Archive for February 9th, 2012

As English becomes the language of commerce/business, should we ignore others languages…

February 9, 2012

Larry Summers recently said:

English’s emergence as the global language, along with the rapid progress in machine translation and the fragmentation of languages spoken around the world, make it less clear that the substantial investment necessary to speak a foreign tongue is universally worthwhile. While there is no gainsaying the insights that come from mastering a language, it will over time become less essential in doing business in Asia, treating patients in Africa or helping resolve conflicts in the Middle East.

Victor Ginsburgh of Université Libre de Bruxelles reacts to this comment. He says the world is far more diverse than Summers thinks:



How to reform state of economics? Avoid Envying Physics…

February 9, 2012

Andrew Lo reflects on the state of economics and suggests what could be done to improve teaching in economics. He says the problem has been this economists fascination with Physics where things can be controlled in lab experiments and hence some superb research comes with accuracy etc.

Earlier economists were highly impressed with Physics and tried to model economics accordingly. Peter Boettke even said economics suffered big time because of Paul Samuelson:


How to calculate India’s core inflation

February 9, 2012

Tracking Core inflation in India has become the buzzword but very few know how to really calculate it. In developed world,  core and headline inflation are given by the stats agency. Here we only get headline number and need to compute core inflation from the overall number.

Quite a few people have asked me on this calculation and hence writing this post. Though I had written an earlier post on the topic, I think it was not clear.

Though there can be many measures for core inflation, RBI has preferred non-food manufacturing products inflation as the core  inflation.  This paper  evaluated various measures which could be used as core and finds this non-food manufacturing products inflation gives best results.  I am not going into benefits and disadvantages of core inflation as have written enough on it.

This post is about calculation.  Some background first.


Euro, the EU, and Europe are far from being identical…

February 9, 2012

This is a superb out of the box thinking article on Europe.

Bruno Frey says policymakers keep harping on the fact that Euro is so crucial to Europe’s survival. Even most of us think so.

He disagrees.


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