Campaigning for Economic Stability
By Rebekah K. Murray
U-M professor Jan Svejnar may not have been elected President of the Czech Republic, but he has an economic plan that belongs on the world stage.
Whether he’s speaking to a lecture hall full of students or to members of the international media, U-M professor and world-renowned economist Jan Svenjar has a message about how the United States can climb out of the current financial crisis: Work with Europe.
“Europe’s economy is equally large or larger than the economy of the United States. So when the U.S. economy gets weaker, you would think Europe could stimulate global economic growth,” Svejnar said recently at a lecture on U-M’s campus about Europe’s political and economic challenges. He went on to point out that the economies of the United States and Europe combined account for more than half of the world’s gross domestic product.
“We need to keep that in mind when thinking of what to do,” Svejnar says. “One country, even as large as the United States, cannot likely resolve it alone. To go it alone will take longer and more resources than if it’s a coordinated action on the part of big world players.”
Listen to a U-M podcast with Jan Svejnar on Europe's financial health.
Svejnar is speaking from years of research and observation on economic development, a topic he has studied since leaving communist Czechoslovakia in 1970, at the age of 17. He’s now a citizen of both the United States and the Czech Republic, a leading researcher in his academic field, and a U-M professor of economics, public policy, and business administration. Last year, Svejnar took a leave from the University to pursue a bid for presidency of the Czech Republic. He narrowly lost the parliamentary election to incumbent Václav Klaus, but he gained widespread recognition and support for his views from Czech citizens.
In his U-M public lecture, Svejnar said that the last few months have seen only partial and mostly uncoordinated initiatives in Europe to offset the current recession. President Barack Obama has been seeking help from global leaders and what’s needed now, Svejnar says, “is a large-scale joint approach from the United States and Europe to reverse the downward spiral.”
The lecture, part of the "Conversations on Europe" series, was sponsored by U-M’s Center for European Studies-European Union Center, the Center for Russian and East European Studies, the International Policy Center, and the Weiser Center for Emerging Democracies.
A key aspect in the economic recovery will be how to provide more supervision and regulation of the financial sector without over-constraining the world economy, Svejnar says. It’s a tough balance to achieve.
Advising policy makers on how to stimulate and improve the economy is something Svejnar has been researching and doing for years. He has advised numerous policy makers, institutions, and firms, including the Czech Republic’s former president Vaclav Havel and prime minister Vladimir Spidla. He has also worked to train a new generation of economists, both in the United States and Europe. In Prague, he founded and chairs the Center for Economic Research and Graduate Education Economics Institute (CERGE-EI), an American-style doctoral program in economics.
His Own Economic Recovery
Using his economic expertise to assist the Czech Republic has fulfilled a dream Svejnar carried since the age of 17. He was a high school student then, just weeks from taking his final high school exam, when he realized it was time to go to college now while he was still able to leave communist Czechoslovakia.
“After the pro-Soviet forces were taking over the country in 1970, I knew if I didn’t leave right away I might not be able to. They were preventing people from leaving the country. So I took a midnight train and appeared at the border at two in the morning. I was just hoping I was not on the list of people who should be taken off the train. I wasn’t, but I heard that two days later my name was on the list. I just made it.”
Svejnar wanted to study at a top European university, but without the score from his final high school exam, he wasn't accepted. It was America’s Cornell University that gave him a chance and in 1974, he earned a bachelor’s degree with honors from Cornell’s School of Industrial and Labor Relations.
From there, Svejnar earned a master’s degree and doctorate in economics from Princeton University, and then was hired as a professor at Cornell. His academic career has spanned Cornell, the University of Pittsburgh, and U-M. He’s married to Katherine Terrell, a professor of business economics and public policy at U-M. Their children, Daniel and Laura, graduated from U-M in 2003 and 2008, respectively.
Svejnar’s knowledge and expertise in his academic fields naturally led to advising policy makers, and while he didn’t envision himself in public office, “I ran as a public service to try to help my country and Europe. I think that would be a good complement to an academic career. ”
Though he wasn’t elected by the Czech Republic’s parliament, Svejnar says, “I’m happy being a professor.” From his office at U-M and through international trips, he monitors Europe’s political and economic situation closely.
He’s concerned about the reemergence of protectionism, cautioning that “the last thing we’d want to happen is to close in to separate blocs or fortresses. As we’re going through a downswing, we want to minimize the impact and not take narrow self-interest measures and make others do the same. We don’t want to mutually hurt each other.”
On the contrary, he believes Europe can do more to stimulate the world economy. “I tell Europeans to think of being leaders instead of followers. The European financial markets open five to six hours before those in the United States, yet as soon as Wall Street opens, they all follow Wall Street. Why is Europe still following, and will that change?”
Jan Svejnar is the Everett E. Berg Professor of Business Administration, a professor of public policy analysis, and professor of economics at U-M. He is also a founder and Chairman of the Executive and Supervisory Committee of the Center for Economic Research and Graduate Education Economics Institute (CERGE-EI) in Prague. He serves as the Chairman of the Supervisory Board of CSOB Bank, Governing Board member of the European Economic Association, co-editor of the Economics of Transition. He is also a fellow of the European Economic Association and research fellow of the Center for Economic Policy Research (London) and Institute for the Study of Labor (IZA, Bonn). He has advised numerous policy makers, institutions, and firms, including President Vaclav Havel and Prime Minister Vladimir Spidla of the Czech Republic, OECD, the World Bank, the European Bank for Reconstruction and Development, GE Capital, Expandia Bank, and SPT Telecom. In the 1990s, he was one of the chief architects of the Czech Republic's economic reforms.