Young Scholar Profile: Conversation with Alp Simsek
1. Can you please talk about your background? (How did you choose your major? How did you decide to come to the USA?)
I came to the US when I was 17 to study at MIT. I didn't make a deliberate plan to come to the US at an early age -it was to some extent a chance event. I went to high school in Izmir Fen Lisesi (IFL). I enjoyed my time at IFL, not the least because it introduced me to math olympiads. I won a medal in a national competition organized by TUBITAK. I knew one past olympiad winner, also from IFL, who had continued his education at MIT. Although my main plan was to study in Turkey, I also decided to apply to MIT and got admitted through the waiting list. It was then an easy decision to come to the US since MIT is an excellent university.
At college, I had to do some soul searching until I converged to my current field, economics. I received my Bachelors' degrees in mathematics and computer science. At the time, this choice seemed appropriate given my relatively technical background. But I wasn't sufficiently excited to pursue a PhD in either of these fields. Math did not excite me any more since I was interested in more practical matters. Computer science did not excite me because it felt a bit narrow and detail oriented, whereas I was interested in the bigger picture issues. I found the perfect match in economics: It uses mathematical tools heavily, but it is also quite practical, and parts of it concern important questions such as why certain countries are richer than others. Once I discovered these aspects, I decided to pursue a PhD in economics.
I should also add that my mentors at MIT at the time, Prof. Asu Ozdaglar and Prof. Daron Acemoglu, played a big part in my switching to economics. Prof. Ozdaglar was my advisor, and although she is not in the economics department, some of her research and teaching was quite related to economics. Prof. Acemoglu is at the economics department and he was my coauthor on a project. They were both extremely helpful in making me understand what research in economics is about.
2. Would you be able to summarize your research in one paragraph?
My recent research is about how financial markets might malfunction, and how these problems could then spill over to the rest of the economy to create crises or recessions. This agenda was motivated by the subprime financial crisis in the US, since I realized that some of the traditional views in finance and macroeconomics did not quite capture what happened at the time.
The organizing theme of my research is that beliefs play an important role in the functioning of financial markets. To give one example, I found that prices of certain assets, such as houses, are influenced by not just the beliefs of their owners but also by the beliefs of lenders, such as banks, whose money is used to finance the purchase of the asset. In particular, lenders' optimism can be the driving force behind asset price bubbles fueled by cheap credit. If lenders' optimism later turns into pessimism, then this would also naturally crash these bubbles. These observations are consistent with the boom-bust cycle we have seen in the housing market in the run-up to the subprime crisis.
3. What is the driving force behind your success at such young ages?
I think I got lucky. I had the opportunity to study and work at excellent institutions. I also had excellent mentors at these institutions. These places and people have set very high standards, which in turn has motivated me to try harder.
4. What would you like to say to the young Turkish Scientists?
I would suggest that they should take seriously each academic task they are assigned, no matter how unimportant it might seem at the time. Doing these little tasks properly is like going to the gym regularly. It makes sure that you are prepared when the more important tasks arrive. It also creates good working habits. If you are not sloppy with the little tasks, the chances are this will become your second nature and you will be very careful also with the more important tasks.
5. What would you like to achieve in the near future?
I would like to continue my research agenda in finance and macroeconomics. One specific goal is to understand better how financial markets should be regulated to mitigate the incidence and the impact of financial crises.