Book review: False Economy

After reading Easterly's review of False Economy, I was really looking forward to reading it and get surprised by the true reasons behind economic outcomes. It turned out to be disappointing. It lacks the anecdotal precision of A splendid exchange, the convincing force of Bad Samaritans, and the economic wit of The undercover economist. I end up merely entertained...Easterly's review is better than the book itself.

It's kind of a non-academic literature review of economic papers that are very famous and everybody knows. Maybe it's a good book that was just not written for economic students. So, if you are unfamiliar with the topics he approaches, the book might be adequate. It's easier to read than any other similar book I've read.

Rythm: You got it or you don't

A little entertainment for the week end!

Some Wisdom on Development Economics

While at this conference, I saw some quite interesting presentations on the recent developments in protectionist measures. However, one of the most striking statements I heard was only indirectly related to the conference’s topic. The argument was roughly the following:

Development agencies have to be risk averse when conducting their business since they use taxpayers’ money. Hence, developing countries which receive the donations form these agencies are subject to very stringent rules in the way they make use of the money. But if developing countries are not allowed to make mistakes throughout their development process the whole idea of development is put ad absurdum. It is only through trial and error and learning that countries can find their particular way to develop.

Now this seems like a well informed critique about the whole way that development aid is organized in most Western countries. But it comes even better: The argument was made by Pierre Jacquet, director and chief economist of the French Development Agency!

Maybe I should have asked him to give his money to the RDB!

Solving for Love and Hate

I read an interesting article today on the New York Times from Steven Strogatz a guest blogger for the Times and also Professor of Applied Mathematics at Cornell University. He basically simplifies the dynamic of Love and Hate in a couple with the help of two "simple" differential equations. Suppose there are Romeo and Juliet. Suppose that their love for each other develops according to the following dynamics:

Romeo's Love (dR/dT)= Theta * Juliet's current love (J)
Juliet's Love (dJ/dT)= -Gamma * Romeo's current love (R)

The article explains vary well what are the assumptions, but let me repeat them in common words: when Romeo is an assh*** Juliet finds him attractive, while Romeo loves Juliet when she cooks for him...

So given this description of their love, how does their love evolve through time? The answer is in the article, but here is the graphical answer:

Note the oscillation are the same by assumptions, just to be politically correct...

They both love each other one quarter of the time, all the rest is spent mumbling and thinking about...but this is just the prediction of a theoretical model. The world is different from that, but the model can be augmented to make it more realistic, as described in the article. But it's striking how the law of maths come appropriate even when talking about love and hate. As Einstein told us, the puzzle remains "How can it be that mathematics, being after all a product of human thought which is independent of experience, is so admirably appropriate to the objects of reality?"

Nuhu Ribadu

Nuhu Ribadu, former head of the Economic and Financial Crimes Commission of Nigeria, imperiled himself by charging a powerful state governor with corruption. Now in exile in the U.S., he talks about the misuse of authority and the continued need for foreign aid in Africa Read the interview.

And Bill counterattacks...

... now Bill displays his best artillery, with a series of blows straight to Jeff's face... keep tune for more action and don't forget that the road to hell is paved with good intentions.

GENEVA FORUM ON SOCIAL CHANGE

The University of Geneva’s International Organizations MBA (IOMBA) program is organizing a forum on social change that will include documentary films and panels on conflicts and trade policy etc… It takes place on 5-6 June. Register now for all movies and panels…it’s free! For myself I will go see this movie and this one too, and try to get a picture with this guy.

Sachs vs Easterly: No K.O.

The boxing match between Sachs and Easterly seems to have no end, and nobody wants to throw in the towel . Sachs gave the last uppercut, but the opponent is ready to counterattack...

And now we have Dambisa Moyo as the new one million dollar baby in the ring!

Few debates in economics are as hot (and get as personal) as this one.

Interesting statistics

“Goldman Sachs gives out more in annual bonuses to its workers than the entire rich world gives to the Global Fund each year to help save the lives of poor children”.

Jeffrey Sachs, here

"Bangladesh and Cambodia pay average tariffs of over 15% because their exports are concentrated in apparel. In dollar terms, they pay as much in tariffs as do France and the UK on a fifteen-fold larger value of imports. Indeed, the $850 million in import duties that these countries jointly paid to the US in 2006 dwarfs the $120 million that they received in foreign aid."

Kimberlery Ann Elliott, here