Monday 29 June 2009

Elasticity and the encyclopedic size of economic concepts

One of the things I found most difficult about economics was the jargon that came with the discipline. This was probably the result of not having any economics background at the secondary school level which meant I kind of parachuted myself into economics. This would be a typical excuse for being a bit thick, if it wasn't for the fact that I came across Robert H. Frank's the Economic Naturalist and his comment about how this difficulty in acquiring basic economic principles is a wide spread trend. In that spirit I'd like to start writing some of these down, so that if memory fails, this blog can help.
I guess that as I'll come across each and anyone of these, I'll come back to the blog and write them down. I have to say, embarrassingly that wikipedia is hugely helpful with this type of query and that I will find myself going back there for definitions.
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Today's concept is Elasticity of price, substitution, and wealth (income + whatever else fill your pockets):
In practice: "A good or service is considered to be highly elastic if a slight change in price leads to a sharp change in the quantity demanded or supplied. Usually these kinds of products are readily available in the market and a person may not necessarily need them in his or her daily life. On the other hand, an inelastic good or service is one in which changes in price witness only modest changes in the quantity demanded or supplied, if any at all."
Numerically:"In economics, elasticity is the ratio of the percent change in one variable to the percent change in another variable.(...).An "elastic" good is one whose price elasticity of demand has a magnitude greater than one. Similarly, "unit elastic" and "inelastic" describe goods with price elasticity having a magnitude of one and less than one respectively.
I always found it hilarious that I remembered the numerical difference between a normal, superior, inferior and even a Giffen good, but I never knew whether to call them elastic or inelastic... It's like having the cheese and a knife but not being able to explain to other people how to use each without maths...
FYI, every basic macro book has a definition of this!

Saturday 27 June 2009

Links and list of all online courses from Yale

All courses from Yale available here
Courses are:
Financial Markets
France since 1871
Frontiers of Biomedical Engineering
Frontiers/Controversies in Astrophysics
Fundamental Physics
Game Theory
Introduction to Ancient Greek History
Introduction to Psychology
Milton
The American Novel since 1945

Ancient Greece - Yale University Course

Another colection of videos of lectures from Yale University.
Ancient Greece from the Rise and fall of the Polis (this is not official name of the course)

Friday 26 June 2009

History of France - 1871-2009

Videos of another fascinating course from Yale University
History of France - 1871-2009
16. The Great War, Grief and Memory (Guest Lecture by Bruno Cabanes)

Game Theory - Economics 159 Yale University

A third course from Yale University:
Game theory
1. Introduction

Introduction to Psychology from Yale University

Continuing with the Yale University Series...
Introduction to Psychology

EC252 - Financial Markets course at Yale University

Here's a series of great links, to different lecture videos in Financial Markets from Yale University.
They are very good. Check particularly lecture 7 and the last two(25 and 26).
1. Finance and Insurance as Powerful forces in our Economies and Societies (introduction)
7. Behavioural Finance: The Role of Psychology
9. Investment and Portfolio Management - Guest Lecture by David Swensen

Iran until now

There are a lot of interesting things about the ongoing turmoil in Iran.
Firstly, it is amazing to see that whether you are French, Czech, Hungarian, Portuguese, Spanish, Iranian, Russian or Chinese, it does not matter. Everybody wants to have money, live confortably, and anything can trigger unrest. We do not want to be literate or numerate. We don't naturally crave for philosophy or politics. We want to live fairly happily and hopefully for as long as we can. Skills are only useful as a means to an end. Double digit inflation is not hyperinflation, but it still stinks! Lagging economic growth is not just a measure of some abstract concept and mathematical creation. It is indeed a useful tool to measure welbeing.
Secondly it is moving to see the lengths to which Iranians are willing to go to express their discontent. I wasn't there, but I dont remmember chinese citizens charging against the police. Check the Huffington Post.
Thirdly, some Political Economy.
Who are the Veto players?
Khamenei The Supreme Leader), the council of the wise men, the Revolutionary Guard and the Police. Also at this stage the opposition leader, given the amount of informal support also seems to have become a veto player. Informally, I suppose one may consider the parliament (though lightly so), but more importantly, (Urban) the merchants from the bazars, the middle class educated students, the university professors, and (Rural) the poor, and the uneducated, and the religious establishment.
What is the political system like? Centralised or decentralised? Likely the first... not sure
What about the welfare state? I would suppose that health care is provided by the state, in a rather poor manner, given corruption, and the toll taken on the budget by international sanctions. Pensions outside the public sector must be fairly inexistent. The same must apply to unemployment benefits. Education however seems to be rather good, from what I hear. That seems to be one of the reasons ppl go on the streets. They have all these skills and nobody lets them use them for anything, because the elite care little about the economy.
Fourthly it has to do with the nature and the organisation of the protests.
Reza Aslan on the daily show, with Jon Stewart proposed that both sides (Ahmadinejah and Mousavi) know how to dance this tango, because they were the ones dancing it during the Islamic Revolution. The idea is that this is kind of the same as what happened then, but now the players know what's goind on, where as then they were feeling the field. Aslan proposes that the protestors are going to alternate between taking to the streets and mourning for their deads, like they did in the past. And that in each period of mourning they organise better. It will be interesting to see whether this is the case. Either way, for our short term attention span western society it will probably take too long.
Fifthly, there are signs that some of the religious leaders in the council are trying to remove Khamenei. I cant come accross his name... anyway, 3 things seem possible.
  1. Either they remove Khamenei
  2. Either there's a Tienamen like bloodbath
  3. Or there's a government of unity
1 Seems unlikely, unless Mousavi is able to get the support of the army and the other religious clerics or that the opposition organises into militias that can fight at first the basij and then the police. For this they need guns, which unless they take them from the police, it seems unlikely that it will work. 3 seems unpractical as the interests of Mousavi and Ahmadinejah may not intersect. Then again it is possible that they do and that Mousavi is just leveraging a return to politics. Its hard to tell, though he seems too arty and sophisticated for Ahmadinejah's rhetoric and brutish style. The only thing stopping 2 from happening is the fact that the opposition may be too large. If they go in with tanks it may lead to a face off which could lead the army to join the ranks of the protestors and that the ball game. What if instead of one guy sanding up to a tank, 1 million or a counple of thousands do at once and peacefully? From what I hear, Iran did something similar to that during the revolution, putting flowers in the canon of guns.
So in conclusion: 1 is logistically impossible, due to the lack of guns. It is also difficult due to the existence of the revolutionary guard. However, if the system does not change too much and they are left with their percs it is possible to get to that. A changing flied bu similar crap kind of scenario. The worst case however, would involve the army breaking ranks with the clerics or breaking up into opposing camps some of which might oppose the revolutionary guard and the rest of the army which has not changed allegiances.
2 could actually serve as a catalist for the fall of the regime. This would depend on the determination of the iranian ppl and on the number of times the military are willing to go in and kill ppl.
3 is no good because a unity government without unity or at least equality does not work. Mugabe and Tsvangirai taught us that.
Lastly, and on a lighter note, this has been a rather voyeuristic experience for me. The access to information and footage is just unbelievable. There's more now, without a large press presence, then ever before. I guess the opportunity cost of not sending the press has become really too high with youtube, and "viewer"(more like citizens) generated content. Also, media truly is changing. It seems like it is turning into more of a comentary than a matter of obtaining facts. This is not good, because the press then retrenches itself in a subjective field, and distances itself even more from factual reporting. Also, it's lazy! There's something to be said about the reporter having been present in the midst of the events. "...and now just posted on youtube, in what seems to be a large street, we have a large number of individuals, screaming loudly at what seems to be the police, for some important reason." Where is it? why is it there? What moves the ppl protesting? is it just a bandwagon effect. Are they behaving like a herd? or do they identify some cause for the existing malaise which they must voice. Is it the election? the economy? the lack of freedom?
...
Oh and is the rest of the region saying?
BTW: The media was already tiring of covering the protests. Now that Michael Jackson died, I wonder whether the coverage is not going to disappear altogether. After all it's not like there are that many journalists in the field...

Interesting Blogs and Websites

Its ridiculous how much data is available and how dispersed it is. Everybody always complains about the difficulty of coming accross data or just normal news. Hopefully this page helps. It sure as hell helps me!!
Anyway, this is pretty self explanatory. Divided into 7 groups:
Politics, Economists write,General Economic Journals, Economic Data and International Organisations, European Union(1-6), European Labour Market (Labour Unions & Employer Organisations) and Innovation
Politics and political data
EuroAsia Group - Defining the business of Politics- a business consultancy about politics
Freedom House - For political and economic freedom. Annual reports (2002-...)
Transparency International - organisation against corruption and Reports: 2009
Human Rights Watch -and annual Reports: 2009
Amnesty International and annual Reports: 2009
World Bank Database of Political Institutions - really complete!! A must have!!
Power Index - This is a very good website, from which you can download a computer programme ( I.O.P2.0.2. ), which allows you to compute power indexes based on a game theoretical application of veto player theory, from the University of Konstanz in Germany.
Elections
Inter-Parliamentary Union - A fairly thorough website with information about elections in the last 40 years throughout the world and its own set of links to other similar websites.
Islam in Europe - this is an interesting albeit at times extreme website about muslims in Europe. Better to read the facts and ignore some of the comments.
Economists write
VOX EU - Many smart people say what...? Best open economic website, in my opinion
Cafe Hayek - (for an alternative Austrian perspective on Economics)
General Economic Journals
Economic Data
New York University list of recommended websites better and more complete list than the one here
N.B.: Some of the data is not accessible for free. Universities and other such bodies normally allow access. For LSE access, check here (micro, macro, financial data, GIS and International data centre and Institutes) or alternatively here (here and here).
World Governance International Organisations (non EU)
UN - The Organisation of the United Nations (data)
WTO - World Trade Organisation (data)
WB - World Bank (data)
IMF - International Monetary Fund (data)
Regional International Organisations (Non European)
OECD - Organisation for Economic Cooperation and Development wiki (a good list of who is the West)
NATO - North Atlantic Treaty Organization wiki
OSCE - Organisation for Security and Co-operation in Europe
NAFTA - North American Free trade Agreement wiki
AU - African Union wiki
MERCOSUR/MERCOSUL - Common market of the South (customs Union in South America)wiki
ASEAN - Association of South East Asian Nations wiki
USA
CBO - US's Congressional Budget Office
OMB - US's White House Office of Management and Budget
US's Deparment of the Treasury - equivalent of finance ministry
Federal Reserve System of the USA - Central Bank of USA
European Union (EU)
1.General Information
European Union Presidency
European Union Glossary - A Dictionary for all things EU
Euroactiv - Fantastic site with enormous amounts of information. Also good for job hunting
The Economist's Charlemagne - The Economist's European Section
2. Economics
Eurostat (the statistical branch of the EU. Not exactly the same thing as the previous link)
Central Banks
ECB - European Central Bank (data)
Riksbank - Central Bank of Sweden (data)
Danmarks NationalBank- Central Bank of Denmark (data)
Bank of England - Central Bank of the UK (England, Wales, Northern Ireland and Scotland) (data)
Narodowy Bank Polski - Central Bank of Poland (data)
Ceská Narodoní Banká - Czech National Bank (data)
Magyar Nemzeti Bank - Central Bank of Hungary(data)
Latvijas Banka - Central Bank of Latvia (data)
Esti Pank - Bank of Estonia(data)
Lietuvos Bankas - Central Bank of Lithuania (data)
Statistical Offices
Statistisches Bundesamt Deutschland - Germany's Statistics office
3. Politics, Democracy and Legitimacy
VoteWatch.eu - Keeping track of who votes for what at the EU level
Eurobarometer - Public opinion and perception of the EU polls. 1974- ...
4. Agriculture
An introduction to the CAP (Common Agricultural Policy)
CAP Health Check - A website that keeps track of developments regarding EU agricultural policy
5.External Trade
6. Cohesion Policy and the rest of EU Budget
Regional policy - Objective 1 (map), objective 2 (map) and wiki
European Labour Market
Labour Unions
ETUC -European Trade Union Confederation
Employers Organisations
FedEE - Federation of European Employers
Innovation
Gizmo - Great site for previews and reviews of gadgets
iSupply - innovation consultancy. Relevant for automotive industry
Nature The World's best Science and Medicine on your Desktop.
Science The World's leading journal of original scientific research, global news, and commentary

Disclaimer

Hey and Welcome!

As this is my first post, for your sake, but mostly for mine, I think it is fitting to explain the blog. I came up with it for two main reasons. To be able to go on about what interests me without boring people too much and in order to have a place to help me keep in touch with people with whom I no longer have the opportunity to see on a regular base.

First, this is a place to stay in touch. A place where I can share my thoughts about events and ideas with far away friends, whom I would want to share these thoughts but with whom discussing these over the phone may seem waistful given the limited amount of times we get to catch up. More than for anyone else, this is a blog for you guys whom I was unable to keep by my side, but whose brain I'd still like to be able to pick.

Secondly, this is a fairly selfish enterprise, if enterprise is the word. The idea is for it to be a repository of some thoughts, titled in a manner that attempts to give direction to what is otherwise a chaotic and random collection of pseudo-intellectual outbursts. The fact that it is public reinforces this and forces me to organise my thoughts and clarify my opinions...

The idea is "obviously" and "oh, so humbly", to use this as a space to reflect about world peace, tolerance and prosperity. Moreover, it is also an attempt for me to try to practice whatever knowledge of social sciences I have acquired over the last couple of years and see how useful it is in understanding present events and in inferring the likelihood of the coming ones.

"Rebuilding Babel" has nothing to do with religious or conservative notions of moral decadence or with exiling the people of Israel. If anything it is inspired by the idea that human beings are one people and that, as such, we deserve to be united in one society, with some level of common body politic, to manage our interactions and their unexpected and undesired consequences. Should we have a world government? Why? If so, what should it do? What should it look like? and the ultimate question, Should an earth government be desirable, how should it be achieved? or alternatively, if it is undesirable, how should it be avoided?

Biased as I am, I must apologise for the limited scope of analysis or reflections I may include. It will most likely incorporate some rather crude notions of economics and politics, and a disproportionate inspiration from Europe's history and the present process of European integration. This is where other people might come in handy. I ask that you bear with me and beg that you politely correct any inaccurate theoretical or empirical assertions that I may come up with. As a shourt cut, my thought process tends to (over)simplify things and I will surely be wrong more often than not.

I would also really like to know more about Asia and the Middle East, the Americas, Oceania and Africa. So please feel free to complement or correct any of my comments with examples from places. Some of these places will probably be over represented just for the fact that they have more history (understood as a written and organised record of events) than others which were unable to develop writing or whose records were to a large extent destroyed by, not so innocent, civilizing efforts from (Western) conquerors and colonial presence. But quantity is not quality, so it’s not very clear.

One final note... This is profoundly annoying, but for my sake, I would really be grateful if people were able to use a minimal amount of references, when these apply. It is not because I am geeky, though I probably am, and it is not because I am evaluating people. It's just that if you are using someone else's idea and he or she put it down in a book or an article, it is likely that he or she wrote it better and more at length than you did, and if you can refer to him or her, I can then go read it for myself and make up my own mind.

This being said I do hope that you may find this interesting and look forward to all and any comments.

(hehe, I am looking forward to checking this blog in 5 years... It will be hilarious to read this post and notice that in that time I have not received a single comment... )