Schelling Quote- The Very Basics of Game Theory

"If I go downstairs to investigate a noise at night, with a gun in my hand, and find myself face to face with a burglar who has a gun in his hand, there is a danger of an outcome that neither of us desires. Even if he prefers to just leave quietly, and I wish him to, there is danger that he may think I want to shoot, and shoot first."

via David Henderson

The Lesson: 'in thinking through various actions you might take to have an effect on B, ask yourself how you would respond to such actions if you were B. In other words, put yourself in the other person's shoes, not to get a touchy, feely, we're-all-in-this together Kumbaya moment, but to come up with your most-realistic analysis'

Maths Pocast of the Day

Probability;

Heads or tails? It’s a simple question with a far from simple answer. One that takes us into the strange and complex world of probability.

Probability is the field of maths relating to random events and, although commonplace now, the idea that you can pluck a piece of maths from the tumbling of dice, the shuffling of cards or the odds in the local lottery is a relatively recent and powerful one. It may start with the toss of a coin but probability reaches into every area of the modern world, from the analysis of society to the decay of an atom.

More Readings;
F. N. David, Games, Gods and Gambling (Griffin, 1962)

T. M. Porter, The Rise of Statistical Thinking, 1820-1900 (Princeton University Press, 1986)

S. M. Stigler, The History of Statistics (Harvard University Press, 1986)

J. Von Plato, Creating Modern Probability (Cambridge University Press, 1994)

John Haigh, Taking Chances: Winning with Probability (Oxford University Press; New Ed edition (8 May 2003)

Gerd Gigerenzer, Reckoning with Risk: Learning to Live with Uncertainty (Penguin Books Ltd; New Ed edition (24 April 2003)

Frederick Mosteller, Fifty Challenging Problems in Probability With Solutions (Dover Publications Inc.; New Ed edition (1 Feb 1988)

Ian Stewart, Taming the Infinite: The Story of Mathematics (Quercus, July 2008)

Teacher package: Statistics and probability theory

A competitor for Dani Rodrik's program?

MSc in International Trade, Finance, and Development- from Barcelona

See the Director's Blog

Lecturers;
Hans-Joachim Voth / Antonio Ciccone / Alessandra Bonfiglioli / Jaume Ventura /
Fernando Broner /Kurt Schmidheiny / Ghazala Azmat / Paula Bustos /Xavier Sala-i-Martín/ Gino Gancia / Alberto Martin / Libertad González/Antoni Estevadeordal/Eduardo Levy Yeyati


Related;
Applied Econometrics for Masters Students

A Course on Poverty and Development from Google

Ted Miguel / Davesh Kapur / Steve Redelet


Lant Pritchett



Seema Jayachandran / Ted Miguel


Janice E. Perlman
/Ananya Roy


Nancy Birdsall / Raymond C. Offenheiser

Enter the Dragon: Understanding the History and Future of Chinese Development

Dr. Christopher Lingle Visiting Professor Ramkhamhaeng University in Bangkok Napoleon once referred to China as the "Sleeping Dragon," and he advised European leaders from his era that they would be better off to let it sleep.

* What factors were responsible for China's remarkable economic progress?
* What adjustments have the Communist Party made to accommodate this growth?
* How are China's neighbors coping with its success?
* What challenges stand in the way of future progress?

Why Do Some Countries Remain Poor While Others Grow Rich?

Econ Talk of the Day- Dani Rodrik answers the question

Related;
Turkey Country Economic Memorandum

The twentieth-century experience: half empty or half full?

Random Course of the Day

Central Bank Watching

Explainer of the Day

Growth Rate Question & Answer

Lecture for the Day

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Random Public Finance introductory courses

Public Sector Economics- McGill

Public Finance- UC Davis

Stephen's Lecture of the Day- The Black-Sholes Model

EC4024 Financial Economics: The Black-Scholes Model from Stephen Kinsella on Vimeo.

Black–Scholes Model

Memo to Chris Blattman

I would appreciate very much if you could add some economics courses to 'Open Yale Courses'- Yale's answer to MIT's OpenCourseWare- when you start teaching. Currently there are no economics courses.

Only the Hawks go to Central Bank Heaven

"Central Bankers- they live and die for price stability"

Laurence Meyer gives an inside look at the workings of FOMC (it starts about 10 minutes into the program, after Greenspan's comments)- it's a bit old lecture, but very informative and useful.

Best book for the layperson on the inner workings of the Fed- yes, better than Greenspan's.
A Term at the Fed: An Insider's View
by Laurence H. Meyer

Brad DeLong on Karl Marx the economist

This week I asked my graduate students to write on the following question: whether--and how--Karl Marx is relevant to a twenty-first century neoclassical economist.

Complex orders arise from simple rules

via Skeptical Liberal

Mostly Econ Talks

Behavioural Economics: Common Mistakes in Daily Decisions
Why do smart people make irrational decisions every day? Why do we repeatedly make the same mistakes when we make our selections? How do our expectations influence our actual opinions and decisions? The answers, as revealed by behavioural economist Professor Dan Ariely of MIT, will surprise you

Why is New York America's largest city?
A lecture with Edward Glaeser, Fred and Eleanor Glimp Professor of Economics at Harvard University entitled, "Urban Colossus: Why is New York America's Largest City?"

Identity and Homecoming
Rageh Omaar, presenter on the Al-Jazeera English Channell

The scientific basis for projections of climate change (in a nutshell)

Measuring American Power in Today`s Fractured World
Paul Kennedy

Faith in the Halls of Power: How Evangelicals Joined the American Elite
D. Michael Lindsay, assistant professor of Sociology at Rice University

Cuba Libre!
Daniel Drezner talks about the future—and the past—of the Cuban embargo.
Gang Leader for a Day

Financial Crises: Lessons from the Great Depression and the Writings of Ben Bernanke
Download the podcast

China's Quest for Resources

Clay Shirky

Macroeconomics Lecture of the Day

Ronald McKinnon Professor Emeritus of Economics at Stanford and Senior Fellow of SIEPR and SCID, John B. Taylor, Professor of Economics at Stanford and Hiroshi Watanabe, Special Advisor to the Japan Center for International Finance spoke about What Will Happen to the Dollar? Managing International Exchange Rates at a SCID SIEPR breakfast on February 20.

Download the video

How is Singapore's economy doing

IMF's annual health check on the Singapore economy is out;

IMF's view: Large net fiscal reserves resulting from past prudence provide scope over the medium term to meet social needs associated with rising income inequality and aging without compromising fiscal sustainability. A further deepening of structural reforms will be key to sustaining robust growth. While the financial system is sound, risks from increasing integration with international financial markets should be closely monitored and managed to maintain the stability and growth of the financial sector. With inflation expectations well anchored, there is no compelling reason to change the current monetary policy stance of targeting a modest and gradual appreciation of the nominal effective exchange rate at this moment. Nevertheless, if large capital inflows persist, the MAS should refrain from sterilization. This would discourage such inflows, easing the need for foreign exchange intervention. The large current account surplus at present can be mainly explained by structural and cyclical factors, but its ratio to GDP is expected to decline gradually over time as private investment continues to recover and the rapid aging of the population lowers national savings. The real effective exchange rate is likely to appreciate gradually as part of this process.

Government's view: The authorities broadly agreed with the staff’s assessment and policy recommendations. Notwithstanding their concerns about stagnant wages of low-skilled workers, they reiterated their view that work is the best form of welfare but did not rule out the possibility of further strengthening the social safety net. Proactive structural reform aimed at sustaining growth would continue, including promoting high value added sectors, encouraging research and development, and strengthening human capital. Safeguarding financial sector growth and stability is crucial to Singapore’s heightened role as a global financial sector. The authorities saw no need to adjust liquidity management (sterilization). They emphasized that money market operations are aimed at maintaining adequate liquidity in the banking system and that interest rates are not their monetary policy instrument. Within the exchange rate centered framework, interest rates could adjust on market expectations of the future path of the Singapore dollar without any shift in the MAS’ liquidity management.

Related;
Monetary Policy Operations in Singapore

Singapore's Exchange Rate Policy

Equilibrium Exchange Rates and Exchange Rate Forecasting
Professor Ronald MacDonald

The Foreign Exchange Origins of Japan's Economic Slump and Low Interest Liquidity Trap
Professor Ronald McKinnon

"Free Trade Agreements - An Economic Policy tool for Singapore in a Globalized World" by Teo Ming Kian, Executive Chairman of the Economic Development Board,

Economic Growth Lecture of the Day

Oded Galor on Natural Selection and the Origin of Economic Growth;

Oded Galor presents his collaborative research with Omer Moav on an evolutionary growth theory that captures the interplay between the evolution of mankind and economic growth since the emergence of the human species. The researchers argue that for much of man’s existence his life was characterized as a stagnant period of struggle for survival and that a gradual process of selection changed the composition of types within the human population and made it more complimentary to the growth process. Additionally, this change in human types permitted the take-off from stagnation to economic growth.

The model for their research is based on four fundamental elements: the main ingredients of the Malthusian world (economies characterized by fixed factors of production and subsistence consumption); the main ingredients of Darwinian evolution (variety, intergenerational transmission of traits, and natural selection); a link between evolution of the human species to the process of economic growth; and a link between the rate of technological progress, demographic transitions, and sustained economic growth.

According to Dr. Galor, increases in the return to human capital induce parents to substitute quantity for quality of children. This bias towards quality offspring increased as technological progress intensified, reinforcing the growth process and allowing mankind to break free of the Malthusian trap. In their research, Galor and Moav conclude that this set the stage for the industrial revolution and eventually, the modern world eceonomy.

Random Course

Q: Economists love to analyze markets for goods that are illegal (e.g., drugs, prostitution, etc.). One study showed that the own-price elasticity of the demand for powder cocaine (in absolute value) is 1.2, while the comparable elasticity for marijuana is 0.6. You have probably observed that the federal and state governments punish cocaine suppliers and dealers more severely than they punish marijuana dealers. Give TWO possible (if unlikely) explanations that relate back to demand analysis for this difference in policy.

Introduction to Political Economy: Microeconomics- Charles Moul

Textbooks; Mankiw's Principles of Microeconomics and Landsburg's The Armchair Economist

Course rating: (4 out 10 stars)


*Answer to the above question here.