Interview with Professor Peter Schmidt, World-Renowned Economics Scholar On September 3, Professor Peter Schmidt of Michigan State University gave his first lecture for Yonsei students. Only in his first week of teaching at Yonsei, Professor Schmidt has already become a member of the community, cheering for the Yonsei team at the 2008 Yon-Ko Games. The School of Business and Economics in Yonsei University is currently offering opportunities for students to learn from world-famous professors such as Drew Fudenberg, Peter Schmidt, and Eric Maskin, with the support of the top Korean corporation, SK. Last Semester, Drew Fudenberg, a renowned expert of the Game Theory - known to have been initiated by John F. Nash Jr. - taught his theory to graduate students at Yonsei during the month of April. He not only taught his theory but also helped students with the application of the theory in their research. Drew Fudenberg was a student of Eric Maskin, the 2007 Nobel Economics Prize Laureate, who is scheduled to lecture Yonsei in September 2009. Peter Schmidt is an expert in econometrics. He received his B.A., M.A, and Ph.D. from Michigan State University in 1969, 1970, and 1970, respectively. He has served as the associate editor of several prestigious economics journals including Econometrica, Journal of Econometrics, and Journal of Productivity Analysis. He is a Fellow of the Econometric Society and the American Statistical Association. Econometrics is concerned with applying quantitative and statistical methods to understanding economic principles. Now at the beginning of this semester, we visited Professor Schmidt and had a talk about his life in Seoul, his professorship, and the prospects for economics in Korea. Co-Authored Papers with Korean Scholars Professor Schmidt, with a smile, said, “Seoul is an easy city to live in. The people are very nice and kind and the food is excellent. The only problem I have is that I do not know much Korean. I have been in Seoul before, but only for a few days at a time, and it is exciting to have a chance to actually live here.” He has published several articles with Korean economists, for example, “Panel Data Models with Multiple Time-Varying Individual Effects” in 2006, which was co-authored with Seung C. Ahn and Young H. Lee. “Working with Koreans is one of the reasons why I came to Seoul. In addition, I have many former Korean students, and six of them are in Seoul. Perhaps this is why I am more interested in Korea than the typical American.” Before coming to teach at Yonsei, Professor Schmidt already had an extensive experience teaching at universities as a visiting professor in many other countries, such as Australia, Germany, Greece, and Spain. “Definitely, my foreign experiences have been important to my academic achievements. Going to different countries is very stimulating since the people in each country have different concerns and interests. In economics, the difference is not too large, but even economists from different cultural backgrounds study different topics and they do so in slightly different ways. I have written articles jointly with professors at most of the universities that I have visited.” Econometrics: A Field Which Strives to Predict Economic Trends and Understand Economic Phenomen. When asked about teaching methods and materials, Professor Schmidt replied, “Since I just met the students, I cannot say much yet about how good they are. I am giving two econometrics classes this semester, one for undergraduates and the other for graduate students. My undergraduate class has forty-five students while my graduate class has fifteen. So far I am using the same methods and materials as I do in the US, but we will see how the class goes.” To the question of what motivated him to study econometrics, Professor Schmidt replied that he was just naturally interested in econometrics. He obviously did not agree with the claim that econometrics is too much of a quantitative approach in understanding real economic phenomena. “Econometrics is useful and practical. Some people say that econometrics does not correspond to reality but I do not think this is true. Econometrics is not just about prediction but also testing and analysis of economic data, and econometric methods are not very different from those used by researchers in medicine and other fields.” He remarked that what he does in econometrics is primarily theoretical. He mostly develops methods for the analysis of cross-sectional data as opposed to time-series data. Cross-sectional data contains observations on a number of individuals or companies at a single point in time while time-series data deals with observations over time. One of his main interests is to develop techniques for analyzing the technical efficiency of the production of firms in an industry. Professor Schmidt maintains that econometric methods are very useful for studying all kinds of non-experimental data, including work in non-economic fields such as criminology, tax compliance and daycare pricing. Language and Research Environment Most Important in Competition with International Universities Regarding the academic setting at Yonsei, Professor Schmidt had quite a few things to say. “Frankly, the facilities, buildings, and grounds are much nicer than the ones back home in the U.S. There seems to be genuine interest among the administration in encouraging the faculty members to do internationally-recognized research. The prospects of Economics as a discipline in Korea are very promising. However, there are some obstacles to Yonsei becoming a truly world-famous university. The fundamental problem that Korean universities face is that they are naturally run in Korean. For example, The National University of Singapore presents all of its classes in English, which means they can hire good professors from all over the world. I can teach here in Yonsei but really could not do so permanently since I do not speak Korean.” “Also creating a good research environment is very important,” he went on, “since Koreans I have met in the U.S. were sometimes hesitant to go back home after finishing their degree. I know a Korean professor at Seoul National University who moved to the US because Seoul National University put pressure on him to do non-academic tasks like consulting businesses and advising the government, which is not what he was good at. This is one reason why Korean universities have trouble attracting talented intellectuals from overseas. Korean universities somehow need to create a situation in which graduate students do not have to go abroad for their PhDs. And they need to pay high enough salaries that the best Korean economists will want to return here if they do get their PhDs abroad.” Korean Nobel Laureates: A Possibility Our last question was about the possibility of a Korean winning a Nobel in the field. “Sure, there are Koreans who would be considered to be contenders for the Nobel Prize,” was his answer. “There will come a time for Asian winners in economics. But in order for Korean universities to have potential Nobel Prize winners, they have to make serious efforts that those Korean potential winners are actually at Korean universities, as opposed to being Koreans at US universities.” He favorably commented on Yonsei University’s efforts to place a larger number of internationally-acclaimed intellectuals in the faculty. “This will help to provide Yonsei with more exposure on the global stage. The university will have more chances for recognition.” Professor Schmidt is going to lecture only this semester. He said, “I do not think I am going to stay long enough to help students much with writing their theses. But as I usually end up collaborating on articles with other professors, I hope to write papers with my Korean colleagues at Yonsei.”