Friday, May 30, 2003

-clutching head and moaning- my brain hurts from all the information i just attempted to stuff into it in the space of less than three hours. -grins- econ 203 followed closely by econometrics was probably not the most brilliant idea i've had all year, but hey, i thought it would be fun at the time...=p and frankly i did have fun this morning, when my head wasn't aching from trying to keep up with my -two hundred word per minute in heavily accented english- 'metrics teacher who was babbling merrily away about autocorrelation and selection bias...-whimper- i didn't even know some of these words existed until i took metrics -- heteroscedasticity anyone? who on earth knew that existed? before, of course, the advent of statistics and econometrics classes for everyone who's an econ major...haiyah! econometrics is now officially over for me -- no more new material since the next class is review during reading period...thank god for small mercies. =)

speaking of economics: we're doing money right now in econ 203. for people unfamiliar with chicago's classes, econ 203 = macro II. much funness - we've been working on money and international economics -IE exchange rates and that sort of fun stuff- which i really loved doing back in the day with mr R. i had a flashback today in class to one lecture when mr R was telling us about fixed vs floating exchange rates, and how if you are in a floating exchange rate system your monetary policy can be used to control either exchange rates or prices/interest rates, but not BOTH, and i remember thinking at the time -well that's not very helpful...- i still think that now -grins- i hate having to make decisions. perhaps going into central banking would have been totally the wrong career path for me -sticks out her tongue at MAS, who didn't want her anyway- anyways, i was sitting in class and realised all over again that the entire system of money -currency- is based entirely on faith. we were talking abt attacks on overvalued currencies a la George Soros and the sterling back in 1992, and to a certain extent to asian economic crisis back in 1997, and it just hit me that if enough people believed that a currency is worth X US dollars, it'll BE worth X USD no matter what the country's central bank tries to convince you of. i mean, sure they can maintain a given exchange rate for a certain amount of time, but sooner or later they're going to run out of international reserves to throw at the market, and come on, no one central bank can hold enough reserves to hold its own against a world market that's turning against it. -shudder- seriously, monetary policy and exchange rate policy is all about the credibility of the central bank, isn't it -- it's slightly terrifying that so much hinges on how trustworthy we find our central bankers to be...-mind involuntarily turns to our own central bank and a certain DPM Lee- money is so cool [in more ways than one]. i'm looking forward to taking a bunch of classes on international economics and international finance my third year...i can't believe my second year of college is almost over. wow. i'm almost halfway to graduating!

i'm also reminded that i am indeed at the university of chicago, which is a strong believer in free markets -markets WILL clear, prices are NOT sticky =p- and 'compete until you die' philosophy, and i'm starting to find that i'm coming down on the side of the Chicago school. now i clearly don't know enough empirically about whether in reality markets do clear and if prices are sticky -and i suspect that of course there is some truth to the notion that labour markets don't adjust as fast as we claim they do AND that wages are sticky downwards [i blame the unions. except that in singapore we don't have that strong a set of unions, so what can we blame sticky prices on?]- but i think i would like to believe in an efficient market system. perhaps it all has to do with signals being inefficient because of interference from non-economic factors. if we let our markets do their job perhaps the world would be a better place...

and then again perhaps it might not. i mean, i can definitely see the need for a government type institution to fill in gaps in social providence that we as human beings not purely economic rational actors see. like public goods; like cheap healthcare; like education; like welfare to keep the problem of poverty at bay. some things can't be solved from a purely rational point of view. but for all other things, i think we should believe in open markets, the fewer the restrictions the better, and the restrictions that exist had better have strong strong justifications. trade restrictions in particular just bother the hell out of me.

it's almost the end of ninth week. where does time go? and why is the weather shitty again? [it's rainy and cold. i swear if it gets cold enough to drop snow i'm going to cry.] those are two questions that i think are totally unanswerable.


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