Archive for the ‘Blogs to Read’ Category

How China’s central bank works?

September 26, 2014

WSJ Blog explains:

Unlike the U.S. Federal Reserve and other western central banks, the People’s Bank of China isn’t independent of the government. It reports to the State Council, the Chinese government’s top decision-making body and as a result, the PBOC has no real control over China’s monetary policy.

But on inflation front, China has had low inflation for a while. So even if the central bank is not so called independent,  it has managed to keep govt at bay:

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Is Economics a Science? Dogmatic Economics Vs. Reflective Economics..

September 25, 2014

Fixing the economists Blog has this interesting post on the topic.

This is one of the most important philosophical questions regarding economics- is it a science? Econs surely believe and have tried to model  their ideas as Science like with laws and theories etc. This is met with criticism as these laws are not universally applicable and are inconsistent.

But then what is science at the first place? There is huge disagreement on the same. The blog defines science and then sees whether economics fits as a science:

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What explains the wage premium in silicon valley?

August 8, 2014

Jonathan Rothwell of Brookings has a nice post on the topic.

He puts up US map and looks at earnings of Software professionals across regions. He sees there is a wage premium in Silicon Valley compared to other places. Why this is so? It seems the region requires some typical software skills which lead to the premium:

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Road Safety – Choice Architecture in Sweden..

May 15, 2014

This blog had earlier pointed to this fascinating story on how Sweden managed to lower its road accidents and deaths.

Gulzar adds to the discussion from a behavioral perspective. He is mostly alert to the various nudges being implemented around the world:

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How Indo-Pak ended up hosting the 1987 World Cup Cricket?

April 30, 2014

As I write this post, there is a real proud feeling.

First, this is the 5000th post of Mostly Economics. This is a huge personal milestone as had no clue that would end up writing so much! Thanks to WordPress and the visitors who have encouraged  this blog all this while. Huge pat to the blog..

Second, there could be no better way to write this 5000th post than talk about this wonderful book – The Story of the Reliance Cup by Mr. NKP Salve. The blogger has always been a huge fan of cricket and would love to write and think more on the sport. The events of the last few years has led to huge discontentment with the state of affairs. The blogger never cared to figure the man reason behind NKP Salve tournament and this autobiography gives you great insights about many things. As the authorities keep piling shame on Indian cricket, perhaps they should read this book to understand the challenges faced by authorities then to bring this whole cricketmania to India. Given how things stand today, even the guys who brought this whole game to Indian shores would be reflecting on whether they did any wrong?

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Is Sweden headed the Japan way?

April 23, 2014

Things are getting more and more complex. Countries which had recovered post-crisis are slipping. Sweden is the latest entrant to the list. The last reading was at -0.6% fueling debates over deflation in Sweden.

  • Krugman always on red alert to these developments started the debate – one and two .
  • Lars Svensson, former Riksbank MPC member and deflation expert added fuel to the fire. He blames the Riksbank rightaway:

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Philosophy declining in universities but Philosophers top thinkers ranking…a paradox

April 10, 2014

Peter Singer Professor of Bioethics at Princeton University has this interesting article in Proj Synd.

He says that the intake in humanities has slipped sharply in recent years:

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Brief analysis of Indian macro-economic time series…

March 27, 2014

Isha Agarwal (no relation to ME blogger!) a graduate student at Cornell Univ has started this intersting blog and hope we get to read some more posts.

In one of the two posts written so far, the author explains the time-series analysis of Indian macro data.

Macro economic time series are known to display trend growth. For example, if we look at a country’s GDP, it rises over time, i.e. it has a trend growth which can be categorized as a long term feature of GDP, however, in the short term we observe that the GDP fluctuates around the deterministic trend. A substantial literature in macro economics deals with the properties of these business cycles and how the government can come up with policies to counter these business cycles – also know as counter cyclical policies. Whether or not such policies are effective in containing the business cycles is a bigger question and there are different schools of thought (Freshwater and saltwater) which feel differently about this issue.

There is a class of models known as RBC (Real Business Cycle) models which addresses questions such as: what causes business cycles, how persistent is the deviation of any time series from its steady state, what accounts for co-movement between various time series(such as consumption and income). RBC model conjectures that business cycle fluctuations are due to real factors (such as shock to technology) as opposed to monetary factors(such as change in money supply/monetary policy). The macro economic course taught in the spring semester at Cornell revolves around RBC theory which also happens to be my area of interest.

In the first lecture of this course I learnt how to extract the cyclical component from any given time series and some stylized facts about GDP, consumption-income ratios, investment-income ratios, their correlations and persistence. In this post I endeavor to conduct the same analysis for Indian data. I take data on GDP and its components from RBI’s website.The first step is to extract the business cycles from the series of GDP. I use annual data from 1950 to 2012 for this analysis.

Nice stuff. Read the post for details.

Though, the graphs could be better as one can hardly detect the difference between original and cyclically/trend adjusted time-series. And then the author could also explain how does one actually detrend all this. It does share a matlab code but a code is a code.

Overall an interesting effort and looking for more such posts..

ME eventually wants to get into posts like these as econ research via papers is getting boring.  Idea is to use simple econometrics (an oxymoron!) to convey basic ideas.  There is hardly any dedicated website to doing economic research and helping people do research using basic tools. Especially these time series analysis where we fail to look at basics and keep projecting left, right and centre..

But as ME is still not there yet, so will have to wait. ME hopes to get into this space quickly..Till then hope Isha helps us..

Why do people vote? Insights from a small experiment..

March 6, 2014

Well the biggest circus/tamasha (whatever you may call it) is about to begin. As ECI announced dates for Elections-2014, we are going to have loads of action for next two months..

Interestingly, just y’day there was this interesting post in voxeu on voting and psychology behind it. The authors conduct the experiment in just one region (Illinois) and one time (2010 Congressional election) so there are limitations:

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Is Prof. Krugman a French war general?

February 18, 2014

Another round of debate on relevance of macro modelling.

It starts with NoahSmith’s poston macro modelling.  Prof Krugman reponds in his usual style connecting French war generals with macro modelling:

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From James Bond’s licence to kill to central banker’s licence to lie

February 4, 2014

Anatole Kaletsky (chief economist of GaveKal Dragonomics) has this superb piece.

He says the central bankers have a licence to lie and they do the job really well.

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Wishing all a very happy new year and ME’s Annual report 2013

December 31, 2013

Wishing all the viewers a very happy new year. Hope 2014 is a great year for all of you.

Here is ME’s 2013 Annual Report (courtesy wordpress.com):

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How certain Univ of Manchester students want to change the econ syllabus?

December 6, 2013

The website is here and the blog is here.

We are The Post-Crash Economics Society and we are a group of economics students at The University of Manchester who believe that the content of the economics syllabus and the way it is taught could and should be seriously rethought.

We were inspired to start this society when we heard about a Bank of England Conference called ‘Are Economics Graduates Fit for Purpose?’ At this event leading economists from the public and private sphere came together to discuss whether economics undergraduates were being taught the right things in the light of the 2008 Financial Crisis. This chimed with some of our frustrations about the economics we were learning and so we decided to set up a society that would through doing research, organising events and running workshops seek to bring this discussion to Manchester. That was at the start of the 2012/13 academic year.

As of today we have a fully-fledged society, a book club, an incredibly successful launch event led by world class economists, many student and academic supporters, a petition that is constantly gaining signatures, links with a national network of economic societies and organisation and even more passion and determination to change the current state of economic education!

However, this is just the start. We will ensure that this society will become a permanent fixture on the Manchester economics landscape in the years to come, forever seeking to provoke discussion between students and staff about what economics is, what it should be and how it should be taught.

Superb..Much needed action..

Core-econ: A project to reform the undergraduate syllabus

November 12, 2013

Core-econ stands for: Curriculum Open-access Resources in Economics and is an attempt to reform economics teaching. It is funded by INET and the website is here (HT:MR Blog).

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Bloomberg syndicates content from Mostlyeconomics..

November 7, 2013

Time for some shameless self-publicity (much needed)..

It seems Bloomberg has begun to syndicate content from ME…if you have access to Bloomberg terminal…type blgs and then search for mostly economics…it is right there..whatever is posted on this blog comes on Bloomberg as well..(I get no royalty in case people are thinking)..

I was quiet excited to learn this..I have been reading/researching on Bloomberg for a while…now to see ME being featured on “The Newswire” is quite satisfying.. :-)

I did not know this till my friend Alok pointed this out. Thanks Alok..

Now, this post will also be featured on Bloomberg..

Blogging is going to be weak in next few days..

September 10, 2013

Blogging is going to be weak in the next few days. Will try and post a few things but not sure. Will try and write on weekend or perhaps next week. Till then, keep posting your comments and suggestions.

Interestingly, only today the blogger realised that ME ranked in top 100 most influential economics blogs last year (an amazing achievement for the blog and its visitors, given the high profile list). But it is not in the list anymore. The blogger has been unable to blog as vigorously compared to earlier months due to shift of base.  But has always tried to put an  effort. The focus has also moved to Indian economy drama and not much research related stuff. The drama was too interesting to miss. Though,  will surely try and up the research ante in next few months.

So as the blog goes on a break, i would be grateful if you could send your suggestions to improve things here at ME…Thanks a ton as always for your comments and inputs..

A day in the life of a behavioural economist..

May 13, 2013

A superb post by  of Worth a lot Canadian Blog.

She points how one struggles to stay focused despite being a behavioral econ. Quoting the whole post as it is:

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Measuring the clarity of central-bank communication..

April 12, 2013

A nice discussion by Aleš Bulíř, Martin Cihák, David-Jan Jansen in voxeu. The long paper is here.

There is a measure for measuring simplicity in language called – Flesch-Kincaid readability test. They use this to see which of the selected central banks communicate better and simpler.

Quality, clear communication is a very powerful tool for central banks because it influences expectations. This column presents new research on central-bank communications, using a formal measure of clarity – the ‘Flesch-Kincaid grade level’. The picture is varied: there are significant and persistent differences in clarity over time and across countries. However – and worryingly – the financial crisis is associated with unclear communication for some central banks.

We ask whether the clarity of central-bank communication depends on the context; if clarity is sensitive to the inflation outlook or uncertainty, or both; and how the global financial crisis has affected central-bank communication.

Under our null hypothesis, communication clarity is impaired when the bank is unsure about future developments or when it needs to explain larger deviations from the inflation target. Suppose that current inflation runs above the target, but the official inflation projection is close to the target, and the bank identified numerous mutually offsetting demand and supply inflation factors. It is going to be harder to present these developments in an accessible manner, presumably leading to less clarity. Nonetheless, the central bank may be aware of the need to present a clear message to the public and it may devote more resources to communication. If it succeeds, communication clarity may remain unchanged, or it may even improve. 

The seven central banks are: Chile, Sweden, UK, ECB, Czech and Poland. Findings:

We find statistically significant variation in the Flesch-Kincaid over time for each of the seven central banks, partly reflecting idiosyncratic trends. The inflation reports have become clearer over time in Chile, Sweden, and the UK (although the UK’s reports became less clear after 2007), improving by almost one fifth of a year of schooling per year. In contrast, the Eurozone Monthly Bulletins and in particular Thai inflation reports have become less clear during the sample period, by about one tenth and two fifths of a year of schooling per year, respectively. For the Czech Republic and Poland there are no statistically significant trends. Turning to our main question of the relationship between the clarity of communications and the broader economic environment, only a handful of factors structurally appear to affect readability..

Nice bit…

There is another such readability index I came to know of –  Gunning-Fog index. Econolog.net which ranks econ blogs uses this to see which blogs are simple to read and so on. Proud and humbled to say Mostly Economics ranks really nicely on this. One just needs 9 years of schooling and is much better placed compared to other blogs..

How US resolved its first debt ceiling crisis

March 11, 2013

A fascinating post by Kenneth Garbade of NY Fed.  It is written on the style of Lords of Finance.

In the second half of 1953, the United States, for the first time, risked exceeding the statutory limit on Treasury debt. How did Congress, the White House, and Treasury officials deal with the looming crisis? As related in this post, they responded by deferring and reducing expenditures, by monetizing “free” gold that remained from the devaluation of the dollar in 1934, and ultimately by raising the debt ceiling.

Well, just like most history episodes particularly econ history ones, one can’t help but compare the eerie similarities to today’s US debt ceiling crisis. The debt ceiling issue keeps coming back to hit the global markets as US keeps piling on debt. And how US resolves it each time just in nick of time should be fairly similar to how they resolved it way back in 1953.

What is most amusing is how fannie Mae rescued the government on debt ceiling crisis in 1954:

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Latvia’s Parliament votes for the Euro….

February 25, 2013

Anders Aslund of PIIE points that Latvia’s Parliament has voted for joining the Euro:

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