Saturday, February 10, 2007
Half the world away..I've been lost ..I've been found..But I don't feel down......(clap clap)...-Oasis.
Music is back in my life. I now have a guitar and a mouth organ. And I have radio. Life is good.
India's inflation rate has shot up to 6.58% due to food prices. No wonder the Phillip's curve relationship does not hold.
I started my thesis work with great hope. I wanted to discover if there existed any relationship between inflation and output gap for India. I read a lot of papers. They were all very discouraging, but I nonetheless went ahead. The cul-de-sac quest..had to have an end. The results were inconclusive. A negative insignificant relatioship. Depressesed to not have got a basic result, I abandoned any hopes to going through with any general equilibrium model for India. smart decision wo3 says. If inflation is gonna bounce around every odd week, the days of inflation targetting are nowhere near.
we are apparently tampering around with our exchange rate too. So there. But then we are emerging and just because there is a model I should not be greedy to apply it.
You have to wait.
That's we are learning in the development economics course. A very chilled out course, but really hits you with reality checks. Why are the poor poor? We cannot rely on Solow's mechanical interpretation. Institutions, Intergration and Geography play a role. And each economist tries to push his own theory. I believe institutions are of foremost importance.
Again institutions not how world bank or IMF would define them. It's very subjective. But on average good governance, savings and investment, property rights, open economies are in principal the important ones.
Rodrik and Rodriguez in a paper mentioned that each country must identify their binding constraint by some economic methodoloy and try and improve on that. Apparently finally there is some consensus(a rare term put in practice in economics) on this theory.
What troubles me about development economics is there the lack of consensus. The cross country regressions are so filled with errors. Five papers will conclude 5 different things. Who do you believe. Is income inequality increasing - decreasing? what is the poverty line?
My prof told us that once phillippines found that it had much higher poverty than indonesia, they lowered the poverty line and reduced the gap. My friend( an analyst with Citibank) says she does believe in econometrics. But it's the best we can do. To err is human after all..
Music is back in my life. I now have a guitar and a mouth organ. And I have radio. Life is good.
India's inflation rate has shot up to 6.58% due to food prices. No wonder the Phillip's curve relationship does not hold.
I started my thesis work with great hope. I wanted to discover if there existed any relationship between inflation and output gap for India. I read a lot of papers. They were all very discouraging, but I nonetheless went ahead. The cul-de-sac quest..had to have an end. The results were inconclusive. A negative insignificant relatioship. Depressesed to not have got a basic result, I abandoned any hopes to going through with any general equilibrium model for India. smart decision wo3 says. If inflation is gonna bounce around every odd week, the days of inflation targetting are nowhere near.
we are apparently tampering around with our exchange rate too. So there. But then we are emerging and just because there is a model I should not be greedy to apply it.
You have to wait.
That's we are learning in the development economics course. A very chilled out course, but really hits you with reality checks. Why are the poor poor? We cannot rely on Solow's mechanical interpretation. Institutions, Intergration and Geography play a role. And each economist tries to push his own theory. I believe institutions are of foremost importance.
Again institutions not how world bank or IMF would define them. It's very subjective. But on average good governance, savings and investment, property rights, open economies are in principal the important ones.
Rodrik and Rodriguez in a paper mentioned that each country must identify their binding constraint by some economic methodoloy and try and improve on that. Apparently finally there is some consensus(a rare term put in practice in economics) on this theory.
What troubles me about development economics is there the lack of consensus. The cross country regressions are so filled with errors. Five papers will conclude 5 different things. Who do you believe. Is income inequality increasing - decreasing? what is the poverty line?
My prof told us that once phillippines found that it had much higher poverty than indonesia, they lowered the poverty line and reduced the gap. My friend( an analyst with Citibank) says she does believe in econometrics. But it's the best we can do. To err is human after all..
Labels: Economics
# posted by qq @ 11:07 PM 
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Ha aren't you a bob dylan for the 21st... even lamenting the state of the world already ... now all you need is to pull out an e on your harmonica, and then start singing in A flat or something...
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