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Thursday, January 15, 2009

The Current GFC - Global Financial Crisis

The Current GFC - Global Financial Crisis

No, I am not going to talk about the GFC to explain it to people. That's not the point of this post. The point of this post is about themes. And the difficulties of my incredibly difficult ISM and the conundrum that I've faced, and also a bit about philosophies.

On Bullshit and the GFC (Ponzi schemes)

Anyways, the GFC is also evidence of the lengths that people would go to just to bullshit others, in terms of the Madoff case and the lax regulations that led to renegade money managers. I was thinking of proposing:

"Is the liberal financial regime in the US and Europe one giant Ponzi scheme?"

Other proposals that I have in mind:

Does the GFC mark the end of the liberal financial model, or is it just an aberration?

Effects of ... on the GFC

... include:

rumours, economic liberalisation, economic integration... and much more. Just imagine that to be a Satzklammer, where you can fill in any nice word you want.

Effects of hamburgers on the GFC (that would get me kicked out!)

The problem is that this is an ISM, and with a very important and clever professor.

Why?

I cannot do a literature survey or a simple analysis in words, because that would not suffice for a major ISM. In economics there is now a pressing demand for models and empirical studies or econometric studies at the undergraduate level, even for level 3000.

This is not a fact but a kind of trend. I have a friend whose professor just said that a literature review and simple analysis would do - because we are not trained to make models or to innovate models or conduct econometric studies at year 3. On the other hand, there is my professor, who is wise and clever enough to inform me of the pitfalls of "traditional economics", which is under heavy attack by mathematics. I am using such strong words, but basically the mathematisation of economics is an ongoing and continuous trend that will not abate, and in fact has been established as part of this field for ages.

SO the problem is THIS:

Building a model, and then doing empirical testing.

Another possible way is to have the empirical evidence and then do a model based on that.

Needless to say there are debates.

I am going to graduate with an Economics First Class here, so no matter what it takes, I'll do it (yes, that's not economic thinking - did not weigh opportunity cost). So one possible strategy would be to bite bullets.

Biting bullets

Mankiw claimed that he is not good at math. Yet he bit the bullet and became an Economist. I have bitten the math bullet.

In addition, the other intellectual bullets that I have bitten are:

1. Physics - at the level of concepts and hypotheses - models of course

2. Biology and evolution

3. Increasing mathematisation in Economics including abstract statistical concepts

4. Additional modules - including International Economics (which is not compulsory for me) - i.e. doing more work, in effect

5. Dumping History, my beloved subject... because I have to get Economics First Class and USP. Sigh. I will miss her, but then again, I can always study history and read stuff on my own, whereas Economics and USP are paying and metaphorically paving me the metaphorical road to metaphorical success. You know, I really loved Economics and History at JC, but now, when I do Economics as a "professional" subject, it is a bit dry.

But there are more bullets to come.

Now I go back to writing proposals.

One good thing about blogging is that it is a form of catharsis. And what do you know, you may actually think of better ideas whilst formulating your own ideas into words.

One last thing is that for you non-economists, this current global financial crisis is colossal and has far reaching repercussions, the likes of which the world has never seen. This is really indeed some catastrophe and I am not alarmist (i.e. I'm not that kind of DOOMSSSSSDAY IS COMINGGGGG!!! person). Francis Fukuyama predicted the end of history. Many predicted the end of finance (i.e. that finance was fully developed). Well, they were right and wrong - it was no end to finance, but now it seems that it is an end to finance.

The world is ending!!!

PS You will be pleased to know that economists are spectacularly bad at predicting. We are not dentists (Harford, of Undercover Economist fame).

Anything that interests me