Being a researcher is not always an easy task. Despite its complexities, Michal Szkup, assistant professor at the Vancouver School of Economics, loves spending his days looking for answers to economic problems. Originally from Poland, he crossed the Atlantic Ocean some years ago to pursue graduate studies in Economics at New York University after a first stop at the London School of Economics to complete an undergraduate degree. At UBC he now continues with his research on international macroeconomics and finance while also teaching some courses on applied Economics.
I have two main research topics right now. One is on the role of financial frictions on export dynamics and firms’ decisions. Back while doing my PhD my friends and I were wondering about which interesting economic questions remained unanswered. One that had been pointed out to us was the lack of knowledge about the determinants of firms’ exports decisions. It was still unclear which trade barriers firms were generally exposed to and which of those trade barriers were important for the firms’ decisions. This happened during the financial crisis so our first thought was naturally directed towards financial frictions. Firms often purchase equipment before they start producing and have to pay their workers before they actually get paid for their product. Therefore they need to have some access to finance in order to fund their operations. We started investigating this question and we found significant evidence to claim that frictions in access to finance do affect exports decisions and exports’ dynamics following economic shocks. Right now I am looking at how changes in exchange rates affect exports decisions and how those effects on exporting firms are amplified via their access to finance. This can be directly applied to the Canadian case. Does experiencing a large currency devaluation mean that our exports will increase? This is the question we are tackling right now.
The other topic is on coordination frictions and the role of information in explaining those frictions. Very often in real life there are strong incentives for people to coordinate their actions. This can be seen in many different occasions but it becomes particularly common in times of crisis. If the firms you are competing with are thinking of adopting a particular technology standard, you want to adopt that technology standard too because otherwise you will be left out. These coordination frictions are important. Unfortunately we don’t have a good theory on how people coordinate their actions. I am working on understanding what determines which actions people coordinate on. One possibility is that the outcome of the coordination is strongly affected by informational frictions. So although I am not sure whether you will adopt the technology standard or not I have to make my decision. It turns out that if you have complete information about the behaviour of others under certain conditions you can predict exactly what people will be doing. This has repercussions for optimal policy of central bank because by releasing information they can affect how firms coordinate.
Anybody who asks a question and spends time not only understanding the main issues around the question but also trying to come up with an answer supported by evidence can call himself a researcher. Whenever you pose a question and spend time trying to answer it rigorously you are doing research.
During my first year of my undergraduate studies at the London School of Economics I took a course that changed my career path. When I first went to England I was not thinking of majoring in Economics but Economic History instead. As part of the curriculum, however, I had to take an Economics class in my first semester. I was so impressed by the professor and what he taught us that I decided to try and do that for the rest of my life. At the time, however, I didn’t know if I had what it takes to become a researcher.
My favorite aspect of being an academic is to be able to work on questions that I find interesting. I love spending time trying to understand real life issues that are important to all of us. By deepening my understanding of the world and investigating economic problems I hope to be able to contribute to society’s development. It is also very rewarding to get students interested in Economics. It is impossible to excite everybody but it makes me really happy to see that some students enjoy coming to my lectures and learning about new concepts.
Economics is everything around us. It is not only about the economy but also about the behaviour of individuals. Economics helps us understand any decision we make in our everyday lives. Furthermore, it also allows us to get the bigger picture of everything that is happening around us. It provides the tools to search for answers to questions in politics, finance, sociology, etc. I think these days everybody should have some basic knowledge of economics to be able to check whether what the politicians are promising or advertising is feasible or not. We need to critically question our leaders and economics provides the tools to do so.