Economists of the world, unite! Help the world understand the role of prices.I'm in.
Friday, October 28, 2005
Thursday, October 27, 2005
I think, instead, the president should buy ... a helicopter! I hate it when the government officials are transported. It always creates traffic jams. That costs me time.
Tuesday, October 25, 2005
Update: It's Ben.
Wednesday, October 19, 2005
Recently, I gather that critics of Keynes usually don’t understand Keynes very well. They believe, Keynes is all about Big Government, and that is bad; full stop. So, they find it strange that a person like me, who loves how the market works through price mechanism and hates big government still has belief in Keynes. Worse yet, when I argue for liberalizing the market, they think I am a convert. Strangely enough, they are the ones who come up with policy recommendation such as cash transfer as a compensation for oil subsidy removal, that economic downturn is caused by investment shortage, that herd instinct is more desirable than hoard instinct in stimulating growth, that monetary policy “might have its limits”, that deficit spending is sometimes -- many times -- needed. And they say Keynes should be despised? In fact, they even call for bastardized Keynesianism: that the government should create jobs; that the government should lead growth. These two, even me have reservation.
Tuesday, October 11, 2005
Both Aumann and Schelling are top notch game theorists. Aumann's papers are tough. By contrast, Schelling has written some non-technical books. Go find them, especially The Strategy of Conflict.
Somehow I know what to answer the next time my wife complains to me why I don't like too many open options offered to me. ("You're strange. I thought economics is an art of choice. Why do you complain when I tell you that to go to Building X you can choose either way 1 or way 2 or way 3 or... so forth. You always want less options"). Now I know the answer. Schelling has taught us! It's the focal point that interests me. Too many similar options can blur my focal point. Yes, it's the... Schelling's Point.
Tuesday, October 04, 2005
But, I applaud the decisiveness. After all, this was a brave, unpopular call. And it was inevitable. It was really a matter of time. Some people argue that the timing is bad. I think it's not. In fact, there should be a dampening effect with the seasonal Ramadhan shopping spree, as opposed to that if the price adjustment took place before or after the Ramadhan. In addition, experience has told us that such price hike will on average have only 3 months of effective impact. Therefore, while we should submit to a double digit inflation this year (probably 11-12%), next year should be better.
Having said that, I am not hesitant to give a credit to the government. I even raised a discourse among fellow critics that cabinet reshuffle might not be the most important issue anymore (I think the demand for reshuffle is a function of the success of dealing with the oil problem). The recently launched "October 1, 2005 Package" provides another justification for that position. The October Policy includes, among all:
- Reduction of sugar import tariff.
- Removal of industry raw material import tariff.
- Removal of converter kits import tariff.
- Reduction of container handling charge and installment of a 50% cap on surcharge.
- Closure of 73 truck inspection stations ("jembatan timbang").