Friday, 24 March 2017

In Defense of the Great Disruption

One of the most important talks at LibertyCon17 was given by the Swedish entrepreneur Henrik Jönsson, with the great title 'Everything you know is Dead or Dying: How to thrive after the E-pocalypse'. The topic is one that has been challenging economically illiterate people's beliefs since time immemorial and we've been pretty good at giving them various names: luddites, protectionists, conservatives, neophobes. It has to do with the most fundamental economic mechanism, call it development, dynamics or perhaps the name Schumpeter once coined: Creative Destruction. And knowledge of history and economics is key to understand why this development is beneficial.

Sunday, 19 March 2017

The Enemies of Liberty: The Authoritarian Right and The Intolerant Left

My reflections of academic conferences continue; Glasgow Economic Forum last weekend, followed by Lithuanian Free Market Institute's second Colloquium on Scarcity (where I learned an important lesson for behavioural economics), and the heighpoint of the this weekend: European Students for Liberty's LibertyCon2017. The great sessions included beer as a metaphor for economic life, Wolf von Laer's very inspiration rants, Enrique Fonseca's enthusiastic tips on communication, as well as great writing tips from Bill Wirtz. The main attractions of the conference (Jeffrey Tucker, Bruce Caldwell and Tom Palmer) were even better still!

Friday, 17 March 2017

The Blind Spots of Behavioural Economics and Paternalism

The hectic Life of an Econ Student continues; last weekend saw the incredibly successful Glasgow Economic Forum, followed by a rushed econometrics assignment and an intership proposal deadline on Monday. A few days of catch-up, before I was off to the massive SFL LibertyCon 2017 in Prague preceeded by the Lithuanian Free Market Institute's Colloquium on Scarcity, Morality and Public Policy. My first time to the reknowned Cevro Institute and an entire day of conversations and debates with brilliant minds. Here's the most mindblowing revelation one of the sessions (on Entitlement) gave rise to: Behavioural Economics has some serious blind spots. 

Monday, 13 March 2017

Reflections of a Forum

And then it was suddenly over. Months of work, planning, emailing, applying for funds, booking trips, selling tickets and coming up with witty, interesting questions and themes for our incredible speakers. Always in the back of my head, nagging, pondering, visualising what it would be like. This last weekend, Glasgow Economic Foru 2017 was finally here, a little project I got involved with in early second-year that has now developed into quite something. A bold and interesting idea by upset and naïve students about bringing cool speakers to the University, expanding the very narrow (read: boring) view of what economics is/ought to be, and it has become the highlight of the year. After this intense weekend, there are so many things I wanna read, so much I want to follow up on and and so much sleep to regain. Do bear with me while I indulge in this sentimental reflection. After all, I won't be involved in organising our beautiful GEF again, as I'm spreading my wings to go elsewhere in a few months.

Tuesday, 7 March 2017

The Statistical Fairy Tale They Call The Gender Pay Gap

The worst time of year for anyone with an intense allergy for abused statistics is election times: of all the many things economists and math teachers have failed to convey to the public, the difference between percent and percentage points must be the worst and most prevalent one  the amount of headache I suffer from listening to journalists reporting election outcomes or polling results is incredible! Below in occurance, but definitely equalled in annoyance, are the hopelessly repeated claims about a gender pay gap. They generally occur around March 8 (or October/November, after which women apparently work for free), when good virtue signalling commentators across the political spectrum try to illustrate how women are oppressed, by reaching for the alleged Gender Pay Gap. So, pre-empting all those sensationalist claims you are about to witness tomorrow, here is a critical refutation. Similar to debates over 'Austerity', you have to see the simple truth: there is no gender pay gap.

Sunday, 5 March 2017

The Boy Who Cried Austerity

You have all heard it  and most of you believe it: in its blatant disregard for the poor, always championing the capitalists' interest, the Coalition (and now the disgraceful Tories) have sought to violently cut back government spending, cut welfare provisions and raise taxes to reduce the budget deficit, ultimately reducing the government's debt. This 'Austerity Delusion' is allegedly hurting the poor, the disabled and anyone else I'm supposed to care for.

Everybody knows the fable (or ancient story) of a boy who cried wolf; after a few times of crying wolf nobody would believe him anymore, whether or not there was an actual wolf. We have now reached the exact opposite point: the boy yet again cries 'austerity', and everyone believes him, irrespective of whether there is any cutting of government spending going on.

Thursday, 2 March 2017

Affirming Affection: John Weeks and Despising Markets

Sometimes I wonder if I live in a parallel universe, separated from the realities of my friends and peer group and most people's normal experiences. In the present world of alternative facts and intellectual echo chambers, where the social and cultural divide between, say, hip liberal world citizens in inner-city New York and traditionalist Midwest sports fan in a way is larger than perhaps ever, these kinds of experiences are to be expected. But they never cease to amaze me.

Sunday, 26 February 2017

When Do You Become An Economist?

On a regular Sunday evening, sitting across from me, my flatmate is reading Friedman's Optimum Quantity of Money. All of a sudden, he bursts out laughing. In between his strained attempts of catching his breath he jokingly says "This is the best sentence is all of economics! If anybody asks me what economics is about, I'll read them this sentence".

Tuesday, 21 February 2017

Central Bank Independence Cannot Survive a Crisis

For once my university curriculum was enough in-sync with world events around us to provide some relevant and interesting readings. The essay I just finished dealt with central bank independence, a fairly modern invention to these rather old institutions: most of them used to be another sub-departments under direct control of a Treasury. The idea behind an independent central bank, one that makes its decisions about monetary policy and target rates underlying most interest rates in the economy without influence by politicians or current policy-makers is as follows: since the result of monetary policy operates with a certain lag, a sitting government in direct control of the central bank can lower the target rate before an election – an action that will spur investments and increase economic activity in the short run – which lowers unemployment, and may help the sitting government to victory. This action has longer-term consequences in higher price inflation, which will not be apparent until later; to bring that price inflation down, rates have to be increased again, often causing (slight) recessions.

Sunday, 19 February 2017

How Scotland Caused the American Revolution

When I first read Niall Ferguson's The Ascent of Money a few years ago I was mesmerized not only by the brilliant clarity of his writing, but the underlying theme throughout that work, well captured on the back cover of the book itself: "[Ferguson] reveals financial history as the essential back-story behind all history." It's in line with what I've argued on numerous occassions: doing history without recourse to financial or economic reality is rather pointless  or at least seriously limited in scope. Penguin books, Ferguson's publisher, did a great job for Ascent of Money in getting potential readers hooked by listing quite a fascinating intro:

Wednesday, 15 February 2017

Noah Smith says Stuff

Say what you will about Noah Smith, the former econ professor at Stony Brook Uni and prolific blogger, now continuing his writing for Bloomberg View. His well-formulated articles and succint blog posts have always resonated with me, causing a reaction (mostly negative, however...) and inspired me to read, write and argue. In other words, Noah's writing brings out the very purpose of economists, Paul Romer-style; in September last year, Paul Romer made a fuzz with his article The Trouble With Macroeconomics, in which there was a quote I instantly pulled to place on my wall of inspirational quotes: 

Sunday, 12 February 2017

Turner and Banking Crises

I adore John Turner, not only from the fact that he’s coming to Glasgow Economic Forum in four weeks (get your tickets here!), but for his great work in financial and economic history. Honestly, until April last year I didn’t even know he existed  borderline treason for those of us with an academic interest in financial history. As I stumbled upon his award-winning book, Banking in Crisis: The Rise and Fall of British Banking Stability, 1800 to the Present, I added it to my very long dissertation reading list. The extra push given by my advisor in September was enough for me to order it and read it. And what a read it was. Although the book is relatively short – 220 pages – it took me weeks to finish, for the simple fact that every single page contains valuable lessons, amazing reasoning and breath-taking insights that I simply had to jot down; my OneNote entry on the book is one of the largest I have and there are countless of individual entries in my vast Google Keep archive.

Thursday, 9 February 2017

Economic Reflections of a Journey: Morocco

A few days ago, the length of my experience and knowledge of Morocco amounted to the dates I buy at Tesco. Yes, yes, yes I had watched Casablanca, I knew the name of a few cities and could place them on a map, but none of that really counts. Sitting on a terrace, looking out over the white brick-and-clay buildings of the Tangier Medina, with the wood-fired smoke from neighboring houses filling my nostrils, it all felt a lot more real. On top of the almost randomly scattered houses there are countless TV paraboles and antennas reinforcing my impression that this feels a bit like a poor imagination of East Germany; the old garbage cars, the teared and unfinished houses, the dirty alleys and intrusive plethora of smells: cat piss, old stables, hashish, the occassional unknown spice, of dirt and rain washing it all away. 

Saturday, 4 February 2017

Review of Bernanke's 'Courage to Act'

This review was originally published in Swedish on website of the Swedish Mises Institute in January 2016. Ben Bernanke was the chairmen of the U.S. Central Bank, 'The Federal Reserve', 2006-2014, and nowadays blogs for the Brookings Institute. In late-2015 he released a book, his memoir, of the crisis, titled The Courage to Act: A Memoir of a Crisis and its Aftermath, which I reviewed in Swedish not long after. This piece has been translated and re-worked from the Swedish version. Since I recently discussed Bernanke's "Firefighter Analogy" that appears in the book, I figured it was finally time to bring this 1500-word review onto Life of an Econ Student.

Tuesday, 31 January 2017

Two Missing Considerations in the Inequality Debate

Recently I have been engaging in a lot of "bashing the inequality crowd"-type posts (see my posts on WahlroosOxfam or measurement errors) at the expense of my many other intellectual interests. This is justified, I'd argue, since Life of an Econ Student and the experience of being an econ student in the 21st century is to constantly argue or consider inequality – even in class! It is a bit like historians and their relationship to class-gender-race. All. The. Bloody. Time. 

Sunday, 29 January 2017

Review of Björn Wahlroos

This review was originally published in Swedish on the website Frihetssmedjan in June 2015. Björn Wahlroos is a well-known figure in the Scandinavian finance sector, as a chairman of Nordea, the 9th largest European bank by market cap and Sampo, the holding company of IF (the largest Insurance company in Sweden). He has a Ph.D in Economics and used to teach at Brown University, Northwestern University and Hanken School of Economics in Helsinki, Finland. To my knowledge the book has not been translated from Swedish, and so those curious about Wahlroos may have to learn a new language beforehand.

Thursday, 26 January 2017

Why I Want to Master 'Metrics

Sometimes words or sentences fly out of your mouth before you have a minute to think about them. Most of the time such rambling is rather meaningless ad hoc answers to questions or comments you weren't expecting. But other times, you surprise yourself with how true your words are, aka Freudian slip or simply a moment of clarity. 

The other week I had one of those. A friend of mine asked me why I was taking econometrics as one of my optional classes. For the love of everything holy, why would I voluntarily take more econometrics than I am required to (or, in my flatmate's snarky comment: "do you have a death wish"?)

Monday, 23 January 2017

What's the Difference Between Economic History and History of Economics?

This is a question people have (rightly?) asked me on numerous occasions. Especially during my first semester in Sydney when I was studying both at the same time; obviously, then, people outside the nerdy game of economics would tend to get confused. I shouldn't blame them – but I guess I kind of did, probably rolled my eyes and said something snarky about googling it. Today, however, I feel more generous. 

Saturday, 21 January 2017

Putting the Cart Before the Horse

This week, like most weeks during semester time, we had a guest lecture with GURWES (Glasgow University Real World Economics Society), a heterodox students’ society focusing on academic pluralism of economic ideas. On campus, we’re known as the crazy-leftie economics society, and not without reason; apart from me, most other students involved with GURWES take various degrees of far-left positions, especially on economic issues. As I’ve discussed many times before (here and here) this is one of the major problems with the Rethinking Economics movement in general: pluralism is important, but only one-sided pluralism and, you know, how can those conservatives even live with themselves?

Wednesday, 18 January 2017

Dear Oxfam, There Is No Inequality Crisis

In January every year the conspiracy think-tank Oxfam publishes a report claiming that some number of billionaires own as much as the world's poorest 50%. This year the number they cranked out is 8  and the top 1% owns more than the rest of the planet combined. Wow, goes every indignant left-leaning person from the Guardian's editors to Social Justice Warriors on every political site across the globe. That's so unfair, and so bad, and capitalism has obviously failed. Oxfam describes the distribution as 'obscene'; here's Max Lawson, Oxfam's head of policy:
There are different ways of running capitalism that could be much, much more beneficial to the majority of people.

Monday, 16 January 2017

Emerging From a Bubble

This Bubble was not one of those exciting financial market or property ones that I enjoy discussing. This Bubble was called 'dissertation', a rather lengthy essay worth almost 17% of my entire university degree. It has kept me very occupied since September, and has completely absorbed me for the last few weeks. Daunting task, and most days since September, and every day since Christmas have I been reading, counting, writing, regressing, handling data-series, analysing, proof-reading, referencing and finally a few days ago handing it in. Such a relief.

Sunday, 1 January 2017

Summarizing 2016

It's that time of year, and I thought I'd make a brief note of how 2016 turned out.  
  • I have written about 8 university essays, including around half a dissertation. 
  • I posted 28 articles and blogs on, of much varied quality, as well as 102 blog posts on Life of an Econ Student.
  • Read something like 85 journal articles or chapters in academic books.
  • Read at least 11 academic books in full, and on average probably halfway through another 5-6 books (among which are McCloskey, Shaikh, Mokyr, King)
  • The only fiction I managed to read this year was all four books of the Inheritance series (about Eragon and his dragon Saphira), which I devoured in a week or so. #PostExamDestress
  • Judging by my library history, I have taken out about 90 books from the university library (both Sydney and Glasgow).
  • I spent about £250 on books and £320 on clothes (continuing the strange trend from last year when spending on clothes exceeded spending on books); little over £3000 on food/drinks, about £5000 on rents and about £4000 on various trips
  • I added 220 new songs to my Spotify playlists, 2 new countries and 1 American state to my list and in total 16 flights.

Wednesday, 21 December 2016

How Rich Is Mr. Darcy?

Pre-Christmas chill has meant picking up my lovely edition of Pride & Prejudice. There's something about the language and the beautiful words that capture me  Jane Austen was onto something. Anyways, I started to think about the numbers and the incomes she reports throughout the book (and remembered how Piketty used them to portray how capital simply "earns its return r"). One of the first things we learn in the book is that insanely rich Mr. Bingley has let Netherfield, and he has "four or five thousand a year" (chapter 1). In chapter 7 we're told that Mr. Bennet (Lizzy's, the protagonist's, father) earns £2000/year and that his father-in-law left them £4000. In chapter 16 we also learn that Mr. Darcy, the rich proud and unpleasant fellow we initially loath, has £10k/year. It is never really explained or described how they earn this, and Piketty infamously argues that it was normal for capital to simply reproduce at some percent every year  so normal, in fact, that it's superflous for Austen to even describe it. 

Monday, 19 December 2016

If You've Never Missed a Flight, You're Spending Too Much Time at Airports

Waiting in a basically empty terminal for a flight not scheduled to depart for another hour reminded me of something Dr. Jordan Ellenberg convincingly discussed in his brilliant book How Not to Be Wrong: The Hidden Maths of Everyday Life. Back in October I thought I praised his book slightly too much, only to realize that I had forgotten to discuss this point.

In one of his chapters he discusses the optimal time to arrive at airports before the flight departures. He uses expected utility theory (for all its problems...) to suggest that maybe those hours waiting in the departure area or simply wandering the airport are pretty much wasted and could be avoided by showing up later  which also means that from time to time you may miss a flight or two. This is how Business Insider summarized the point when his book came out:

Friday, 16 December 2016

The Ins and Outs of Closing Fiscal Deficits

A range of well-respected economists, including Harvard economist Alberto Alesina whom I had pinned down as a Nobel candidate, just last week published an article (available here) that ought to cause some storm among academic economists. The snappy title of their paper on this politically-infected topic of fiscal policy is appealing enough: "Is it the 'How' or the 'When' that matters in fiscal adjustments?"