed's economists. The IMF, central banks and leading macroeconomists are all trying to understand what has happened to it and their interest is not theoretical at all. The answer to this question determines quite a lot, in particular, how much central banks should tighten their policy in order to curb inflation that has broken out of control.