Archive for May 31st, 2017

The World Bank has bigger problems than bad writing…

May 31, 2017

Paul Romer recently raised a storm over wanting World Bank econs to wrote better but got sidelined. I mean how can you teach “the econs” from “The Bank”? Romer should have known better.

Noah Smith says problems are deeper than writing:

A picture is beginning to emerge of global financial institutions that are too hidebound and conservative. Faced with changes in both the global economy and economists’ understanding of recessions, both the World Bank and the IMF have too often resisted change rather than embrace it. It’s worth wondering if the root of the problem comes from the culture of economics.

Economists are, in general, an insular and hierarchical bunch. They are used to having the quality and value of their work judged only by other economists. The outside world is expected to pay economists’ salaries and listen to their advice, but not to question the value of what they do. But when this ivory-tower approach is applied to real-world organizations, the result can be unacceptable institutional inertia.

Perhaps it was this insular culture, rather than just bad writing, that Romer had really intended to shake up. If so, the deck was stacked against him from the start. Making economists open up and engage with the wider world — and make themselves vulnerable to criticism by intelligent outsiders — may be a task too great even for a famous and brilliant individual like Romer.

Nice bit…


The Norwegian economy, sea and banknotes

May 31, 2017

Norway has released new banknotes – 100 kroner and 200 kroner. I had earlier pointed to this superb video on its banknotes.

The new notes are inspired from sea as the Norwegian economy gets much from the seas:

The motifs on all of the new banknote series denominations show the importance of the sea for the prosperity and welfare of the people of Norway. The primary motif on the front side of the 100-krone banknote is a Viking ship, while on the 200-krone note, a cod is portrayed facing left. On the back sides, abstract representations of a cargo ship (100-krone note) and a fishing boat (200-krone note) can be seen on the horizon.

The banknotes were designed by Norges Bank’s banknote designers Arild Yttri and Morten Johansen. The designs on the front sides of the banknotes are based on the proposal from Metric Design and Terje Tønnessen. The proposals for the back of the notes were submitted by Snøhetta Design. The primary motifs were drawn by the artist Sverre Morken. The Atlantic puffin watermark motif is based on a photo taken by photographer Tom Schandy.

The new 100-krone and 200-krone banknotes were printed by Oberthur Fiduciare in France.

There is a speech by the central bank chief who links Norway economy to the sea:

This is a day I have been looking forward to for a long time – it’s not every day a new banknote series is put into circulation. The last time was in 1994. And being able to hold the launch here in the Lofoten islands is an added bonus. The sea and the Lofoten islands are inextricably linked – the sea is a defining feature of the landscape and a key source of food, employment and recreation.

Norway’s coastline is embraced by the sea from the northernmost point to the southernmost tip. The sea has shaped our history and our economy, and from today onwards, it will also feature on Norwegian banknotes. Norges Bank has been governed by our elected representatives since 1816 under a clear mandate: to safeguard the monetary system and the value of our money. Norges Bank’s banknotes and coins are the community’s money, and our trust in the value of our banknotes is closely linked to our trust in each other. With this in mind, it was important to design banknotes that would tell a story about us as a community of people. As the sea is a key dimension in that story, it was chosen as the theme of the new banknote series.

Fascinating stuff..

Exorbitant privilege and the Triffin dilemma through forex swaps

May 31, 2017

The French said US has exorbitant privilege due to hegemony of US Dollar. Triffiin dilemma suggested that though US Dollar is a reserve currency, it implies that US will have to keep running trade deficits to keep supply of US dollar going to other countries. Thus the dilemma between looking at short term objectives and also playing a global role. Thus, both privilege and dilemma are connected in their own ways.

In this paper, Takeshi Kimura and Teppei Nagano say both these are present in forex swaps market as well:

Hmm.. never really thought about it..
The power of US Dollar extends much beyond the reserve currency role..

A week without internet leaves Saharanpur residents in the dark…

May 31, 2017

Earlier one associated such articles with lack of electricity. Now darkness can also be associated with lack of internet facilities.

As Saharanpur suffers from violence, internet connectivity has been snapped. This has left citizens in dark:

Following several incidents of caste-related violence in the district, the Saharanpur administrationhad suspended internet facilities indefinitely from May 24. Legitimate and law-abiding users, including students, have been having a tough time ever since. CBSE and ICSE results were declared on Sunday and Monday, and Saharanpur students, including those who wanted to share the good news with their friends and relatives, found themselves cut off. Others who have been trying to seek information or updates about jobs and studies have been similarly isolated, they said.

After district magistrate Pramod Kumar Pandey took over following the suspension of his predecessor NK Singh, internet connectivity in Saharanpur has been limited to only broadband connections.

Law student Praful Bandhu told TOI, “The internet ban has affected almost everyone. Only broadband services have been permitted, but this is used by only a few private citizens. The rest of us rely mainly on mobile internet services. I have to send some important documents related to my dissertation to my professor but couldn’t, because the services at a local cyber cafe were very slow. One of my friends is facing problems at work because he has not been able to send his emails for days now.”

No electricity means plastic money is just plastic:

Mohit Goel, an e-commerce businessmen, said, “Credit and debit cards have turned into just plastic, since swipe machines are useless without internet. People like me who deal in digital marketing and e-commerce have been sitting idle for the past eight days. We have no clue how long this situation will last.”

These are exactly the risks people warn of not moving over digital world completely. In cases of such exigencies, the whole thing goes upside down. How we sapiens keep thinking we have created this new world only to fall under its own trap..

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