there is a certain kind of freedom in knowing that in the short run, you only have a year to take a tilt at things. you don't have to be afraid of burnout.

went hillwalking 2 weekends ago at the trossachs, because it's probably the only long weekend i would have had the whole year. i don't see myself having many more free weekends anytime soon.

last week! spent a bit on time on my personal web page, and was also getting used to typesetting. i am glad that typesetting mathematical equations no longer involves complex lines of code in LaTex and Scientific Workplace has made things a lot more easier. LaTex does strike me as being very last generation. But who knows, I may need it when I start desiring a certain degree of flexibility (which i'm glad I don't need for now)

Anyway, it also means that my documents are starting to look very homogenous and very much like your average JSTOR article.

Graphs are still a pain though. Not data plots, I mean those graphs that you draw because you want to make some conceptual point. These things handle data plots well but not concepts.


i wanted to write about current account imbalances. will just jot down main points
- why do east asian countries save so much?
- bernanke thinks that this is a "savings shock". there is also a thinking that "cultural factors" have a lot to do with saving.
- high saving = prudence. not optimal. but who can blame asian economies? when they run out of money something like the AFC happens and the suffer a loss of a certain degree of economic independence.
- could this be the reason for high S in E Asia? true, artificially depreciated currencies may be a cause but I think that this is a result of a fear of 1997 happening again.
- why is so much of our K locked up in low-yielding treasuries? K could be deployed elsewhere.
infrastructure, and shouldn't domestic return on K be higher than foreign return on K in a less-developed economy. unless we have already over-accumulated and what we really need is TFP growth.
- to be fair, asian swfs were changing their asset portfolio. but then this risk environment arrives again.
- are we over-accumulating capital?

- history: debate on sources of east asian growth : krugman article in foreign affairs (who refers to this )

i wouldn't be surprised if people started sitting down again to discuss a real Bretton Woods ii soon. there are some huge imbalances on the global scale.

1 comment:

Desolation said...

Alan Greenspan posed the same argument in his memoir. The savings of the East drowned the west with cheap liquidity which could very be the root of this crisis-borrowed cheap cash.

Nevertheless, it is true that events such as the AFC and the lack of a security blanket of unemployment benefits which increases uncertainty forces us to save more.

I doubt the crisis will worsen further given that all the governments are doing their best to prevent the financial institution from failing. It is far from over since the next correction would be the over heated economies of the east and west.

Anyway, its a good time to invest and learn some heart wrenching lessons...