Tag Archives: economics

My final school year begins

By Mack D. Male ·

Post ImageI started what had better be my final year of University yesterday. Three classes on Monday/Wednesday/Friday, and one on Tuesday/Thursday. In every single one, the first class was just a review of the course outline and nothing else. In a way that was good, because we got to leave early, but in a way it was bad too – I had lots of time to kill yesterday. Here are some notes about the “back to school” experience thus far:

  • This year is going to be great: I can walk from my house (remember, I just moved) to class in Tory (northernmost part of campus) in under 20 minutes.
  • I am always amused by the first years running around like crazy people, worried because they don’t know where their class is. I was probably like that too, I know. I think part of the problem is orientation – the University itself should offer a simple, no-frills orientation that is a tour of campus and getting your ID card and nothing else. The SU puts a lot of work into their orientation events, but I skipped mine because there was too much “lets all be friends and sing songs and dance and play games and wear stickers all day.” I wonder if lots of students skip orientation?
  • Wireless in CAB seems much faster than it used to be. Maybe it’s just that hardly anyone was using it on the first day?
  • Also on the topic of CAB (I had to stop there, for old times sake) I found out you can buy stuff from the cafeteria using your OneCard now! Apparently this isn’t a brand new development…but it’s not like I was really on campus last year to know that :)
  • I met Andrew, Megan and Renee for lunch at the PowerPlant. It was good to see them and we had a good time, but the service was absolutely horrible. The Plant has a “new look” and stuff this year, but they apparently chose to ignore how impossibly slow their service is. I remember now why I stopped going there. Next time we’re gonna try the new Hudson’s (where Scholars used to be).
  • Construction on the new Sciences building is moving along! Well sort of, the are still demolishing the old buildings, but still, it was a very busy and active place.

Now that the “course outline classes” are finished, the real lectures will begin tomorrow. I am taking two 300-level economics courses this term, a first year astronomy course, and a 200-level EAS course (as you can probably tell I am filling in the gaps for my program requirements). So far it’s a tossup between the astronomy course and the environmental economics course for which one looks most interesting. Astronomy is the clear winner in terms of scenery though ;)

Twenty Years of Burgernomics

By Mack D. Male ·

Post ImageWay back in 1986, the editor of The Economist had the brilliant idea to invent a Big Mac index, as a “light-hearted introduction to exchange-rate theory.” I first learned of the index roughly three years ago when I took an international economics course, and I thought it was rather ingenious. This year marks the 20th anniversary, so The Economist is looking back on the index:

The Big Mac index is most useful for assessing the exchange rates of countries with similar incomes per head. Thus, among emerging markets, the yuan does indeed look undervalued, while the currencies of Brazil, Turkey, Hungary and the Czech Republic look overvalued. Economists would be unwise to exclude Big Macs from their diet, but Super Size servings would equally be a mistake.

According to the latest edition of the index (May 22), the cheapest place in the world to buy a Big Mac is in China, where it costs just $1.31 USD. The most expensive place is Norway, at $7.09 USD. Here in Canada, we’re only four cents more expensive than our American counterparts, at $3.14 USD.

The index was never intended to be a precise predictor of currency movements, simply a take-away guide to whether currencies are at their correct long-run level. Curiously, however, burgernomics has an impressive record in predicting exchange rates: currencies that show up as overvalued often tend to weaken in later years.

I wonder if it will continue to be as successful in the next twenty years. In any case, I am sure it will continue to be one of the more interesting indexes that economics has produced.

Read: The Economist

Big Oil Profits and Alberta

By Mack D. Male ·

I
thought I’d highlight this rather interesting discussion on the big oil
companies and their profits taking place at Robert McClelland’s My Blahg. After describing the profits of Exxon Mobil, Royal Dutch Shell, and Petro-Canada (all up, surprise surprise) Robert had this to say:

Pricks. I say regulate them. And to hell with Alberta if they don’t like it.

And later in the comments he says:

Someone else: And the NEP worked really well last time didn’t it…

Robert: It worked great for Eastern Canada where I live and only care about.

I don’t know if he’s trying to be funny, or if he’s serious, but I
thought they were interesting comments nonetheless. I don’t think it’s
fair to blame Alberta for the current rise in prices. There are a
number of different factors, including speculators as explained by Mark Cuban back in September.

Not only that, but Alberta is using at least some of the profits from oil for worthy purposes. For example, we’ve stockpiled lots of Tamiflu and are ready to share.
We’re also investing more in our already top notch childcare
facilities. You can be bitter about the high cost of oil and the amount
Alberta profits, but it’s not like we’re actively spending money to
snub the other provinces!

That being said, I wish Alberta would take the lead and get a
national energy policy started. It would be wise to be proactive about
it, instead of defensive, I think.

MORE: One other thing I wanted to point out – I think Albertans have just as much reason to complain about oil prices as anyone else. The oil is extracted here, refined here, and doesn’t have to travel anywhere else, yet we pay around 90 cents a litre (as of today). How does that make sense? There are absolutely no distribution costs, especially here in Edmonton where we have a number of refineries, yet we pay just as much as everyone else.

Read: My Blahg

A Theory On Technological Innovation

By Mack D. Male ·

I’m currently taking an Economics course (ECON 222) at the
University of Alberta entitled “Economic Growth, Technology, and
Institutions.” I find it very interesting, which is hardly surprising
given my liberal use of technology and the number of economics courses
I have taken as part of my Computing Science degree. As a result, I
like to think that I know a thing or two about technology and it’s
relation to economics (though I am sure to learn more before this
course is complete). At the very least, I can make some educated
assertions and theories. So today when I came across Tony Long’s Wired
article entitled “Dark Underbelly of Technology”
I felt the need to say something, presumably because I’m a blogger and
thus, in his words, “everything [I] say is so interesting it should be
shared with everyone.”

Besides that little swipe at bloggers, it’s actually a well-written
opinion piece. The gist of his column can be found in the second last
paragraph (incidentially, I’m also taking a Sociology course right now,
so perhaps I can touch on that):

Anything that diminishes the value of a single human being poses a
threat to a rational, humane society. When technology can cure a
disease or help you with your homework or bring a little joy to a
shut-in, that’s great. But when it costs you your job, or trashes the
environment, or takes you out of the real world in favor of a virtual
one, or drives your blood pressure through the roof, it’s a monster.

First, let’s tackle the issue of technology negatively impacting us
as individuals. Sure when the computer crashes, or something breaks, we
get annoyed. But if you really think your ancestors were not also
annoyed by their technology, you’re mistaken! I don’t imagine it was
very much fun to have to fix the farm equipment when most people lived
and worked in the fields. Technology is created by humans, and I don’t
know about you but I don’t know anyone who’s perfect, so there’s no
reason to expect that technology should be.

Then there is the very common argument that technology forces us to
lose touch with humanity; that technology negatively impacts society as
a whole. Being connected all the time but never interacting face to
face is “bad”, or so the theory goes. I think the claim that we’re
“losing touch with humanity” is pretty baseless. Most people who make
the claim overlook a simple fact of history – that has never been the
case. Here’s why.

Technology is not new! Since the dawn of time pretty much, humans have created technology. Take the printing press
for example, which was developed in the 15th century. There are a few
important things to note about its development. First, the printing
press took a while to impact society – it was not an overnight change.
Second, there were very few other “major” technologies created around
the time of the printing press. And while the printing press did put a
few people out of work (scribes, for instance), it created far more
jobs than it destroyed.

Why did I mention the printing press? Because it’s a good example of
something I learned in my ECON 222 class. To summarize what my
professor and the textbook said:

Before 1800, people figured they lived in a static world simply because
growth was too slow for them to be aware it was happening at all. While
some economists and historians will claim that economic growth prior to
1820 was 0%, this is most definitely not true and even though growth
rates were tiny, compounded they still result in significant economic
growth over time.

Technology is one of the major reasons we see economic growth, so
it’s not unfair to say that if there was economic growth, there was
probably technological innovation too. And as economic growth since
1800 has been much higher, it’s likely that there has been more
technology developed. And given that the year 1800 was only just more
than 200 years ago, it’s fair to say that the period of high economic
growth and technology development has been fairly rapid in the grand
scheme of things. And that’s what is forgotten in articles and opinion
pieces like the one I mentioned above.

Most people are too quick to say that technology is harmful, simply
because they see development and change a lot faster than their
grandparents or great-grandparents ever did. Does that make it bad or
harmful? I would say no. In the past, people were not aware that
technology was changing and improving, so they didn’t care if it
affected society negatively (sure a few individuals did, but nothing
like today). And as history has shown, it didn’t affect society
negatively – we are several times richer than our parents and
grandparents (in terms of money, standard of living, education,
productivity, all those things). So therein lies my theory:

In the long run, technological innovation will always benefit society.

If we didn’t pay so much attention to whether or not technology was
negatively affecting society, we would carry on with our lives,
technology would continue to develop, and everyone would end up better
off, just as in the past.

Economist.com Redesign

By Mack D. Male ·

Post ImageNormally I wouldn’t post about a website getting a new look (unless it were one of my own or one that I manage) but I read the Economist all the time and I think it’s a great resource for information. And yes, they are sporting a new look:

For a start our homepage, article pages and Print Edition page have all been redesigned. You will see several other changes too:

  • We’ve enhanced the navigation – so it’s even easier to find what you want
  • The new pages are clearer – making them easier to read
  • Article titles are more consistent with the print edition – making cross-referencing straightforward

More improvements are due in the coming months. The aim is to make Economist.com sharper and fresher – a perfect complement to our incisive global analysis.

It looks really great! The Economist is a great resource for all you politics-economics-current affairs nuts out there, so check it out. And tell them I sent you!

Read: Economist.com Redesign

Back to School

By Mack D. Male ·

Post ImageAs the years have gone by, I have found that I look forward to the first day of school less and less. This year was no different, as I almost didn’t go back. Nevertheless, I couldn’t help but feel a little excited this morning as I made my way to my first class. The usual stuff goes through your mind – this is going to be interesting, I’m going to keep up on my readings, I’m never going to skip class, etc. It never works out that way, but there’s no harm in trying right?

My first class today was SOC 300, or “Principles of Sociology”; clearly, one of my electives. There are many things about this class that made me feel old. First, SOC 300 is the same as SOC 100, but only first and second year students can take SOC 100. Second, the majority of the class (judging by the hands that were raised) are third year students, not fifth year. The professor didn’t teach any material today, just went through the outline and gave a brief introduction. Near the beginning of the class he asked how many people in the class of roughly 200 were Sociology majors. Not a single hand went up; it was rather funny!

My second class was ECON 222, or “Technology, Institutions, and Economic Growth”. Again, I couldn’t help but feel a little old. One kid walked into the class and I swear he looked like he belonged in high school. Don’t get me wrong, I don’t look that old either, but this kid was just incredibly young. I was also the only one who said anything the entire class besides the professor (I asked him to clarify if something he said was in real or nominal terms). I think back to my first and second year, and I realize I didn’t say anything back then either. Must be a student maturity thing.

My last “first class” will be tomorrow morning, so we’ll see how it goes. Both of the courses today seem like they will indeed be interesting, so that’s always a good thing. A couple of other notes:

  • I absolutely hate how the Tory building doesn’t have wireless, drives me nuts.
  • My SOC 300 professor very loosely defined “mass media” as television, radio, newspapers, etc. because they are media outlets that reach a mass audience. I think I have come to prefer the term “mainstream media”, as a website or blog or podcast could also be considered mass media in that they can reach the masses. They might not, but neither does the Food Network.
  • It never ceases to amaze me how some people just saunter along in the middle of a major thoroughfare. Do they not realize there are people behind them?
  • I didn’t see anyone in my classes today with a laptop, let alone a Tablet PC. Granted it is only the first day, and there was very little work done. There were a few laptops out in the common areas though.
  • For the fashion-minded among you – I have decided that girls in pink tops and white bottoms look good, but not the other way around. You might not think so at first, but wait until you see them sitting almost side by side as I did today. Pink pants just don’t do it for me.

David Dodge on U.S. Economics

By Mack D. Male ·

Post ImageI have read many times about the huge current account deficit in the United States, but usually from American media like The Economist, or maybe something from Europe. Never from Canada! It seems the Canadian government generally likes to keep quiet about our neighbour’s spending habits, maybe for fear of more beef or softwood lumber-like troubles. Needless to say, I was quite surprised to read today that Bank of Canada governor David Dodge had something to say on the matter:

In the text of a speech to be given at a Montreal conference, the central bank chief warned of “large, global economic imbalances that have become the subject of increasing concern” to policy-makers.

“I am referring, of course, to the persistent and growing current account deficit in the United States that is mirrored by large current account surpluses elsewhere, especially in Asia.”

Basically what has happened is that the United States has decreased their saving while most of the rest of the world has increased saving. Thus, the U.S. has become reliant on foreign borrowing, creating the large deficits that Dodge and other economists talk about (the United States actually has three deficits, international trade, current account, and federal budget). At the same time, China and other Asian nations have used their large and growing export income to soak up the American debt.

I think it’s really interesting to watch, even if the situation unfolds slowly. For some reason, it seems significant to me that Canada finally had something to say on the matter too, though I can’t put my finger on exactly why.

“At some point, they will have to be resolved. Why? For one thing, a country’s external indebtedness cannot keep growing indefinitely as a share of its GDP. Eventually, investors will begin to balk at increasing their exposure to that country, even if it is a reserve-currency country, such as the United States.

“For another thing, the buildup of foreign exchange reserves by Asian countries will, eventually, feed into domestic monetary expansion and lead to higher inflation. These imbalances will ultimately be resolved, either in an orderly, or in an abrupt, disorderly way.”

Perhaps Dodge is worried that things are heading down the path to a disorderly resolution, which would probably be bad for Canada.

Read: CBC News