‘I Teach a Very Interesting Subject’

Sergey Pekarsky

Sergey Pekarsky, Professor at the Faculty of Economics Subdepartment of Macroeconomic Analysis, first came to the HSE to get a second higher education, since he did not know where to apply his knowledge of applied mathematics. Fifteen years later, he is about to head the HSE’s Department of Theoretical Economics, and students have voted him one of the best teachers at the HSE.

— Why do you think your students voted for you as an outstanding teacher?

— I think that this achievement is only partly down to me. I teach a very interesting subject, which is related to real life. Specifically, in the context of the recent financial crisis, the problems I talk about are more and more interesting and topical.

— Speaking about relevance, in your PhD thesis there are some conclusions which look temptingly topical: a compact formula describing models of interaction between some macroeconomic indicators, including such policy options where increasing state debt does not lead to growing inflation. It looks like it could be taken and used immediately. But would I be mistaken to say that no government in the world has adopted this method? Why do you think that is?

— My analysis was related to the connection between two processes: accumulation of state debt, and inflation. While inflation is traditionally considered as a monetary phenomenon and related to central bank policies, the problem of state debt sustainability is a problem of fiscal policy implemented by the government.

When I wrote my thesis, over 5 years ago, it did not seem as relevant as today, if we consider the debt situation in Greece and other European countries, as well as in the US and Japan. In my paper I tried to prove that the problems of state debt do not always and inevitably cause inflation problems. My thesis proposed a model which shows that there are some variants of fiscal and monetary policy which will be able to support a sustainable balance.

Many things depend on the form of interaction chosen by the government and the central bank. Interaction between the academic community and decision-making officials works in a way where central banks, including Russia’s, have good-quality research departments which develop their own working models on the basis of models suggested by the academic community. Fiscal policy is implemented in another way. Decision-making politicians depend on socio-political processes and do not always listed to academics.

In relation to this, Eric Leeper recently published a very interesting paper where he called this situation ‘monetary science and fiscal alchemy’.

— What is your first priority at the HSE, and what takes more time – research, teaching, or, more recently, administrative work?

— Unfortunately, of these three activities, administrative work takes up the most time, then teaching, and then research. Though, in terms of my personal preferences, the ranking is exactly the opposite.

— I see, so that must make your academic achievements even more valuable, then. Do you have any recent publications you’d like to mention?

— I published my paper in a well respected academic journal. (Budget deficits and inflation feedback, S.E. Pekarski // Structural Change and Economic Dynamics, 2011). One of my recent papers includes an article published in the HSE’s Economic Journal, about the Nobel laureates Thomas Sargent and Christopher Sims. My academic work started after reading Sargent’s and Wallace’s article ‘Some Unpleasant Monetarist Arithmetic’. And when Thomas Sargent and Christopher Sims became Nobel laureates in 2011, it was a huge event for me, and I was happy to agree, together with my colleague, Oxana Malakhovskaya, to write an article celebrating these two outstanding researchers.