Manon's Econ Blog

Archive for the ‘Other’ Category

This week at the school, we are having an “Earth Week,” and today is the no-printing day. The Eco Club is trying to cut down the consumption by banning students from using the printer. This is because of the negative externality of consumption shown on the diagram below.

Since the MPB and the MSB are different, there is a negative externality. The goal for the eco club is to reduce the price from P1 to Popt and the quantity from Q1 to Qopt. The solution it has found for this is to ban the printer for students, and as a consequence demand will fall, as shown on the diagram below.

This decrease in demand is both caused by the banning policy and by the advertisement for teachers to not use printers today.

The incentives for the Eco Club to create this policy is to save energies such as electricity and paper in order to avoid the cutting of trees. The school also had incentives to let this policy happen because it wants to cut down its costs and save money: by not printing, we do not consume electricity, paper and ink.

The policy was effective in the sense that we saved electricity and ink in the short term for that day, but in the long term people printed everything anyway (usually on the next day) so it was not as effective as it could be. The ban plus some advertising and some incentives all together may work better than just ban and advert. I think people were not concerned with Earth Week so much because they had no incentives to do so.

Since March the 20th, the Eyjafjallajokull Volcano in Iceland has been erupting, but it has gotten much worse since last week, creating a cloud of ash that it spreading all over Europe, and it does not seem to get better. It actually seems to get worse and worse. This is a real problem for the economy since no planes are allowed to fly in Europe. Thousands of people are trapped in airports, hoping for a change in the wind so that it could push the ash cloud out of Europe. For now, it is costing “more than £1 billion” to European airlines, but it is not the end. Plane flights are canceled in 23 European countries till at least Monday.

This situation is not the worse for the people who have been told to postpone their vacations, but for the people who are in other countries and unable to get back. Thousands of people have to sleep in airports, with no where else to go, and in some cases no money to go to the hotel. Flights could be canceled till mid-week, with no promises of an amelioration after that.

BBC News Article

CNN News Article

“Sharing is caring.” You can often hear that everywhere; but economists realized that people care more about things when they are “private property.” When it is public, such as public streets, public bathrooms and so on, people do not take care of it. Nevertheless, as soon as it is a private property, people make sure it stays clean.

Also, when something, such as fishes or elephants, are public property, people take as much as they possibly can. They do not care about others, they take as much as they can to make the more profit possible. Is this greed? It is in the sense that people, although have self-interest, take things away from others. Nevertheless, as soon as the elephants became private property of the village (people could buy a license to kill them), less elephants were killed because people were making sure that no one else was killing them. These people were not motivated by the willingness of sharing, but by self-interest. So are they greedy? Or just self-interested?

If greed brings good (like more elephants) then is greed bad? In Africa it saved thousands of elephants, so the question of “greed” and “self-interest” is not that easy.

.keynes

John Maynard Keynes was an economist. After the economic crisis of 1929 and its recovery, economists thought of themselves as the rulers of the world. They saved the world from the biggest crisis experienced; they by consequent thought they would be able to save it from any other crisis. During this period of “economic victory”, Keynes said “Practical men, who believe themselves to be quite exempt from intellectual influences, are usually the slaves of some defunct economist.”

What that line means is that the entire world economy is ruled by economists. But that supremacy has repercution when the economy goes wrong. Indeed, who is to blame if not the people in charge? The world now doubt of the ability of economists to take control of the economy. No one was able to predict and prevent people from the actual crisis, so the power of economists is now questionned.

It is now the economist duty to better the economy in order to retore their reputation. If they are able to make the economy better, then people may trust them again. But if they are not, then the credibility will be damaged.

Keynes, even after its death, allowed economists to be famous, in both the positive and the negative way.

At the beginning, I thought that using a laptop during class would be really disturbing, and that I would be tempted to do something else.

Now that we use one, I do not think that it is that tempting. Class work takes enough time not to do anything else.

Also, it is much easier to organize file such as lessons or exercises because we can have folders to classify them. The immediate access to internet makes researches much faster and easier; we do not have to wait until we are home to work.

I so think that the 1:1 pilot program is a very good idea for classes such as economics.

money-1I found several interesting links that may be useful for all of us in our study of economics.

  • Economists blog, although not written by people specialized in the study of economics, covers many different topics related to economics. You can find detailed informations and reactions about the economic situation of today’s world, as well as the decisions taken by the governments that relate to both macro and micro economics. The posts are not difficult to understand and are written in a comprehensible manner.
  • The Economist is a well known online magazine about economics. It is written by journalists specialized in economics, and that makes it a reliable source. Published magazines tend to be more reliable than websites written by anyone because all articles are checked and verified by professionals everyday.
  • Businessweek, for the same reasons as evoked for the previous website, is a reliable sources. Businessweek covers many different topics -more or less related to economics- but this part of the website is the analysis and the reactions about the economic choices made in the world today. The author, Michael Mandel, “BW’s award-winning chief economist, provides his unique perspective on the hot economic issues of the day.”
  • Japanese Economics News is interesting because it covers the Japanese news. Since we all live in Japan, we should know about the economic choices made in this country, and this blog relates all economic events happening. In opposition to the Businessweek website, this blog covers positive economy; reactions are not so dominant. It is written by  Ken Worsley, “senior partner at a Tokyo-based firm specializing in strategic consulting, market entry, marketing and multilingual web-based solutions for a wide variety of clients in Japan,” so the source is reliable.

"I has money. What I do wif it?"I think it is really important that we, as students, start to learn about the most efficient way to use resources such as money. In life, we are going to be confronted to many choices we will have to make, and if we learn soon how to make the best choices possible, it would be easier to make them. Also, especially at this moment in history, everyone talks about economics because of the crisis, so it is interesting to learn about why this crisis happens and what are some possible ways to make the economy better.