Looking at SSE Riga, Morten is one of the few faculty members that quickly comes to mind for an “outsider”.  Morten is somewhat of a public figure – he publishes a blog on economic matters in English on the magazine Ir’s website. He has taught a course on macroeconomics for journalists – many of the same media people who call him for comments and interviews. He is a member of the Fiscal Discipline Council, the independent watchdog of Latvia’s government spending. Morten is also active as a researcher for the Baltic International Centre for Economic Policy Studies (BICEPS), whose task is publishing sometimes controversial policy studies and papers.

In short, the 55-year old Dane with a master’s degree in economics from Aarhus University has a say or a hand in various forums and processes linked to the Latvian and global economies. Morten calls this “applied economics” – something he both teaches and practices. He has little desire to be a purely academic economist, working on theoretical models and abstract ideas – for him, reality (as in facts and data) is the test of any economic model.


Working with “data from reality”

“We have to build models, do the equations, but also take in data from reality, rather than build a model that may or may not have anything to do with reality,” Morten says, waiting for a salmon dish at Osiris that gets ordered by the mere fact of his walking in the door. A favourite for 15 years, he notes.

Asked about the changes he has seen at SSE Riga since he started teaching in 1997, Morten gets back to talking about data. There was very little available about the Latvian economy (as a post-independence market economy) back then; now there are 25 years of data on the ups and downs of all the key indicators – gross domestic product (GDP), unemployment, inflation, retail sales, various markets, etc.

“When I came to Latvia, we had three or four years of GDP data. What does that tell you? Nothing. Today we have 25 years of data … so you can tell a much better story. You can tell the story of good times and of the big recession, and then the story of the comeback or the big recovery. There is simply much more to work with,” he says. He expects his students to make the best use of this in their work.

Morten also teaches microeconomics or the economics of everyday life and activities. Here, too, he has seen remarkable change – from a pitch-dark city when he first arrived in 1993 (doing other work in Latvia) to a city centre lit largely by the light from shop windows. His students today can stroll through the centre of Riga (when it is not dug up) and observe shops, cafes, restaurants and other public gathering places rather than picking their way through a dark and depressing urban landscape.

Speaking of students, Morten has seen some changes from 20 years ago, when everyone entering SSE Riga had spent part of their life in the Soviet system, including primary and sometimes high school education. SSE Riga was also the only easily accessible institution offering a Western-style business and economics education in English, so that applicants and students were “ultra-motivated”.

“20 years ago, motivation was fantastic, but in a sad way – either you made it at SSE Riga or you flunked completely in your career. It is nicer that there are other options besides SSE Riga,” he says. To be sure, “easily accessible” in 1997 meant that it was much harder, before Latvia joined the European Union (EU), to apply to and study at universities with equally high admission standards in other European countries. Now that has changed and SSE Riga is not the only option for Latvian and Baltic students who want a high-quality business education.


SSE Riga feels and meets the competition from elsewhere

“We feel competition from the UK and the Netherlands and Denmark, where there is no tuition. Today the competition is there, but we can deal with it,” Morten says, adding that other educational institutions in Latvia and elsewhere can give more or less the same boost to a business career as an SSE Riga diploma is reputed to give.

Morten’s “applied economics” approach to teaching means there is no tension between “the dismal science” and more exciting courses that teach putting together financing packages or how to motivate a start-up team – the kinds of skills and knowledge that students seek in a “business” education.

“We have a long enough title as it is, but we should have been called the Stockholm School of Economics and Business in Riga”, Morten muses, noting that would have more accurately described the institution’s purposes. As for economists, he says that a number of his students have gone on to work for central banks (lately, SSE Riga takes in students from not only the Baltics, but also East European and former Soviet countries) and in the economics departments of commercial banks, yet still do a kind of “applied economics” for their employers.


Businesses ignore economics at their peril

It is also clear that no one can run a business and disregard macroeconomic factors such as wages, inflation, GDP fluctuations and the business cycle. For the business manager “economics gives insight into the economy in which you operate – how economic indicators affect business. You cannot ignore them and succeed,” Morten says.

As he digs into his salmon, I remind Morten that he has, yet again, expressed some cautions about the Latvian economy in his blog and public statements, almost ten years after the crash at the end of 2008.

“There are some warning signs, but it will not be a repeat of 2008. There is no credit boom as there was at the time. Times are good, the labour market is tight, there is low unemployment by Latvian standards and it is getting hard to find people. Wages going up faster than in the past nine years, and a 9% increase in wage costs will impact inflation. This will hit at exports. Things will still go up for a while and tighten again. There will be no crash. We will have a small party for a few years, then things will get tighter,” Morten predicts.