A Conversation with Fatih Güvenen
In every issue of The Bridge, we aim to introduce a member of our diaspora. These individuals touched the lives of many by their research, teaching or service activities. They are mentors who train the next generation of scientists, they are innovators whose innovations make our lives better, and they are teachers who educate hundreds of students. But they all have one thing in common; they make a difference.
Our guest on this issue of The Bridge is Fatih Güvenen, who is a professor of economics at the University of Minnesota and an Economic Advisor to the Federal Reserve Bank of Minneapolis, and The Central Bank of Turkey.
The Bridge: Could you please give us a brief summary of your background?
Fatih Güvenen: I attended Ankara Science High School and received my B.Sc degree in electrical engineering from Bilkent University in 1995. As much as I loved math, and hard sciences in general, I always felt that my true calling was tackling social questions, so I switched to economics and did my master’s and PhD work in economics at Carnegie-Mellon University, graduating in 2001. I have been a faculty member at the University of Minnesota since 2008. I am currently an advisor to the Federal Reserve Bank of Minneapolis and the Central Bank of Turkey, as well as a research associate at the National Bureau of Economic Research.
T. B. : Could you also summarize your studies/research?
F.G. : My research lies broadly along the boundaries between macroeconomics and labor economics. Until a few decades ago, the study of macroeconomics relied almost exclusively on the “representative agent” paradigm, meaning that the modeling of the aggregate economy was done as if decisions (consumption, investment, production) were made by a single stand-in household representing the entire US economy. This approach was largely dictated by technical considerations, because modeling the rich heterogeneity among consumers, investors, and so on, made the resulting mathematical models intractable (analytically). With the remarkable improvements in computational power, the recent few decades saw the rapid development of mathematical and simulation models of the macroeconomy that allow for very rich types of inequality. My research program is in this broadly defined area and involves writing mathematical models of socioeconomic phenomena, obtaining numerical solutions and computer simulations of these models, and confronting the resulting behavior with actual data observations.
In the last few years, this area has witnessed the rapidly increasing availability of “big data”—data sets that contain information on hundreds of millions of households, firms, and so on, that are tracked over several decades. These data now allow us to study questions that were considered almost hopeless until recently due to a lack of data, or revise our answers to questions we thought were answered. My work is focused on the documentation and interpretation of new facts and findings from big data, a lot of it coming from government administrative records on wages, employment, taxes, and so on. I am also working with comparable data from Europe (Sweden, Germany, and France, among other countries). In these countries, the level of detail in the data is even richer and includes data on portfolio holdings, family histories, skill and occupation data, and other areas. The analyses of these data are upending many long-held beliefs in economics. I have been fortunate enough to have contributed to some of these analyses and hope to continue to do so.
T. B. : Where do you see studies of your area of specialty in Turkey? What are your suggestions to improve the research in Turkey in this area?
F.G. : As is the case in many sciences, research output in economics is also highly concentrated in a few countries, with the United States taking the lion’s share. In light of that fact, I believe it makes more sense to compare the state of research in Turkey with that in European countries. In economics research, Turkey ranks similarly to Italy but is behind France, Spain, and Germany, and is even behind Switzerland and Sweden.
In my view, two main steps can be taken to improve research in Turkey—steps that are similar to the paths that some of these European countries have followed in the recent past. The first is that a good research environment is usually built from top to bottom. Offering lots of money to attract brilliant new PhDs is not likely to succeed without first hiring senior established colleagues, who can nurture and mentor those young researchers. The young researchers can then turn the spotlight on Turkey by using their established networks and connections, and can protect their junior colleagues against outside distractions. So my deeply held belief is that we have to start at the very top and spend significant resources and energy to attract world-class researchers as university presidents, college deans, and department chairs. This is a very difficult task. Established researchers in the United States have extremely comfortable lives, both personally and academically. Encouraging them to invest their energies in building a place from the ground up will require some coaxing with substantial resources that they can control directly. This is precisely what Germany, Switzerland, and other countries have been doing recently by granting very large chaired positions, whereby each chair is allowed to hire the people they would like to work with. These policies cost millions of dollars per chair, so they are not cheap. Canada has recently established 13 Canada Excellence Research Chairs for attracting top researchers, each funded with 20 million Canadian dollars over seven years.
I believe a second aspect of academic policy, which relates to the last point I mentioned, should be to aim to build just a few world-class institutions, at least initially, rather than spreading resources across a broad set of schools. The countries I mentioned above each have only two or three departments or institutions that are viewed as world-class, but their very existence opens the door to other top researchers who might be more willing to going back to their countries for various reasons (including personal ones).
T. B. : Would you please tell us about the current status of collaboration between the US and Turkish research institutions in your field? What can be done to increase the collaboration and strengthen the bridge between Turkey and the US? And how can TASSA, in your opinion, contribute to it?
F.G. : Economics is not a lab-based research field, so most collaborations do not happen between institutions but rather between individual researchers. Some of that collaboration is happening, for example, between advisors in the United States and their advisees who go on to become faculty in Turkey.
It would be useful to organize an annual interdisciplinary conference in Turkey that would bring together Turkish scientists from around the world. A conference like this would allow them to meet in person and hopefully develop stronger personal and academic ties. As an umbrella organization, TASSA could play a key role by leading such an effort.
T. B. : You have been mentoring many international scientists and scholars and also graduate students throughout your career. What would you advise young scientist for a successful scientific career?
F.G. : A quote attributed to Thomas Edison is worth repeating: “Genius is 1% inspiration and 99% perspiration.” This statement is not at all an exaggeration; it is our business. I tell my students that I have never met anybody who really wanted to succeed in academia but failed. Instead, almost all failures I have witnessed were due to underestimating the amount of work it takes to succeed, becoming discouraged by the long list of rejections and failures that precede success, and quitting when success could have been there waiting up the hill.
Also, the benefits of academic work increase exponentially at the high end of the quality scale. So even if it takes a few years longer to accomplish, I would encourage students to try to get into the very best school they can. Sometimes this requires taking an intermediate step (for example, doing a master’s in a good school and getting excellent reference letters) and then moving on to a top school.
T. B. : Could you please tell us about your life outside of your work? Do you have hobbies? What are your favorite activities? If you recommend a book, what would that be and why?
F.G. : My life outside of work revolves around my family and my two boys, a lot of soccer watching (Visca el Barca!), and travel. I usually make book recommendations for light reading on my website, which I update once in a while. One particular book I would choose to highlight is entitled The University: An Owner’s Manual, an entertaining and informative book on academic life written by Henry Rosovsky, the former dean of Harvard’s Faculty of Arts and Sciences (and an economics professor). I read this book many years ago while doing my PhD and greatly enjoyed it. Rereading it recently and with the benefit of some hindsight, I found it as good as the first time I read it.