Interview with Thomas Sargent on the Ph.D. and Elite MA Programs at PHBS
2019-09-26 10:08:26
Questions posed by Professor Jiao Shi
Written for SIQEF Newsletter
Q: Why is PHBS trying to start a Ph.D. program?
A: Because the Dean and administration believe that economic theory and econometrics provide good ways to understand economic and social interactions and to devise ways to improve peoples' lives.
Q: Who are PHBS’s targeted students?
A: Students from China (and other countries too!) who want to learn economics and how it can be used in diverse applications
Q: What are the goals of the program?
A: To empower students by teaching them the fundamental tools and ideas of economics. While economic theory can seem bewildering and immensely complicated because it appears very technical at first sight, in reality there is a unity and simplicity to it if seen from the proper perspective. A small number of results from mathematics and statistics and economic theory serve to unify what seem at first to be diverse areas of economics. By presenting those tools to students in a patient and step-at-a-time way, we intend to empower them and make them confident in understanding and creating economic theories.
Q: We know that the program is quite different from other programs in China, which typically feature an apprenticeship style of advising. Some students call it an “American style” Econ Ph.D. program. In which ways is the program different from other programs in the US?
A: PHBS is not bashful in saying that the program is mainly “copied” from the best programs that we have seen in place at other places. We have tried to copy and combine and improve aspects of the most successful programs that we know about in other countries, in particular, in the United Kingdom at the London School of Economics and in Austria at a master's program that has since been discontinued. Those programs taught students the basics — small amounts of core material that made it easy for students to understand other work based on those foundations.
Q: The design of the program means students will not get a chance to learn applications of the tools until later in their Ph.D. program. How are we going to introduce them to economics applications after the fundamental classes?
A: That will be easy because at Peking University HSBC Business school we have some ambitious and technically very good young faculty members doing applied research in a variety of fields. MA and Ph.D. students will meet them and take courses from them after they acquire the basic tools. And because the students will be tooled up and empowered, they will be able to participate in applied research quickly.
Q: Some students may question whether the basic training is “useful.” How should we answer those questions?
A: Be pragmatic. Basic training has been the key to success for many, many fine economists. There are no shortcuts.
Q: Why is it better to introduce the tool set first, instead of introducing questions and let students acquire the tools when searching for answer?
A: Good question. Two answers: the pragmatic answer - learning tools after you have a question just hasn't seemed to work for most people. Why? Because learning tools actually teaches you what are good questions to ask. And while learning tools, one sees example after example of work carefully done, and that is contagious.
Q: What does it mean when you say that you hope eventually to make the curriculum be coherent and connected? And why is that important?
A: An ultimate aim is to coordinate among teachers and present tools and applications in a systematic, first-things-first basis. We hope to find and hire teachers who agree to work as a team and understand what each other are teaching and how courses can complement and build on each other. This is important in order to present ideas and tools to students in an orderly way that will make students feel empowered and smart.
Q: You say that you want the fundamental classes to give a ``tool-based'' training. What does that mean? And why is it necessary or important?
A: The great French mathematician Henri Poincare said that “Mathematics is the art of giving the same name to different things.”
That beautiful quote captures what our philosophy about economics is too. Lots of applications that seem very different have exactly the same logical structure. Learning basic structures — namely, game theory and general equilibrium theory — opens many doors in terms of understanding. Our job as teachers of young people is to show them unity beneath apparent diversity.
Q: Upon finishing the classes, PhD students may have mastered a more solid and complete tool set than faculty. In what ways are their advisor supposed to guide them into various research fields. How will the toolset enable students to cooperate with faculty of the school in a mutually beneficial way?
A: I answer with a confession. I have always regarded teachers simply as more experienced students. As teachers, we are supposed to be learning together with our students. In my long life, time and again I have been inspired (I won't say “forced”) to learn new things by students who learned important new things before me and wanted to discuss them with me. Recognizing that students and teachers are actually on the same footing and pursuing the same activities is liberating and enlightening. The greater of experience possessed by the teachers can be an advantage, it is true sometimes; but not always. Sometimes it can be a great advantage to have had less experience and be freer to take a fresh approach unburdened by errors from the past.
Q: That is a very interesting point. If less experience can be a blessing, do you think having too much “premature exposure” to economic ideas before mastering the tools can present challenges to students?
A: Great question. On occasions some of the ways that macroeconomics, for example, to undergraduates can give students the wrong idea about what scientific macroeconomists at central banks and treasuries and hedge funds throughout the world actually do. That is, it is more than loose storytelling and curve shifting and involves much more math and statistics and careful reasoning. However, I still think undergraduate economics texts are great at getting students interested in economics questions and making them want to learn more about the world and economic analysis. So, on balance, knowing some undergraduate economics will help. But it is not essential. And it can be good to have the attitude that it is wise to challenge what one has learned as an undergraduate and to seek deeper explanations and understandings.
Q: On a separate issue, students who majored in math or statistics may be better equipped when they come to the Ph.D. program. Do you think undergraduate education in economics can be improved in some way to better prepare students to conduct original research?
A: Yes, I think that undergraduate economics all over the world can be improved by bringing in more mathematics, statistics, and rigor. Unfortunately, relative to fields like physics, chemistry, and engineering, undergraduate economics is often taught as a “literary” subject (I borrow that description from Paul Samuelson) rather than the more rigorous subject that it is in practice in business and government and in graduate school. I agree with people like Paul Samuelson and Leonid Hurwicz and other great economists who wanted to put more rigor into undergraduate economics. (I have tried to do that in several experimental courses, and it worked very well.)
Q: When it is eventually up and running as PHBS hopes, the Ph.D. program will share the fundamental training with an Elite Master’s program. Who are the targeted students of the Elite Master’s program? How will the program add value to them?
A: I think that an elite master's program should open doors to ambitious students by providing them with tools and understandings and empowering them intellectually. Our MA program would aim to give graduates many options. Today with the explosive growth of artificial intelligence and machine learning at exciting companies like Tencent and Alibaba and others, there are jobs in industry that are just as “academic” as those at Universities. Some of my most talented friends have left universities to join high tech firms because they provide even greater pure research opportunities and facilities than we have at some universities in the US. This is a trend that I expect to continue, and it creates exciting prospects for graduates of an MA program that delivers solid foundations. And of course, opportunities to pursue further studies and a Ph.D. will also open up.
Q: What about our Ph.D. students? Do you think the best job for student with an Econ Ph.D. is to be a researcher at a research university?
A: There are challenging and exciting jobs at universities and colleges and research institutions for sure. But today there are also very good jobs for outstanding Ph.D. graduates at central banks, the IMF, the World Bank, various government and private profit-making institutions. For example, I know some outstanding Ph.D. economists who do excellent research working for Alibaba and Amazon, and at some hedge funds, and at commercial banks and insurance companies. These private institutions also have wonderful hardware and software research facilities.
(Sample vs. population moments from Quant Econ)
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Peking University HSBC Business School(PHBS)
University Town, Nanshan District Shenzhen 518055, P.R.China