Jan Švejnar: "Being Average Is Not Enough."

8 February, 2022

Who will be most affected by inflation? And what would be the best recommendation for the government? Watch Czech Academy of Sciences' interview with Jan Švejnar.

Who will be most affected by inflation?

Jan Švejnar: "During inflation, the broad middle class suffers most. Highly low-income people have nothing to lose because they have no savings. Wealthy investors are very capable; they can protect themselves. Inflation is such a tax. It is actually an inflation tax that affects those somewhere in between who are not economically and financially literate enough to defend themselves and cannot hide the money somewhere. I think we have the advantage that people can buy, for example, real estate that retains value."

Recommendations for the government?

Jan Švejnar: "We are a country that does not have much mineral wealth, so we must base our development strategy on investing in human capital.  So in that sense, really the best possible education, the best possible science, research, and innovation. That is the way to the future. I emphasize quality or excellence because what is relatively new but very important is that the winner takes almost everything in the main system in today's world. So being average is not enough. It used to be good. Now doing mediocre research does not make sense.

Average education does not have a significant return. For those investments to have a high return and increase our standard of living, we need them to be investments in the very best. It means centers of excellence that give the greatest return in every field. And then, of course, it is transferred to the education system. It will ensure our standard of living compared to others."