Of the Economy’s Weal and Woe
Young economists and management scientists have a chance to shape debates in their field as part of a Berlin doctoral program.
Jan 31, 2018
In the United States and Europe, the economy has only been growing slowly for years. Disagreement remains on the causes, both in politics and among economists. Is it due to the 2008 financial crisis? A failed fiscal policy? Or is it part of an ordinary economic cycle? “None of the above,” says Philipp Pfeiffer. In his office at Technische Universität Berlin, the economist is exploring another cause: Pfeiffer considers a lack of innovation as the key factor in declining economic performance. “American and European research institutes and companies aren’t producing enough new ideas,” he states. “What’s more, today’s technical breakthroughs are very specific and hence less widely applicable.” Where there is innovation, only a small number of very large corporations benefit from it. Pfeiffer attributes this to a fall in public spending on research and development and the resulting privatization of research. According to Pfeiffer, “Small and medium-sized companies are being left behind. In the long run, that will have an impact on the whole economy.”
"We prepare doctoral candidates for an international career"
Pfeiffer is a doctoral candidate in the Berlin Doctoral Program in Economics and Management Science (BDPEMS), an international program jointly organized by Humboldt-Universität zu Berlin, Freie Universität Berlin, Technische Universität Berlin, the WZB Berlin Social Science Center, the European School of Management and Technology, and the German Institute for Economic Research (DIW). For his doctorate, he is collaborating with a professor at the University of St. Gallen and economists at the European Commission. The research project forms part of Pfeiffer’s thesis.
"We prepare our doctoral candidates for an international academic career,” explains Alexandra Spitz-Oener, a professor of applied microeconomics at Humboldt-Universität zu Berlin and the program’s director. The BDPEMS is a structured doctoral program based on the American model. Before the participants start their research, they first spend two years attending lectures and seminars. During this phase, they can choose from all areas of economics and management science, from advanced courses in macro- and microeconomics to special subjects such as the economics of climate change.
Professor Spitz-Oener illustrates, “The doctoral candidates hone their methodological skills during the course phase. This then enables them to produce academic work of an exceptionally high standard very quickly.”
The BDPEMS has been running for over ten years. Each year, 350 candidates who have graduated from universities all over the world apply for ten available places there. To be considered, they must have a master’s degree in economics, business administration, mathematics, or a related subject. Those accepted onto the program are generally awarded a scholarship during the course phase. “We can now offer our own scholarships to most of our doctoral candidates,” says Frank Heinemann, a professor of macroeconomics at Technische Universität Berlin and member of the scientific board of the BDPEMS. “We’re delighted that we’ve recently received funding from Humboldt-Universität. A large part of this will go into further scholarships.” After the course phase funded through scholarships, the doctoral candidates start their research work, becoming employed in a research area with a suitable focus.
“As six research institutes collaborate on the BDPEMS, we can offer a very broad spectrum of different focus areas,” Frank Heinemann points out. Philipp Pfeiffer also considers this as one of the program’s greatest advantages. “It means you can do research off the beaten track,” he says. For one research project, he conducted behavioral economic experiments to find out the role played by the time factor in risk decisions. In his laboratory experiment, the study participants had to decide between work and pleasure: allowed to watch YouTube videos, they also had to do comparatively boring computer work. They were faced with a choice: First work, then pleasure? Or lots of work one day and then lots of consumption the next? Should they take the risk of possibly having to do more work to gain the chance of having more free time? Or should they opt for a balanced ratio with as low a risk as possible?
"It’s very important to us that our participants can actively shape academic debates even before they graduate.”
The results of the study showed that people’s preferences can vary immensely. But Pfeiffer drew one conclusion, “People want to know as soon as possible how their consumption will evolve – even if they can’t do anything about it.” However, he points out that this preference is not as pronounced as is widely assumed in contemporary financial theory.
Pfeiffer is working on a so-called cumulative dissertation on the BDPEMS: instead of one long thesis, he is writing several individual papers, often as part of a team. This is how many of the doctoral candidates on the BDPEMS work – and many of their papers are published in leading academic journals. Frank Heinemann states, “Many of our participants have a high research impact even before they graduate. It’s very important to us that they actively shape academic debates.”
The majority of the program’s graduates want to go into academia after gaining their doctorates, and they find positions at universities around the world. Many also join public institutions, such as the European Central Bank. Philipp Pfeiffer is also planning to follow a European career path. After completing his doctorate, he will take up a post as an economist at the European Commission.