Funny Commencement Address

Mindy Kaling at the Harvard Law Graduation Ceremony

Latin America – Divergent Economies

Pacific Side vs. Atlantic Side

http://www.bloomberg.com/news/2014-05-28/divided-latin-america-favors-fast-growing-pacific-region.html

Brazil – Promises Unfulfilled Again?

http://online.wsj.com/articles/hope-fades-in-brazil-for-a-world-cup-economic-boost-1401242039

Finance Lesson - Value versus Price Valuation of Equities

Best Review of Piketty's Capital in the 21st Century

Leading development economist Debraj Ray (of NYU) offers his nuanced critique of Piketty's much discussed tome:

http://www.econ.nyu.edu/user/debraj/Papers/Piketty.pdf

Previous Posts on Piketty:

http://vivekjayakumar.blogspot.com/2014/05/data-errors-in-piketty-study.html

http://vivekjayakumar.blogspot.com/2014/04/solow-and-cowen-review-pikettys-capital.html

http://vivekjayakumar.blogspot.com/2014/04/an-economist-becomes-star.html

http://vivekjayakumar.blogspot.com/2014/04/capital-and-new-gilded-age.html

http://vivekjayakumar.blogspot.com/2014/05/piketty-on-pbs.html

UPDATE:
Piketty's response to FT criticism:
http://piketty.pse.ens.fr/files/capital21c/en/Piketty2014TechnicalAppendixResponsetoFT.pdf

Martin Wolf on India's Economy

Europe Shifts Right

EU Parliamentary Elections – Euro skeptics and the Far-Right Do Well

http://www.theguardian.com/world/2014/may/25/france-national-front-win-european-elections

http://www.bloombergview.com/articles/2014-05-25/europeans-against-europe
http://www.nytimes.com/2014/05/27/opinion/cohen-the-banality-of-anger.html

Given that the EU parliament is largely impotent, the election results are unlikely to lead to major policy changes. In some regards, the EU parliamentary election is the ideal platform for voters to blow-off some steam.

Physics is Fun

http://www.npr.org/blogs/krulwich/2014/05/25/315259156/a-young-woman-falls-in-love-with-everything

Top Ten - List of Major Calculation Errors

BBC Magazine has put together a list of famous (and costly) calculation errors:
http://www.bbc.com/news/magazine-27509559

Do Hedge Fund Managers Deserve Their High Pay?

See:
http://www.newyorker.com/online/blogs/johncassidy/2014/05/how-hedge-funds-get-away-with-it.html

Principles of Economics – In Need of Fundamental Changes

There is an interesting debate taking place currently on the need to change the content and structure of introductory economics courses. Noah Smith offers his perspective here:

http://www.bloombergview.com/articles/2014-05-22/why-is-econ-101-so-bad

Greg Mankiw offers his take here: http://gregmankiw.blogspot.com/2014/05/improving-econ-101.html

There are two fundamental challenges in how Principles of Economics is taught at many American universities:

A.     Making economics relevant while keeping it accessible to freshman college students with wide-ranging backgrounds is certainly a challenge. The best way to introduce economics in not by emphasizing empirical testing of the validity of economic theories. In fact, the most interesting and useful lessons are often derived from studying economic history. For instance, if you want to examine business cycles, readings on the Great Depression and the Great Inflation (1970s) can be invaluable. Additionally, a thorough discussion of the causes and consequences of the recent financial crisis would be highly illuminating (especially, if students are shown the historical parallels to earlier crises). At the microeconomic level, a careful analysis of real world market imperfections –imperfect competition and industrial organization and asymmetric information problems – would enliven classes. Again key historical cases would make the material more accessible to students.

All of this requires highly motivated students who are willing to undertake extensive reading and analysis and faculties willing to challenge them. This leads us to the incentive problem discussed below.

B.     Underlying incentive structure for students and young faculties is flawed: Many students these days do not want to be seriously challenged (especially in first year courses). They want to essentially get through the lower core courses with the least amount of effort and with the highest possible GPA (the path of least rigor leads them to seek out instructors who are likely to be easygoing and flexible). From the instructor side, the growing obsession with student evaluations creates an incentive to kowtow to student wishes. As long as you make it easy to get a good grade and are as accommodating as possible, you will be ‘popular’ with the students. Universities need to create a system in which rigor and serious exploration of complex issues is appreciated. 

MIT Economist David Autor on Inequality

Skills, education, and the rise of earnings inequality among the “other 99 percent” by David H. Autor

Science 23 May 2014: Vol. 344 no. 6186 pp. 843-851

http://www.sciencemag.org/content/344/6186/843.full

Abstract

The singular focus of public debate on the “top 1 percent” of households overlooks the component of earnings inequality that is arguably most consequential for the “other 99 percent” of citizens: the dramatic growth in the wage premium associated with higher education and cognitive ability. This Review documents the central role of both the supply and demand for skills in shaping inequality, discusses why skill demands have persistently risen in industrialized countries, and considers the economic value of inequality alongside its potential social costs. I conclude by highlighting the constructive role for public policy in fostering skills formation and preserving economic mobility.