New School Economic Review

Why are the protesters so angry?

Weeellll…. This very lovely slideshow from Business Insider has some pretty good suggestions to why there are protests on Wall Street, by St. Paul’s in London and in Greg Mankiw’s EC 10 class at Harvard… No really, they had a walk-out which saw 10-15% of the class leave, although I gather that some old students walked-in as a counter protest. Either way, if it wasn’t entirely clear what the problem is, have a look at the slideshow.

My brother recently pointed out that the tent camps in front of St. Paul indicated that this would be the “winter of our discount-tents”… But I digress.

Advice to young economists… zzzz

A new video on the INET webpage promises ‘advice to young economists‘ but it’s not exactly awe-inspiring stuff (despite the star cast of the video). Best of the lot is probable INET director Rob Johnson who (paraphrasing Richard Hamming or Johnny Bunko) says to focus on important problems, because you only have so much time on earth and you should look at the big questions.

Beyond that John Kaye says to look at how people act, not how we think they should act – despite, as he says, the things he has been teaching over the last many years. Joe Stiglitz says to look at solving the problems of the developing world, Ian Goldin wants a toolbox and Anatole Kaletsky says these are exciting times to study economics. So yeah, despite the amount of interesting things these people usually have to say about economics, there’s not a lot to take away here. The cruel twist is perhaps Rob Johnson’s comment that he would give this advice to a ‘rising star in economics today’ … Of course, said rising star would probably not be coming with your radical or different ideas.

I think Deirdre McCloskey’s letter to a graduate student is a better time to spend five minutes, so let me leave you with her closing sentiment:

Please, please, my dear, be brave, and remake our splendid subject, the intelligent student of prudence, by bringing it back to science. I’ll hire you, if I can. And you’ll have a worthwhile life in science.

What a Nobel day to be back

Courtesy of Banx at the FT

Back at the keyboard after a hectic late summer which included getting a final sign-off on the thesis, so that is all done, dusted and deposited in the university library. And what a day to be back. In a few hours they will announce who is going to win the Prize for Economics in memory of Alfred Nobel, and if Fama gets it this year I think it will be good fun. He was odds on favourite two years ago, but since the crash and recession all odds are off.

Harvard even had an on-line pool, but had to shut it down due to legal reasons. Oh well, we’ll know in a few hours. Either way, we’re back to our blogging ways now that term has properly started and there can be no more conference distractions.

Unfortunately, we have been advised by Harvard University to immediately shut down the Nobel pool due to legal reasons, and we have decided to comply with this request. We will fully reimburse the money of all participants, and we apologize for any inconvenience this creates for you. All participants will be contacted by email. (http://www.people.fas.harvard.edu/~pollmann/nobel/)

Why it’s all philosophy

So a few weeks back I was reading xkcd.com and while hovering the mouse over the cartoon (#220) I was told the following:

Wikipedia trivia: if you take any article, click on the first link in the article text not in parentheses or italics, and then repeat, you will eventually end up at “Philosophy”.

I thought that sounded like a good game, and a really nice urban legend so I went ahead and looked at economics… It gave the following string: Economics -> Social sciences -> fields -> academic -> community -> living -> life -> objects -> Philosophy… Admittedly I found a couple of loops, but then someone trumped it all and built a script to check how far this link to philosophy holds…  1,000 iterations later only 11 did not close at Philosophy. ELEVEN!  (check out the mapping here) I think that is pretty good proof that life boils down to philosophy.

Of the 11 left-over they ended in seven ‘sinks’ according to New Scientist: Architecture, gender, German reunification, Grail message, Iraq war, pragmatism and process manufacturing.  Not sure what that that could mean?

When the U.S. last defaulted

I am grabbing this across from a seperate blog (the history of economics playground) because I think this is something to bear in mind as the media enters its final stage of Debt-ceiling coverage over the coming fortnight. Of course there may be more, but for now…

Two things seem to be taken for granted in the current debt-ceiling debate: 1. The parties will come to an agreement on the debt ceiling because 2. These United States have never defaulted and will not start now. Well, Lexington has eight pretty good reasons why an agreement is not inevitable and as far as I can tell, the United States has defaulted in the past, and we need to recognize that fact…

The historical trick revolves around ‘these united states’ because these 50 States are somewhat recent. Hawaii and Alaska would finalize statehood in ’59. but various make-ups of the USA have indeed defaulted or re-structured its debt. Most recently – I think – was in 1933 when the then 48 State government refused to repay the gold annuity it owed to Panama. This was eventually repaid in 1936. I take that observation, and many more from Rogoff and Reinhart’s book (2010: 112-3) which I have commented on earlier.

We can add to that list debt restructuring in 1790, where interest was deferred by the government for ten years. Then there are State cases where the central government allowed default on debts and – I would suggest – implicitly accepts government default: 1841-42 when three States repudiated their debts altogether and 1873-83/4 where ten states were in default, with West Virginia not settling its account till 1919. One could throw in the confederate army debentures and bonds which for various reasons were never repaid to foreign investors, but whether that is legitimate US debt, I am not sure.

My point is simply that the USA has deferred, restructured or cancelled its debt before. If Lexington is right that “compromise may still be possible, but there is nothing inevitable about it,” then on track record you might expect to see an announcement to delay repayment of certain debts, for a long while, on 2 August.

News to Me

Since 2006, a large percentage of people my age get their news from The Daily Show.  As of June, The Daily Show’s ratings are higher than almost any cable news program.  Some find this frightening, others humorous, and interesting.

I think it takes courage to admit where we get our news.  So, in the spirit of honesty, here is a list of my economics-oriented bookmarks (arranged by how often I look at them):

1. Real World Econ

2. Greg Mankiw’s Blog

3. Paul Krugman

4. Left Business Observer

5. Marginal Revolution

6. World Socialist Website

7. Naked Capitalism

For general news (or other niches) I go elsewhere, but this is basically my filter for the economic world.  Where do you get your regular economics news?

PS notice I tried to exclude business news on this list.  This means Financial Times, Wall Street Journal, The Economist etc.  If included, they would (honestly) be tied for first or second place.

CALL FOR PAPERS: REMINDER

Here at the New School Economic Review, we are less than a month away from our paper deadline.  July 15 is our official deadline for any paper submissions.

So if you are interested in submitting a paper for our journal edition this year (on “What is Economics Today?”), we are currently accepting abstracts and papers.

We have already received numerous abstracts (with some papers) and will update interested parties with the review process as soon as possible.

Here is our original call for papers with further details.

INET grants for New Schoolers

Rejection is a standard – if frustrating – part of academic life, but with INETs (Institute for New Economic Thinking) Spring 2011 grant money just being announced there is much to celebrate from a New School side of things. From 400 submissions and a selected 23 grants, the New Shool economics faculty picked up one grant and the alums got another. Not too shabby for a global competition!

Prof. Anwar Shaikh’s proposed book on Turbulent Dynamics and Hidden Patterns wants to look at the world from a perspective of ‘magnificent dynamics’… I have to be honest and say that I am not entirely sure what that means, but a quick browse revealed this review article which helps. I hope we won’t lose Anwar for too long as he attempts the full manuscript, for which an outline is provided:

The book’s aim is to demonstrate that a revived form of the “magnificent dynamics” of the classical economists can explain the actual patterns of developed economies involving relative industrial prices, stock prices and interest rates, exchange rates, growth, cycles and inflation. The book develops a classical theoretical approach to these and other fundamental economic issues which it then contrasts to the corresponding theoretical arguments in the neoclassical and Keynesian traditions. It also confronts all theories with the relevant empirical evidence. It is my hope that this will encourage others to analyze the “two-sidedness” of markets: strong patterns achieved through turbulent processes.

Also in the list is one of our recent alumni Ph.D. Students, Stephen Kinsella currently at Limerick University in Ireland where he is collecting a lot of (well deserved) accolades. He wants to build a stock-flow consistent model of Ireland. It looks like an exciting and ambitious project, which I suspect follows on from other work in this area which Steve has been doing and is forthcoming in EEJ among other places (see the stock-flow-consistent model papers here).

No model helped predict or understand why Ireland’s economy has collapsed so spectacularly since 2007. This is because the real and financial sides of the economy aren’t modeled using current tools. Using INET funds, we will build a stock flow consistent model for Ireland to solve this practical problem, as well as a theoretical problem in the estimation of large stock flow consistent models highlighted in the literature. The project is important because previous modeling methods have largely failed, and because small open economies in an era of globalization all over the world face the same challenges as Ireland.

All in all good news, and I hope that we can continue this kind of success going forward. I wonder if any of the grad students submitted a proposal or worked with the faculty on one? It’s good experience and a great opportunity to get a yes.

PhD Comics… The movie!

Following on from the Simpsons and Family Guy it appears that PhD Comics are planning a film… This may be just a gag but hey – if it is, I am not going to complain because the trailer is good enough as it is :)

PHD Movie Trailer from PHD Comics on Vimeo.

That might also explain their absence of comics recently…

15 TED talks for econ nerds

At least that’s what the headline says on this post by Liz Nutt over at the AccountingDegree.com blog who kindly dropped me an e-mail pointing to it and encouraging me to re-post. I have to admit there’s a lot of good stuff in here, my personal favorites include Hans Rosling and Collier’s talk is worth a listen. Steven Levitt is a question of your tastes, and I am now off to learn about the economics of terrorism (the presenter has gotten some good reviews in the past) and the talk on Bernie Madoff.

Through these talks, you’ll get to hear some of the world’s foremost experts on behavior, economics, and politics discuss a wide range of issues, from inequality to consumerism– often with an interesting and unique take on the subject matter that’s perfect for stimulating your inner (and not-so-inner) geek.

Loretta Napoleoni: The intricate economics of terrorism: You might be surprised at the economic and political issues that go on behind terrorist organizations. In this talk  you’ll learn about the money laundering, dirty deals and political subterfuge that goes on all over the world, helping to fuel terrorist organizations.
Steven Levitt analyzes crack economics: Freakonomics author Steven Levitt presents some interesting data on the financial aspects of drug dealing in this talk, showcasing the dangers that go along with the work– sometimes with little or no reward for anyone outside of the top echelons.
Laurie Santos: A monkey economy as irrational as ours: Humans can behave pretty irrationally when it comes to money or just making decisions in general. Laurie Santos shows in this talk that we’re not the only primates that make silly decisions– some of our closest genetic relatives do so as well.
John Gerzema: The post-crisis consumer: In this talk, you’ll hear about a surprising possible upside to the recent financial crisis– more thoughtful consumers and businesses who are adapting to meet their needs.
Hans Rosling: Asia’s rise — how and when: Today, Asian nations like China and India are economic powerhouses, and could soon outstrip the US and many other nations– something researcher Hans Rosling demonstrates in an amusing and clear way in this talk.
Paul Collier on the “bottom billion”: Much attention is focused on the wealthy and successful, but what about the world’s billions of individuals living in poverty? This talk from Paul Collier discusses some ways that we can all work to help close the gap between the rich and the poor.
Nandan Nilekani’s ideas for India’s future: Discussing India’s recent economic success, author and IT expert Nandan Nilekani addresses what the country will need to do to maintain its recent progress in the coming years.
Martin Jacques: Understanding the rise of China: Economist Martin Jacques addresses the rise of China as an economic power in this talk, explaining how the country has changed, what has allowed it to do so and how it will continue to change in the future.
Amory Lovins on winning the oil endgame: Because so much of the world depends on oil it is an incredibly precious commodity, one that makes us very dependent on international trade and certain regions of the world. Here, Amory Lovins explains his plan to wean the US off of oil and start building a different kind of energy industry here at home.
Eleni Gabre-Madhin on Ethiopian economics: Ethiopia is currently the world’s largest recipient of food aid but Eleni Gabre-Madhin doesn’t think it should have to be that way. Instead, she lays out a plan to help revolutionize the economy of the country, creating wealth and large commodities market.
Kevin Bales: How to combat modern slavery: From an economic standpoint, slavery is a quick and easy way to make more money but from a moral standpoint, it’s simply reprehensible. Unfortunately, many businesses around the world still operate and profit from slavery– something activist Kevin Bales wants to change, making significant economic and political changes to limit the possibility of slavery around the world.
Misha Glenny investigates global crime networks: An expert on organized crime networks worldwide, Misha Glenny explains how these groups now make up 15% of the global economy– a frightening statistic for any law-abiding citizen.
Geoff Mulgan: Post-crash, investing in a better world: While the money has already been spent today, Mulgan presents an interesting option for those stimulus dollars that might have been a better solution in the long run: invest them into new, sustainable businesses, focusing on the future instead of the past.
Peter Eigen: How to expose the corrupt: Corruption is a pretty common thing worldwide when it comes to politics and business, but it’s not something that’s ultimately good for the citizens of any nation in the world. Here, Peter Eigen shares his mission to improve transparency and fight corruption.
Matt Weinstein: What Bernie Madoff couldn’t steal from me: Matt Weinstein lost his life savings to scammer Bernie Madoff, but in this lecture, he shares some of the lessons he’s learned from the experience and the wisdom financial disaster helped him to gain