Experts Talk: An Interview with Dr. Ed Dolan

Experts Talk: An Interview with Dr. Ed Dolan

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We spoke with Dr. Dolan about his crossover interests in Russian literature and economics (and how he made that combination work to his advantage), his experience working in Moscow during the last years of the Soviet Union and why he recommends the MBA degree, among other topics.

Ed Dolan, who writes the popular Ed Dolan’s Econ Blog (which is also hosted on EconoMonitor), is the first expert we interviewed for a new series titled Experts Talk, conducted by INOMICS. We proposed this series as a way to tap into the experiences and ideas of leaders from diverse fields, with economics being the natural place for us to start. We were very pleased to have Dr. Dolan be our first guest in this series. We hope you find his answers as insightful and interesting as we do!

  1. Both your Bachelor’s and Master’s degrees are in Russian Studies. How did you make the leap from the Russian and East-European Institute at Indiana University to earning a PhD in economics at Yale?

When I started studying Russian in college, I concentrated on language and literature. By the time I graduated, I was getting nervous about career prospects as a Russian literature teacher, so I followed the advice of friends who suggested adding some more practical subject—economics in my case. The REEI at Indiana University was a perfect fit. It was a double Master’s degree program, one degree in Soviet area studies (more literature but with politics, geography, history and other subjects added) and simultaneously a Master’s degree in economics.

From there, continuing to a PhD at Yale was a natural step. My studies at Yale included the expected broad background in economic theory and econometrics, but I kept up my interest in Russia by writing a dissertation on the early history of economic planning in the Soviet Union.

  1. After teaching at multiple American universities, including Dartmouth and the University of Chicago, you moved to Russia in 1990 and began teaching at the State Finance Academy. Can you briefly describe that experience?

The “briefly” part is hard. It was quite an adventure. My wife (who is also a graduate of the REEI) and I had always been frustrated that we had never had the opportunity to live and work in Russia for an extended time—long enough to turn our bookish Russian into a real conversational fluency and to get a feel for everyday life in that country. Finally, Gorbachev’s perestroika gave us that chance, so we took the first teaching job we could find.

In addition to the State Finance Academy, where I taught, we both taught for a small program, run by a former Soviet dissident now living in the United States, that offered American-style business courses to Russians. When we ran an ad in a Moscow paper for an entrance exam to the program, we were overwhelmed with 1,200 applications for sixty openings.

Neither of those teaching jobs paid much, and life in the last two years of the Soviet era was pretty chaotic. We learned more about Russian everyday life than we bargained for—how to buy butter under the old Soviet three-line shopping system, how to make an international telephone call to our kids in college back home (unbelievably difficult), how to survive on a packed trolley bus, and lots of other useful skills.

The cleaning woman on the hall where we lived at Moscow State University was convinced that we would starve to death since, with empty stores, the only way you could get food was through “connections.” She used to trade us chicken legs (which she got through a nephew who worked in a butcher shop) for aspirin (which we could buy for hard currency.) It was an interesting time.

  1. In 1993 you founded the American Institute of Business and Economics in Moscow. Could you give some insight into building an MBA program in post-Soviet Russia? How did your students compare to those you’d taught in the U.S.?

The first thing that made it possible to build an MBA program from scratch, with no sponsoring university on the US side, was the energy and ability of our students. Most of them were graduates of the top institutes for math, physics, and engineering that had fed the Soviet military-industrial complex. They had skills in nuclear weapons design, laser-guidance systems, and the like that suddenly had no demand in Boris Yeltsin’s new Russia. Given their fantastic quantitative skills and strong motivation, it was a professor’s dream to introduce them to finance, economics, and accounting.

The second thing that made the program possible was the enthusiastic support of the American and Western European business community in Moscow. Western firms by the dozens were opening offices in Moscow in the early 1990s, and they were hungry for employees who could speak English and understand basic business concepts. Some of them gave small grants, some sponsored students, and most important of all, they hired our graduates. Not that all of our students went to work for Western firms. Some started their own companies and others went to work for Russian companies that wanted to do business with the newly arriving Western firms. Whatever their choice, they were always in demand.

The third thing that made building the school possible was the fact that there were no rules to follow and nobody paid any attention to us. In the first few years, while we were getting our feet on the ground, no one insisted that we get a license, no one demanded a bribe, no one at the official level even knew we were there. We never asked official permission to do anything, we just did it.

Unfortunately, that blissful situation did not last long. By the late 1990s, more and more of our time went to dealing with fire inspectors, education commissions, and tax police. Hiring “consultants” to deal with these people drained money, energy, and morale. By the time Vladimir Putin arrived on the scene, we knew it was time to move on. Two of our people (one a former student, another a professor) agreed to take over the school, which they continue to run to this day. After eleven years, it was sad to leave Moscow, but in another way, the feeling was a little like what you get when you take off your ski boots at the end of a hard day on the slopes.

  1. Since the late 1990s you’ve held teaching positions at universities across Europe. Do you feel your diverse academic background was an asset in helping you along your professional trajectory?

It is perhaps generous to call it a “professional trajectory.” That sounds like something planned in advance with a goal in mind. But yes, a diversity of experience helped. In my case, the diversity included not just teaching both in Europe and America, but also stints as a regulatory economist in Washington D.C. and as an adviser to the National Bank of Kazakhstan. After Moscow, teaching jobs in Hungary, Croatia, Bulgaria, the Czech Republic, Estonia and Latvia added still more perspectives.

Sometimes I open an economics journal and see an article written by a Yale classmate who, I realize, has held the same job for forty years or more. Most of them have professional resumes that are a lot more impressive than mine, but I probably have more experiences to draw on when I stand up in front of a class, and probably I’ve had more fun.

  1. Would you advise students interested in working as economists in academia today to pursue a Master’s degree and/or PhD or an MBA?

I am a strong believer in the MBA degree. The interdisciplinary nature of the MBA—technical courses like economics and finance mixed with “soft” courses like leadership and marketing—gives a good basis for flexibility in building a career in business or government. I still think of a PhD in economics as mostly a teaching degree, and I encourage my students to go that route only if they are sure they want an academic life. A masters’ degree in economics seems to me to offer narrower alternatives than an MBA and not quite enough for academia. Having said that, though, I should note that one of my daughters has built a very good career in banking based on a Master’s degree in financial economics, so sometimes it can be just right.

  1. Global mobility is highly promoted and ever increasing – what advice can you give to young people studying or working abroad for the first time?

First, although Americans probably need this advice more than Europeans, don’t neglect to study the language of the country you’re going to. Even if your working environment is all in English or your home language, just a smattering of the local language can make your living experience much richer. My command of Hungarian never got much beyond being able to ask for a half-kilo of duck liver at the butcher shop, but that was enough at least to get me a smile along with the kacsa maj.

Second, keep your eyes open, ride public transport, shop where the locals do and absorb what you can. You’ll be surprised how those things help you in business situations, too.

  1. You say on your blog that you want to promote economic literacy. Do you feel you’ve made an impact in this area? Relatedly, how do you feel the public’s engagement with economics has changed in general since you entered the field?

By college, if not earlier in their education, people sort themselves into “good with words” or “good with numbers”. The humanities draw mostly from the “good with words” group and economics from “good with numbers.” Because I started out in the humanities and got into economics by the back door of Russian area studies, I’m better with words than the average economist. That gives me a comparative advantage—I am happy to let others do the heavy lifting of econometrics and model building, and then translate their ideas into language that I hope a wider public can understand. I’m glad to say that I’ve had some success with that strategy, first with my textbooks and more recently with my blogging.

As far as public engagement with economics—yes, people are engaged, in that they know economic events affect their lives and want to understand them, but at the same time, I think the gap between economics as written in the leading journals and anything a nonprofessional could actually read is wider than ever. In that sense, there is still a niche for translators.

  1. What impact has blogging had on your professional and/or personal life?

Blogging has been great for me. I’m doing much less classroom teaching now that I was a few years ago, and I’ve never written much for academic journals, so it’s the perfect way for me to keep professionally engaged. I’m happy to say, also, that economics bloggers have a significant impact on public policy debates, especially in shaping what ideas are talked about and how they are framed.

  1. Have your views as an economist changed throughout your career?

A lot has changed in the economics profession as a whole, of course. When I was in graduate school, the orthodox center was represented by a Keynesian-neoclassical synthesis that was challenged on the left by Marxists and on the right by monetarists. Marxism and monetarism are now just footnotes to the history of economic thought, but that does not mean the Keynesian-neoclassical synthesis of the 1960s has survived unchallenged. Instead, it is challenged from approaches to economics that either did not exist 50 years ago or that got virtually no attention—public choice theory, behavioral economics, Austrian economics, and modern monetary theory are all examples.

Gradually over the years, I stopped trying to figure out which single approach represents “the truth” and became more appreciative of the fact that many different approaches offer useful insights. I think my international experience has had a lot to do with how my thinking has evolved. Very likely if I’d spent my whole career teaching in the United States, I would have become much more specialized and had a much narrower perspective. I can remember how disappointed I was when I didn’t get tenure in my first job at Dartmouth, but if I had, I would probably still be there, and I would have missed out on far more than could have foreseen at that time.

Photo credit: Ed Dolan