Adrian R. Pagan

I attended a seminar given by Prof. Pagan from Australia about macroeconomic modelling for policy purposes. To sum up, he said that dynamic stochastic general equilibrium models, though strong on economics, actually do not fit the data well. And to fit the data well is crucial for policy purposes.
He also said that the best model nowadays is the Canadian TOTEM. That's all what I remember. :-))

Random Walk Down Wall Street

I started reading "Random Walk Down Wall Street" by Burton Malkiel, a professor of Economics from Princeton. It is nothing new for me so far, but I hope to learn something new in the later chapters. The message so far is: avoid tulip bubls, stick to Benjamin Graham's good old wisdom.

Economics as Religion

Back to my good old theme. Someone has recently returned the book "Economics as Religion" by Robert H. Nelson, a professor of Economics from Maryland, so I was able to read it. I found out, that when I was writing a critical summary of Nelson'speech at a conference at Wheaton College on practice of Christianity and Economics, I did not really understood what he was saying. Now, I don't have time to read that book. But it is highly interesting. I added it to my "I wish I had time to read it" list.

Journal of Economic Perspectives Fall 2005

I came across JEP today in the library as I was looking for something to satisfy my intelectual curiosity and my longing for a new thrill in my life. And I found there an article which examined if there is an bubble on the housing market. Something very similar to what my supervisor is working on. I was familiar with the OFHEO housing data, editing which were my RA duties. It was interesting. There is even one more article on housing in that issue: it is on the history of american mortgage or something.

The Playboy Legacy

Hugh Hefner, the first of the pornographers, turns 80.

Link to WSJ's Opinionjournal.com.

John Stroud: Setting Captives Free

Great and simple men alike have known the horrid chains
Of sin's enslavement and defeat of struggle without gain.

This battle common though it be takes daily casualties
And leaves the wounded living without hope of being free.

They walk in silent solitude behind their painted masks
And wallow in their private sins until somebody asks,

"Hey brother, how may I and these who know your desperate plight
Walk side by side with you in grace to end your pain and strife?"

We've known defeat and sorrow in this battle you now see,
But now we spend our lives instead in Setting Captives Free.

Your battlescars and stories of entrapment and of blame,
we know them all, we've lived them all, we understand the shame.

Step up and walk beside us now, we're going the same way
We're seeking life in Jesus Christ and trusting more each day

That He will change our hearts and minds so we might come to be
Ones who pass the truth along by Setting Captives Free.

Oscar Wilde: The Selfish Giant

Today's founding session of our small literary circle started with a debate about a short story written by Oscar Wilde. The Selfish Giant, to sum it up, was a written for kids and adults alike. For kids it is a fairy tale, but adults will see there is more to the story. It is unequivocally based on Bible, as most of Oscar Wilde's short stories. (By reading "The Picture of Dorian Grey", by the way, one would not expect him to be so religious.) Personally, I was not able to get the meaning of all the details. But maybe all the details were not meant to have a hidden, complex meaning, but just provided framework for the fairy tale.
Anyway, this is the kind of story, I would like to read to my kids one day.

Sex Wars Hinder Debate about Morality

Opinionjournal.com

My Research Supervisor's Comments

I employ a lot of first-year students this year. You can recognize them by the circles under their eyes.

C.S. Lewis on Relationships

I recently stumbled on a quote by C.S. Lewis that reminded me why, it's still worth the risk of being open to relationships.

"To love at all is to be vulnerable. Love anything, and your heart will certainly be wrung and possibly broken. If you want to make sure of keeping it intact, you must give your heart to no one, not even to an animal. Wrap it carefully around with hobbies and little luxuries; avoid all entanglements; lock it up safe in the casket or coffin of your selfishness. But in that casket—safe, dark, motionless, airless—it will change. It will not be broken; it will become unbreakable, impenetrable, irredeemable."

I found the quote in Christianity Today.

Iannaccone: Economics of Religion

These days, I am writing a position paper in the Academic Writing course, where I try to show through a case-study of the Waco tragedy that the rational-choice approach carries the most explanatory power in explaining religious behavior. The field of economics of religions is a recent product of the Chicago School's economic imperialism. Laurence R. Iannaccone, whose thesis was supervised by (guess who?) Gary S. Becker is a pioneer of this field. He is working now at George Mason University. Here is the link: Association for
the Study of Religion, Economics, and Culture.

Iannaccone's "Formal Model of Church and Sect" present a model where a church and a sect are analytically defined. A church is characterized by low commitment and low spiritual benefits, the sect asks high commitment and provides high benefits. This distinction can be extended to other social groups. Provides mathematical definition of what a sect is and the rationale for this kind of religious firm. Iannaccone also shows that theoretical consequences of a sectarian orientation include strict behavioral standards, definite conversions, resistance to social change, high levels of religious participation, and lower-class and minority appeal. As all of the Chicago School efforts, it is difficult to accept, because it challanges common attitudes about the studied phenomena. However, this story fits the reality amazingly well.

"Sacrifice and Stigma: Reducing Free-Riding in Cults, Communes, and Other Collectives." is another Iannaccone's article worth mentioning. According to the author, bizzare behavior standards are a tax on alternatives to sect participation (that is, consumption of secular commodities). These measures serve to screen out people, whose participation would be low and at the same time increase participation of those who remain. Thus, efficient religions benefit from stigma, self-sacrifice and strange behavioral restrictions. This rationality can easy be extended to other social goups as well.

Donald McCloskey: If You're So Smart...

Today, I've just started to read this.

McCloskey says that economics, as all sciences, just tells stories, like any other science, art or literature. He (he at the time of writing the book, she now) dismisses the modernist's idea of universality of science. All arts and sciencies just tell stories and use metaphors. The fact that economics relies mostly on logic and facts, does not imply it universality. In fact, economics lacks metaphors and ... - to operate with the complete tethrad of rhetorics.

I will continue reading.. . during lunch breaks.... :-)))

Max Weber: The Protestant Ethics and the Spirit of Capitalism

Recent weekend I had to pleasure to read this classic work of sociology. My understanding of social effects of Lutheranism and Calvinism increased greatly. At least, I hope so.
Today, the most important point of Weber's story is that religious ideas of Reformation are the forces which shaped economic attitudes of Westerners. The economic development that followed is the result.

In my opinion, ideas of Martin Luther and John Calvin are mirrored even today in differing attitudes of Anglo-American and German people on questions like working hours, organization of business etc. Astonishingly so.

Best Society

"Best Society is not a fellowship of the wealthy, nor does it seek to exclude those who are not of exalted birth; but it is an association of gentlefolk, of which good form in speech, charm of manner, knowledge of the social amenities, and instinctive consideration for the feelings of others, are the credentials by which society the world over recognizes its chosen members." (Post, E.:Etiquette. New York, 1922)