tag:blogger.com,1999:blog-29186137839756917772024-03-13T02:40:50.333-04:00Ruang 413...or room 413penunggu ruang 413http://www.blogger.com/profile/10520868126113485662noreply@blogger.comBlogger41125tag:blogger.com,1999:blog-2918613783975691777.post-61451468450708099322011-07-21T01:01:00.001-04:002011-07-21T02:42:32.987-04:00Another cool thing from Google and R.I've found a new cool stuff. Well I don't think it's really a new thing as Hans Rosling already started it <a href="http://www.gapminder.org/%20">here</a>. Yet I used Indonesian Province-Level Data (e.g. Regional GDP, Net Enrollment rate in senior high school etc). The Chart below is aimed to look at the relationship between Regional GDP percapita (i.e. Province GDP) and Net Enrollment Rate in Senior School Level, for a given the population size.<br />
<br />
I also set up the data by using <a href="http://www.r-project.org/">R</a> and <a href="http://code.google.com/p/google-motion-charts-with-r/">a Google Project</a>.<br />
<br />
Before you play it: to make the chart interesting (and meaningful), you should change Color box in the upper right <u>from Date to Unique Colors</u>. Then, you also need to change the X-Axis from <u>Year to Income</u> (i.e. Regional GDP percapita). Now we can observe the relationship between school and income percapita from 2004 to 2010.<br />
<br />
Once you set all of these, now you're ready to play. Click play button in the bottom-left. Do you see any strong relationship?...if you think so, let me know :) [data are taken from BPS, 2004-2010]<br />
<br />
<script src="http://www.google.com/jsapi" type="text/javascript">
</script><br />
<script type="text/javascript">
// jsData
function gvisDatawicaksono ()
{
var data = new google.visualization.DataTable();
var datajson =
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[
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[
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],
[
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[
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],
[
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],
[
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2006,
"38867679.22",
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],
[
"Sulawesi Tenggara",
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"8643330.06",
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],
[
"Maluku",
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"1/1/2006",
2006,
"3440114.1",
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2.706,
3.44,
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],
[
"Maluku Utara",
new Date(2006,0,1),
"1/1/2006",
2006,
"2359483.02",
48.66,
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2.6235,
2.36,
0.9
],
[
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2006,
"18402197.42",
33.36,
1.9183e+06,
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18.4,
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],
[
"Aceh",
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2007,
"35983090.79",
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],
[
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],
[
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<div id="wicaksono" style="height: 500px; width: 600px;"></div>Unknownnoreply@blogger.com38tag:blogger.com,1999:blog-2918613783975691777.post-92034376479857197052009-01-25T05:53:00.002-05:002009-01-25T05:56:59.996-05:00CSIS made the 2008 political survey data for public<span style="font-size:130%;"><span style="font-weight: bold;">Voting behaviour survey data is available</span></span><br /><br />On May 2008 the Centre for Strategic and International Studies conducted a voting behaviour survey with 3000 respondents and covering 13 provinces. The data is now available upon request for those who are interested. It is our hope that these individual level data may be useful to increase our understanding on the development of Indonesians voting behavior. <p>Please contact Sunny Tanuwidjaja to request the data. </p><p>His email is: sunny_tanuwidjaja@csis.or.id. </p>Unknownnoreply@blogger.com41tag:blogger.com,1999:blog-2918613783975691777.post-5636175092943266712008-11-20T05:22:00.002-05:002008-11-20T06:40:26.025-05:00.....And We're Back!It's official. We're back! As you may have noticed we've been quite inactive for a long period of time (blame us....we're procrastinator and good at it). However, while this blog fell into prolonged hibernation, we were kept busy elsewhere. Yudo was (and is still) occupied by his research projects, while also having a blog of his <a href="http://twicaksono.wordpress.com/">own</a>. Meanwhile, I have just finished my studies, in my spare time also moonlights as a guest DJ at the <a href="http://cafesalemba.blogspot.com/search/label/Pasha">cafe</a> next door, and am now in the early stages of my reserch projects.<br /><br />Then, some unknown and unseen force(s?) drove us back to revisit this blog. Yudo got the ball rolling by posting the result of his recent research on labor issues. One thing led to another, we thought why not revitalize the whole look for the blog? So we did a full cosmetic change, cleaning our blog from spammers, remove unnecessary stuffs, etc. Hope you'll like the end result.<br /><br />Finally, as a bonus we present you with Thin Lizzy's "The Boys Are Back in Town". We think this song is appropriate for the occasion, enjoy :)<br /><br /><object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/FDhWIIU_cfk&hl=en&fs=1"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/FDhWIIU_cfk&hl=en&fs=1" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="425" height="344"></embed></object>Pashahttp://www.blogger.com/profile/03040951834210426940noreply@blogger.com1tag:blogger.com,1999:blog-2918613783975691777.post-18985899913544539912008-11-15T22:51:00.008-05:002008-11-15T23:27:12.274-05:00More on labor issueThis <a href="http://cafesalemba.blogspot.com/2008/11/wages-unemployment-and-formal.html">posting</a> leads me to re-read again what I wrote and I stumbled with this fact. First, unit wage cost became less sensitive after the crisis period to employment. In the pre-crisis period, One percent increase in nominal wage cost in the TCF industry was associated by 0.25 percent employment reduction. Yet in the post-crisis period, the one-percent change in wage cost was associated by 0.09 percent employment change.<br /><br /><div style="text-align: center; font-weight: bold;">The impact of nominal wage cost on employment<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjnefUwb-UbyledxG_r9TwFpuoKzd8mxOMiwg46bbOxqefr5yF3HNnGvy0ad3rAc8vUtjxIf228QPqT8Ulf9L5Fy5TYaXW0cNohga6uB1ahd1iVZgF_jMJeDXtpnD-tsO5pKLT0Xb8gI5w/s1600-h/image002.gif"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer; width: 320px; height: 107px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjnefUwb-UbyledxG_r9TwFpuoKzd8mxOMiwg46bbOxqefr5yF3HNnGvy0ad3rAc8vUtjxIf228QPqT8Ulf9L5Fy5TYaXW0cNohga6uB1ahd1iVZgF_jMJeDXtpnD-tsO5pKLT0Xb8gI5w/s320/image002.gif" alt="" id="BLOGGER_PHOTO_ID_5269105862348349634" border="0" /></a></div><div style="text-align: center;">Statistik Industri<br /></div><div style="text-align: center;"><br /></div><div style="text-align: justify;">My argument is :“<span style="font-style: italic;">..After the crisis, firms are likely not to dismiss workers immediately in responding to rising wage cost, particularly older workers with permanent job status, because of, largely, high severance payments. However, at the same time, stringent dismissal regulations leads firms to restrain hiring new permanent workers, though wage cost declines..</span>”<br /></div><div style="text-align: justify;"><div style="text-align: justify;"><br />Second: while at the same time, speed of adjustment in labor demand due to a shock is getting longer in the post-crisis period.<br /></div><br /><div style="text-align: center; font-weight: bold;">The Speed of Adjustment in Labor Demand (year)<br /></div><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjD0Sd65aGBzQeyzMTAPCAi_R0OCRctlTZ41TaaQ3ynT6Ei_uvC1XGjrj40FfMTY6MvEv9mwwIpH4EXsGfVApFNhbIvKiCwaAdjxewpon1QTAr6xqSjhrxjgt_QCZUUFqEQOw2Jc4ZQ4lg/s1600-h/image002.gif"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer; width: 320px; height: 268px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjD0Sd65aGBzQeyzMTAPCAi_R0OCRctlTZ41TaaQ3ynT6Ei_uvC1XGjrj40FfMTY6MvEv9mwwIpH4EXsGfVApFNhbIvKiCwaAdjxewpon1QTAr6xqSjhrxjgt_QCZUUFqEQOw2Jc4ZQ4lg/s320/image002.gif" alt="" id="BLOGGER_PHOTO_ID_5269101196310570066" border="0" /></a><br />“…<span style="font-style: italic;">Comparing between the pre and post crisis, we can say that the post-crisis labor market environment in the industry is much tighter that the pre-crisis environment. Two explanations can be offered here. First rising uncertainty in demand for output leads firms to keep the existing level of employment, despite a growing demand for output (e.g. footwear industry immediately after the crisis). Second, slow adjustment can be attributed to surging adjustment cost (i.e. firing cost). Therefore pointing high dismissal cost as an explanation behind this is quite justified</span>…”<br /><br />This situation applies only to permanent job in textile industry- part of formal employment. So given this, I cannot say that the impact of wage cost on formal employment will be the same as in the case of permanent workers. Yet this gives indication that even though firms' compliance rate to other labour regulations (non minimum wage) may be low, these have backwash effect for permanent job creation and, in turn, secure job.<br /><br /></div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2918613783975691777.post-68042479941186237902008-11-15T15:27:00.005-05:002008-11-16T05:12:57.523-05:00Does trade-off between MW and employment levels apply to All?<div style="text-align: justify;">The debate is going interesting. Though I used textile industry (not the whole economy) as my basic argument, the industry is still important as an indicator of formal employment. Prior to the crisis, employment in the textile industry was accounted for around one-third of all jobs in manufacturing.<br /><br />Ape in <a href="http://cafesalemba.blogspot.com/2008/11/wages-unemployment-and-formal.html">his comment</a> argued that “the wage-formal employment trade off is apparent” but paradoxically this is not the case of textile industry-one of labor-intensive industry and supposedly is much more sensitive to minimum wages (MW). Based on Sakernas data, such trade-off is absent indeed. From the figure below, we can clearly visualize that the percentage of formal employment followed closely MW.<br /></div><br /><div style="text-align: center;">MW is left axis & % of formal employment right axis (sakernas)<br /></div><br /><div style="text-align: center;"><div style="text-align: justify;"><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgr9tu_NNA8zgGA2Q1QFBCbq3xWypO7picbApB-gx6OgxIAR5-9tAM2L0IeCT-tg4BilchtZr039pAkhEmPSq0WEp9UoB9WFX5-wv2Cgc1r3fk4uYEKhyPVVrpXvpABeo5-rOYSf7dAgYE/s1600-h/image002.gif"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer; width: 320px; height: 239px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgr9tu_NNA8zgGA2Q1QFBCbq3xWypO7picbApB-gx6OgxIAR5-9tAM2L0IeCT-tg4BilchtZr039pAkhEmPSq0WEp9UoB9WFX5-wv2Cgc1r3fk4uYEKhyPVVrpXvpABeo5-rOYSf7dAgYE/s320/image002.gif" alt="" id="BLOGGER_PHOTO_ID_5268988990881642210" border="0" /></a>However, if we juxtapose real value added of textile industry and % of formal employment in the textile industry, it becomes obvious that output determines employment levels. Putting technical change together, it seems that the change in factor intensity affects employment levels.<br /></div><br />Real value added (trillion Rp)<br /></div><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgducdlVxk7sZWO2B0o5b7R0M2C8bIQKG4-2patUeaTP3a4yj9fMgODIxKvOk2F8cuaVUn52ZgsjHbYNhyBqSb1DwnraiRJ4Zux-NVhuXoJ1TQq9GzUz37xhlnoIyaZvKKC_9Z7xrhR5to/s1600-h/image002.gif"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer; width: 320px; height: 228px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgducdlVxk7sZWO2B0o5b7R0M2C8bIQKG4-2patUeaTP3a4yj9fMgODIxKvOk2F8cuaVUn52ZgsjHbYNhyBqSb1DwnraiRJ4Zux-NVhuXoJ1TQq9GzUz37xhlnoIyaZvKKC_9Z7xrhR5to/s320/image002.gif" alt="" id="BLOGGER_PHOTO_ID_5268989403396380130" border="0" /></a><br />If the formal sector employment starts to grow amid stringent EPL, it does not necessarilly mean that EPL is not an obstacle (or has less impact). Solid domestic output demand may compensate the impact of EPL on employment. But if we relaxe this, perhaps we may see that formal employment grows faster. But it is better for me to say that i don't know exactly which one is the main obstacle (MW or EPL) on employment. But based on my study in textile industry, the employers are concerned much more on the latter (EPL) rather than the former (MW).<br /><br /><span style="font-style: italic;">Conclusion:</span><br />The impact of MW on employment levels seems to vary within formal jobs. I don't say that MW does not bring an adverse impact on employment levels. Yet growing output demand recently is likely to compensate the impact of MW. MW and EPL are determinants affecting input cost of firms and in turn labor demand. But output demand is another driver affecting labor demand as well. Another issue is about data reliability-well I don’t know exactly how to get around this issue.<br /><br /><span style="font-weight: bold; font-style: italic;">Update</span><br />this is <a href="http://ruang413.blogspot.com/2008/11/more-on-labor-issue.html">one more</a>Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-2918613783975691777.post-11465870063378979622008-11-15T09:53:00.005-05:002008-11-15T10:03:05.791-05:00How technical change affects the employment levels<div style="text-align: justify;">This posting is triggered by <a href="http://cafesalemba.blogspot.com/2008/11/wages-unemployment-and-formal.html">Ape’s posting</a>. Increasing minimum wages (MW) is considered as the main factor of slowing formal employment growth. But is it true? I’m a bit skeptical to this argument. I do not undermine the impact of MW on formal sector employment, but just question its magnitude. Based on my research on textile industry (labor-intensive industry), I found how technical change also contributes to decelerating employment growth in the formal sector. Here is the excerpt<br /><br /><span style="font-size:100%;">“</span><span style="font-size:100%;"><span style="font-style: italic;">…fiber industry and spinning industry are characterized as relatively capital-intensive industry. On the other hand, the apparel industry and footwear industry are classified as labor-intensive industry. This category is reflected by the figure X. The capital intensity of textiles industry (left-axis) is far above the capital intensity of apparel and footwear industry (right-axis). However, several trends are worth pointing. First the 1998 economic crisis has brought a significant change in the factor intensity. In three sub sectors, the capital intensity increased dramatically in the crisis period. The main driver was because the crisis led to a surging capital price and massive-scale of job dismissal (i.e. compositional change).</span></span><br /></div><br /><div style="text-align: center;">Figure x. Capital Intensity in Textile, Apparel and Footwear industry<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgMWDMB4Pyhi_1dLSKi6WbmvvrlE85w1uK05kPo7J-EZmNXzqoMtzq2s9KYbBkwoX4jdMESTv0UeiId45iblw9K_idMjQgPChQNZzaKDmiF4N5M6ZVcMfh_mTVUOOAMy6_yUvdGkvuf8_4/s1600-h/image002.gif"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer; width: 320px; height: 229px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgMWDMB4Pyhi_1dLSKi6WbmvvrlE85w1uK05kPo7J-EZmNXzqoMtzq2s9KYbBkwoX4jdMESTv0UeiId45iblw9K_idMjQgPChQNZzaKDmiF4N5M6ZVcMfh_mTVUOOAMy6_yUvdGkvuf8_4/s320/image002.gif" alt="" id="BLOGGER_PHOTO_ID_5268897784276528498" border="0" /></a>calculated from statistical industry<br />green: textile; red:apparel and black: footwear<br /><br /></div><div style="text-align: justify;"><span style="font-size:100%;"><span style="font-style: italic;">..Nevertheless the capital intensity of textile industry returned back to the pre-crisis level with the economic recovery. This trend, surprisingly, did not occurred in apparel and footwear industry. The capital intensity in apparel and footwear industry continued to grow. It is obvious that apparel and footwear industry would not change dramatically into capital-intensive industry. Yet the increase brings a notable consequence to job creation. Moreover, the increase in the capital intensity of apparel and footwear industry has decelerated employment creation in these sectors. In sum, <span style="font-weight: bold;">a rising capital intensity occurring in 1995 has been followed by slowing employment growth in the apparel and footwear industry </span>(discussed in the Chapter on Labour). This suggests that there has been a strong substitute from labor to capital in the TCF industry…”</span></span><br /><br />In other words, slowing employment growth in textile industry already took place before the crisis and, surely, before the rapid increase in MW. I’m thinking that perhaps other labour regulations affecting much employment growth instead of MW.<br /><br /><br /></div>Unknownnoreply@blogger.com4tag:blogger.com,1999:blog-2918613783975691777.post-77016432468688060202007-09-01T14:53:00.000-04:002008-12-09T04:50:00.182-05:00Is trade diversion bad? (2)Now we relax our first assumption. Suppose consumption on hat is closely (but not perfectly) substituted by clothing. Notice the difference in the utility curve. In the graph 2 now we have a curly utility curve because of our assumption: both goods are closely substituted.<br /><br />The story is the same as before-NJ signs FTA with WJ and utility level of North Jakarta under FTA, U<sub>NJ</sub><sup>FTA</sup>, is lower than utility level under free trade, U<sub>NJ</sub><sup>FT</sup>. But look at carefully, U<sub>NJ</sub><sup>FTA</sup> curve crosses blue dash line T** (situation where NJ imposes tariff to both WJ and Tangerang). What does it mean? It clearly shows that bundle consumption in B gives the same utility level as bundle consumption in C. In other word, utility level under FTA is as good as utility level under tariff-to-all system.<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj2CGpPxPqcJoiXrDVmNptAraNXuXeZlBeGfhLG8kvZAEUdPNHL2wQt1VFvkgIStpktjzouXoF7k_w96HFYBg2ill6As9_NLSwwgz5gdZN8Wq03o7Ue98wBfYVqlr9Cg3Sqz_dhInPgRoc/s1600-h/image001.gif"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj2CGpPxPqcJoiXrDVmNptAraNXuXeZlBeGfhLG8kvZAEUdPNHL2wQt1VFvkgIStpktjzouXoF7k_w96HFYBg2ill6As9_NLSwwgz5gdZN8Wq03o7Ue98wBfYVqlr9Cg3Sqz_dhInPgRoc/s400/image001.gif" alt="" id="BLOGGER_PHOTO_ID_5105311357524241346" border="0" /></a> <p class="MsoNormal" style="text-align: justify;"><o:p> </o:p></p> <p class="MsoNormal" style="text-align: justify;">From these two graphs, i conclude that: it is true FTA may create trade diversion. But is trade diversion really bad in terms of welfare? My answer is not necessarily. <b style="color: rgb(51, 204, 0);">Trade diversion is not necessarily bad for the welfare of North Jakarta if <st1:place st="on">West Jakarta</st1:place> efficiency in producing hat is quite close to Tangerang efficiency</b>. <o:p></o:p><br /></p><p class="MsoNormal" style="text-align: justify;"><br /></p><p class="MsoNormal" style="text-align: justify;">Some of you may argue, why I don’t draw blue dash line crossing point A which is the same as the graph 1. Well, I can do that but as in this case the individual preference is different from the one on the graph 1, the blue dash line crossing point A means nothing (why?).<o:p></o:p><br /></p><p class="MsoNormal" style="text-align: justify;"><br /></p><p class="MsoNormal" style="text-align: justify;">What happen next if we, once again, take both assumptions off (there are substitution goods and more than one factor production). The result strongly proposes that trade diversion is not necessarily bad for welfare.<o:p></o:p><br /></p><p class="MsoNormal" style="text-align: justify;"><br /></p><p class="MsoNormal" style="text-align: justify;">If so, does it mean that FTA is the best deal? The answer is surely no. This simple example only justifies the welfare of home country due to FTA where its partner’s efficiency in FTA is pretty close to other countries out of FTA. More importantly, in this case I assume that the cost of doing and cost of FTA itself are close to zero-which is in many cases unrealistic. </p>Unknownnoreply@blogger.com4tag:blogger.com,1999:blog-2918613783975691777.post-39730721489898327592007-09-01T14:02:00.000-04:002008-12-09T04:50:00.509-05:00Is trade diversion bad? 1<img src="file:///C:/DOCUME%7E1/TEGUHY%7E1/LOCALS%7E1/Temp/moz-screenshot.jpg" alt="" />I was involved in a debate with Pasha on Free Trade Agreement (FTA). At any rate, we share the same idea that free trade is worth advocating for. Unilateral-by reducing tariffs regardless what other countries do is the best way; multilateral-based on reciprocity principle is the most economic sensible way.<br /><br />Yet, the very question here is how we go there. From here, I think, we make a different route :D. Perhaps Pasha may propose something here.<o:p></o:p><br /><br /><br />Without any disagreement between us, I suppose, FTA (or Preferential Trade Agreement you may say) is discriminatory. Moreover, we are also concerned that FTA may end in trade creation or trade diversion. Unfortunately, studies on the last issue (trade creation <i style="">vs</i> trade diversion) are still inconclusive (not only empirical but theoretical as well).<o:p></o:p><br /><br /><br />Yet, posting<span style="color: rgb(51, 204, 0);"> </span><a style="color: rgb(51, 204, 0);" href="http://cafesalemba.blogspot.com/2006/09/discriminatory-trade-arrangements.html"><b style="">here</b></a><span style="color: rgb(51, 204, 0);"> </span>interests me. <b style="color: rgb(51, 204, 0);">My point here : “is trade diversion bad for welfare?”</b> I’ll use an example from this posting, hopefully café’s manager and the author do not mind with this :D. For background story, please see the posting.<o:p></o:p><br /><br /><br />Suppose North Jakarta signs free trade agreement with <st1:place st="on">West Jakarta</st1:place> and leaves Tangerang out of deal. It would be true that free trade agreement in hat bad for North-Jakarta people only and if only: <b style="color: rgb(51, 204, 0);">first North-Jakarta people have a unique preference</b><span style="color: rgb(51, 204, 0);"> </span><b style="color: rgb(51, 204, 0);">(there is no substitution in consuming hat</b><span style="color: rgb(51, 204, 0);">) and </span><b style="color: rgb(51, 204, 0);">second, hat production requires only one factor of production</b> (which is true in this context where hat is produced only by labor).<o:p></o:p><br /><br /><br />This may look too technical. But hopefully the graphs may help us understanding the concept of trade diversion.<o:p></o:p><br /><br /><br />Look at the graph 1, red line curves are combinations of consumption bundle consisting of clothing and hat which give the same utility for <st1:place st="on">North Jakarta</st1:place> people. U<sub>NJ</sub><sup>FT</sup> means utility level of <st1:place st="on">North Jakarta</st1:place> in free trade condition, while U<sub>NJ</sub><sup>FTA</sup> is utility level under Free Trade Agreement (FTA). Green line, NJ-T, is trade pattern between NJ and Tangerang under free trade (or in technical term we may call as production possibility frontier) while dark line is pattern between NJ and West Jakarta (WJ).<o:p></o:p><br /><br /><br />In this case, only Tangerang and WJ are the only hat producers and NJ is the only clothing producer ( I assume this). Under free trade, NJ will import hat from Tangerang since Tangerang is more efficient than WJ (from the graph we can see that Tangerang produces more hats than WJ).<br /><br /><br />Now, North Jakarta and <st1:place st="on">West Jakarta</st1:place> agree on FTA but NJ still imposes tariff on hat from Tangerang. What happens then, North Jakarta is likely to import hat from West Jakarta, even though <st1:place st="on">West Jakarta</st1:place> is not an efficient producer. Tariff on Tangerang shifts trade pattern between Tangerang and NJ, hence the NJ-T green line shifts and becomes NJ-T* blue dash line (means that tariff reduces demand for hat from Tangerang ). <o:p></o:p><br /><br /><br />This is what trade diversion means. FTA alters consumption from the more efficient producer to less efficient one. And it reduces possibility of producing more good. At the same time we can see clearly that utility level of North Jakarta is lower now under FTA compared to free trade (just rule of thumb, as utility curve is close to origin, it means that utility level decreases-that’s why I draw line crossing the origin)<o:p></o:p> Then, we compare situation between FTA and condition when North Jakarta imposes tariff to both <st1:place st="on">West Jakarta</st1:place> and Tangerang. How can we analyze this? When NJ levies tariff from both WJ and <st1:place st="on"><st1:city st="on">Tangerang</st1:city>, <st1:state st="on">NJ</st1:state></st1:place> still imports hat from Tangerang because, even there is tariff, Tangerang is still the most efficient producer of hats.<p class="MsoNormal" style="text-align: justify;"><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiM9FzkOebt3CusBOm2bQLoLR-LWm5jyrFD5QdNG2aW6KpMxB7A-1dlqZ110pR6LYtvBKGxljPDDD5M22vBf6gtsQlX1NhxUqCoGmhfYQQNER2z8wZcNyEYM39MfgCdvXF49lOG0maCdrw/s1600-h/image001.png"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiM9FzkOebt3CusBOm2bQLoLR-LWm5jyrFD5QdNG2aW6KpMxB7A-1dlqZ110pR6LYtvBKGxljPDDD5M22vBf6gtsQlX1NhxUqCoGmhfYQQNER2z8wZcNyEYM39MfgCdvXF49lOG0maCdrw/s400/image001.png" alt="" id="BLOGGER_PHOTO_ID_5105309691076930482" border="0" /></a></p><o:p></o:p>Look at blue dash line in T** (without any loss generality, I don’t draw a new line for WJ). It is trade pattern between NJ and Tangerang when NJ imposes tariff to both countries. Under T**, Tangerang produces more hat than condition under T* (under FTA) why? because WJ’s hat is also imposed tariff by NJ. Yet remember, under T**, Tangerang produces less than under free trade, namely, T.<o:p></o:p><br /><br /><br />Under tariff for both WJ and Tangerang, NJ imports hat from Tangerang (because Tangerang is still more efficient producer than WJ). Therefore utility level exists in intersection between blue dash line T** (tariff) and green line T (free trade). In other word, utility level under tariff coincides with utility level under free trade. You may surprise why utility level under tariff is the same as utility level under free trade. This may happen if tariff revenue is returned to this kind consumer by lump-sum method. What if tariff revenue is not returned to the consumer? Then utility level under tariff lies between free trade condition and FTA. Yet the point is still the same, <b style="color: rgb(51, 204, 0);">utility level under FTA is lower than under tariff-to-all system (Most Favored Nations tariff) and absolutely far lower than free trade</b><span style="color: rgb(51, 204, 0);">.</span><br /><img src="file:///C:/DOCUME%7E1/TEGUHY%7E1/LOCALS%7E1/Temp/moz-screenshot-4.jpg" alt="" /><img src="file:///C:/DOCUME%7E1/TEGUHY%7E1/LOCALS%7E1/Temp/moz-screenshot-5.jpg" alt="" /><span style=""><!--[if gte vml 1]><v:shapetype id="_x0000_t75" coordsize="21600,21600" spt="75" preferrelative="t" path="m@4@5l@4@11@9@11@9@5xe" filled="f" stroked="f"> <v:stroke joinstyle="miter"> <v:formulas> <v:f eqn="if lineDrawn pixelLineWidth 0"> <v:f eqn="sum @0 1 0"> <v:f eqn="sum 0 0 @1"> <v:f eqn="prod @2 1 2"> <v:f eqn="prod @3 21600 pixelWidth"> <v:f eqn="prod @3 21600 pixelHeight"> <v:f eqn="sum @0 0 1"> <v:f eqn="prod @6 1 2"> <v:f eqn="prod @7 21600 pixelWidth"> <v:f eqn="sum @8 21600 0"> <v:f eqn="prod @7 21600 pixelHeight"> <v:f eqn="sum @10 21600 0"> </v:formulas> <v:path extrusionok="f" gradientshapeok="t" connecttype="rect"> <o:lock ext="edit" aspectratio="t"> </v:shapetype><v:shape id="_x0000_s1333" type="#_x0000_t75" style="'width:442.45pt;"> <v:imagedata src="file:///C:\DOCUME~1\TEGUHY~1\LOCALS~1\Temp\msohtml1\01\clip_image001.gif" title=""> <w:wrap type="none"> <w:anchorlock/> </v:shape><![endif]--><!--[if !vml]--><!--[endif]--></span>Unknownnoreply@blogger.com11tag:blogger.com,1999:blog-2918613783975691777.post-54934581585426576042007-08-30T19:01:00.000-04:002007-08-30T22:04:55.824-04:00Some Mathematical ProofEconomist John Siegfried wrote an interesting piece for students who never took econometrics or planning to take their first econometrics class. Here's the <a href="http://academic.reed.edu/economics/course_pages/354_s06/Siegfried_JPE_70.pdf">link</a>.Pashahttp://www.blogger.com/profile/03040951834210426940noreply@blogger.com2tag:blogger.com,1999:blog-2918613783975691777.post-56764349376310542202007-08-19T11:41:00.000-04:002007-08-20T22:33:32.122-04:00Robert Mundell on David Letterman<div>I found this on youtube. Nobel Laureate Robert Mundell appeared in the Late Show with David Letterman. It truly shows that economists are a unique bunch. Enjoy.<br /></div><br /><object width="425" height="350"><param name="movie" value="http://www.youtube.com/v/AFQWnRiXYws"></param><param name="wmode" value="transparent"></param><embed src="http://www.youtube.com/v/AFQWnRiXYws" type="application/x-shockwave-flash" wmode="transparent" width="425" height="350"></embed></object><br /><div> </div><br /><div><object height="350" width="425"><param name="movie" value=""></object></div>Pashahttp://www.blogger.com/profile/03040951834210426940noreply@blogger.com2tag:blogger.com,1999:blog-2918613783975691777.post-34612446479075793082007-08-17T11:15:00.000-04:002007-08-17T11:45:09.707-04:00Not So Dismal After All<a href="http://nces.ed.gov/pubsearch/pubsinfo.asp?pubid=2007475">Here's</a> an interesting news. Here's a quote:<br /><br /><blockquote>"In 2006, in the first ever national assessment of economics, 79 percent<br />of 12th-graders nationwide performed at or above the Basic achievement<br />level. Forty-two percent performed at the Proficient level or higher.<br />On average, male students scored higher than female students, and<br />White and Asian/Pacific Islander students scored higher than other<br />racial/ethnic groups. Students from schools in large cities had lower<br />average scores than students from schools in other locations. Students<br />from families with higher levels of parental education scored higher, on<br />average, than their peers from families with lower levels of parental<br />education. Most 12th-graders reported some exposure to economics<br />content during high school."<br /></blockquote>Pashahttp://www.blogger.com/profile/03040951834210426940noreply@blogger.com0tag:blogger.com,1999:blog-2918613783975691777.post-487940828026898582007-08-03T16:08:00.000-04:002007-08-03T16:23:22.336-04:00Mickey Mouse Once Tried to Commit SuicideHere's something way off the mark. As a fan of sequential art, I always find something interesting about the history of long established characters such as superman, batman, or spiderman. This time it's Mickey Mouse. During the 1930's, to capitalize on the success of the character in the cartoon movie, Walt Disney decided to also put the character in a comic strip. The strip was drawn and written by <a href="http://en.wikipedia.org/wiki/Floyd_Gottfredson">Floyd Gottfredson</a>. One of the strip tells the story where Mickey was upset with his relationship with Minnie and decided to commit suicide, although in a comical way. You can read the whole strip right <a href="http://www.barnaclepress.com/comics/archives/comedy/mickey_mouse/index.html">here</a>. It goes to show how sense of humor evolves over time. Mickey Mouse used to be very funny.Pashahttp://www.blogger.com/profile/03040951834210426940noreply@blogger.com11tag:blogger.com,1999:blog-2918613783975691777.post-64065491534571766672007-07-20T02:16:00.000-04:002007-07-20T14:10:58.861-04:00Why A Chapter in Game Theory is So Important, Particularly for Partygoer Students<div align="justify">One day, two procrastinating economics students decided to go for a party in a campus instead of studying for exam. They knew that the next Monday is Microeconomics Analysis 1 exam (let’s say so). But it's so worthy not to be missed. This party would be getting crazy and hang out (a bit hang-over) with ladies in the next campus could be a lot of fun. A party which must be put on not-to-be missed party list. Besides, they should not worry about exam anyway. The party is on Saturday and there is a plenty of time for reviewing the materials. Since they thought they are smart students and, of course, good party goers, 6 hours on Sunday for refreshing the course is enough.<br /><br />Then they went to the party. They’re right. At least the party got crazy and many were unconscious-including them. Getting hang-over….back home and oh sleeping the whole day on Sunday. After all, Shit!..no time for covering the whole materials. They just reviewed Social Welfare I and II and no much time for studying A chapter on Game-Theory. In a very decisive time, one of them realized, raised a brilliant idea and thought that they could use special consideration for delaying exam.<br /><br />They would tell the Prof that they attended a seminar (or workshop…or whatever academic things) in Econ program at the neighbour university. And when they were on the way back home, there was something wrong with one of the wheels. The wheel was broken and it took a whole day for fixing it. “Mmmm it sounds reasonable….” replied another smart but artful student. They did and they were allowed to take the exam in the next week after.<br /><br />What a brilliant idea. Then they would have a plenty of time for studying lovely microeconomics. The exam time was coming. They sat separately (of course this is an exam and not a study group). Both were surprised since there were only two questions.<br /><br />The first question was about consumer theory which account for only 10 % of total grade. Even, there was no question about game-theory. The second question was only one sentence but significant and account for 90 % of total grade. The question is like this: “which wheel was broken?”<br /><br />Well the Prof just applied one important part of a chapter in game theory, namely, Prisoner’s Dilemma. Yeah..they once again missed that part.<br /><br />*Note: this is a common joke and ,of course, not a real story :D </div>Unknownnoreply@blogger.com4tag:blogger.com,1999:blog-2918613783975691777.post-970865062435005262007-07-19T19:15:00.001-04:002008-12-09T04:50:00.662-05:00A New Look and Blabbing...guh..Babbling<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhFXS8CeyIHNx5s9YuDndZnwXwG71LcC2QTSNioeRXt0o7f9IIZFlQ9DoijxVMpFDaQqZ_rB0nHa80LZiLxFpPclyyX-4HsdH8nh7BSYpigU4eGZnbmyhpek9uharSC1DscesSvlPh_cFY/s1600-h/CalvinEconomics.jpg"><img style="margin: 0pt 0pt 10px 10px; float: right; cursor: pointer;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhFXS8CeyIHNx5s9YuDndZnwXwG71LcC2QTSNioeRXt0o7f9IIZFlQ9DoijxVMpFDaQqZ_rB0nHa80LZiLxFpPclyyX-4HsdH8nh7BSYpigU4eGZnbmyhpek9uharSC1DscesSvlPh_cFY/s400/CalvinEconomics.jpg" alt="" id="BLOGGER_PHOTO_ID_5089053529925996210" border="0" /></a><br />As you can see we got a new look for our blog. What do you think? By the way, did any of you ever read this blog? No? Or just skimming? No? Just looking at the pretty pictures? What pretty pictures?? Pictures that someday we might put in this blog. WHAT?? Sure, someday people won't have to write or read blogs anymore, they look at pretty pictures. Didn't the porn industry already done that?? Riiiiiiiight. Nevermind, here's Calvin and Hobbes taking a shot at economics (just click the comic for a bigger picture).penunggu ruang 413http://www.blogger.com/profile/10520868126113485662noreply@blogger.com4tag:blogger.com,1999:blog-2918613783975691777.post-66356130529668891422007-07-18T17:22:00.000-04:002007-07-18T18:14:26.531-04:00Something to Laugh AboutGiven my <a href="http://ruang413.blogspot.com/2007/07/sowhat-have-you-been-up-to-lately.html">previous post</a>, apparently <a href="http://en.wikipedia.org/wiki/Jorge_Cham">Jorge</a> and I were thinking of the same <a href="http://www.phdcomics.com/comics/archive.php?comicid=887">thing</a>, but with a different <a href="http://www.phdcomics.com/comics/archive.php?comicid=888">twist</a>. So much for this <a href="http://www.econlib.org/library/Enc/Productivity.html">one</a>.Pashahttp://www.blogger.com/profile/03040951834210426940noreply@blogger.com0tag:blogger.com,1999:blog-2918613783975691777.post-39750077294425738312007-07-18T00:37:00.000-04:002007-07-18T18:26:34.811-04:00So...What Have You Been Up To Lately?I ran into a friend the other day, we went to the same school by the way. As usual, when you ran into someone you know in the summer, you'll be asked the "what are you doing this summer?" type of question. Thus, I was asked that philosophical question. A typical graduate student answer would be "Oh, I'm doing an intership at this blablabla..." or "Well, I'm doing my research on bla...". Ok, I'm a graduate student but I'm not doing any internship this summer. I kind of doing research but not quite sure yet due to some administration problem. Trust me, it's complicated. "So what do I have to say as an answer?", I thought to myself.<br /><br />Let's see, I finished reading <a href="http://www.amazon.com/Undercover-Economist-Exposing-Poor-Decent/dp/0345494016/ref=pd_bbs_sr_1/102-2506726-0076107?ie=UTF8&s=books&qid=1184736277&sr=8-1">this</a>, which is quite interesting. I also read <a href="http://www.amazon.com/Unbearable-Lightness-Being-Perennial-Classics/dp/0060932139/ref=sr_oe_1_2/102-2506726-0076107?ie=UTF8&s=books&qid=1184736471&sr=1-1">this</a>, which kept me up for three days (once you start reading the first sentence, it's hard to put it down). Not only that, <a href="http://www.amazon.com/Knowledge-Wealth-Nations-Economic-Discovery/dp/0393329887/ref=pd_bbs_sr_1/102-2506726-0076107?ie=UTF8&s=books&qid=1184736587&sr=1-1">this</a> and<a href="http://www.amazon.com/Mathematics-Birth-Numbers-Jan-Gullberg/dp/039304002X/ref=pd_bbs_sr_1/102-2506726-0076107?ie=UTF8&s=books&qid=1184736617&sr=1-1"> this</a> just arrived from Amazon which will keep me busy for the rest of the summer. I'm in the first few chapters of <a href="http://www.amazon.com/Knowledge-Wealth-Nations-Economic-Discovery/dp/0393329887/ref=pd_bbs_sr_1/102-2506726-0076107?ie=UTF8&s=books&qid=1184736587&sr=1-1">this</a>. I also enjoyed reading <a href="http://www.dccomics.com/comics/?cm=7458">this</a>, I was quite taken by its surprise ending. In all my years as a reader and collector of <a href="http://en.wikipedia.org/wiki/Comic_book">this</a>, it was the first time in a long while I felt excited reading page after page (Well done <a href="http://en.wikipedia.org/wiki/Geoff_Johns">Geoff</a>!).<br /><br />Aside from reading I <a href="http://imdb.com/title/tt0413300/">saw</a> this, which was not as good as the second one. The filmakers tried to tell too many things in just under three hours which convoluted the story. A few days after that I moved into a new apartment. Not only that, I also help some of my friends move out from their apartment, which is a good exercise for the summer. It builds your upper and lower body, not to mention you get free lunch...well not exactly free...rather you're compensated for being a goood samaritan. I highly recommend it. Then, two weeks ago I went in the movie theater and spend $9 to see <a href="http://imdb.com/title/tt0418279/">this</a>, which was not the best $9 I've ever spent. Thank you <a href="http://en.wikipedia.org/wiki/Michael_bay">Michael Bay</a> for ruining my childhood heroes. To me, <a href="http://imdb.com/title/tt0092106/">this</a> version is better, despite that it's corny and <a href="http://en.wikipedia.org/wiki/Optimus_Prime"><span style="text-decoration: underline;">he</span></a> died in it. But at least he died fighting and not that lame fighting sequence in the new movie. <a href="http://en.wikipedia.org/wiki/Megatron">Him</a> killed by <a href="http://imdb.com/name/nm0479471/">him</a>, come on. The franchise is about robots not humans! Fortunately, I still have <a href="http://www.sonypictures.com/tv/shows/seinfeld/">this</a> and <a href="http://www.thesimpsons.com/episode_guide/">this</a> to fall back to every evening. To enhance my cultural experience, I went to this <a href="http://www.bostonpops.org/bso/mods/perf_detail.jsp?pid=24300073">concert</a> which was very entertaining, But mostly I'm preparing myself for <a href="http://www.ets.org/portal/site/ets/menuitem.fab2360b1645a1de9b3a0779f1751509/?vgnextoid=b195e3b5f64f4010VgnVCM10000022f95190RCRD">this</a>. And right now I'm pondering whether or not I should enter<span style="font-weight: bold;"><span style="text-decoration: underline;"></span></span><span style="text-decoration: underline; font-weight: bold;"></span> this <a href="http://www.g4tv.com/ninjawarrior/index.html">contest</a>.<br /><br />Given all this. I come up with one perfect answer, "Not much".Pashahttp://www.blogger.com/profile/03040951834210426940noreply@blogger.com4tag:blogger.com,1999:blog-2918613783975691777.post-63775630689457005882007-07-12T01:12:00.001-04:002007-07-12T01:47:06.212-04:00Gaming for EconomicsHere's an interesting development. The University of North Carolina at Greensboro (UNCG) has created an online course for introductory level economics. You're probably wondering, "So what? There's a gazillion online courses anyway on the net". Well, to make it interesting, the <a href="http://www.uncg.edu/ure/news/stories/2006/May/Econ201051706.htm">course</a> is in the form of an online game, where the students play an alien race that crash landed on Earth. In the game, students have to make decisions to ensure the survival of the alien race. This is a very interesting way to introduce the basic concepts of the economics to students, such as opportunity cost.<br /><br />To play the game you have to <a href="http://econ201.uncg.edu/dcl/econ201/">enroll</a> in the course in the fall semester, which is open to those who are interested. Will this method of teaching catch on? We'll just have to wait and see. Besides, you don't really have to play this game to learn basics economics. If you're a game fanatic, playing games such as <a href="http://en.wikipedia.org/wiki/Civilization_IV">civillization IV</a> or the now classic <a href="http://en.wikipedia.org/wiki/Sim_City">sim city</a>, or any other strategy based game already taught you economics without you even realizing it.Pashahttp://www.blogger.com/profile/03040951834210426940noreply@blogger.com0tag:blogger.com,1999:blog-2918613783975691777.post-31890318291521936142007-07-10T11:06:00.000-04:002007-07-10T11:08:27.645-04:00Growth Theory and the Wealth of Nations (2)<p>Here's Ap with his second part of the article:<span style="font-weight: bold;"><br /></span></p><p><span style="font-weight: bold;"><br /></span></p><p><span style="font-weight: bold;"></span>So, <a href="http://ruang413.blogspot.com/2007/07/growth-theory-and-wealth-of-nations.html" target="_blank" onclick="return top.js.OpenExtLink(window,event,this)">once again</a>, why a country can be rich, and the other poor?</p> <p> </p> <p>Most of research on growth empirics are trying to look how far do these variables explain the cross-country per-capita income differences: investment, human capital, population growth, or trade. Such analysis will be subject to the usual problems of empirical analysis: correlation does not mean causality!</p> <p> </p> <p>True, the higher the country's investment, or schooling rate, or trade volume, and the lower the population growth rate, the higher is the GDP per capita. But can we say that education (or investment or trade) that makes a country rich, or vice versa? Or, perhaps, there are other unobservable things that affect both education and GDP per capita simultaneously.</p> <p> </p> <p>Economic historian <a href="http://www.ggdc.net/Maddison/" target="_blank" onclick="return top.js.OpenExtLink(window,event,this)">Angus Madison</a> once show that the world <a href="http://www.j-bradford-delong.net/articles_of_the_month/maddison-millennial.html" target="_blank" onclick="return top.js.OpenExtLink(window,event,this)"><script><!-- D(["mb","has\nbeen unequal\u003c/a\> since even before the industrial revolution (see his graph \u003ca href\u003d\"http://www.chrrd.kabissa.org/nigeria-inequality-review_files/image008.gif\" target\u003d\"_blank\" onclick\u003d\"return top.js.OpenExtLink(window,event,this)\"\>\nhere\u003c/a\>).\nThat means, world's inequality is not just a recent issue. The question is, of\ncourse, what makes the world unequal? Some studies try to go further to find\n'deeper' explanations. To do so, we must find an exogenous factor; something\nthat affects countries' per-capita income differences, but not affected by\nper-capita income.\u003c/p\>\n\n\u003cp\> \u003c/p\>\n\n\u003cp\>One possible explanation is \u003cb\>geography\u003c/b\>. If we look at the distribution of countries by income\nper capita, almost all of the poorest countries are close to the equator, and\nmost of the richest ones are in the temperate zone. Maybe it was not just a\ncoincidence. Maybe something with the temperate climate that affects\nproductivity (lower energy intake required to do a similar thing). Maybe being\nin the tropical zone has something to do with germs and contagious disease\n(virus and germs are less aggressive in cold weather; this is what \u003ca href\u003d\"http://www.earth.columbia.edu/about/director/index.html\" target\u003d\"_blank\" onclick\u003d\"return top.js.OpenExtLink(window,event,this)\"\>Jeffrey Sachs\u003c/a\>\n\nkeeps arguing).\u003c/p\>\n\n\u003cp\> \u003c/p\>\n\n\u003cp\>Geographical position is also important in the sense\nisolation. If a region is isolated from\u003cspan\> \n\u003c/span\>the rest of the world by hills or mountains, lacking of access to the\nsea or navigable river, then the society won't be able to benefit from trade,\ntechnology and knowledge diffusion. \u003c/p\>\n\n\u003cp\> \u003c/p\>\n\n\u003cp\>Another theory related to geography is what \u003ca href\u003d\"http://www.geog.ucla.edu/people/faculty.php?lid\u003d3078&display_one\u003d1&modify\u003d1\" target\u003d\"_blank\" onclick\u003d\"return top.js.OpenExtLink(window,event,this)\"\>Jared\nDiamond\u003c/a\> proposed in his seminal \u003ca href\u003d\"http://www.amazon.com/Guns-Germs-Steel-Fates-Societies/dp/0393061310/ref\u003dpd_bbs_sr_1/105-0964311-0894044?ie\u003dUTF8&s\u003dbooks&qid\u003d1183629709&sr\u003d8-1\" target\u003d\"_blank\" onclick\u003d\"return top.js.OpenExtLink(window,event,this)\"\>",1] ); //--></script>has been unequal</a> since even before the industrial revolution (see his graph <a href="http://www.chrrd.kabissa.org/nigeria-inequality-review_files/image008.gif" target="_blank" onclick="return top.js.OpenExtLink(window,event,this)"> here</a>). That means, world's inequality is not just a recent issue. The question is, of course, what makes the world unequal? Some studies try to go further to find 'deeper' explanations. To do so, we must find an exogenous factor; something that affects countries' per-capita income differences, but not affected by per-capita income.</p> <p> </p> <p>One possible explanation is <b>geography</b>. If we look at the distribution of countries by income per capita, almost all of the poorest countries are close to the equator, and most of the richest ones are in the temperate zone. Maybe it was not just a coincidence. Maybe something with the temperate climate that affects productivity (lower energy intake required to do a similar thing). Maybe being in the tropical zone has something to do with germs and contagious disease (virus and germs are less aggressive in cold weather; this is what <a href="http://www.earth.columbia.edu/about/director/index.html" target="_blank" onclick="return top.js.OpenExtLink(window,event,this)">Jeffrey Sachs</a> keeps arguing).</p> <p> </p> <p>Geographical position is also important in the sense isolation. If a region is isolated from<span> </span>the rest of the world by hills or mountains, lacking of access to the sea or navigable river, then the society won't be able to benefit from trade, technology and knowledge diffusion. </p> <p> </p> <p>Another theory related to geography is what <a href="http://www.geog.ucla.edu/people/faculty.php?lid=3078&display_one=1&modify=1" target="_blank" onclick="return top.js.OpenExtLink(window,event,this)">Jared Diamond</a> proposed in his seminal <a href="http://www.amazon.com/Guns-Germs-Steel-Fates-Societies/dp/0393061310/ref=pd_bbs_sr_1/105-0964311-0894044?ie=UTF8&s=books&qid=1183629709&sr=8-1" target="_blank" onclick="return top.js.OpenExtLink(window,event,this)"><script><!-- D(["mb","\nGuns,\nGerms and Steel\u003c/a\>. He wrote that world inequality started as early as 13,000\nyears ago, when human invented the agriculture system and switched from\nhunting-gathering to food producing. Development of food production has enabled\nsociety to generate food surplus and live a sedentary lifestyle. Food surplus\nand sedentary lifestyle then led to division of labor and more complex\npolitical structure. Such lifestyle\u003cspan\>  \u003c/span\>then\npaved the way for important inventions (wheel, alphabet) and\u003cspan\>  \u003c/span\>technology.\u003c/p\>\n\n\u003cp\> \u003c/p\>\n\n\u003cp\>The thing is, the earth has been exogenously unfair, meaning\nnot all societies were lucky enough to get close to available domesticated\nplants and animals. That explains why Europeans, who were close to the Fertile\nCrescent, and China, had a\nhead start than the Americas,\nAfrica, Australia and New Guineas.\nThat explains why it was the Europeans who sailed to the New\n World, not vice versa. \u003c/p\>\n\n\u003cp\> \u003c/p\>\n\n\u003cp\>While geography hypothesis is interesting, it seems to be\ntoo deterministic. It also fails to explain why some big ancient civilizations\n(like Egypt,\nAztec) failed to sustain, while the current rich were far behind those (read my\naccount on this similar issue \u003ca href\u003d\"http://cafesalemba.blogspot.com/2007/06/prambanan-irony.html\" target\u003d\"_blank\" onclick\u003d\"return top.js.OpenExtLink(window,event,this)\"\>here\u003c/a\>).\u003c/p\>\n\n\u003cp\> \u003c/p\>\n\n\u003cp\>If we see the history of modern economic growth, two\u003cspan\>  \u003c/span\>main drivers are: i) commercial activities,\nand ii) the advance of knowledge, technology and innovations (the variable \u003ci\>A\u003c/i\> in Solow's model). In both cases,\nthere are some pre-requisites:\u003c/p\>\n\n\u003col style\u003d\"margin-top:0in\" start\u003d\"1\" type\u003d\"1\"\>\u003cli\>Individual\n freedom and autonomy, be it from\u003cspan\> \n \u003c/span\>the ruler or the church.\u003c/li\>\u003cli\>Incentives\n to pursue trade and innovations.\u003c/li\>\u003c/ol\>\n\n\u003cp\> \u003c/p\>\n\n\u003cp\>Both (1) and (2) were enabled by, among other things, the\ninventions of \u003ca href\u003d\"http://en.wikipedia.org/wiki/Property\" target\u003d\"_blank\" onclick\u003d\"return top.js.OpenExtLink(window,event,this)\"\>",1] ); //--></script> Guns, Germs and Steel</a>. He wrote that world inequality started as early as 13,000 years ago, when human invented the agriculture system and switched from hunting-gathering to food producing. Development of food production has enabled society to generate food surplus and live a sedentary lifestyle. Food surplus and sedentary lifestyle then led to division of labor and more complex political structure. Such lifestyle<span> </span>then paved the way for important inventions (wheel, alphabet) and<span> </span>technology.</p> <p> </p> <p>The thing is, the earth has been exogenously unfair, meaning not all societies were lucky enough to get close to available domesticated plants and animals. That explains why Europeans, who were close to the Fertile Crescent, and China, had a head start than the Americas, Africa, Australia and New Guineas. That explains why it was the Europeans who sailed to the New World, not vice versa. </p> <p> </p> <p>While geography hypothesis is interesting, it seems to be too deterministic. It also fails to explain why some big ancient civilizations (like Egypt, Aztec) failed to sustain, while the current rich were far behind those (read my account on this similar issue <a href="http://cafesalemba.blogspot.com/2007/06/prambanan-irony.html" target="_blank" onclick="return top.js.OpenExtLink(window,event,this)">here</a>).</p> <p> </p> <p>If we see the history of modern economic growth, two<span> </span>main drivers are: i) commercial activities, and ii) the advance of knowledge, technology and innovations (the variable <i>A</i> in Solow's model). In both cases, there are some pre-requisites:</p> <ol style="margin-top: 0in;" start="1" type="1"><li>Individual freedom and autonomy, be it from<span> </span>the ruler or the church.</li><li>Incentives to pursue trade and innovations.</li></ol> <p> </p> <p>Both (1) and (2) were enabled by, among other things, the inventions of <a href="http://en.wikipedia.org/wiki/Property" target="_blank" onclick="return top.js.OpenExtLink(window,event,this)"><script><!-- D(["mb","property\u003c/a\>\nrights. But property rights alone is not enough. One needs to find an agreeable\nmechanism on how to: i) acquire it, ii) prove it, iii) protect it, and iv)\nenforce (iii). All of those conditions require good and strong \u003cb\>institutional setting\u003c/b\> (see \u003ca href\u003d\"http://nobelprize.org/nobel_prizes/economics/laureates/1993/north-autobio.html\" target\u003d\"_blank\" onclick\u003d\"return top.js.OpenExtLink(window,event,this)\"\>\nDouglass\nNorth's\u003c/a\> 1990 \u003ca href\u003d\"http://www.amazon.com/Institutions-Institutional-Performance-Political-Decisions/dp/0521397340/ref\u003dpd_bbs_sr_1/105-0964311-0894044?ie\u003dUTF8&s\u003dbooks&qid\u003d1183693487&sr\u003d8-1\" target\u003d\"_blank\" onclick\u003d\"return top.js.OpenExtLink(window,event,this)\"\>\nbook\u003c/a\>\nfor more discussion).\u003c/p\>\n\n\u003cp\> \u003c/p\>\n\n\u003cp\>To make the story short, the institutional hypothesis argues\nthat the disparity of today's world income per capita is the product of the\nvariations of institutional quality: rule of law, bureaucracy, governance\nregulatory quality, corruption, risk of property expropriation, even democracy.\u003c/p\>\n\n\u003cp\> \u003c/p\>\n\n\u003cp\>One tricky question. How can we be sure that it is\ninstitution that affects economic performance? Can it be that when a country\ngets richer, it can afford to have better institution, better governance, lower\ncorruption or better democracy?\u003c/p\>\n\n\u003cp\> \u003c/p\>\n\n\u003cp\>This problem was answered by a \u003ca href\u003d\"http://econ-www.mit.edu/faculty/download_pdf.php?id\u003d144\" target\u003d\"_blank\" onclick\u003d\"return top.js.OpenExtLink(window,event,this)\"\>paper\u003c/a\> by\nAcemoglu, Johnson and Robinson (2001). The authors argue that the quality of a\ncountry's institution today is shaped by the institutional setting brought by\nthe colonial power. The decision to build different types of institution in the\ncolonies were determined by the colonists' strategy, which range from\n'extractive state' at one extreme (Congo,\nLatin America to a lesser extent) to 'New Europe' at the other extreme (USA, Canada,\nAustralia, New Zealand).\u003c/p\>\n\n\u003cp\> \u003c/p\>\n\n\u003cp\>What then determined different strategy? The challenges\nfaced by the colonists. If the colonists faced hostile environment like\ntropical disease or resistance from indigenous people, they don't find an\nincentive to build settlements, and end up pursuing extractive state strategy.\nOn the other hand, the Europeans in North America or Australia did not find hostile\nenvironment, and the indigenous population was relatively easy to defeat. In\nthis circumstances, it was possible to build a New Europe, copying the same\ntype of institution that they have had in the Old Europe.",1] ); //--></script>property</a> rights. But property rights alone is not enough. One needs to find an agreeable mechanism on how to: i) acquire it, ii) prove it, iii) protect it, and iv) enforce (iii). All of those conditions require good and strong <b>institutional setting</b> (see <a href="http://nobelprize.org/nobel_prizes/economics/laureates/1993/north-autobio.html" target="_blank" onclick="return top.js.OpenExtLink(window,event,this)"> Douglass North's</a> 1990 <a href="http://www.amazon.com/Institutions-Institutional-Performance-Political-Decisions/dp/0521397340/ref=pd_bbs_sr_1/105-0964311-0894044?ie=UTF8&s=books&qid=1183693487&sr=8-1" target="_blank" onclick="return top.js.OpenExtLink(window,event,this)"> book</a> for more discussion).</p> <p> </p> <p>To make the story short, the institutional hypothesis argues that the disparity of today's world income per capita is the product of the variations of institutional quality: rule of law, bureaucracy, governance regulatory quality, corruption, risk of property expropriation, even democracy.</p> <p> </p> <p>One tricky question. How can we be sure that it is institution that affects economic performance? Can it be that when a country gets richer, it can afford to have better institution, better governance, lower corruption or better democracy?</p> <p> </p> <p>This problem was answered by a <a href="http://econ-www.mit.edu/faculty/download_pdf.php?id=144" target="_blank" onclick="return top.js.OpenExtLink(window,event,this)">paper</a> by Acemoglu, Johnson and Robinson (2001). The authors argue that the quality of a country's institution today is shaped by the institutional setting brought by the colonial power. The decision to build different types of institution in the colonies were determined by the colonists' strategy, which range from 'extractive state' at one extreme (Congo, Latin America to a lesser extent) to 'New Europe' at the other extreme (USA, Canada, Australia, New Zealand).</p> <p> </p> <p>What then determined different strategy? The challenges faced by the colonists. If the colonists faced hostile environment like tropical disease or resistance from indigenous people, they don't find an incentive to build settlements, and end up pursuing extractive state strategy. On the other hand, the Europeans in North America or Australia did not find hostile environment, and the indigenous population was relatively easy to defeat. In this circumstances, it was possible to build a New Europe, copying the same type of institution that they have had in the Old Europe.<script><!-- D(["mb","\u003c/p\>\n\n\u003cp\> \u003c/p\>\n\n\u003cp\>There are other theories. For example, \u003ca href\u003d\"http://www.economics.harvard.edu/faculty/landes/landes.html\" target\u003d\"_blank\" onclick\u003d\"return top.js.OpenExtLink(window,event,this)\"\>David Landes\u003c/a\>\nin his \u003ca href\u003d\"http://www.amazon.com/Wealth-Poverty-Nations-Some-Rich/dp/0393318885/ref\u003dpd_bbs_1/105-0964311-0894044?ie\u003dUTF8&s\u003dbooks&qid\u003d1183697124&sr\u003d8-1\" target\u003d\"_blank\" onclick\u003d\"return top.js.OpenExtLink(window,event,this)\"\>\n2001\nbook\u003c/a\> explained that it was \u003cb\>culture\u003c/b\>\nthat matters. Culture, he argued, especially scientific and secular culture of\nthe Europeans explained why it was Europe, not China nor the Islamic world who\ndominated the world. Other theory points to the ethnic, language or religious \u003ca href\u003d\"http://www.nber.org/papers/w9411\" target\u003d\"_blank\" onclick\u003d\"return top.js.OpenExtLink(window,event,this)\"\>fractionalization\u003c/a\> of a country.\n\u003c/p\>\n\n\u003cp\> \u003c/p\>\n\n\u003cp\>At the end, the question 'why a country can be rich, and the\nother poor' remains a mystery. But we don't have to find a single explanation,\nbecause it will be impossible. More important is \u003cb\>the process\u003c/b\> on how do we get the answer.\u003c/p\>",1] ); //--></script></p> <p> </p> <p>There are other theories. For example, <a href="http://www.economics.harvard.edu/faculty/landes/landes.html" target="_blank" onclick="return top.js.OpenExtLink(window,event,this)">David Landes</a> in his <a href="http://www.amazon.com/Wealth-Poverty-Nations-Some-Rich/dp/0393318885/ref=pd_bbs_1/105-0964311-0894044?ie=UTF8&s=books&qid=1183697124&sr=8-1" target="_blank" onclick="return top.js.OpenExtLink(window,event,this)"> 2001 book</a> explained that it was <b>culture</b> that matters. Culture, he argued, especially scientific and secular culture of the Europeans explained why it was Europe, not China nor the Islamic world who dominated the world. Other theory points to the ethnic, language or religious <a href="http://www.nber.org/papers/w9411" target="_blank" onclick="return top.js.OpenExtLink(window,event,this)">fractionalization</a> of a country. </p> <p> </p> <p>At the end, the question 'why a country can be rich, and the other poor' remains a mystery. But we don't have to find a single explanation, because it will be impossible. More important is <b>the process</b> on how do we get the answer.</p>penunggu ruang 413http://www.blogger.com/profile/10520868126113485662noreply@blogger.com5tag:blogger.com,1999:blog-2918613783975691777.post-86937782585966922762007-07-05T11:38:00.000-04:002007-07-10T11:09:59.454-04:00Growth theory and the wealth of nations (1)Our friend <a href="http://ariperdana.blogspot.com/">Ap</a> from <a href="http://cafesalemba.blogspot.com/">cafe salemba</a>, and frequent visitor of "ruang 413" (literally...in the real world) is starting his stint as guess blogger this month. So, without futher ado, here's what <a href="http://ariperdana.blogspot.com/">Ap</a> has written for our enjoyment...<br /><br /><br /><span style="font-size:130%;"><br /></span><div style="text-align: center;"><span style="font-style: italic;font-family:georgia;font-size:130%;" ><span style="font-weight: bold;">Growth theory and the wealth of nations </span></span><br /></div><br /><br /><p>Judging from his posts <a rel="nofollow" target="_blank" href="http://ruang413.blogspot.com/2007/04/on-growth-theory-and-kaldor-facts.html"><span style="background: transparent none repeat scroll 0% 50%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" id="lw_1183649783_3">here</span></a>, <a rel="nofollow" target="_blank" href="http://ruang413.blogspot.com/2007/04/on-growth-theory-part-1.html"><span style="background: transparent none repeat scroll 0% 50%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" id="lw_1183649783_4">here</span></a> and <a rel="nofollow" target="_blank" href="http://ruang413.blogspot.com/2007/04/evidence-on-growth-theory.html"><span style="background: transparent none repeat scroll 0% 50%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" id="lw_1183649783_5">here</span></a>, Yudo seems to be in the 'fascinated' stage with the (neoclassical) growth theory. Indeed, since <a rel="nofollow" target="_blank" href="http://nobelprize.org/nobel_prizes/economics/laureates/1987/solow-autobio.html"><span id="lw_1183649783_6">Robert Solow's</span></a> 1956 <a rel="nofollow" target="_blank" href="http://links.jstor.org/sici?sici=0033-5533%28195602%2970:1%3C65:ACTTTO%3E2.0.CO;2-M"><span id="lw_1183649783_7">paper</span></a>, the field of economic growth has become a very interesting subject. The paper provided a scientific framework to analyze what makes a country grow faster while the other don't. </p> <p> </p> <p>Then, thanks to the availability of both empirical data on cross-country national income, and the advance of statistical tools, starting in the 1980s-1990s economists were able to do empirical analysis on economic growth. Some people have even devoted their life and career on doing such regression, like Harvard's <a rel="nofollow" target="_blank" href="http://www.economics.harvard.edu/faculty/barro/barro.html"><span style="background: transparent none repeat scroll 0% 50%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" id="lw_1183649783_8">Robert Barro</span></a>.</p> <p> </p> <p>The basic, fundamental question for doing cross-country growth analysis is: why some countries are rich and some other poor? Moreover: why some countries have successfully become rich while some others failed?</p> <p> </p> <p>The irony is, the more we try to explain it, the more likely we fail to do so. The reason became the mechanism of economic growth is very complex to fit into a single model. Consider Solow's <a rel="nofollow" target="_blank" href="http://en.wikipedia.org/wiki/Exogenous_growth_model"><span id="lw_1183649783_9">famous model</span></a>. As explained by Yudo, the model predicts that a country's income per worker will grow faster if: i) it can accumulate physical capital ('investment') faster than the rate of its population growth and depreciation ('net depreciation'), ii) its capital-per-worker stock is relatively low. </p> <p> </p> <p>By way of corollary, Solow model than provides the basic for the famous 'convergence' analysis: at a given rate of investment and net depreciation, poorer countries would grow faster in terms of income per worker, and soon they will catch up the richer ones, who are growing only at the 'steady-state' rate.</p> <p> </p> <p>In the context of economic development, Solow model suggests that:</p> <ol style="margin-top: 0in;" start="1" type="1"><li>Level of physical capital should explain cross-country income differential.</li><li>Investment should affect only the short-run economic growth.</li><li>In the long-run, economic growth would be determined by the growth rate of something <a rel="nofollow" target="_blank" href="http://en.wikipedia.org/wiki/Exogenousl"><span style="background: transparent none repeat scroll 0% 50%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" id="lw_1183649783_10">exogenous</span></a>. Solow labeled it <i>A </i>for technology. What is <i>A, </i>and what affects it, we don't know (he didn't provide any explanations). It is something like the 'manna from heaven.'</li></ol> <p> </p> <p>When people did the empirical testing for Solow model, (1) and (2) are generally confirmed, but unsatisfactorily. For example, <a rel="nofollow" target="_blank" href="http://gregmankiw.blogspot.com/"><span style="background: transparent none repeat scroll 0% 50%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" id="lw_1183649783_11">Mankiw</span></a> (1995) found that variation of physical capital only explains about a third of cross-country income per capita differences in the 1990s. He suggested the term 'capital' should be re-formulated by including 'human' capital. Using secondary school enrollment rate as the proxy for human capital, Mankiw showed that the combination could explain around 80% of income differences.</p> <p> </p> <p>But still the puzzle still remains. Does secondary enrollment make a good proxy for education in general? Does it mean that poor countries should invest more in schooling? One may tempted to say 'yes.' But other empirical analysis show that Africa remains poor despite heavy investment in education (in terms of school enrollment), as mentioned by <a rel="nofollow" target="_blank" href="http://www.nyu.edu/fas/institute/dri/Easterly/"><span id="lw_1183649783_12">William Easterly</span></a> in his <a rel="nofollow" target="_blank" href="http://www.amazon.com/Elusive-Quest-Growth-Economists-Misadventures/dp/0262550423/ref=sr_1_1/105-0964311-0894044?ie=UTF8&s=books&qid=1183609191&sr=8-1"><span style="background: transparent none repeat scroll 0% 50%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" id="lw_1183649783_13"> 2001 book</span></a>. (A chapter in the book discussed how the idea of controlling population growth also did not work well). </p> <p> </p> <p>There are even bigger puzzles. <i>First, </i>the fact that rich countries are able to sustain, even increase, their growth rates for a very long period. This suggests that the exogenous variable <i>A</i> is more important that just a residual. Perhaps it is not even exogenous; it may be <b><a rel="nofollow" target="_blank" href="http://en.wikipedia.org/wiki/Endogenous_growth_theory"><span style="background: transparent none repeat scroll 0% 50%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" id="lw_1183649783_14">endogenous </span></a></b><i>.</i> </p> <p> </p> <p><i>Second,</i> the model has little to say about historical path of economic development. Some today's poor countries were not poor some hundreds and thousands years ago, while the rich group only recently – in the human civilization history scale – became rich. What explains this reversal of fortune? It is very likely that the current per-capita income differences that we observe now have a long and deep historical determinants.</p> <p> </p> <p>Therefore, the basic, fundamental questions I raised earlier still unanswered by the existing growth models.</p>penunggu ruang 413http://www.blogger.com/profile/10520868126113485662noreply@blogger.com0tag:blogger.com,1999:blog-2918613783975691777.post-6809375088576309632007-06-25T00:25:00.000-04:002007-06-25T09:03:04.508-04:00Does blogging make you addict?<p class="MsoNormal"><a href="http://twicaksono.wordpress.com/"><b style="">This</b></a> is a simple proof. Moreover if you want to know what a non-economist says about economics idea behind blogging, <a href="http://pjvermonte.wordpress.com/2007/06/23/harga-blog-ini-dan-soal-kebebasan/"><b style="">this</b></a> is a good example. He also gives you a link to know how worth your blog is. </p> <p class="MsoNormal"><o:p> </o:p></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2918613783975691777.post-22437023110921336172007-06-13T23:35:00.000-04:002007-06-14T06:10:13.990-04:00Why perfect political market is not always good (part 2 of 2)<p class="MsoNormal" style="text-align: justify;">We continue our discussion. Suppose the coalition form is like the table. The first term in the bracket is number of seat in parliament (gain for president) and the second one is gain for each political party. Zero in the first term means that the president is not supported by a party.<br /></p><p class="MsoNormal" style="text-align: justify;"><br /></p><p class="MsoNormal" style="text-align: justify;">From here we know that Policy A is supported by <span class="blsp-spelling-error" id="SPELLING_ERROR_0">Golkar</span>, <span class="blsp-spelling-error" id="SPELLING_ERROR_1">PKB</span>, and PD; Policy B is supported by <span class="blsp-spelling-error" id="SPELLING_ERROR_2">PDIP</span>, <span class="blsp-spelling-error" id="SPELLING_ERROR_3">PKS</span>, PD and Party Y; Policy C is supported by <span class="blsp-spelling-error" id="SPELLING_ERROR_4">Golkar</span>, <span class="blsp-spelling-error" id="SPELLING_ERROR_5">PKS</span>, PD and Party Y. Total support (237) means the number of member in parliament supporting the president's policy and this is more than half of the total seats in our hypothetical matrix. The coalition is formed according to the preference of political parties (for example in Policy A, <span class="blsp-spelling-error" id="SPELLING_ERROR_6">Golkar</span>, <span class="blsp-spelling-error" id="SPELLING_ERROR_7">PKB</span> and PD form a coalition to support the president). In this situation, the president is indifferent as the number of support is equal in each policy (just to make our analysis simple).</p><p class="MsoNormal" style="text-align: justify;"><br /><span style="font-weight: bold;"></span></p><p class="MsoNormal" style="text-align: center;" align="center"><span style="font-weight: bold;"></span><b style="">Gains for the President and Political Parties<span style="font-size:85%;"><a style="" href="http://www.blogger.com/post-edit.g?blogID=2918613783975691777&postID=2243702311092133617#_ftn1" name="_ftnref1" title=""><span class="MsoFootnoteReference"><span style=""><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><b style=""><span style="">[1]</span></b></span><!--[endif]--></span></span></a></span><o:p></o:p></b></p> <p class="MsoNormal" style="text-align: center;" align="center"><o:p> </o:p></p> <div align="center"> <table class="MsoTableGrid" style="border: medium none ; width: 445px; border-collapse: collapse; height: 190px;" border="1" cellpadding="0" cellspacing="0"> <tbody><tr style=""> <td style="border: 1pt solid windowtext; padding: 0in 5.4pt; width: 88.4pt; color: rgb(0, 102, 0);" valign="top" width="118"> <p class="MsoNormal" style="text-align: center;" align="center"><b style="">Party<o:p></o:p></b></p> </td> <td style="border-style: solid solid solid none; border-color: windowtext windowtext windowtext -moz-use-text-color; border-width: 1pt 1pt 1pt medium; padding: 0in 5.4pt; width: 92.95pt; color: rgb(0, 102, 0);" valign="top" width="124"> <p class="MsoNormal" style="text-align: center;" align="center"><b style="">Policy A<o:p></o:p></b></p> </td> <td style="border-style: solid solid solid none; border-color: windowtext windowtext windowtext -moz-use-text-color; border-width: 1pt 1pt 1pt medium; padding: 0in 5.4pt; width: 92.95pt; color: rgb(0, 102, 0);" valign="top" width="124"> <p class="MsoNormal" style="text-align: center;" align="center"><b style="">Policy B<o:p></o:p></b></p> </td> <td style="border-style: solid solid solid none; border-color: windowtext windowtext windowtext -moz-use-text-color; border-width: 1pt 1pt 1pt medium; padding: 0in 5.4pt; width: 77.55pt; color: rgb(0, 102, 0);" valign="top" width="103"> <p class="MsoNormal" style="text-align: center;" align="center"><b style="">Policy C<o:p></o:p></b></p> </td> </tr> <tr style=""> <td style="border-style: none solid solid; border-color: -moz-use-text-color windowtext windowtext; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 88.4pt; color: rgb(255, 0, 0); font-weight: bold;" valign="top" width="118"> <p class="MsoNormal" style="text-align: justify;"><span class="blsp-spelling-error" id="SPELLING_ERROR_8">Golkar</span></p> </td> <td style="border-style: none solid solid none; border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 92.95pt; color: rgb(255, 0, 0); font-weight: bold;" valign="top" width="124"> <p class="MsoNormal" style="text-align: center;" align="center">(128,100)</p> </td> <td style="border-style: none solid solid none; border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 92.95pt; color: rgb(255, 0, 0); font-weight: bold;" valign="top" width="124"> <p class="MsoNormal" style="text-align: center;" align="center">(0,-100)</p> </td> <td style="border-style: none solid solid none; border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 77.55pt; color: rgb(255, 0, 0); font-weight: bold;" valign="top" width="103"> <p class="MsoNormal" style="text-align: center;" align="center">(128,50)</p> </td> </tr> <tr style=""> <td style="border-style: none solid solid; padding: 0in 5.4pt; width: 88.4pt;" valign="top" width="118"> <p class="MsoNormal" style="text-align: justify;"><span class="blsp-spelling-error" id="SPELLING_ERROR_9">PDI</span>-P</p> </td> <td style="border-style: none solid solid none; border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 92.95pt;" valign="top" width="124"> <p class="MsoNormal" style="text-align: center;" align="center">(0,-100)</p> </td> <td style="border-style: none solid solid none; border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 92.95pt;" valign="top" width="124"> <p class="MsoNormal" style="text-align: center;" align="center">(109,100)</p> </td> <td style="border-style: none solid solid none; border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 77.55pt;" valign="top" width="103"> <p class="MsoNormal" style="text-align: center;" align="center">(0,-100)</p> </td> </tr> <tr style=""> <td style="border-style: none solid solid; padding: 0in 5.4pt; width: 88.4pt;" valign="top" width="118"> <p class="MsoNormal" style="text-align: justify;"><span class="blsp-spelling-error" id="SPELLING_ERROR_10">PKB</span></p> </td> <td style="border-style: none solid solid none; border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 92.95pt;" valign="top" width="124"> <p class="MsoNormal" style="text-align: center;" align="center">(52,100)</p> </td> <td style="border-style: none solid solid none; border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 92.95pt;" valign="top" width="124"> <p class="MsoNormal" style="text-align: center;" align="center">(0,-100)</p> </td> <td style="border-style: none solid solid none; border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 77.55pt;" valign="top" width="103"> <p class="MsoNormal" style="text-align: center;" align="center">(0,-100)</p> </td> </tr> <tr style=""> <td style="border-style: none solid solid; border-color: -moz-use-text-color windowtext windowtext; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 88.4pt; color: rgb(255, 0, 0); font-weight: bold;" valign="top" width="118"> <p class="MsoNormal" style="text-align: justify;"><span class="blsp-spelling-error" id="SPELLING_ERROR_11">PKS</span></p> </td> <td style="border-style: none solid solid none; border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 92.95pt; color: rgb(255, 0, 0); font-weight: bold;" valign="top" width="124"> <p class="MsoNormal" style="text-align: center;" align="center">(0,-100)</p> </td> <td style="border-style: none solid solid none; border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 92.95pt; color: rgb(255, 0, 0); font-weight: bold;" valign="top" width="124"> <p class="MsoNormal" style="text-align: center;" align="center">(45,100)</p> </td> <td style="border-style: none solid solid none; border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 77.55pt; color: rgb(255, 0, 0); font-weight: bold;" valign="top" width="103"> <p class="MsoNormal" style="text-align: center;" align="center">(45,50)</p> </td> </tr> <tr style=""> <td style="border-style: none solid solid; border-color: -moz-use-text-color windowtext windowtext; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 88.4pt;" valign="top" width="118"> <p class="MsoNormal" style="text-align: justify;">PD</p> </td> <td style="border-style: none solid solid none; border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 92.95pt;" valign="top" width="124"> <p class="MsoNormal" style="text-align: center;" align="center">(57,100)</p> </td> <td style="border-style: none solid solid none; border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 92.95pt;" valign="top" width="124"> <p class="MsoNormal" style="text-align: center;" align="center">(57,100)</p> </td> <td style="border-style: none solid solid none; border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 77.55pt;" valign="top" width="103"> <p class="MsoNormal" style="text-align: center;" align="center">(57,100)</p> </td> </tr> <tr style=""> <td style="border-style: none solid solid; border-color: -moz-use-text-color windowtext windowtext; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 88.4pt;" valign="top" width="118"> <p class="MsoNormal" style="text-align: justify;">Party X</p> </td> <td style="border-style: none solid solid none; border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 92.95pt;" valign="top" width="124"> <p class="MsoNormal" style="text-align: center;" align="center">(0,-100)</p> </td> <td style="border-style: none solid solid none; border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 92.95pt;" valign="top" width="124"> <p class="MsoNormal" style="text-align: center;" align="center">(0,-100)</p> </td> <td style="border-style: none solid solid none; border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 77.55pt;" valign="top" width="103"> <p class="MsoNormal" style="text-align: center;" align="center">(7,100)</p> </td> </tr> <tr style=""> <td style="border-style: none solid solid; border-color: -moz-use-text-color windowtext windowtext; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 88.4pt;" valign="top" width="118"> <p class="MsoNormal" style="text-align: justify;">Party Y</p> </td> <td style="border-style: none solid solid none; border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 92.95pt;" valign="top" width="124"> <p class="MsoNormal" style="text-align: center;" align="center">(0,-100)</p> </td> <td style="border-style: none solid solid none; border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 92.95pt;" valign="top" width="124"> <p class="MsoNormal" style="text-align: center;" align="center">(26,100)</p> </td> <td style="border-style: none solid solid none; border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 77.55pt;" valign="top" width="103"> <p class="MsoNormal" style="text-align: center;" align="center">(0,-100)</p> </td> </tr> <tr style=""> <td style="border-style: none solid solid; border-color: -moz-use-text-color windowtext windowtext; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 88.4pt;" valign="top" width="118"> <p class="MsoNormal" style="text-align: justify;">Total support</p> </td> <td style="border-style: none solid solid none; border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 92.95pt;" valign="top" width="124"> <p class="MsoNormal" style="text-align: center;" align="center">237</p> </td> <td style="border-style: none solid solid none; border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 92.95pt;" valign="top" width="124"> <p class="MsoNormal" style="text-align: center;" align="center">237</p> </td> <td style="border-style: none solid solid none; border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; width: 77.55pt;" valign="top" width="103"> <p class="MsoNormal" style="text-align: center;" align="center">237</p> </td> </tr> </tbody></table> </div> <p class="MsoNormal" style="text-align: justify;"><o:p> </o:p></p> <p style="text-align: justify;" class="MsoNormal"><br /></p><p style="text-align: justify;" class="MsoNormal">To simplify the problem, the president tends to choose policy which get strong signal and support from the political parties. We should only notice three parties supporting more than one policy: <span class="blsp-spelling-error" id="SPELLING_ERROR_12">Golkar</span>, <span class="blsp-spelling-error" id="SPELLING_ERROR_13">PKS</span> and <span class="blsp-spelling-error" id="SPELLING_ERROR_14">Partai</span> <span class="blsp-spelling-error" id="SPELLING_ERROR_15">Demokrat</span> (PD). We drop PD from our analysis since it is less relevant (it supports every president’s policy). </p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="MsoNormal"><o:p> </o:p></p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="MsoNormal"><br /></p><p style="text-align: justify;" class="MsoNormal">Each political party does not cooperate. Each signals strong support for the most favorite policy and strong opposition for the least favorite policy. In this case, <span class="blsp-spelling-error" id="SPELLING_ERROR_16">Golkar</span> strongly support policy A while strongly reject policy B. <span class="blsp-spelling-error" id="SPELLING_ERROR_17">PKS</span> strongly support policy B while strongly reject policy A. </p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="MsoNormal"><o:p> </o:p></p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="MsoNormal"><br /></p><p style="text-align: justify;" class="MsoNormal">Then some brilliant politicians from both suggest “Why do not we cooperate and signal our second preferred policy as strong as the most preferred policy, so the president will choose policy C?”. It happens, the president chooses policy C, but would this cooperation be lasting? Maybe not. <span style=""> </span><span class="blsp-spelling-error" id="SPELLING_ERROR_18">Golkar</span> is tempted to defect the coalition and signal the most favorite policy (policy A) but <span class="blsp-spelling-error" id="SPELLING_ERROR_19">PKS</span> also does the same thing (policy B). Then, is there any outcome which is stable and certain? The answer is perhaps no. </p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="MsoNormal"><o:p> </o:p></p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="MsoNormal"><br /></p><p style="text-align: justify;" class="MsoNormal">This very simple situation shows how uncertain and unstable the multiparty and presidential system. Let’s put more complicated things. It surely does not make sense to assume that only one or two political parties doing portfolio of policies like what <span class="blsp-spelling-error" id="SPELLING_ERROR_20">Golkar</span> and <span class="blsp-spelling-error" id="SPELLING_ERROR_21">PKS</span> do. Imagine when there are many policies, many portfolios, the spreading support of political parties for every policy and the president is not indifferent over his policies. To narrow down many possibilities, president only pursue policies which get strong support. Since the coalition changes over time which means that support also changes, the president’s policies will lose coherency. Therefore, it is very possible that a policy chosen by the president contradicts to what he campaigned in the election. </p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="MsoNormal"><o:p> </o:p></p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="MsoNormal"><br /></p><p style="text-align: justify;" class="MsoNormal">What happen to other interest groups? Well they have to “<i style="">bribe</i>” more than one political party and also the president (since the president may come not from major political party, like <span class="blsp-spelling-error" id="SPELLING_ERROR_22">SBY</span>) to influence their favorite policies. This increases the cost of lobby. </p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="MsoNormal"><o:p> </o:p></p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="MsoNormal"><br /></p><p style="text-align: justify;" class="MsoNormal">The soaring cost of lobby and uncertainty may endanger our democracy. It is very clear that we should restructure our political institution. There are two systems which may bring good political outcome, parliamentary system or oligopoly political party-presidential system. These systems, i think, reduce uncertainty and the cost of lobby among interest groups. The first one reduces the cost of lobby and uncertainty in the relationship among interest groups, parliament and prime-minister. The second one narrow down policy options supported by political party and finally it eliminates uncertainty and push the cost of lobby for interest groups.</p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="MsoNormal"><o:p> </o:p></p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="MsoNormal"><a href="http://pjvermonte.wordpress.com/about/"><br /></a></p><p style="text-align: justify;" class="MsoNormal"><a href="http://pjvermonte.wordpress.com/about/">My colleague</a><b style=""> </b>argues that presidential system is desirable particularly in divided society since the winners do not take all and it also trim down potential conflicts among groups (ethnic or religion). But looking what <a href="http://64.233.179.104/scholar?hl=en&lr=&q=cache:tjioCzwQyf4J:www.cuhk.edu.hk/gpa/wang_files/Dem04.doc+What+Makes+Democracies+Endure">these guys</a> find, stable and certain outcome are more important than “<i style="">representation of all</i>”. Regarding current political situation, I favor parliamentary system.<span style=""> </span></p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="MsoNormal"><o:p> </o:p></p><div style="text-align: justify;"> </div><p style="text-align: justify;" class="MsoNormal"><br /></p><p style="text-align: justify;" class="MsoNormal">Lastly, it is completely wrong to blame democracy as the cause of our chaotic political situation. What has happened is that our political system within democratic regime does not produce efficient political outcome. The worst thing is that our politicians endanger the future of our democracy.</p><p style="text-align: justify;" class="MsoNormal"><br /></p><div style="text-align: justify;"> </div><div style=""><div style="text-align: justify;"><!--[if !supportFootnotes]--> </div><hr align="left" size="1" width="33%"> <!--[endif]--> <div style="" id="ftn1"><div style="text-align: justify;"> </div><p style="text-align: justify;" class="MsoFootnoteText"><span style="font-size:85%;"><a style="" href="http://www.blogger.com/post-edit.g?blogID=2918613783975691777&postID=2243702311092133617#_ftnref1" name="_ftn1" title=""><span class="MsoFootnoteReference"><span style=""><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="">[1]</span></span><!--[endif]--></span></span></a></span> <span style="font-size:85%;">The first number in the bracket is the real seats in parliament. The second one is hypothetical gain for a political party. Party X and Y are hypothetical parties. This matrix is a very simplified (variant) menu-auction game since it is pretty difficult to cover each player strategies (the president and political parties) in a plain way within this short posting. You may come up with more illuminating model.</span> </p> </div> </div>Unknownnoreply@blogger.com5tag:blogger.com,1999:blog-2918613783975691777.post-73054389021240640972007-06-13T23:31:00.000-04:002007-06-19T03:59:29.741-04:00Why perfect political market is not always good ( part 1 of 2)<p class="MsoNormal" style="TEXT-ALIGN: justify">Could I find someone who really loves our politicians? You may reply “what a stupid question”. Surely, it is too naïve, to think that politicians advocate the interest of the people. I do believe there are good politicians but I do not trust, for sure, the devils in their hearts.</p><p class="MsoNormal" style="TEXT-ALIGN: justify"><?xml:namespace prefix = o /><o:p></o:p><br />Recalling our politicians’ behaviors, I very often find myself so peevish. Recently several former candidates for the 2004 presidency election has been found involved in accepting non-budgetary fund from Ministry of Fisheries. In the last year, the members of parliament agreed to increase their salary. A couple months before, they endorsed a budget for laptop-project. What irritating the most is what they have gotten do not match with what they have done.</p><p class="MsoNormal" style="TEXT-ALIGN: justify"><o:p></o:p><br /><a href="http://kafedepok.blogspot.com/2007/05/just-added-thought-on-institutions.html">My friend</a> indicates that this problem may come up due to high transaction cost and inefficiency in political market. To eliminate the cost and increase efficiency, it is necessary to bring competitive political market into the political system. Only by competitive means, our political system may produce an efficient political outcome. </p><p class="MsoNormal" style="TEXT-ALIGN: justify"><o:p></o:p><br />It is true that current political institution is not efficient, particularly regarding the impact of the political outcome on the welfare of the people. However, calling for competitive political market does not seem to be the answer. What has happened actually is that our political system is too competitive. Multi-party system in parliament illustrates this situation and this is when our problem begins.</p><p class="MsoNormal" style="TEXT-ALIGN: justify"><o:p></o:p><br />I argue that multi-party and presidential system is likely to increase the cost of lobby and uncertainty. Presidential system puts strong power on president to govern. However multi-party disperses the power on parliament. Power to govern, in the end, should be supported by voters which are represented by the parliament. </p><p class="MsoNormal" style="TEXT-ALIGN: justify"><o:p></o:p><br />Here, the president will pursue policies which bring maximum gains (support from many parties) meanwhile parties put their support on some range of policies which the magnitude of supports varies in each policy. </p><p class="MsoNormal" style="TEXT-ALIGN: justify"><o:p></o:p><br />Some say that the president Susilo Bambang Yudhoyono seems to be pigheaded by doing coalition when many political observers told him that he does not need to form a coalition. Why is he still doing coalition? Perhaps, by doing coalition, he thinks he can reduce uncertainty in the relationship between him and the parliament. Yet since the political parties avoid the risk of getting nothing, they spread out political support over available policies. Then no wonder does a political party stand in more than one side and a coalitional form in the parliament changes over time. This seems what SBY has missed</p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2918613783975691777.post-74971629324811833812007-05-16T14:37:00.000-04:002007-05-16T14:52:36.502-04:00Summer Reading<p class="MsoNormal" style="text-align: justify;">Recently a friend of mine, who is non-economics major, asked me to provide him a list of economic books that are non technical and interesting to read during the summer. Here’s what I come up with, in no particular order:</p> <ol style="margin-top: 0in;" start="1" type="1"><li class="MsoNormal" style="text-align: justify;"><a href="http://www.amazon.com/Armchair-Economist-Economics-Everyday-Life/dp/0029177766/ref=pd_bbs_sr_1/103-1150551-1465415?ie=UTF8&s=books&qid=1179340732&sr=1-1">The Armchair Economis</a>t, Steven Landsburg.</li><li class="MsoNormal" style="text-align: justify;"><a href="http://www.amazon.com/More-Sex-Safer-Unconventional-Economics/dp/1416532218/ref=pd_bbs_sr_1/103-1150551-1465415?ie=UTF8&s=books&qid=1179340772&sr=1-1">More Sex is Safer Sex: The Unconventional Wisdom of Economics</a>, Steven Landsburg.</li><li class="MsoNormal" style="text-align: justify;"><a href="http://www.amazon.com/Freakonomics-Revised-Expanded-Economist-Everything/dp/0061234001/ref=pd_bbs_sr_1/103-1150551-1465415?ie=UTF8&s=books&qid=1179340809&sr=1-1">Freakonomics</a>, Steven Levitt and Stephen Dubner.</li><li class="MsoNormal" style="text-align: justify;"><a href="http://www.amazon.com/Undercover-Economist-Exposing-Poor-Decent/dp/0195189779/ref=pd_bbs_sr_1/103-1150551-1465415?ie=UTF8&s=books&qid=1179340841&sr=1-1">The Undercover Economist</a>, Tim Harford.</li><li class="MsoNormal" style="text-align: justify;"><a href="http://www.amazon.com/Culture-Prosperity-Markets-Nations-Remain/dp/0060587059/ref=pd_bbs_sr_1/103-1150551-1465415?ie=UTF8&s=books&qid=1179340867&sr=1-1">The Truth About Markets: Why Some Nations are Rich but Most Remain Poor</a>, John Kay.</li><li class="MsoNormal" style="text-align: justify;"><a href="http://www.amazon.com/Elusive-Quest-Growth-Economists-Misadventures/dp/0262550423/ref=cm_lmf_img_9_rdssss0/103-1150551-1465415">The Elusive Quest for Growth</a>, William Easterly.</li><li class="MsoNormal" style="text-align: justify;"><a href="http://www.amazon.com/White-Mans-Burden-Efforts-Little/dp/0143038826/ref=pd_bxgy_b_img_b/103-1150551-1465415">The White Man’s Burden</a>, William Easterly.</li></ol> <p class="MsoNormal" style="text-align: justify;">If any of you have some other interesting titles that you have read or just dying to read, let me know. Enjoy the summer!</p>Pashahttp://www.blogger.com/profile/03040951834210426940noreply@blogger.com5tag:blogger.com,1999:blog-2918613783975691777.post-60538368908076008062007-05-03T11:37:00.000-04:002007-05-03T11:50:39.504-04:00Between Politics and Business<a href="http://www.thejakartapost.com/detailbusiness.asp?fileid=20070503.M05&irec=4">This </a>shows why state-owned banks are vulnerable to political <span class="blsp-spelling-corrected" id="SPELLING_ERROR_0">concession</span>. Worst, they may risk macroeconomic stability which has been achieved so far. I suspect (it seems very clear anyway) that PT <span class="blsp-spelling-error" id="SPELLING_ERROR_1">Bosowa</span> Trading International is part of <span class="blsp-spelling-error" id="SPELLING_ERROR_2">Bosowa</span> group-a business group of vice-president <span class="blsp-spelling-error" id="SPELLING_ERROR_3">Jusuf</span> <span class="blsp-spelling-error" id="SPELLING_ERROR_4">Kalla</span>.<span style="font-family:Arial, Helvetica;font-size:85%;"><br /><br /><br /></span>Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-2918613783975691777.post-84467653932571763832007-04-30T15:29:00.000-04:002007-04-30T15:54:10.319-04:00Democrats vs. RepublicansThis is a clip that depicts Democrats (Hillary, Obama, Gore, etc) againts the current administration (Bush, Cheney, etc). What made it funny is that it shows them fighting each other with a kind of "Super Friends" cartoonish flavor attached to it. Enjoy...<br /><br /><object height="350" width="425"><param name="movie" value="http://www.youtube.com/v/Wr0MLl-fxuo"><param name="wmode" value="transparent"><embed src="http://www.youtube.com/v/Wr0MLl-fxuo" type="application/x-shockwave-flash" wmode="transparent" height="350" width="425"></embed></object><br /><br /><a href="http://www.challengeofthesuperduperfriends.com/cast_gb.asp"><span style="text-decoration: underline;">Here's</span></a> a list of the character bios shown in the clip if you're interested. Oh, in case you don't know or forgot what "Super Friends" is, it's a cartoon show that ran from the 70's to the early 80's (guess how old am I?:D) that showed Superman, Batman, Wonder Woman and other super heroes fighting againts supervillains such as Lex Luthot, the Joker, etc. Here in the US, with the presidential primaries nearing, I guess this type of things always come up. I'm betting the guy who made this is a liberal:DPashahttp://www.blogger.com/profile/03040951834210426940noreply@blogger.com0