Invasion of the intuition snatchers

June 2000 - in France a group of Economics students and professors appealed against the modern day methodology of teaching economics in graduate schools. Their petition protested against a lot of issues - one of the issues was the dogmatic teaching style in economics, which leaves no place for critical and reflective thought. Their academic revolution has introduced a new term in the world of academics "THE POST-AUTISTIC ECONOMICS MOVEMENT".I talked to lot of professors and students who are associated with the economics PhD programs in different graduate schools of US - most of them believe that the movement didn't affect the US economics circuit in any respect. I agree with them but does that imply we are happy enough to ignore any sort of consequences of the movement that is taking place in Europe. I'm not against the rigorous theoretical and empirical training that Doctoral students get in most of the US schools - but side by side can we ignore the fact that PhD students are not getting sufficient opportunities to get acquainted with more intuitive courses? No we can't and this is a reality! Ok..some people have already raised their eyebrows.Let me put it in different words. It is better to say that most of the grad schools in US (I'm from India and did both my bachelors and masters in Inida; I believe even Indian institutions are not exceptional in this context) are not very efficient these days in encouraging graduate students to apply their intuition to highbrow research!In US I'm lucky enough to meet some of the best intuitive people I've ever seen in my life - but even after saying this I'm not really contradicting the points mentioned earlier. The curriculum has been made in such a way that the students seldom get a scope of going beoynd all type of sophisticated techniques mainly taken from pure science subjects - going beyond doesn't mean pursuing more hi-fi tools but it means applying more and more intuition. It may sound like I'm complaining too much but that is not true - I'm just a bit conscious on making Economics more and more interesting. Economics being one of the most dynamic subjects in academic world drew my attention in early years of student life.I sincerely hope lot other people who have been fascinated by the charm of this subject will continue to pass on the message of making it more and more intuitive(and grad school shouldn't be an exception)

btw..if you want to know more about "THE POST-AUTISTIC ECONOMICS MOVEMENT" check the following links,

http://www.paecon.net/PAEhistory02.htm
http://www.btinternet.com/~pae_news/history.htm
http://en.wikipedia.org/wiki/Post_Autistic_Economics

Theorectial hullabaloo and layman's economics

1981 - just after the Nobel prize committee's announcement, people at Yale's economice department arranged a press conference so that the reporters could face that year's Nobel Laureate Prof. James Tobin. For obvious reasons most of the reporters wanted to know what was the acclaimed theory of Prof. Tobin which had brought him "Nobel"! So, Prof. Tobin tried his best to explain everything associated with his much famous "Portfolio Theory". He was under the impression that the brief lecture would convey his message in lay man's language to evryone attending the conference.However, the reporters were not happy and they specifically mentioned "Oh no! please explain it in lay language"....Prof. Tobin though for a while and said "You know, don't put all your eggs in one basket" - that was his everbest try to make people understand the benefits of diversifying assets. Next day almost every newspaper in the world made a headline "Yale economist wins Nobel prize for 'don't pull all your eggs"....one friend of Prof. Tobin even sent him an cartoon from a newspaper which showed a sketch of next year's winner explaining how his award was for "An apple a day keep the doctors away"!

One of my faculty members also told me that same thing happened with Prof. Wassily Leotief who was awarded Nobel prize in 1973 for the development of the input-output method and for its application to important economic problems. While attending the royal dinner at Stockholm just after award giving ceremony, one of the fellow winners (I don't know whether he was a Physict or Chemist or Biologist but someone associated with pure science) requested him to explain his work in non-technical language. After Leontief tried to do so, the guy told another fellow winner..."You know..they have awarded him the prize for inverting the matrix".

Well...so you see, being a layman or at least pretending to be a layman is not at all a good strategy for an economist. Jokes apart, it is true that explaining those sophisticated theories in layman language is a difficult job. Nevertheless people often complain that day by day theoretical economics is going beyond the scope of normal comprehensibility. I agree with them - pick up a recent paper on "Social choice theory" or "evolutionary game theory" and even if you have a good background in economics there are high chances that you'll be totally lost in the domain of greek alphabets and uncomprehensible mathematics. But it is normal enough for an ordinary people to get interest (or at least just to be acquainted with)in theories which made Amartya Sen or John Nash media celebrities. We can argue that not everything is for every people in the world - how many of us can actually understand the "quantum theory of optical coherence" which has brought "Nobel" to Harvard physicist Roy Glauber in 2005. But I'll like to remind those people unlike Physics or Chemistry, Economics is a part of social science and that's why common people may want to have a thorough look on some economic theory at first rather than dwelling upon some hi-brow pure science theory. I personally believe that theoretical economists often get the pleasure from writing(publishing) a theory paper which is comparable to the pleasure poets/novelists get from their own creations. Self satisfaction is a keyword in this profession and it helps you to remain enthusiastic with your research.But on the other hand why not we give a try to popularize the "dismal science" - we can always try to make people understand that economics is not just about stocks and bonds and share market...there are something more!! We have some duties to let people know acronyms like GDP and GNP are not the ultimate words in the world of economics...you can explore lot other things...have fun and learn side by side!! A consciousness is needed....and we need it pretty soon.

African Sufferi(ng)

It was 2001 - Journal of Development Economics(JDE) accepted a paper by Dr. Steven Block (Professor of international economics at Tufts University)named "Does Africa grow differently"? It was 2003 - cypriot economist Chris Papageorgiou was giving a seminar at Louisiana State University - "Africa does grow differently"(co-authored with Winford Masanjala)....oh! how lucky we are...took only 2 years to realize the truth!! Anyway, being an admirer of this young and jolly economist Prof. Papageorgiou it was not possible for me to skip the seminar(during my brief stay at Louisiana State University, the best thing ever happened was to meet my mentor,philosopher and guide Dr. Sudipta Sarangi; meeting Papageorgiou was second best opportunity for me)...the seminar was really good; it forced me to think, to think a lot actually - how can we possibly explain the negative growth rate of some countries even in the beginning of 21st century?! The World Bank and IMF treated Africa as just another continent for a long time and just ignored the possibility of adopting exclusive economic policies for Africa. However, blaming only World Bank and IMF may not ease the pressure - we are still looking for some "Black box" which will explain every single factor responsible for dismal economic condition in Africa.


Block and Papageorgiou both claimed that quality of economic institutions play a major role in this regard.Block's empirical results give us some astonishing facts - it is surprizing to note that increased stock of education does not affect the quality of economic institutions in Africa or abundance of raw materials in Africa actually reduces the quality of institutions!! Whereas Papageorgiou found out low quality of political institutions, lack of correlation between ethnic diversity and activities and frequent revolutions and coupe are some other factors along with low quality of economic institutions which have made the scenario worse.

However, one question still remains - what are the feasible way outs? (sometimes it reminds me of 70's intellectual Bengali films which dealt with the socio-political problems and analyzed those from innumerable viewpoints of different individuals but never spoke a single word about any sort of solution - whether utopian or realistic)....It's time to arrange a marriage between development economics and growth theory if we want to pursue much sought - after solutions.

And God created division

When the Nobel prize committee awarded Prof. Gray Becker ( Chicago based Economist), their news release stated "Gary Becker's analysis has often been controversial and hence, at the outset, met with scepticism and even distrust." People who know a little bit about Gary Becker and his research are aware that starting from his graduate school days he had been focussing a lot on the economics of discrimination. Lot of people were sceptical;they thought Gary was doing sheer wastage of time! After all, how could a good economist work on discrimination? Is it an economic activity at all?!
Becker was lucky to have Milton Friedman as one of his mentors who continuously defended his(Becker's) work. Becker continued his work on discrimination and eventually produced a new generation of economists who actively took part in this type of socio-economic research. This young generation owes a lot to Becker and Friedman and of course to University of Chicago (Chicago's tradition of doing offbit research seems even wider these days - Steven Levitt is one example[even if you want just fun, I'll suggest don't try to understand his work only by reading "Freakonomics"...visit his webpage and go through some of his papers....those are amazingly wonderful!!])

It is true that gender, caste, ethnicity and religion are common examples of social constructs to which we belong and our sense of belonging or identification with a particular group affects our behavior; however, when we discriminate on the basis of these social constructs do we lose some economic efficiency? Well...you can come up with counter arguemts and can say that even social ties are needed for successful economic activites. This is a valid point but what if the loss from discrimination outweighs the gain from social ties? What if some members of our society remain excluded from socio-economic activities just because of caste or gender based discrimination!! For last 2 years I've been trying to understand the problems and challenges of caste/gender based discrimination from an economist's perspective - the subject being dynamic enough created a whole lot of hardship.However, persistent enthusiasm is always there to tackle everevolving new challenges. My theory suggested that caste/gender based discrimination was one of the root causes behind initial disastrous performance of "microfinance" transplanting programs in India. These days I've been searching for data to support my theory empirically. Data or no data - I truely believe that this theory is valid enough and not just a theory for theory's sake. But, a long journey is awaiting again to establish these view points firmly.

Anyway, are you getting the moral? - don't hesitate to say "wrong quote,wrong place" when someone fumbles from "Manusanghita" to give you some bullshit causality on a topic like this divine division!!!

Chaotic Beginning

Let's start with a story told by Nobel laureate economist Franco Modigliani in his lecture "My evolution as an economist" at Trinity University in San Antonio on 24th March,1987.

The story is of an argument among a surgeon,an engineer and an economist. The problem was that each claimed that his profession was the oldest.The surgeon spoke first and said, "remember at the beginning when god took a rib out of Adam and made Eve? Who do you think did that? Obviously, a surgeon." The engineer, however, was undaunted by all this and said, "Just a moment.You remember that God made the world before that. He separated the land from the sea.Who do you think did that except an engineer?" "Just a moment", protested the economist, "Before God made the world, what was there? Chaos, Who do you think was responsible for that?"

Well....so, this profession makes you humble......makes you truthful and of course,makes you Chaotic!! True lies..huh?! Anyway, who cares!! One thing is certain - fun will be a part of our journey. Now fasten your seatbelts....be ready for an exciting adventure....enjoy your random time travel.