tag:blogger.com,1999:blog-14892302969335992972024-03-20T06:52:48.776+08:00a.h.roslan harahapa.h.roslan harahaphttp://www.blogger.com/profile/17662362318448170096noreply@blogger.comBlogger390125tag:blogger.com,1999:blog-1489230296933599297.post-49627852852147029732015-11-02T00:18:00.001+08:002015-11-02T00:27:30.243+08:00Wawancara Malaysia1News dengan A.H.Roslan Harahap - "Rasionalisasi Bajet 2016"<p dir="ltr">Watch here: <a href="http://www.malaysia1news.my/portal/video/20428">http://www.malaysia1news.my/portal/video/20428</a></p>
<div class="separator" style="clear: both; text-align: center;"> <a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhvT7b5QkvClmWq7PP8vQ1d_yo56lvRfhhgV9bfvyXVHML3lEMPnbRSHMD_PS5kuzND_jzKWauqayxb2JCoRH6ocjdCd-JhcOMr17N43VkxVjzrHyUfL8sMryv1d0Z5eg5mq6qE9uPp_Ms/s1600/rasionalisasi-1-small.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"> <img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhvT7b5QkvClmWq7PP8vQ1d_yo56lvRfhhgV9bfvyXVHML3lEMPnbRSHMD_PS5kuzND_jzKWauqayxb2JCoRH6ocjdCd-JhcOMr17N43VkxVjzrHyUfL8sMryv1d0Z5eg5mq6qE9uPp_Ms/s640/rasionalisasi-1-small.jpg"> </a> </div>a.h.roslan harahaphttp://www.blogger.com/profile/17662362318448170096noreply@blogger.com0tag:blogger.com,1999:blog-1489230296933599297.post-74081790424536999522015-01-07T08:07:00.001+08:002015-01-07T08:13:34.770+08:00Inequality abd growth...<p dir="ltr"><a href="http://www.washingtonpost.com/blogs/worldviews/wp/2015/01/05/how-inequality-made-these-western-countries-poorer/">http://www.washingtonpost.com/blogs/worldviews/wp/2015/01/05/how-inequality-made-these-western-countries-poorer/</a></p>
a.h.roslan harahaphttp://www.blogger.com/profile/17662362318448170096noreply@blogger.com0tag:blogger.com,1999:blog-1489230296933599297.post-66763522313069507822014-12-29T20:28:00.001+08:002015-01-07T08:15:00.394+08:00Why Poor People Stay Poor<p dir="ltr"><a href="http://www.slate.com/articles/life/family/2014/12/linda_tirado_on_the_realities_of_living_in_bootstrap_america_daily_annoyances.html">http://www.slate.com/articles/life/family/2014/12/linda_tirado_on_the_realities_of_living_in_bootstrap_america_daily_annoyances.html</a></p>
a.h.roslan harahaphttp://www.blogger.com/profile/17662362318448170096noreply@blogger.com0tag:blogger.com,1999:blog-1489230296933599297.post-40937087657219331152014-12-29T20:27:00.001+08:002014-12-29T20:27:41.164+08:00http://www.slate.com/articles/life/family/2014/12/linda_tirado_on_the_realities_of_living_in_bootstrap_america_daily_annoyances.htmla.h.roslan harahaphttp://www.blogger.com/profile/17662362318448170096noreply@blogger.com0tag:blogger.com,1999:blog-1489230296933599297.post-24242206177517126942014-12-26T20:36:00.002+08:002014-12-26T20:36:17.553+08:00Poor Us: an animated history - Why Poverty?<iframe allowfullscreen="" frameborder="0" height="315" src="//www.youtube.com/embed/TxbmjDngois" width="560"></iframe>a.h.roslan harahaphttp://www.blogger.com/profile/17662362318448170096noreply@blogger.com0tag:blogger.com,1999:blog-1489230296933599297.post-42753287039848864842014-12-22T20:26:00.001+08:002014-12-22T21:30:26.825+08:00Good and Bad Inequality by Dani Rodrik<a href="http://www.project-syndicate.org/commentary/equality-economic-growth-tradeoff-by-dani-rodrik-2014-12">http://www.project-syndicate.org/commentary/equality-economic-growth-tradeoff-by-dani-rodrik-2014-12</a>a.h.roslan harahaphttp://www.blogger.com/profile/17662362318448170096noreply@blogger.com0tag:blogger.com,1999:blog-1489230296933599297.post-2047006932920696242014-12-16T16:03:00.002+08:002014-12-16T16:03:58.174+08:00Economics of Nationalism by S. P. Chakravarty<table border="0" cellpadding="9" cellspacing="3" style="background-color: white; width: 100%px;"><tbody>
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<span style="font-family: Times New Roman;">Source:</span>http://www.island.lk/2005/09/05/features1.html</div>
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<span style="font-family: Times New Roman;"><b><span style="font-size: medium;">Economics of Nationalism</span></b><i>by S. P. Chakravarty</i></span></div>
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One of the features of modern life is the hankering for communal (or group) identity, sometimes unfortunately manifest in violent conflicts, for example in the Balkan countries and also in Sri Lanka and now in Iraq. A gap has developed between the way we perceive our individual economic interest in articulating economic policy and the we way we articulate our communal interest in defining national priorities. We conjecture here that this fissure is due to a false belief amongst politicians that economic prosperity is enhanced by the possession of military power to gain control over resources.</div>
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The idea of globalization in economics is informed by the philosophy of market economics, which postulates that the rational individual is driven by self-interest. The ideas of blood and ethnicity, or any other idea of nationality, are so imprecise as to be meaningless in the calculus of a rational economic man. For example, prior claims over geographical borders on the basis of ethnic nationalism are based on a belief in a uniquely defined shared genetic descent going back to the origin of man of a population circumscribed by some arbitrary geographical borders. Archeological evidence points otherwise, to the hybrid nature of genetic descent. Yet the nationalist persists in her belief, even when the language in which the claim to geographical inheritance is made betrays recent arrival in the land.</div>
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In what has come be known as the ethnic bargain in the constitution bequeathed by the departing British rulers to what is now Malaysia, the Malay community was conferred a primary role as sons of the soil, the claim to belonging of the Chinese and Indian communities that took root during colonial rule to the new nation being thus weakened.</div>
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The implication of the language of the constitution in the eyes of the Malay nationalist was that the <i>bumiputeras</i>, the Malay word for sons of the soil, descended from those who lived in the peninsula from time immemorial but the others were newcomers. Yet the word<i>bumuputera</i> derives from the Sanskrit language (<i>bhumi</i> meaning soil and <i>putra</i> meaning son) laying bare the claim to linear descent from time immemorial.</div>
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It appears that we define our national (or group) identity by selective remembrance of a collective memory. The sociologist Stuart Hall puts the point more politely. He says that identities are defined by the different ways in which we can tell the narratives of the past. In his narrative of the past, the Malay nationalist had chosen to forget that the Malay peninsula stood at a thoroughfare of human movements in Asia over centuries. Waves of immigrants, including those from China, must have settled in the peninsula well before the British arrived as colonial rulers. In the nationalist rhetoric in the post-colonial era, descendants of those who arrived in the wake of British rule were termed Indians and Chinese, and the mixed genetic descendants of the waves of earlier arrivals were called <i>bumiputeras</i>, as if to underline their greater claim to belonging in the new post-colonial geographical entity. The <i>bumiputeras</i> were the imagined community, to use a term coined by Benedict Anderson, of the Malay nation.</div>
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Sociologists and psychologists have discussed reasons why group identity holds sway over the imagination of people, and here we suggest a conjecture about the political expression of that imagination. We conjecture that a fissure between politics and economics has developed due to the poverty of political discourse. Political leaders articulate a view of national (or group) economic interest based on the power to control geography and resources. Thus the Malay nationalist at the time of independence from British rule perceived the economic benefits in terms of the power of control over resources of the peninsula. If the outcome of economic policy based on such views enhance economic growth, that would only be a temporary phenomenon. Most of those who were described as <i>bumiputeras</i> in newly-independent Malaysia lived in the countryside, and they were mostly poor. But the descendants of those from western China who came in the wake of British rule were engaged in modern commerce in the coastal areas. Their ancestors came to take these opportunities as they emerged with the arrival of the British, and many but by no means all of them became rich. The nationalist political discourse was about the transfer of wealth along enthnic lines, from the Chinese to the<i>bumiputeras</i>. To the extent that the policy reduced poverty and widened participation in modern commerce, economic growth was enhanced. The problem is that a good outcome of policy based on faulty reasoning cannot be sustained. Policy became prisoner of the rhetoric of redistribution between ethnic lines and could not respond by developing a secular income distribution policy to respond to the emerging inequalities within the <i>bumiputera</i> community, leading to political paralysis in the 1990s and a financial crisis later in that decade.</div>
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An even clearer example of the fissure between the economics of nationalism and the reality of economics is seen in the discourse over the Iraq war. The first step in the first Iraq war was taken by Saddam Hussein when he seized oilfields in Kuwait in 1990 in the name of greater prosperity for the people of Iraq. Even if his greater hold on world oil supply allowed additional revenues to be generated through the exercise of market power, there is no reason to suppose that anyone other than those engaged in securing the oil fields, the military, would benefit. If there was any expectation of greater prosperity amongst the people in Iraq, it was based on a false premise.</div>
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What is even more remarkable is that this false premise was sold to the American electorate, at least for a time, by then president George Bush, Sr. He argued, amongst other things, that western economies would suffer if greater control of oil was ceded to Iraq, notwithstanding the evidence that suggested otherwise. Following the four-fold rise in oil prices in 1973, many of the countries which prospered were countries that had no oil and had precious little other mineral resources. Many of the countries that did poorly were endowed with oil and natural gas. Per capita income rose in Japan, Germany and Korea, but problems developed in Holland where the economy faltered although new sources of oil and gas became available. Economists called this phenomenon Dutch Desease, economic decline due to sudden availability of natural resources.</div>
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His advisors also failed to explain to Mr Bush that even if the seizure of the oil fields went militarily unchallenged, Iraq would control only around 12 per cent of the world oil supply at the time, hardly a monopoly control over oil. Again the evidence from the 1970s, when the use of oil per unit of industrial production declined dramatically following the rise in oil prices, only to become profligate when the prices fell, was ignored. Any temporary increase in the price of oil was likely to have been less than increases caused by the disruption to supply caused by the war. In the event, there was a recession in the industrialized nations following the war.</div>
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The problem with nationalist political rhetoric is that politicians cannot publicly admit that the groups in whose name they act seldom have a coherent economic interest by the simple virtue of being a group. Consider the difficulties he faced when the junior President Bush attempted some years ago to impose control on steel imports in the "American" interest, grouping all Americans together in this rhetoric, and also implicitly asserting that the control of steel production by US companies was desirable in the interest of the US economy. It may have been in the interest of the steel workers in Ohio for the United States to impose restrictions on steel imports but it was not in the interest of automobile workers in Michigan for steel prices to rise in consequence, rendering their cars more expensive and difficult to sell and thus putting their jobs in jeopardy. This protectionist gesture had eventually to be discarded.</div>
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Having argued that the political rhetoric about the national economic interest is often based on faulty economics, we are left with a question. What drives the faulty rhetoric? That is a question to which I have no convincing answer, but I notice that failing industries in capitalist societies often appeal to the national interest to garner subsidies. Following the second Iraq was, British and American firms that did not have the confidence that they were efficient enough to win competitive tenders began lobbying national governments for special favours, invoking the mantra of national interest. In an interview reported by F. Brinley Burton of the Reuters news agency, the Chief Executive of one of the largest construction firms based in the UK argued to be made exempt from international competition in securing contracts for the reconstruction of Iraq. The argument begins with the classic fallacy that the interest of a company is the same as the interest of the country in which the company is registered: "Let's ensure that those who have been violently against the conflict don't share in the reconstruction," he said in the interview reported on 28 March 2003, presumably referring to firms located in Germany and France. He betrays in subsequent remarks that his company might be too inefficient to succeed under competitive tendering: "The problem... is if you go down the U.N. route, that means you go to the world to get the best price. They have to go anywhere to get the best price (which is not only) political dynamite, but morally awful.."<i>(http://www.reuters.com/newsArticle.jhtml?type=topNews&storyID=2468110).</i></div>
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In this view, it is the moral responsibility of the British taxpayer in the national interest to prop up inefficient construction companies registered in the UK. Dumb economics.</div>
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<span style="font-family: Times New Roman;"><b><i>The writer is Professor School of Business and Regional Development, University of Wales.</i></b></span></div>
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a.h.roslan harahaphttp://www.blogger.com/profile/17662362318448170096noreply@blogger.com0tag:blogger.com,1999:blog-1489230296933599297.post-15159081212998956962014-08-28T02:29:00.001+08:002014-12-22T21:31:16.737+08:00Daim: Previous Models to build BBC failed<a href="http://dinmerican.wordpress.com/2011/03/31/daim-previous-models-to-build-bbc-failed/">http://dinmerican.wordpress.com/2011/03/31/daim-previous-models-to-build-bbc-failed/</a>a.h.roslan harahaphttp://www.blogger.com/profile/17662362318448170096noreply@blogger.com0tag:blogger.com,1999:blog-1489230296933599297.post-9825350862609648882014-08-28T02:26:00.001+08:002014-12-22T21:31:33.114+08:00Malaysia’s Rapid Growth under Mahathirism due to External Factors, not NEP<a href="http://dinmerican.wordpress.com/2010/07/11/malaysias-rapid-growth-under-mahathirism-due-to-external-factors-not-nep/">http://dinmerican.wordpress.com/2010/07/11/malaysias-rapid-growth-under-mahathirism-due-to-external-factors-not-nep/</a>a.h.roslan harahaphttp://www.blogger.com/profile/17662362318448170096noreply@blogger.com0tag:blogger.com,1999:blog-1489230296933599297.post-27280926300704945052014-08-28T02:24:00.001+08:002014-12-22T21:31:50.013+08:00NEM: Focus on National Unity<a href="http://dinmerican.wordpress.com/2010/03/26/nem-focus-on-national-unity/">http://dinmerican.wordpress.com/2010/03/26/nem-focus-on-national-unity/</a>a.h.roslan harahaphttp://www.blogger.com/profile/17662362318448170096noreply@blogger.com0tag:blogger.com,1999:blog-1489230296933599297.post-40809694474578898712014-08-28T02:23:00.001+08:002014-12-22T21:32:02.915+08:00Affirmative Action in Malaysia<a href="http://dinmerican.wordpress.com/2009/07/24/affirmative-action-in-malaysia/">http://dinmerican.wordpress.com/2009/07/24/affirmative-action-in-malaysia/</a>a.h.roslan harahaphttp://www.blogger.com/profile/17662362318448170096noreply@blogger.com0tag:blogger.com,1999:blog-1489230296933599297.post-32807612159068908942014-08-28T02:22:00.001+08:002014-12-22T21:32:24.469+08:00Ethnic Inequalities in Malaysia remain after 57 Years of Independence<a href="http://dinmerican.wordpress.com/2014/08/27/ethnic-inequalities-in-malaysia-remain-after-57-years-of-independencen/">http://dinmerican.wordpress.com/2014/08/27/ethnic-inequalities-in-malaysia-remain-after-57-years-of-independencen/</a>a.h.roslan harahaphttp://www.blogger.com/profile/17662362318448170096noreply@blogger.com0tag:blogger.com,1999:blog-1489230296933599297.post-90637019441877943122014-08-28T02:21:00.001+08:002014-12-22T21:32:40.185+08:00A New Model of Malay Entrepreneurship needed, says Daim<a href="http://dinmerican.wordpress.com/2011/05/19/a-new-model-of-malay-entrepreneurship-needed-says-daim/">http://dinmerican.wordpress.com/2011/05/19/a-new-model-of-malay-entrepreneurship-needed-says-daim/</a>a.h.roslan harahaphttp://www.blogger.com/profile/17662362318448170096noreply@blogger.com0tag:blogger.com,1999:blog-1489230296933599297.post-74257098120586086012014-04-16T20:51:00.001+08:002014-12-22T21:32:57.352+08:00Kemal Dervi - The future of economic progress<a href="http://www.project-syndicate.org/commentary/kemal-dervi--homes-in-on-the-key-questions-surrounding-the-nature-and-measurement-of-contemporary-growth">http://www.project-syndicate.org/commentary/kemal-dervi--homes-in-on-the-key-questions-surrounding-the-nature-and-measurement-of-contemporary-growth</a>a.h.roslan harahaphttp://www.blogger.com/profile/17662362318448170096noreply@blogger.com0tag:blogger.com,1999:blog-1489230296933599297.post-84468395814432169192014-04-16T20:44:00.001+08:002014-12-22T21:33:14.323+08:00Gary M. 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Source: <a href="http://www.theedgemalaysia.com/business-news/253658-highlight-middle-class-pain.html">http://www.theedgemalaysia.com/business-news/253658-highlight-middle-class-pain.html</a><br />
<br />a.h.roslan harahaphttp://www.blogger.com/profile/17662362318448170096noreply@blogger.com0tag:blogger.com,1999:blog-1489230296933599297.post-82467960401098998762013-07-16T02:51:00.001+08:002014-12-22T21:34:45.551+08:00Remembering Albert O. Hirschman<pre style="background-color: whitesmoke; border-bottom-left-radius: 4px; border-bottom-right-radius: 4px; border-top-left-radius: 4px; border-top-right-radius: 4px; border: 1px solid rgba(0, 0, 0, 0.14902); color: #333333; font-family: Monaco, Menlo, Consolas, 'Courier New', monospace; font-size: 13px; line-height: 20px; margin-bottom: 10px; padding: 9.5px; white-space: pre-wrap; word-break: break-all; word-wrap: break-word;"><pre style="background-color: whitesmoke; border-bottom-left-radius: 4px; border-bottom-right-radius: 4px; border-top-left-radius: 4px; border-top-right-radius: 4px; border: 1px solid rgba(0, 0, 0, 0.14902); color: #333333; font-family: Monaco, Menlo, Consolas, 'Courier New', monospace; font-size: 13px; line-height: 20px; margin-bottom: 10px; padding: 9.5px; white-space: pre-wrap; word-break: break-all; word-wrap: break-word;"><code style="background-color: transparent; border-bottom-left-radius: 3px; border-bottom-right-radius: 3px; border-top-left-radius: 3px; border-top-right-radius: 3px; border: 0px; color: inherit; font-family: Monaco, Menlo, Consolas, 'Courier New', monospace; font-size: 12px; padding: 0px;"><iframe frameborder="0" height="480" scrolling="no" src="http://video.ias.edu/embed/7665/640/480" width="640"></iframe></code></pre>
<pre style="background-color: whitesmoke; border-bottom-left-radius: 4px; border-bottom-right-radius: 4px; border-top-left-radius: 4px; border-top-right-radius: 4px; border: 1px solid rgba(0, 0, 0, 0.14902); color: #333333; font-family: Monaco, Menlo, Consolas, 'Courier New', monospace; font-size: 13px; line-height: 20px; margin-bottom: 10px; padding: 9.5px; white-space: pre-wrap; word-break: break-all; word-wrap: break-word;"><code style="background-color: transparent; border-bottom-left-radius: 3px; border-bottom-right-radius: 3px; border-top-left-radius: 3px; border-top-right-radius: 3px; border: 0px; color: inherit; font-family: Monaco, Menlo, Consolas, 'Courier New', monospace; font-size: 12px; padding: 0px;">Source: </code><a href="http://video.ias.edu/remembering-albert-o-hirschman-3-13" style="background-color: transparent;">http://video.ias.edu/remembering-albert-o-hirschman-3-13</a></pre>
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a.h.roslan harahaphttp://www.blogger.com/profile/17662362318448170096noreply@blogger.com0tag:blogger.com,1999:blog-1489230296933599297.post-70650146907884805312013-06-22T23:32:00.003+08:002014-12-22T21:35:20.743+08:00Al-Fatihah...Malaysia lost another great economist..Source: <a href="http://thestar.com.my/news/story.asp?file=/2013/6/22/nation/20130622204407&sec=nation">http://thestar.com.my/news/story.asp?file=/2013/6/22/nation/20130622204407&sec=nation</a><br />
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Economist Dr Mahani Zainal Abidin succumbs to cancer</h1>
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KUALA LUMPUR: Economist <span about="http://archives.thestar.com.my/search/?q=Datuk Dr Mahani Zainal Abidin" class="knx-annotation" content="Datuk Dr Mahani Zainal Abidin" property="foaf:name" typeof="foaf:Person" xmlns:foaf="http://xmlns.com/foaf/0.1/"><a href="http://archives.thestar.com.my/search/?q=Datuk%20Dr%20Mahani%20Zainal%20Abidin" rel="foaf:homepage" style="color: #003399; text-decoration: none;" target="_blank">Datuk Dr Mahani Zainal Abidin</a></span>, who was involved in the formulation of policies during the 1998 economic crisis, died Saturday at the Universiti Kebangsaan Malaysia Hospital (HUKM).</div>
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<img alt="The late Datuk Dr Mahani Zainal Abidin." src="http://starstorage.blob.core.windows.net/archives/2013/6/22/nation/017557265.jpg" height="281" style="border: none; margin: 0px 0px 5px; padding: 0px;" width="250" /><span class="caption" style="clear: both; color: #333333; display: block; font-family: Arial; font-size: 10px; font-weight: bold;">The late Datuk Dr Mahani Zainal Abidin.</span></div>
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The chief executive officer of the Institute of Strategic and International Studies (ISIS), died about 2pm of cancer.</div>
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Her brother, Adnan, said Mahani's body would be brought home to her residence at No.1, Jalan Puncak Kiara 1, Kiara View, Desa Sri Hartamas and then to the Saidina Umar Al-Khattab Mosque in Bukit Damansara.</div>
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She will be buried at the Bukit Kiara Muslim cemetery after the Maghrib prayer, he added.</div>
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Mahani is survived by husband, Hamidon Howell Miller and son, James Imran Miller.</div>
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Mahani, who obtained her doctorate in development economics from the University of London in 1992, was a professor at the department of applied economics at Universiti Malaya.</div>
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In 2001, she was appointed the head of the Special Consultancy team on Globalisation of the National Economic Action Council, and from 2005 to 2007 was Higher Education Ministry deputy director-general (Private Institution of Higher Learning).</div>
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She was a member of the Board of Trustees of the 1Malaysia Foundation, a commissioner of the Public Land Transport Commission, the deputy president of the Malaysian Economic Association and a member of the International Steering Committee for the Pacific Trade and Development. - Bernama</div>
a.h.roslan harahaphttp://www.blogger.com/profile/17662362318448170096noreply@blogger.com0tag:blogger.com,1999:blog-1489230296933599297.post-26766480764900407002012-12-21T23:49:00.003+08:002012-12-21T23:49:44.986+08:00Today's Graduates Lacking in SkillsRead <a href="http://www.bernama.com/bernama/v6/newsgeneral.php?id=916503">HERE</a>a.h.roslan harahaphttp://www.blogger.com/profile/17662362318448170096noreply@blogger.com0tag:blogger.com,1999:blog-1489230296933599297.post-34646768698116054662012-07-31T01:03:00.000+08:002014-12-22T21:35:32.651+08:00Empirics and Psychology: Eight of the World’s Top Young Economists Discuss Where Their Field Is GoingSource: <a href="http://bigthink.com/power-games/empirics-and-psychology-eight-of-the-worlds-top-young-economists-discuss-where-their-field-is-going?page=all">http://bigthink.com/power-games/empirics-and-psychology-eight-of-the-worlds-top-young-economists-discuss-where-their-field-is-going?page=all</a><br />
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<span style="font-size: large;">Empirics and Psychology: Eight of the World’s Top Young Economists Discuss Where Their Field Is Going</span><br />
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<a href="http://bigthink.com/users/ali-wyne" style="-webkit-tap-highlight-color: rgb(255, 94, 153); color: #e34900; cursor: pointer; text-decoration: none;">Ali Wyne</a> on July 25, 2012, 5:47 PM</div>
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<a href="http://bigthink.com/concentrations/2" style="-webkit-tap-highlight-color: rgb(255, 94, 153); color: #e34900; cursor: pointer; text-decoration: none;">New World Order</a></div>
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The past few years have been tough on economics and economists. In a searing indictment written one year after the collapse of Lehman Brothers, Paul Krugman<a href="http://www.nytimes.com/2009/09/06/magazine/06Economic-t.html" style="-webkit-tap-highlight-color: rgb(255, 94, 153); color: #e34900; cursor: pointer; text-decoration: none;"><span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">concluded</span></a><span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> that</span></div>
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<span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">the central cause of the profession’s failure was the desire for an all-encompassing, intellectually elegant approach that also gave economists a chance to show off their mathematical prowess. Unfortunately, this romanticized and sanitized vision of the economy led most economists to ignore all the things that can go wrong. They turned a blind eye to the limitations of human rationality…to the problems of institutions that run amok; to the imperfections of markets…and to the dangers created when regulators don’t believe in regulation.</span></div>
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<span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">Last August, Graeme Maxton published a book </span><a href="http://www.amazon.com/The-End-Progress-Modern-Economics/dp/0470829982/" style="-webkit-tap-highlight-color: rgb(255, 94, 153); color: #e34900; cursor: pointer; text-decoration: none;"><span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">arguing</span></a><span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> that “modern economics has failed us,” and this April, the<em style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> </em></span><em style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">New York Times</em><span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> </span><a href="http://www.nytimes.com/roomfordebate/2012/04/01/how-to-teach-economics-after-the-financial-crisis" style="-webkit-tap-highlight-color: rgb(255, 94, 153); color: #e34900; cursor: pointer; text-decoration: none;"><span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">hosted</span></a><span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> a roundtable “about how the teaching of economics should change in light of the financial crisis.” </span></div>
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<span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">This soul-searching has led to the establishment of organizations such as the</span><a href="http://ineteconomics.org/" style="-webkit-tap-highlight-color: rgb(255, 94, 153); color: #e34900; cursor: pointer; text-decoration: none;"><span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">Institute for New Economic Thinking</span></a><span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> and invigorated discussions about alternative metrics for gauging countries’ welfare (last July, in fact, the UN General Assembly adopted a resolution </span><a href="http://daccess-dds-ny.un.org/doc/UNDOC/GEN/N11/420/70/PDF/N1142070.pdf?OpenElement" style="-webkit-tap-highlight-color: rgb(255, 94, 153); color: #e34900; cursor: pointer; text-decoration: none;"><span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">asserting</span></a><span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> that “the gross domestic product indicator by nature was not designed to and does not adequately reflect the happiness and well-being of people in a country”).</span></div>
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<span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">To get the pulse of a field in flux, I asked eight of the world’s top young economists to identify the biggest unanswered questions in economics and predict what breakthroughs will define it a decade or two hence. </span></div>
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<strong style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><a href="http://www.stanford.edu/~nbloom/" style="-webkit-tap-highlight-color: rgb(255, 94, 153); color: #e34900; cursor: pointer; text-decoration: none;">NICHOLAS BLOOM</a></strong><em style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"></em></div>
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<em style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">Stanford University; 39</em></div>
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<span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">Why are developing countries poor? In terms of impact on mankind globally, this strikes me as probably the biggest and most important current economic question. I think the answer is complex and linked to a combination of factors around history, geography, luck, etc. I am personally working on management practices: people in developing countries are poor because wages are low, and wages are low because firms are very unproductive, and firms seem to be unproductive in large part because of bad management. An Indian worker makes in one week what an average U.S. worker makes in a half a day. One big factor seems to be that factories in India are frankly very badly managed: equipment is not looked after, materials are wasted, theft is common because inventory is not monitored, defects keep occurring, etc. In a recent project with the World Bank, we found in randomized experiments that giving simple management advice to Indian factories increased productivity by 20%, and I suspect that a number like 200% would be possible in the longer run. </span></div>
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<span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">Developed countries’ biggest question now is probably: how do we restart growth? There are a lot of issues here around innovation, curbing entitlement spending, etc. The area I know best is the short-run side of this, controlling policy uncertainty. A big factor that politicians and the media are pushing heavily right now is that growth is getting crushed by how policy has induced uncertainty. Basically, firms and consumers in the U.S. and Europe are holding back from spending until they know what is going to happen with taxes, spending, and (to a lesser extent) regulations over the next year or so. In the U.S., we have the November 2012 election generating a massive cloud of policy uncertainty, and in Europe, a rolling wave of elections and collapsing governments. </span></div>
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<span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">I do not think that any one single breakthrough will happen. The progress is likely to be heavily empirical—simply because more and more data is becoming available, and it is easy to analyze with fast computers (so empirics is now advancing faster than theory)—and spread across many hundreds of topics. So economics has gone from Victorian science, where one genius in his shed could invent the steam engine over the weekend, to industrial science, where innovation comes in thousands of tiny steps made by dozens of research teams.</span><strong style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><a href="http://www.economics.harvard.edu/faculty/chetty" style="-webkit-tap-highlight-color: rgb(255, 94, 153); color: #e34900; cursor: pointer; text-decoration: none;"></a></strong></div>
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<strong style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><a href="http://www.economics.harvard.edu/faculty/chetty" style="-webkit-tap-highlight-color: rgb(255, 94, 153); color: #e34900; cursor: pointer; text-decoration: none;">RAJ CHETTY</a></strong><em style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"></em></div>
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<em style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">Harvard University; 32</em></div>
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<span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">Many economists are concerned with two broad questions: how can we increase the rate of economic growth and overall well-being, and how can we reduce the rate of poverty? Countless policies—taxation, education, healthcare, etc.—have been implemented in an effort to achieve those objectives. One of our biggest challenges is to distill each policy’s unique impact so that we can understand which ones actually work and which ones do not.</span></div>
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<span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">The traditional state of economics is captured by the joke about ten economists, each of whom has a different theory of how the world works, none of which is directly tested or verified. Looking ahead, I am most excited about the prospect of having clear, evidence-based answers on which policies have the most beneficial economic impacts. I am especially optimistic that the expansion of access to large administrative datasets, such as earnings data from social-security records or student-achievement data from school districts, will yield sharp, quasi-experimental evidence that allows us to test theories and estimate key parameters of economic models. While theory will play an important role in guiding this research, its assumptions and conclusions will increasingly be empirically founded.</span></div>
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<span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">Within this broad area, I plan to pursue research on two sets of projects over the next few years. The first will try to identify the determinants of intergenerational mobility, with an eye towards finding policies that increase equality of opportunity. Should we be focusing on increasing access to higher education? Changing the structure of elementary schooling? Revamping the tax code? A second set of projects will explore the implications of behavioral economics for policymaking. Although we have accumulated considerable evidence showing that people do not always behave rationally, we do not have as good a sense of how they actually </span><em style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">do</em><span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"> behave and what this means for policy. I hope to make progress on this front, focusing on how we can design cost-effective policies that encourage people to save adequately for their retirement—to give just one example.</span><a href="http://www.newyorkfed.org/research/economists/eggertsson/index.html" style="-webkit-tap-highlight-color: rgb(255, 94, 153); color: #e34900; cursor: pointer; text-decoration: none;"></a></div>
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<strong style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><a href="http://www.newyorkfed.org/research/economists/eggertsson/index.html" style="-webkit-tap-highlight-color: rgb(255, 94, 153); color: #e34900; cursor: pointer; text-decoration: none;">GAUTI EGGERTSSON</a></strong><em style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"></em></div>
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<em style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">Federal Reserve Bank of New York; 37</em></div>
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<span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">I think the recent world economic crisis has firmly put back on the map basic macroeconomics: that is, the study of traditional questions, such as how to use monetary and fiscal policy to eliminate unemployment and control inflation. It was actually becoming quite unfashionable within economics to study these types of questions, even though they remain unanswered to a large extent. People even graduated with PhDs in economics with little idea about what role, if any, the government plays in stabilizing business cycles, the role of regulations, and so on. Instead, it was becoming increasingly fashionable to tackle smaller but more manageable questions for which data is rich and answers clear. </span></div>
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<span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">My guess, therefore, is that if one looks back 20 years from now, one will notice that a shift occurred towards studying the basic, big-picture, policy-relevant questions of macroeconomics—e.g., optimal currency areas, bank runs, fads and herding in financial markets, and automatic stabilizers—that have the power to change the course of history. I think there have been two comparable events that shaped the field in this way. As a discipline, macroeconomics was born in response to the Great Depression, giving rise to Keynesianism; the rational-expectations revolution in macroeconomics was born in response to the great inflation on the 1970s.</span></div>
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<span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">Perhaps somewhat under the radar, the past two decades have witnessed the integration of the macroeconomics that came out of the 1970s and 1980s with basic Keynesian models developed in the wake of the Great Depression. I suspect that the current crisis will accelerate that development, with models integrating financial frictions that were clearly central to its emergence. </span><a href="http://pages.stern.nyu.edu/~xgabaix/" style="-webkit-tap-highlight-color: rgb(255, 94, 153); color: #e34900; cursor: pointer; text-decoration: none;"></a></div>
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<strong style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><a href="http://pages.stern.nyu.edu/~xgabaix/" style="-webkit-tap-highlight-color: rgb(255, 94, 153); color: #e34900; cursor: pointer; text-decoration: none;">XAVIER GABAIX</a></strong><em style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"></em></div>
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<em style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">New York University; 40</em></div>
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<span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">The most central open question in economic theory, as I see it, is how to model realistic economic agents. Traditionally, economists have relied on the rational-actor model, but it is clear that it is just a rough caricature. It has been greatly enriched by behavioral economics in the past 30 years. Still, we are far from a unified, versatile, believable alternative to the rational-actor model. I am hopeful, though, that this might be overcome—in part because of progress in the sister disciplines (psychology and neuroscience) and basic modeling, and also because empirical anomalies are forcing the economic profession to be more open-minded. Contributions by computer scientists and physicists will help inject new perspectives into economics.</span></div>
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<span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">The largest concrete questions in economics are, arguably, how to increase growth—particularly in developing countries—and how to avoid economic disasters and financial crises.</span></div>
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<span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">Progress in understanding limited rationality will lead to progress on answering the concrete questions. Low levels of growth are in part due to misapplied cognitive heuristics that lead people to be timid, inert, and gullible. Regarding disasters, during the unfolding of the crisis, traditional macro-financial factors (bank runs, deleveraging, etc.) have arguably been more important than behavioral factors. However, behavioral elements seem to have been paramount in the buildup of the current crisis (in particular, the neglect of tail events by financial actors and by the architects of the euro), as perhaps they are in most crises. The modeling of agents with bounded rationality will help us build economic models (in particular, macroeconomic and financial models) and institutions that better take into account the limitations of human reason.</span><strong style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><a href="http://www.economics.harvard.edu/faculty/gopinath/" style="-webkit-tap-highlight-color: rgb(255, 94, 153); color: #e34900; cursor: pointer; text-decoration: none;"></a></strong></div>
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<strong style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><a href="http://www.economics.harvard.edu/faculty/gopinath/" style="-webkit-tap-highlight-color: rgb(255, 94, 153); color: #e34900; cursor: pointer; text-decoration: none;">GITA GOPINATH</a></strong><em style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"></em></div>
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<em style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">Harvard University; 40</em></div>
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<span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">All countries wish to pursue sustainable growth without large boom-bust episodes. How exactly one accomplishes this remains a challenge that has been made starker by the current crisis. In an increasingly globalized world, the search for answers will necessarily require a much deeper understanding of three areas that interest me. One, we need a better understanding of the interlinkages across countries in trade, finance, and macroeconomic policy. The crisis in the Euro area brings this to the forefront. The complex ties across the member countries via trade, via banks, and through a shared monetary policy are central factors behind the ongoing sovereign debt, banking, and growth crises in the region. While trade interactions are better understood, financial flows remain a challenge.</span></div>
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<span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">Two, understanding the global economy requires a greater appreciation of the differences across economies. In the past, research mainly focused on analyzing interactions across economies that were similar in terms of their stages of development and their economic institutions. The most interesting questions today, however, concern interactions between developed economies and fast-growing developing economies, and between countries with diverse economic institutions. Questions on so-called global imbalances, currency wars, and capital controls have to do with interactions across diverse countries.</span></div>
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<span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">Three, understanding asymmetries in the international monetary system—with the prominence of the dollar in trade and financial transactions—will be crucial to understanding the propagation of shocks across economies. In my research, I find that international prices, regardless of what currency they are set in, respond very little to exchange rates. Since the dollar is the predominant trade currency, this implies that exchange-rate movements have a much smaller impact on U.S. import price inflation than they do on inflation in other countries.</span></div>
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<span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">Addressing these areas will require breakthroughs in theory and empirical work, with more micro-level datasets on prices, trade, and capital flows being brought to bear.</span></div>
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<strong style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><a href="http://www.peterleeson.com/" style="-webkit-tap-highlight-color: rgb(255, 94, 153); color: #e34900; cursor: pointer; text-decoration: none;">PETER LEESON</a></strong><em style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"></em></div>
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<em style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">George Mason University; 32</em></div>
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<span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">My candidate for the biggest unanswered question in economics is the status of the rationality postulate: the decision to analyze actors as utility maximizers with consistent preferences. If we view economics as an “engine” for understanding the world, the rationality postulate was that engine in nearly all of economics until quite recently. The rise of behavioral economics has challenged the usefulness and, in a more subtle but radical way, the legitimacy of the rationality engine. While only a minority of economists would describe themselves as “behavioralists,” behavioralism has affected many more by influencing the kinds of questions economists consider important to ask and influencing the kinds of answers to those questions they consider illuminating. These influences have the potential to profoundly affect the way economics is done, and thus what economics is able offer our understanding of the world.</span></div>
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<span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">At the moment, most behavioralism avers merely to “fine tune” the rationality engine rather than replace it. But even such tuning can have and, as I intimated a moment ago, I think has already had, a noticeable impact on how a growing number of economists and those following them interpret society. To the extent that economists’ view of, say, markets as reflecting rational vs. irrational systems—or, more specifically, their interpretation of economic crises as the product of markets responding rationally to poor policy vs. the product of endemic irrational decision-making—either directly or indirectly influences public policy, the way in which the status of the rationality postulate is resolved will not merely shape what economists are doing. It will shape the kind of society we inhabit.</span><strong style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><a href="http://www.glenweyl.com/" style="-webkit-tap-highlight-color: rgb(255, 94, 153); color: #e34900; cursor: pointer; text-decoration: none;"></a></strong></div>
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<strong style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><a href="http://www.glenweyl.com/" style="-webkit-tap-highlight-color: rgb(255, 94, 153); color: #e34900; cursor: pointer; text-decoration: none;">GLEN WEYL</a></strong><em style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"></em></div>
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<em style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">University of Chicago; 27</em></div>
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<span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">In his famous 1945 article, “The Use of Knowledge in Society,” F. A. Hayek argued that despite their inequity and inefficiency, free markets were necessary in order to allow the incorporation of information held by dispersed individuals into social decisions. No central planner could hope to collect and process all the information necessary for social decisions; only markets allowed and provided the incentives for disaggregated information processing. Yet, increasingly, information technology is leading individuals to delegate their most “private” decisions to automated processing systems. Choices of movies, one of the last realms of taste one would have guessed could be delegated to centralized expertise, are increasingly shaped by services like Netflix’s recommender system. While these information systems are mostly nongovernmental, they are sufficiently centralized that it is increasingly hard to see how dispersed information poses the challenge it once did to centralized planning. </span></div>
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<span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">Information technology thus fundamentally challenges the standard foundations of the market economy. For many years to come, economists will increasingly have to struggle with this challenge. Some will harness the power of the data and computational power provided by information technology to provide increasingly precise and accurate prescriptions for economic planning. Others, who value the libertarian tradition that has often been associated with economics, will be forced to articulate other arguments, perhaps based on privacy, that are not susceptible to erosion by the increasing power of centralized computation.</span><a href="http://bpp.wharton.upenn.edu/jwolfers/index.shtml" style="-webkit-tap-highlight-color: rgb(255, 94, 153); color: #e34900; cursor: pointer; text-decoration: none;"></a></div>
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<strong style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"><a href="http://bpp.wharton.upenn.edu/jwolfers/index.shtml" style="-webkit-tap-highlight-color: rgb(255, 94, 153); color: #e34900; cursor: pointer; text-decoration: none;">JUSTIN WOLFERS</a></strong><em style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;"></em></div>
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<em style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">University of Pennsylvania; 39</em></div>
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<span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">Economics is in the midst of a massive and radical change. It used to be that we had little data, and no computing power, so the role of economic theory was to “fill in” for where facts were missing. Today, every interaction we have in our lives leaves behind a trail of data. Whatever question you are interested in answering, the data to analyze it exists on someone’s hard drive, somewhere. This background informs how I think about the future of economics.</span></div>
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<span style="border: 0px; font: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">Specifically, the tools of economics will continue to evolve and become more empirical. Economic theory will become a tool we use to structure our investigation of the data. Equally, economics is not the only social science engaged in this race: our friends in political science and sociology use similar tools; computer scientists are grappling with “big data” and machine learning; and statisticians are developing new tools. Whichever field adapts best will win. I think it will be economics. And so economists will continue to broaden the substantive areas we study. Since Gary Becker, we have been comfortable looking beyond the purely pecuniary domain, and I expect this trend towards cross-disciplinary work to continue.</span></div>
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a.h.roslan harahaphttp://www.blogger.com/profile/17662362318448170096noreply@blogger.com0tag:blogger.com,1999:blog-1489230296933599297.post-55681631002228548582012-07-16T21:04:00.001+08:002012-07-16T21:04:36.782+08:00Inequality inhibiting growth? - By Raghuram Rajan<br />
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Source: <a href="http://www.nst.com.my/opinion/columnist/inequality-inhibiting-growth-1.107991" style="background-color: white; font-family: Helvetica, Arial, sans-serif; line-height: 18px;">http://www.nst.com.my/opinion/columnist/inequality-inhibiting-growth-1.107991</a></h2>
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START WITH THE EVIDENCE: Addressing weaker demand and the wage gap is key to recovery</h2>
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A worker protesting against unemployment benefit cuts in California. In countries like the US, routine jobs done by the unskilled or the moderately educated have been automated or outsourced. AFP pic</div>
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TO understand how to achieve a sustained recovery from the Great Recession, we need to understand its causes.</div>
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First, overall demand for goods and services is much weaker, both in Europe and the United States, than it was in the go-go years before the recession.</div>
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Second, most of the economic gains in the US in recent years have gone to the rich, while the middle class has fallen behind in relative terms. In Europe, concerns about domestic income inequality are compounded by angst about inequality between countries, as Germany roars ahead while the southern periphery stalls.</div>
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Progressive economists argue that the weakening of unions in the US, together with tax policies favouring the rich, slowed middle-class income growth, while traditional transfer programmes were cut back. With incomes stagnant, households were encouraged to borrow, especially against home equity, to maintain consumption.</div>
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Rising house prices gave people the illusion that increasing wealth backed their borrowing. But, now that house prices have collapsed and credit is unavailable to underwater households, demand has plummeted.</div>
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The key to recovery is to tax the rich, increase transfers and restore worker incomes by enhancing union bargaining power and raising minimum wages.</div>
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But countries like Germany that reformed labour laws to create more flexibility for employers, and did not raise wages rapidly, seem to be in better economic shape than countries like France and Spain, where labour was better protected.</div>
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So consider an alternative explanation: starting in the early 1970s, advanced economies found it increasingly difficult to grow. Countries like the US and the United Kingdom eventually responded by deregulating their economies.</div>
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Greater competition and the adoption of new technologies increased the demand for, and incomes of, highly skilled, talented, and educated workers doing non-routine jobs like consulting. More routine, once well-paying, jobs done by the unskilled or the moderately educated were automated or outsourced.</div>
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The short-sighted political response to the anxieties of those falling behind was to ease their access to credit. Faced with little regulatory restraint, banks overdosed on risky loans.</div>
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While differing on the root causes of inequality (at least in the US), the progressive and alternative narratives agree about its consequences.</div>
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The alternative narrative has more to say. Continental Europe did not deregulate as much, and preferred to seek growth in greater economic integration. But the price for protecting workers and firms was slower growth and higher unemployment.</div>
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While inequality did not increase as much as in the US, job prospects were terrible for the young and unemployed, who were left out of the protected system.</div>
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The advent of the euro was a seeming boon, because it reduced borrowing costs and allowed countries to create jobs through debt-financed spending. The crisis ended that spending, leaving the heavy spenders indebted and uncompetitive.</div>
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The important exception is Germany, accustomed to low borrowing costs even before it entered the eurozone. Germany had to contend with historically high unemployment, stemming from reunification with a sick East Germany.</div>
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In the euro's initial years, Germany had no option but to reduce worker protections, limit wage increases and reduce pensions as it tried to increase employment. Germany's labour costs fell relative to the rest of the eurozone, and its exports and gross domestic product growth exploded.</div>
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The alternative view suggests different remedies. The US should focus on helping to tailor the education and skills of the people being left behind to the available jobs.</div>
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Rather than paying for any necessary spending by raising tax rates on the rich, which would hurt entrepreneurship, more thoughtful across-the-board tax reform is needed.</div>
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For the uncompetitive parts of the eurozone, structural reforms can no longer be postponed. But it is not politically feasible to do everything, including painful fiscal tightening, immediately.</div>
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In a nutshell, the fundamental eurozone dilemma is: the periphery needs financing as it adjusts, while Germany, pointing to the post-euro experience, says that it cannot trust countries to reform once they get the money.</div>
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The Germans have been insisting on institutional change, more centralised eurozone control over periphery banks and government budgets in exchange for expanded access to financing for the periphery. Yet, institutional change will take time, for it requires careful structuring and broader public support.</div>
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Europe may be better off with stop-gap measures. If confidence in Italy or Spain deteriorates again, the eurozone may have to resort to the traditional bridge between weak credibility and low-cost financing: a temporary International Monetary Fund-style monitored reform programme.</div>
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Such programmes cannot dispense with the need for government resolve, as Greece's travails demonstrate. And governments hate the implied loss of sovereignty and face.</div>
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As a reformed Europe starts growing, parts of it may experience US-style inequality. But growth can provide the resources to address that.</div>
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Far worse for Europe would be to avoid serious reform and lapse into egalitarian and genteel decline. Japan, not the US, is the example to avoid. Project Syndicate</div>
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<span class="author" style="border: 0px; color: #d0a95c; font-family: Helvetica, Arial, sans-serif; font-weight: normal; font: inherit; line-height: 18px; margin: 0px; padding: 0px 5px 0px 0px; text-align: left; vertical-align: baseline;"><br />Raghuram Rajan is a former chief economist of the international Monetary Fund and is professor of finance at the University Of Chicago</span><span style="border: 0px; color: black; font-family: Helvetica, Arial, sans-serif; font-weight: normal; font: inherit; line-height: 18px; margin: 0px; padding: 0px; text-align: left; vertical-align: baseline;"><br /><br />Read more: <a href="http://www.nst.com.my/opinion/columnist/inequality-inhibiting-growth-1.107991#ixzz20n2cZGOi" style="color: #003399; position: relative; text-decoration: none;">Inequality inhibiting growth? - Columnist - New Straits Times</a> <a href="http://www.nst.com.my/opinion/columnist/inequality-inhibiting-growth-1.107991#ixzz20n2cZGOi" style="color: #003399; position: relative; text-decoration: none;">http://www.nst.com.my/opinion/columnist/inequality-inhibiting-growth-1.107991#ixzz20n2cZGOi</a></span>
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</div>a.h.roslan harahaphttp://www.blogger.com/profile/17662362318448170096noreply@blogger.com2tag:blogger.com,1999:blog-1489230296933599297.post-57056106339675273822012-07-08T20:54:00.001+08:002012-07-08T20:54:20.042+08:00Elinor Ostrom, Winner of Nobel in Economics, Dies at 78Source: <a href="http://www.nytimes.com/2012/06/13/business/elinor-ostrom-winner-of-nobel-in-economics-dies-at-78.html?smid=pl-share">http://www.nytimes.com/2012/06/13/business/elinor-ostrom-winner-of-nobel-in-economics-dies-at-78.html?smid=pl-share</a><br />
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<nyt_headline type=" " version="1.0">Elinor Ostrom, Winner of Nobel in Economics, Dies at 78</nyt_headline></h1>
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By <a class="meta-per" href="http://topics.nytimes.com/top/reference/timestopics/people/r/catherine_rampell/index.html" rel="author" style="color: #666699; text-decoration: none;" title="More Articles by Catherine Rampell">CATHERINE RAMPELL</a></h6>
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Published: June 12, 2012</h6>
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Elinor Ostrom, the only woman to win the Nobel Memorial Prize in Economic Science — an achievement all the more remarkable because she was not actually an economist — died on Tuesday in Bloomington, Ind. She was 78.</div>
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Elinor Ostrom at a press event in 2009 for her Nobel award.</div>
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The cause was cancer, according to<a href="http://newsinfo.iu.edu/news/page/normal/22577.html" style="color: #666699;">Indiana University</a>, where she taught for many years.</div>
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Professor Ostrom’s work rebutted fundamental economic beliefs. But to say she was a dark horse for the 2009 economics Nobel is an understatement. Not because she was a woman — although women in the field are still rare — but because she was trained in political science.</div>
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Professor Ostrom’s prizewinning work examined how people collaborate and organize themselves to manage common resources like forests or fisheries, even when governments are not involved. The research overturned the conventional wisdom about the need for government regulation of public resources.</div>
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At least it did for the economists who knew who she was and had read her work.</div>
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“The announcement of her prize caused amazement to several economists, including some prominent colleagues, who had never even heard of her,” Avinash Dixit, a Princeton economics professor, said when introducing Professor Ostrom’s work at a luncheon in 2011. Usually, he noted, Nobel laureates need no introduction.</div>
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In fact, when the Nobel recipients were announced, some economists mistakenly thought the prize had gone to <a href="http://economics.mit.edu/faculty/bengt" style="color: #666699;" title="Bengt Holmstrom’s biography.">Bengt Holmstrom</a>, an economist with a similar-sounding (and, to economists, much more recognizable) name. One prominent scholar acknowledged visiting <a href="http://www.freakonomics.com/2009/10/12/what-this-years-nobel-prize-in-economics-says-about-the-nobel-prize-in-economics/" style="color: #666699;" title="A post on Freakonomics.">Wikipedia</a> to figure out who exactly she was.</div>
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Surprise at Professor Ostrom’s honor, <a href="http://www.nytimes.com/2009/10/13/business/economy/13nobel.html" style="color: #666699;" title="The Times article about the Nobel award.">which she shared</a> with Oliver E. Williamson, in some cases gave way to disdain and name-calling on economics blogs.</div>
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“Some things said about her in blogs and other media were so ignorant and in such bad taste that I felt ashamed on behalf of the economics profession,” Mr. Dixit said.</div>
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Professor Ostrom was not the first laureate to hail from <a href="http://economix.blogs.nytimes.com/2009/10/14/are-non-economists-suddenly-taking-over-the-economics-nobel/" style="color: #666699;" title="A related Economix post.">outside the field</a>. Previous recipients include <a href="http://www.nobelprize.org/nobel_prizes/economics/laureates/2002/kahneman-autobio.html" style="color: #666699;" title="About Mr. Kahneman.">Daniel Kahneman</a> (psychologist), <a href="http://www.pbs.org/wgbh/amex/nash/peopleevents/p_jnash.html" style="color: #666699;" title="About Mr. Nash.">John Nash</a> (a mathematician who was the subject of the book and movie “A Beautiful Mind”) and <a href="http://www.nobelprize.org/nobel_prizes/economics/laureates/2007/hurwicz-bio.html" style="color: #666699;" title="About Mr. Hurwicz.">Leonid Hurwicz</a> (trained in law).</div>
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As with these other winners, the outsider perspective Professor Ostrom brought to the field contributed to what made her work so groundbreaking. But the unconventional nature of her studies also made it difficult for her to find a foothold in academia earlier in her career.</div>
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“A lot of important questions are on the narrow borders between disciplines, but it is difficult to find a home for that kind of work,” said Marco Janssen, a mathematician at Arizona State University who collaborated with Professor Ostrom. “She had experienced many of these challenges over the years. Eventually she and her husband just created their own center for it.”</div>
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In 1973, Professor Ostrom and her husband, Vincent, who survives her, founded the Workshop in Political Theory and Policy Analysis at Indiana University. It would become the first of several interdisciplinary institutions she helped shape, and a locus for her collaboration with scholars across academia, including ecologists, computer scientists and psychologists.</div>
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Just as her academic habits emphasized collaboration and cooperation, so did the content of her study.</div>
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Traditionally, economics taught that common ownership of resources results in excessive exploitation, as when fishermen overfish a common pond. This is the so-called tragedy of the commons, and it suggests that common resources must be managed either through privatization or government regulation, in the form of taxes, say, or limits on use.</div>
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Professor Ostrom studied cases around the world in which communities successfully regulated resource use through cooperation. Her work has important applications for<a class="meta-classifier" href="http://topics.nytimes.com/top/news/science/topics/globalwarming/index.html?inline=nyt-classifier" style="color: #666699;" title="Recent and archival news about global warming.">climate change</a> policy today.</div>
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Professor Ostrom’s research and Mr. Williamson’s related work on corporate oversight are part of a field known as institutional economics. Some economists still <a href="http://krugman.blogs.nytimes.com/2009/10/12/an-institutional-economics-prize/" style="color: #666699;" title="A related post from Paul Krugman.">debate</a> whether the field deserves a rightful place within the economics discipline.</div>
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Elinor Awan was born on Aug. 7, 1933, in Los Angeles, an only child. She often spoke about how growing up in the Depression had influenced her interest in cooperative institutions. She recalled helping her family grow food in a large garden and knitting scarves for soldiers. She received her bachelor’s, master’s and doctoral degrees — all in political science — at the University of California, Los Angeles.</div>
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As a researcher she was notable for conducting fieldwork, an unusual method that is admired by some economists but scorned by others. In 1964, when she was working on her dissertation, fieldwork was considered the province of anthropologists, not academics trying to answer economic questions.</div>
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“She would go and actually talk to Indonesian fisherman, or Maine lobstermen, and ask, ‘How did you come to establish this limit on the fish catch? How did you deal with the fact that people might try to get around it?’ ” said Nancy Folbre, an economics professor at the University of Massachusetts, Amherst, and a <a href="http://economix.blogs.nytimes.com/2009/10/19/the-economics-club/" style="color: #666699;">contributor</a> to The New York Times’s Economix blog.</div>
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“In economics, every successive cohort of economists is trained to put greater emphasis on the arsenal of mathematical and econometric expertise,” Professor Folbre said. “That was just not what her work was about.”</div>
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A version of this article appeared in print on June 13, 2012, on page <span itemprop="printSection">B</span><span itemprop="printPage">20</span> of the <span itemprop="printEdition">New York edition</span> with the headline: Elinor Ostrom, Winner of Nobel in Economics, Dies at 78.</h6>
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<br />a.h.roslan harahaphttp://www.blogger.com/profile/17662362318448170096noreply@blogger.com0tag:blogger.com,1999:blog-1489230296933599297.post-20188808136234115922012-07-08T20:51:00.002+08:002012-07-08T20:51:46.306+08:00Anna Schwartz, Economist Who Collaborated With Friedman, Dies at 96Source:
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<nyt_headline type=" " version="1.0">Anna Schwartz, Economist Who Collaborated With Friedman, Dies at 96</nyt_headline></h1>
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By <a class="meta-per" href="http://topics.nytimes.com/top/reference/timestopics/people/h/robert_d_jr_hershey/index.html" rel="author" style="color: #666699; text-decoration: none;" title="More Articles by Robert D. Hershey Jr.">ROBERT D. HERSHEY Jr.</a></h6>
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Published: June 21, 2012</h6>
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Anna J. Schwartz, a research economist who wrote monumental works on American financial history in collaboration with the Nobel laureate <a class="meta-per" href="http://topics.nytimes.com/top/reference/timestopics/people/f/milton_friedman/index.html?inline=nyt-per" style="color: #666699;" title="More articles about Milton Friedman.">Milton Friedman</a> while remaining largely in his shadow, died on Thursday at her home in Manhattan. She was 96.</div>
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Anna J. Schwartz in 1982. Her book with Milton Friedman, “A Monetary History of the United States,” is considered a classic.</div>
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Her death was confirmed by her daughter Naomi Pasachoff.</div>
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Mrs. Schwartz, who earned her Ph.D. in economics at the age of 48 and dispensed policy appraisals well into her 90s, was often called the “high priestess of monetarism,” upholding a school of thought that maintains that the size and turnover of the money supply largely determines the pace of inflation and economic activity.</div>
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The Friedman-Schwartz collaboration “A Monetary History of the United States, 1867-1960,” a book of nearly 900 pages published in 1963, is considered a classic. Ben S. Bernanke, the Federal Reserve chairman, called it “the leading and most persuasive explanation of the worst economic disaster in American history.”</div>
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The authors concluded that policy failures by the Fed, which largely controls the money supply, were one of the root causes of the Depression.</div>
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Mr. Bernanke acknowledged as much when he spoke at a 90th birthday celebration for Mr. Friedman in 2002. “I would like to say to Milton and Anna: Regarding <a class="meta-classifier" href="http://topics.nytimes.com/top/reference/timestopics/subjects/g/great_depression_1930s/index.html?inline=nyt-classifier" style="color: #666699;" title="Recent and archival news about the Great Depression.">the Great Depression</a>, you’re right, we did it,” he said. “We’re very sorry, but thanks to you we won’t do it again.”</div>
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Mrs. Schwartz was widely known in the profession as the co-author of much of the work that led to Mr. Friedman’s Nobel in economic science in 1976. Her supporters thought the prize might have justly been awarded jointly.</div>
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“Anna did all of the work, and I got most of the recognition,” Mr. Friedman said on one occasion.</div>
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After Mr. Friedman’s death in 2006, Mrs. Schwartz “became the standard-bearer” of Friedman monetarism, said Michael D. Bordo, a professor of economics at Rutgers University and for decades a Schwartz collaborator himself.</div>
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Though “not a deep theorist,” he said, Mrs. Schwartz was “probably the best woman economist of the 20th century.”</div>
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During the financial collapse that began in 2008, she was one of the few economists with a firsthand recollection of the Depression. After praising early moves by Mr. Bernanke, she wrote, at age 93, a bitingly critical Op-Ed article for The New York Times in July 2009 opposing the reappointment of the Fed chairman who had been so influenced by her work.</div>
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She contended that Mr. Bernanke had erred in producing “extreme ease” in monetary policy and in failing to warn investors that new financial instruments were difficult to price.</div>
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Mrs. Schwartz also held that the government had been a bigger contributor to the crisis than had been widely realized. By her measure, the government had oversold the benefits of homeownership, pushing Fannie Mae and Freddie Mac, the government-backed mortgage finance giants, to lend increasingly to lower-income borrowers and fostering exceptionally low mortgage rates.</div>
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A leading financial historian, Mrs. Schwartz was also an expert on the monetary and banking statistics of Britain and the United States. Besides her collaborations, she had a large body of work in her own name.</div>
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Her most visible public role was in 1981, when she agreed to be executive director of the 17-member United States Gold Commission, a Washington panel that was charged with recommending the future role of gold in the nation’s monetary system.</div>
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With little interest in a return to any form of gold standard, she and most other members of the panel, consisting mostly of political appointees, limited their recommendations to urging the government to mint gold coins.</div>
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Mrs. Schwartz was born Anna Jacobson on Nov. 11, 1915, in the Bronx, the third of five children of Hillel Jacobson and the former Pauline Shainmark, Jewish immigrants from Eastern Europe.</div>
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She was drawn to economics while still at Walton High School in the Bronx — “I found it more exciting than literature or foreign languages,” she said — and graduated from Barnard College at 18.</div>
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She worked for the Agriculture Department in 1936, the year she married Isaac Schwartz, whom she had met at a Hebrew summer camp. The couple raised four children. Mr. Schwartz, who was the financial officer for a Manhattan import company and had earned a master’s degree in classics from Columbia, died in 1999.</div>
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Besides Ms. Pasachoff, Mrs. Schwartz is survived by another daughter, Paula Berggren; her sons, Jonathan and Joel; seven grandchildren; and six great-grandchildren.</div>
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After five years at Columbia University’s Social Science Research Council, Mrs. Schwartz joined the National Bureau of Economic Research in New York in 1941 and continued to work there for more than 70 years. But she maintained her ties to Columbia, earning a Ph.D. there in her middle years.</div>
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It was at the National Bureau, a private, nonpartisan research organization that has been the nation’s semiofficial arbiter of business cycles, that Mrs. Schwartz met Mr. Friedman and his wife, Rose Director Friedman, who was also an economist. Rose Friedman had heard from mutual friends that the Schwartzes might have a baby carriage to lend.</div>
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Arthur F. Burns, the president of the National Bureau and a future chairman of the Federal Reserve, suggested that Mrs. Schwartz and Mr. Friedman work together.</div>
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The two of them — she in New York and he at the University of Chicago — formed a close relationship based on exchanges of drafts and ideas by mail. “I’ll write something and send it to him, and he’ll criticize it, and he’ll do the reverse,” she told a reporter for The Times in 1970 on the publication of their second major work, “Monetary Statistics of the United States: Estimates, Sources, Methods.” “The wonderful thing about this relationship is that neither of us takes offense if the other says it’s no good.”</div>
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Mrs. Schwartz did take offense, however, when Paul Krugman, an economist and an Op-Ed columnist for The Times, attacked the Friedman legacy in an article in The New York Review of Books in 2007.</div>
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She responded angrily that Mr. Krugman had mischaracterized the work and made “inaccurate forays into economic history” by attributing the Depression to a liquidity trap, a situation in which monetary policy fails to stimulate the economy by either lowering interest rates or expanding the money supply.</div>
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“She went ballistic,” Mr. Bordo said.</div>
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Even after breaking a hip in 2009 and having a stroke, Mrs. Schwartz, by then using a wheelchair, collaborated with Mr. Bordo and Owen Humpage, an economist at the Cleveland Fed, on a project tracing the history of governmental intervention in currency markets. “Anna never stopped,” Mr. Bordo said.</div>
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She often spoke about her successful collaboration with Mr. Friedman on their “Monetary History of the United States,” expressing elation that they had taken on an economic establishment with little regard for theories based on the importance of money.</div>
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Decades afterward, writing in The Cato Journal, a publication of the Cato Institute, the conservative public policy research organization, she quoted Wordsworth:</div>
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“Bliss was it in that dawn to be alive,/But to be young was very heaven!”</div>
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A version of this article appeared in print on June 22, 2012, on page <span itemprop="printSection">A</span><span itemprop="printPage">23</span> of the <span itemprop="printEdition">New York edition</span> with the headline: Anna Schwartz, Economist Peer of Friedman, Dies at 96.</h6>
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</div>a.h.roslan harahaphttp://www.blogger.com/profile/17662362318448170096noreply@blogger.com0