I, The Absolute

Mid-term & Macro-economics

Posted by itheabsolute on July 1, 2005

Term II life has been whirling around assignments – individual and group. Tomorrow we have our Global Economics mid-term. This time I consciously decided not to make elaborate preparations for the exam. I have made minimal preparation required, but my focus has been to be able to understand the concepts in the context of real world situations. Economic theory may say that stock market or bond market or foreign exchange market would react to certain economic data in a particular fashion. But in practice, bond markets look more predictable than equity and forex markets. The variables are too many to be captured. The forex markets move to a news such as Bush attacking Iraq. How can any theory capture this variable? So, it is a better idea to read current economic affairs to understand economic theory better.

Our new eco professor, Krishna Kumar, says that there is no better alternative. Btw, he is rocking. I found him quite effective in his pedagogy. He brings with him a set of convictions; will take us through the course through the framework he believes in. It may not give us an impartial view of the world. But it is always good to have an opinion than not have any opinion. The problem with reading textbooks is that you do not get to form opinions. A professor who has strong convictions can pass on those to the students. Though I did not agree with his view that human beings are almost entirely rational (we had a discussion in class. In a class, you can never win a discussion with a Prof. Remember, he grades you.). I am of the firm view that human beings are not necessarily rational. There are many times, even when making economic decisions, where he is not rational (covered in my blog on behavioral economics dated March 14). Coming back to the topic, good to have a professor who has firm beliefs and better to have one who believes in classical view of economics. He showed us part of ‘Commanding Heights’ documentary. I understand this is one of the best documentaries ever made. It was indeed good. The object of screening of this is to make us learn macroeconomics better. We have full screening of this doc on Saturday, after which I will write more about macroeconomics.

PS: Readers need to excuse this excess propensity towards economic. But it never hurts to learn economics.

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