Sad Land of Contrasts

The saddest place on earth* is the place where a great haircut + tip costs as much as a cocktail at a bar. The land of paradoxes and contrasts, my homeland, is a pretty sad place. That's no news to anyone who lives there currently or has had that privilege in their lifetime. Nonetheless, most often than not, it takes an outsider to tell it straight, and I can attest to that. As I go back even more rarely and I am a mere tourist enjoying her sojourn in familiar places with old friends, it shocks me how much whining is done per diem. Not that the same isn't happening anywhere else, and the US is becoming increasingly unhappier as employers continue to exploit employees while the short-staffed organization is trying not only to keep itself afloat but to grow and expand simultaneously. Cheap labor has moved the US economy to greater lengths and shores while allowing for the exploited to still enjoy a higher standard of well-being here than on any other corner of the earth.

How are things changing? And what can be done to change a mindset in sad countries such as Bulgaria? Well, for once, there is always room for gray areas. Nothing is ever black or white. As many commentators pointed out, there isn't much information given on where the stats came from and how they were manipulated. They are merely food for thought and debate.

My favorite comment on the article was from sheilll [who] wrote: Dec 16th 2010 10:15 GMT "The empiricist...thinks he believes only what he sees, but he is much better at believing than at seeing." George Santayana

It is such a contrast to live in a country where people focus on the positives and it is somewhat demeaning and embarrassing to admit how miserable or desperate you are. There is such an importance given to being happy, comfortable and well off that it scares me how readily the majority of people I talk to on the opposite side of the Atlantic share their problems and concerns, blaming it all on the government, the society, the people around them, but never on themselves. Certain principles I am not willing to compromise yet. I still won't pay more for a haircut if I can. I need to draw the line somewhere.

*Even sadder places relative to income not taken into account due to lack of data

Not Another Annual Appeal

In the spirit of the non-profit world I work for now, I am making an appeal to the teeny number of readers of this blog. I will not ask for contributions but I implore you, as this blog's lifespan is bound to be shorter than average, please, please, please follow this closely instead, or in parallel, if you absolutely need to.

QotD #2

It's already October of 2010 and I watched Moore's "Bowling for Columbine" for the first time this afternoon.

In a societal culture driven by fear, Yoda's pearls of wisdom ring true:  

“Fear is the path to the dark side. Fear leads to anger. Anger leads to hate. Hate leads to suffering.”

Google "hate crimes" and report back why people are so afraid of the unknown/different/nonconformist. Why must we stress how different we are from the rest, and therefore, better than them? We all do it, semi-consciously or not. There is no excuse.

Part dos

I did it! I finished Sach's "End of Poverty"!

EOM

mon(k)eynomix

Monkey business:



FYI, turns out I am completely risk averse.

Multi-You

As this blog continues to stray from a narrow development economics path, I feel compelled to consciously justify my choices for blog topics. As many of you out there, I am not immune to having many interests and keeping up with several of them. I am thoroughly, truly, madly, and deeply fascinated by people who manage to specialize in a certain field and follow through with it, making it their career and life calling. My own inability to control my self-diagnosed ADD has given me an insight into the multi-layered, multifaceted ways to even begin to discuss development economics. People always ask me what DevEc means to me. To me, it is a blend of cultural, social, basic micro- and macroeconomic, environmental, political, military, scientific, humanist, purposeful, engaging and informative understanding of the world on an individual, case-by-case, as well as global scale. How can we begin to search for solutions if we don't even grasp the nature of the problem? What if the problem is only a mere difference in all of the aforementioned characteristics derived from an artificially created divide we have drawn between OECD and non-OECD political entities?

Well, what does it mean to you?

Life is beautiful, albeit overwhelming

Data surrounds us. We swim in it, breathe in it. We socialize with it, share, discuss, fight over it.

The question is, how do we organize it? Information, just like life itself, can be very beautiful if looked through a reflecting prism, at a particular angle. Moreover, overflowing stats taken aside, organization can be creative and liberating.

With the following TED talk I hope that you will leave this blog inspired and start looking at the usual daily news chewed and thrown at you in a brighter, more color-coordinated light.

Dolce far niente is a pain

August has been tough. Not even the seemingly endless summer nights, the pleasant idleness, the purposeful detachment from the outer world. Not only the life-changing, mind-boggling (or so everyone keeps on saying) decision to live with someone, to work somewhere and to dream, want, need something completely different.

Whatever that something may be, I am yet to find out.

I have contemplated canceling the blog probably at least once a month since its creation not too long ago. I have waited long enough for a revelation of sorts in what direction I should take it. I suppose no one has higher expectations from a 22 and 1/2 year-old college graduate than the graduate herself. I have decided to continue writing albeit more rarely than desired. I almost cannot believe I am admitting it, but I miss this medium of expression in a twisted way. It reminds me of my masochist paper writing during the nth all-nighter I have managed to pull off, caffeine and drug free.

The current post serves as a space-filler, as a re-evaluation if you wish. Feel free to let me know how disappointed you are I haven't covered the Gulf oil spill or that I have been silent in regards to my Dantesque experience reading Jeff Sachs. I may even be open to criticism.

Quote of the Day (QotD) #1

I am starting a new rubric enigmatically called Quote of the Day.
Today's blurb is about Malthus and sustainable development.

The sage Mahatma Gandhi once said, "Earth provides enough to satisfy every man's need, but not every man's greed."

How to Deal with Street Charity Collectors

Cynicism may be one of the few ways to remain sane in this starving world. Looking through the prism of a skeptic allows us not to fall for cheap and empty promises, to question how much of donated materials and effort reach their intended destination, and to consider more effective options for aid and assistance.

Personally, I am not easy to convince when it comes to charity. I'd much rather volunteer time and effort. Yet, I can't stop wondering if harm reduction is all we could do at the moment. Charity collectors in the streets of Boston have not failed to amaze me with perseverance and cheerfulness even in the freezing single-digit temperatures of winter. Great actors those guys and gals. Not long ago I decided not to stare down at my feet while passing by one such "hustler" by being so naturally distracted that I failed to notice him coming my way and to act distracted. Too late to pretend, I was left with two options and I didn't have the guts to run. And I am glad I didn't. What I learned from a pretty lengthy conversation was that the person I had feared would sweet talk me into doing something I had been careful to avoid was actually clueless. Not only was he the worst salesman I have ever met, lacking the type of magical charisma that would turn a stone-cold, heartless person like me into Mother Theresa, but he barely knew anything specific about the organization he was supposed to represent. I guess it didn't help him much that I had previously casually researched it, not to mention my educational background and interest in aid. He ended my monologue with a sincere regret that he had wasted his time with me, because "[I was] a good person and knew a lot." Those were his words, not mine for mine would have been something along this line: "You can't expect to easily persuade anyone to do a thing, for which they have made it their life goal to find a reliable substitute."

Democracy Is Not a Spectator Sport

Best things in life are free and my current favorite T-shirt proves it.

I kept hitting my head against the wall trying to put Howard Zinn and Massive Attack in one sentence. Oh, I guess I just did...

Professor Zinn's presence in and around my alma mater was too sentimental and I felt as if I had lost a mentor when the world lost him in January of this year. He was one of the main reasons why I attended BU, being introduced to him during a high school World History class. I took my first college date to his annual lecture in 2006, after which we turned the occasion into a special ritual to commemorate our anniversary.

Then there is Massive Attack who are still here, still rocking steady. Music has been my preferred medium for expression of radical ideas for a long time and last month's show was a sweet surprise. When the video installations rolled Howard Zinn's pearls of wisdom, something inside me shook so violently that at last, I was able to find outward expression of the dormant hunger for justice. All that was left to do was to act on the impulse to create, to destroy, to seek and to simply to do, act, work towards something meaningful. So I danced. I danced even more fiercely, and I hoped. I hoped that I wasn't alone in the crowd packed venue, ripping by the mad force that were the fanatic, maniacal Massive Attack fans. I hoped that they read what I was reading, that they saw what I was seeing. And that they knew what they needed to do more than I understood then or can fully comprehend now.

Synthetic, Artificial, Sci-fi and Cool

On a regular basis, I go back and forth arguing with friends on the impact of today's discoveries. We brush aside the much-publicized moral dilemmas and focus on the juggernaut, the coolness aspect of each innovation. In the end, whether we speak of genetically modified fruit in our insipid mango juice or the creators of the first synthetic cell, the new rock stars you may say, we seem to agree that the mass consumer will embrace the new as easily as they brush aside the old. But there's a catch. There is one condition - how to prove that the synthetically created, cloned or artificially modified product is just as good if not better than the natural, preservative-free, untouched one? Marketing helps, but preconceived notions are not easy to shake and for a reason too. I, as a consumer, could not care less where or how my food is produced if I couldn't tell the difference; moreover, if I knew for a fact that the new product is enhanced with vitamins without a single side effect much like its good old naturally-born prototype, I'll be the first one in line at the grocery store (a place I still dread to this day). To elaborate, I feel constantly cheated when I shop and know what food labels hide from me as if I were a character from Upton Sinclair's "The Jungle" consciously choosing to ignore the truth. There are too many things that are wrong with our society and I need to pick my battles after all!

Purpose Maximizing

Warm glows and purpose vs profit maximization problems. Or how to rethink undergraduate economics.

Philanthropy will not save the world...

...But it gives hope that the world is worth saving.

Feliz Cinco De Mayo, Boston!

Only a state like Massachusetts can get away with legally boycotting a state like Arizona.


Here's an obvious step to promote a little bit of my immigrant-Bostonian pride.

¡Felicidades!

May Day, May Day

I'll take the risk of being dubbed a socialist, a leftist, a commie even, and I wish you a pleasant celebration on this year's sunniest spring day. Happy May Day!*

*This holiday is not to be confused with the American version, known as Labor Day, occurring on the first Monday in September of each year. Despite (or maybe because of) history of May Day celebrations following the 1866 Haymarket Affair, May 1st is no longer a national holiday. I will not be protesting nor participating in any kind of strikes (for tomorrow is Saturday, my day off). Instead, I will be following a May tradition of my own, basking in the sun and enjoying my friends' company. Whatever your political beliefs may be, forget them all tomorrow and remember that we're all workers - from students, to stay-home moms - and we slave all week so we can loosen up on those glorious weekends.

Where's TED?

TED was @ BU! TEDxBU quickly evolved from myth to reality this past Sunday. And were we excited!

The theme "To Epiphany and Beyond" did stimulate a personal epiphany of my own. In the final couple of weeks of my last year of college, I realized how many gifted and interesting people I failed to meet during these past four years due to the choices I have made for lack of better judgment. What counts is the realization, better late than never as the saying goes.

TED is a sweeping phenomenon in a category of its own, growing in popularity with every minute passed. The appeal of having such an independently organized event at BU (hence the "x" in the title) was felt by everyone from the presenters (who, by the way, showed that age/experience is the last thing that matters for the creation of an engaging and powerful presentation) to the organizers and the listeners, myself included in the last category. Whether the talk failed to spark the much advertised, following discussion-to-be is beside the point. Who wouldn't rush out of the auditorium after 5 hours of almost non-stop presentations, which were intriguing yes, but tiring nonetheless? We all needed a breath of cold, fresh, late-April-in-Boston air.  

Either way, I felt like I left that auditorium a better person. If you've met me, you know that I say what I mean and I mean what I say in the wise words of Dr. Seuss. Whether I agreed or disagreed, I never failed to applause. Up until today, I couldn't make up my mind whether to focus on the small steps (to which the first part of TEDx was dedicated, with a direct approach on non-profit action in Africa) or to look at the big picture where hugs can heal hate. With a nudge from yesterday's talk, I dare to explore the possibilities and to dream that one day, in this global village we live in, there will be no such choice as the frontiers will continue to be shifted until there are none left, until the actions on a local scale affect everything we do on the more global level. 

Most likely, I will continue to be called an idealist or a hippie, but to quote Salvador Allende, "Ser joven y no ser revolucionario es una contradicción hasta biológica." I'd like to think that I'm still young...

Free Riders

Yesterday, on my way home after an exhausting day of presentations, lectures and volunteering, I experienced the free rider problem frst-handedly. No later than three minutes after boarding the Number 10 bus to Copley Sq, the drama began to unfold. An absolutely ordinary looking, elderly man got on, tapped his Charlie Card and took a step, continuing to examine the bus's interior in a desperate search for a free seat. I glanced out the window at the augmenting line of workers trying to make the rush-hour 5PM commute and felt somewhat relieved that I was already inside, getting comfortable on the warm, blue seat. I would have continued daydreaming if the bus driver hadn't done what he did. I woke up from my absent-mindedness as he got up from his driver seat, pulled back the old man in an instant and made him tap his bus pass again. The Charlie Card made the "it doesn't work" sound again, and again, and again... The bus driver forced the man to tap it at least a couple more times before the passengers started making disapproving, annoyed remarks. "But he does it all the time," the driver insisted, "he knows what he's doing!"
"So what? Let him! We've got places to be," the loudest woman in the back was heard shouting. The driver finally gave up, reluctantly, and drove off while the gray-haired man kept his vow of silence...

When you realize that someone's free-riding and does it on purpose, willingly and knowingly, where do you draw the line and say enough? If the driver lets one guy get on without paying who knows how many are going to follow? At the same time, the interests of the other passengers are conflicting. On the one hand, the public bus is technically not a public good since people continue to pay to use the MBTA services. On the other, their tax dollars still cover the gaps to fund all of public transportation's maintenance expenses, salaries, etc. Moreover, their willingness to let one slip through the cracks of honesty and good citizenry allows others to believe that it's OK to free ride.

We really don't think in a long term way when we've had an excruciatingly long day at work and all we want is to get off at Copley and take yet another means of transportation to our destination.

Disclaimer: Yes, I have free-ridden myself. Mostly in foreign countries when I don't know where to buy tickets. I also loved the old system of bus transfers and everyone being able to get on the Green Line for free along the BU-BC route. And, I admit that maybe, occasionally, I've forgotten my T-pass or wallet at home and I'm so grateful for the more lenient operators who let me get on without paying... Yes, I believe in universal, free, public transportation for all, but I don't believe in playing dumb. I don't appreciate people taking advantage of a system supported by all and doing it with a clear conscience on a daily basis.

Who Said that Video Games Only Teach Violence?

Yes, who said? Who said video games can't teach valuable diplomatic skills or conflict resolution?

Chew on this, haters: A Force More Powerful (AFMP)

High school, undergraduate (and perhaps even immature graduate) students, rejoice! The time has come to learn and play for peace simultaneously. Topple evil dictators, end inhumane totalitarian regimes through imaginative coup d'etats! Create your own peacefully coexisting world while quenching your thirst for... harmony. No, there will not be blood! This is a nonviolent game according to its creators. I surely hope that there are more enthusiastic than confused players out there.

I always wondered why there is a cafe-restaurant called "Ленин Жив" (Lenin's Alive) on the Neva River in the heart of St. Petersburg. And you know what? Lenin is alive! He is alive so we can remove him over and over again.

So what's next - a Super Mario type of affair where players collect foreign aid instead of mushrooms and ship them to their less-developed friends overseas?

Thanks to a gamer-veteran, B.Y., for sharing this invaluable, aforementioned information.

Another Failed Attempt, Mr. Sachs

Jeffrey Sachs' newest craze (courtesy of AidWatch and wronging rights)
LINK

Sachs is all talk and no action as usual! He excessively obsesses over the round numbers - a decade ago it was the Jubilee (forgiving all foreign debt at the turn of the new millennium in 2000) and now 2020 - but he is yet to prove that it works. Gah! It makes me so annoyed to watch his smug self. Who are you trying to convince, Mr. Sachs? The average American? And of what exactly? That you're a good guy trying to end poverty? Well, where are you results? And don't give me that same old "if everyone does his or her own little bit, if everyone lends a helping hand (meaning dollar), we will conquer all evil." I'm really not sure where he stands exactly; he obviously has some ideas about environmental protection and development economics, but how do we reconcile the two? Am I missing something? I haven't watched a single interview where he gives a concrete agenda and what's more important - results, figures, data. We all thrive on those.

Either way, I am still forcing myself to read beyond Bono's foreword in "The End of Poverty"and I was much  too tired to watch the movie screening at my alma mater recently. To be completely honest, Bono's rendition of the notion of poverty and its intertwined relations with terrorism and 9/11 caught me completely off guard, threw me off, and I am finding it really hard not to feel outraged at this sly, humanistic on the surface but really just moronic argument-attempt at brainwashing. To be continued; it shall be a challenge.

Not April, But Year-Round Fools

Just a year ago, a friend blogged about the Tata Nano hitting the Indian auto market. Revisiting it now, the project sounds a little too enthusiastic and ambitious, but it's only because it failed. Well, almost.
The familiar saying about the best plans of mice and men... applies to economic ventures too. I had to do some intensive Google searching to actually find any concrete information regarding the difficulties in establishing the Tata Nano auto plants in Singur, the move of the project to Gujarat, the most current standing of the situation, etc. I am not even completely sure about the time line of events here!

I guess the Nano explosion won't happen just yet. Maybe they're waiting for me to give them a nudge by finally getting my driver's license?

Here are some links if you'd like to make some sense out of it:
1) from the Examiner
2) from Indian Autos Blog
3) from Yahoo Answers (oh come on! you use them too!)

Best of luck!

The Great Depression Was a Woman

Think about it, don't most females go through a life crisis when nearing or entering their thirties? They hide their age, obsess about wrinkles and party even harder than a college freshman from Amish country. Therefore, unsurprisingly, the Great Depression began in 1929 and lasted through the mid-1930s. If it were a dude, it would happen when most men have their mid-life crises in 1940-45. If you still don't believe me, ask anyone who lived through it and they'd surely tell you that the G. D. was a b*tch.

Of Men and Leprechauns

For every drink you have tonight paid with your hard-earned money, I will donate twice as many drinks to the Society for the Advancement of Leprechaun Development (SALD).

Happy St. Patty's Day!

Double Standard

I guess it's my day to rant and rave, but I couldn't stop myself when bumping onto today's BBC Greek story. I'd like to turn your attention to BBC's informative graph above, which beautifully illustrates that in fact, Greece leads the EU countries with largest percentage of debt out of GDP ... (drum roll please) second only to Italy. Why is then Greece and not Italy getting the ironic "preferential treatment" in the press these days? What's so special about Greece that isn't happening in Italy? Or Spain & Portugal for that matter? Why not treat them as a unit, as the PIGS* they truly are?

*PIGS = Portugal, Italy, Greece and Spain

Census in Wonderland

As soon as I eyed the bright, clear white envelope from the 2010 Census, I rushed upstairs, tore it open and hardly contained my enthusiasm to find out what all the commotion has been about. Everyone seems dissatisfied these days and there is an inexhaustible amount of opportunities to aim this discontent at the government. Here comes the Census and before even officially having been distributed, there are already outcries far and large how race-intensively the questions are molded. I couldn't help but wonder, how did they know???

 'Tis true. There is no denying it, nevertheless I felt excited to make my tiny contribution to the population census as I do believe in the principle wholeheartedly. I filled out the shiny bluish pages with a trembling hand focusing really hard not to make a silly mistake in my DOB or to misspell my name. In less than three minutes, it was all over and I sighed proudly with a sense of accomplishment such as after a long, standardized test.

Then it hit me. Oh, no! Who's going to count me in the Bulgarian Census (the next one is to be expected next year, I presume, as the last one was in 2001) when I'm not there? The blessing and the curse of having dual citizenship strike again. Well, there's nothing I can do now. I can only hope that my poor grandmother can figure out how to add us to the official record for I do not wish to be reduced to nothing. I'd much rather be a mere statistic than a nonexistent one.

Does anyone know how such questions are settled? Is the brain drain data overly exaggerated or on the contrary, quite understated? Alice understood the situation all too well: "'But it's no use now,' thought poor Alice, 'to pretend to be two people! Why, there's hardly enough of me left to make one respectable person!'"

The World of Fab.

I have been under the weather for too long so I decided to blog of something fab (for a change). I cursed myself for having forgotten to take a pen and paper (yes, I still take notes the old school way unlike you tech-savvy gurus out there) during this mind-opening lecture I attended last week. To no avail, I forcefully tried to take mental notes as I was outlining this post in my head. I have fallen behind on memory exercising and my brain is failing me today. Or perhaps it can be attributed to the weather once again or to the caffeine withdrawals I've been suffering from lately.

Anyhow, enough about me. Turning into a phenomenon slightly more Fab than myself, namely the Labs! I'll leave for you to convince yourself of the useful and innovative (although innovation is a tricky word as the creator himself, Dr. Gershenfeld, admitted) Fab Labs. Unfortunately, the program's website is still very much in progress and the wiki page is too short, but to be honest, grasping the concept is not that challenging. With the lecture hall packed to the fullest capacity with an audience ranging from toddlers to senior citizens, the overwhelming majority were information-hungry young and old adults looking for the next big thing.

I know for myself I had many questions during the Q&A session, and after the session ended, I was left with many others. Sure, there can be no clear cut solution even when answers were given in the most eloquent, evidence-full and parallel-rich manner. Needless to say, my biggest worry is how to get these labs started. It still seems that after the tough step of overcoming financial hurdles, the rest comes naturally and easy. There is no dispute over the benefits of education in all shapes and forms (and the need for education reform, but that is the topic of another blog post). Yet when underdeveloped, still backward in terms of industrialization pattern countries are faced with the question how to move beyond the backwardness and make progress a reality, there is a divide among policy makers whether to finance innovation and focus their reforms on building human capital AND/OR to let the same old catching up, conditional convergence Solow story take care of the development gaps in order to provide a sound foundation for all sectors to improve upon. According to the Fab team, gaps can be jumped over and overcome. That is their huge, central idea. But there remains the need for a broad educational and state reform and for a type of micro financing that in turn remains unattainable to most developing countries on a larger scale. And it is this larger scale debate that remains the main critic of the team. For now, economies of scale are not Fab Lab’s concern. They try to promote the acquisition of skills to build (almost) anything you won’t be able to find in the store. Cleverly, these skills are similar to if not the same as those used to create the things that are available to the mass consumer. In a sense, education bridges the gaps between developing and developed nations. In fact, many of the developed nations we often point as examples are hardly any more developed as a whole than the rest of the world they are compared to.

The question I end with today will not be how to get started and get the entire globe involved in this completely worthwhile project, but when? When will policy makers start moving in the right direction where there is no need to define space and boundaries, where accreditation of awarded degrees is not based on a single location where the studying took place, but on achievement, where innovation happens limitless in terms of resources, communication and worldwide engagement?

Let's Talk Politics

Shifting alliances among parties in a multiparty system: one of the main causes of political and social instability.

Examples include but are not limited to South and South-Eastern Europe (since Bulgaria and Italy are my favorite case studies). I have often doubted the efficiency of the bipartisan system, however, could the US be on the right track?

Comparative vs. Absolute

After four difficult years, I can finally say I understand comparative advantage. I don't mean simple calculations or the basic concept behind the fancy technical term. Well, I do mean both, but what I mean to stress is that I understand it. I might just pop up open that bottle of champagne I've been saving for special occasions. Or just have a glass of cold water to wake me up from my temporary excitement and get me started on yet another problem set nearing its deadline. Either one will do.

I can't be certain if it was me falling asleep in the majority of classes, or the way professors try to explain things and often fail, or both, but I am finding out only now that I have confused Smith and Ricardo's absolute and comparative advantage up to this very moment. Who knew that absolute is absolute and comparative is based on comparison?! OK, enough silliness, but as obvious it is to most of you, the notion that by flipping a fraction, the comparative advantage pattern will be reversed holds true every single time (unless the fractions are equal, duh!) had not crossed my mind!!

Full credit and my deep gratitude goes to my online textbook resource (since I refuse to buy actual Econ textbooks anymore) that got me through the basics of my Master's International Trade and the current International Economics classes. Sadly, I took the former before the latter and thought that after passing the more difficult one, I'd dance my way through the other. I couldn't have been more wrong...

The Games People Play

Read this, read this, read it!!!

I.T., a friend at MIT, casually sent me the article, adding that one of the main reasons why he enjoys economics is that this particular field of study toys with people through experiments. In my mind's eye emerged the image of a puppet show - a marionette guided by two giant hands - and I could not help but share my fears with him. I told him that economic policies often serve the interests of few and thus, inequality is brewed. From inequality spur jealousy, violence, conflicts and instability. Envy is not a deadly sin for nothing.

Then I was reminded of a recent discussion on inequality and how it was time to change my stubborn attitude towards the phenomenon. While some level of inequality and unequal distribution of income is required for growth, too much of it most likely creates more problems than solutions. One must keep an open mind when it comes to social policies, but remain focused on the goal of encouraging investment and entrepreneur opportunities.

"You never know what policy is going to be effective for what group of people," my friend elaborated. And this is what I find most curious (and frustrating, sure) about economics. A single policy has so many variables for all of which it is impossible to control, so many possible and hardly foreseeable outcomes. Case studies can be helpful and we can learn from past mistakes, but who knows if the same economic theory can apply universally without catastrophic consequences.

I suppose this is where sociology and psychology come in handy. Or as my friend cleverly pointed out, "The more you know about people, the easier it is to manipulate them."

Thought for Food

Sarkozy at Davos for video, and the full text of the speech here.

Deflation Is the New Inflation

The deflation scare in Japan is all over the news these days. It seems that deflation is in, inflation is out.

Not only are prices decreasing by record rates, but unemployment is falling as well!  Boy, I am so close to packing up my stuff and moving to Japan. Economists don't share my enthusiasm, however. Articles such as this one in Business Week for instance, elaborate on the present danger facing most central banks in developed countries in the Northern hemisphere. Never in my wildest dreams, have I ever pictured falling prices as a phenomenon to be dreaded, feared and fixed. Not that I don't see the very clear point economic theorists make, but I can't seem to be able to turn my back on my inflationary childhood and adolescence.

Just to clarify what I mean, take the Soviet satellites with the traumatic communist and post-communist experiences with their "governments in transition," an endless and seemingly futile history of transition consisting mostly of fighting inflation. Even while residing in the United States, and especially during the recent recession, the Obama administration stimulus plan caused even more worries about hyperinflation and stagflation. Yet, printing money didn't even cause the much-publicized anticipated inflation, let alone help fight deflation. When merely pumping money into the economy doesn't quite have the predicted results, isn't it time to turn to other panaceas?

Convergence, Divergence

"Economic Convergence shows that if two countries at different stages of development (e.g. one rich and one poor) move towards the same steady state level of capital per worker (k*), due to decreasing returns to K, the richer country is projected to grow at a much slower rate than does the poor one, which is at an initial stage of development where any additional increase in k produces much higher returns and thus, a much higher y."

Legend: K = capital; L = labor
              k = capital per worker (K/L)
              k* = steady state level of capital per worker
              Y = output
              y = output per worker (Y/L)
This is just the first sentence I wrote for a problem set. I'm quite proud of its length... and somewhat scared I may be turning into one of those people... You know who you are!

The Coordinates of Happy

Today's class on economic development briefly mentioned the Happy Planet Index and after I got over the initial fit of giggles that shook me, I decided to actually pay attention and keep an open mind to just how economists dare to approach this uncanny task of measuring and classifying happiness.
After a couple of graphs and the professor's ramblings trying to explain the graphs to an audience already with one foot out the door, I finally discovered the main point to years of studying happiness. Or at least the main point for me. Apparently, data show that over time happiness stays fairly constant where an overall increase in a country's level of income or total GDP is observed, ceteris paribus. This means that if the distribution of income remains fairly constant as well, people are not any more likely to feel happier than before. Moreover, what struck me as incredibly narcissistic, yet true, an individual is only likely to feel happier if he or she is better off than the people around him. As the saying goes in most Balkan countries, "I'm doing well only if my neighbor does poorly."

So, if being happy is so dependent on one's well-being relative to others, how can we ever strive for equality? I am strongly averse to talks of utopian politics and societies, but I do believe that there must be some universally established minimal level of subsistence. This debate goes back to ancient times when philosophers from different eras argued about the nature of man. Are we born good and the environment corrupts us or do we have evil and egotism written across our hearts (but we spend a lifetime trying to better ourselves and save our souls)?

Whether we believe one or the other, we must not forget that economists are not trying to make people happy. Redistribution of income can have positive effects on total welfare by raising living standards, but negative effects on individual happiness. Above all, welfare is not a perfect measure of the effectiveness of economic policies, and sadly, it is rarely used as such a barometer.

What seems to make people happy is a groundwork of working domestic policies - today's optimistic prospects for investment in tomorrow's stable returns.

People Respond to Incentives

I just turned 22 a couple of days ago. Thus far, things have been going according to plan - I am at the final stretch, my last semester of college. As I mentally prepare for what comes next - the real world in huge doses - I find it as perplexing, anxiety-filled, exciting, and stressful as the next guy. I can no longer avoid the Big Question reserved especially for this time. Yet, I find it difficult to follow a concrete direction and complete even this short post, let alone to sort out my thoughts, hopes, and aspirations. They say a man is as big as his dreams. Well, how's a girl to dream big in today's world economy? Baby steps.
First, do a little research by your junior year and find out which and if graduate school is the most appropriate choice at this point. Preparing for LSAT/GRE/GMAT exams is not a thing to dismiss even in your freshman year. Trust me, this is not the SATs!
Second, if, like me and most of my friends, you decide to postpone grad school for a year or so and to enter the vast pool of college grads looking for jobs, do not watch the movie "Postgrad." Yes, I repeat, do not! It will not change anything - it will not inspire you nor will it disappoint you, because it is a work of fiction and only you can write your own screenplay. I am proud to have followed my own advice. Ha.
Third, after making the unwavering choice to enter the job market, you will realize that this decision will not make your life any easier. Instead, a myriad of questions begging to be answered will flood your tiny, know-it-all head. For instance, you may ask yourself where your ideal place to work might be. Why yes, there are many subpoints to this question such as:
a) Industry: If, like me, you have made the curious choice of studying economics and even more curiously you are not regretting it, would you like to become a financial analyst? Or perhaps go into consulting? Accounting? These areas seem to be the most lucrative option in terms of financial compensation. Let's suppose for a moment that again, like me, for some unexplainable reason you're more of a macro-thinker, you like looking at the big picture and especially to feel useful. So, if development economics is calling your name, should you perhaps join an NGO, IMF or the World Bank? What if you are sent to a land far, far away to do some hands-on research?
b)Location: It's all about location! Here's where we tie in the big L. Should you consider only the local job market - staying close to home and family, old friends OR close to new friends, new love and new home at the university? Furthermore, for those who have combined both of those locations in one (again... yours truly), why shouldn't you look farther - into new, undiscovered or vaguely familiar places you'd like to explore more? In this day and age, thinking globally is not only encouraged, it is a must.

The popular economic motto "People Respond to Incentives" remains strong and valid. I can't help but wonder, however, what sort of incentives there are for those of us - almost postgrads, but not quite there yet - who will devote the following 4-5 months (I sincerely hope no more than that!) boosting up and sending our curriculum vita to all corners of the world in the almost futile hope of landing the perfect job. I don't mean to sound depressed or disillusioned. I just wish the world had a little more faith in the potential and capabilities of my generation. I'm not saying that we are better than any other generation (quite the opposite, I am certain the next will surpass us), but we surely have much to offer once given the chance. The only thing standing in our way is our own insecurities. We lack confidence where our mothers and fathers had the green light and the carte blanche to go forward almost carefree. We are now burdened by undergraduate student loans, mortgage loans, insurance payments, graduate student loans, credit card fees. And squeezed in between the walls of these responsibilities, we are encouraged to remain hopeful, sunny and dancing on the streets.

Has the US economy failed us? Have we failed ourselves by living on credit for too long and now the system we took advantage of for so long is coming back to bite us in the buttocks?

Cake or Death?

Mmmmm... cake, chocolate cake.... 

It's 12:03PM. Stomach rumbling, eyes closing. Didn't have my morning coffee but had an extra early start at 3:30AM (silly jet lag!). Confined between the 4 walls in the office and everyone else going on lunch breaks... My colleagues better bring my "surprise" birthday cake in an hour or so!

Ah, expectations... The wait and anticipation make me so dependent that I was reminded of something Bill Easterly wrote about vicious cycles. A developing country sits around and waits while foreign aid donors keep dumping aid, forgiving loans. I must admit that I'm becoming quite vicious myself.

Hunger - for money, or for food in my case - can drive one to do despicable deeds. And what's worse, they will all be justified in his or her mind.

And yes, I finally had my cake and ate it too.

Bentley's Second Law of Economics

The law states, "The only thing more dangerous than an economist is an amateur economist."

Similarly, the only thing more dangerous than taking a photo of Chinese military officers in Tibet is taking a photo of Chinese military officers doing the "Heil Hitler" and posting the photo online.

I like to live on the edge... (teehee)