A New Way to study Economics


September 13, 2017

A New Way to study Economics

by John Cassidy

https://www.newyorker.com

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Dealing with Unemployment,Inequality, and  Poverty

With the new school year starting, there is good news for incoming students of economics—and anybody else who wants to learn about issues like inequality, globalization, and the most efficient ways to tackle climate change. A group of economists from both sides of the Atlantic, part of a project called CORE Econ, has put together a new introductory economics curriculum, one that is modern, comprehensive, and freely available online.

In this country, many colleges encourage Econ 101 students to buy (or rent) expensive textbooks, which can cost up to three hundred dollars, or even more for some hardcover editions. The CORE curriculum includes a lengthy e-book titled “The Economy,” lecture slides, and quizzes to test understanding. Some of the material has already been used successfully at colleges like University College London and Sciences Po, in Paris.

The project is a collaborative effort that emerged after the world financial crisis of 2008–9, and the ensuing Great Recession, when many students (and teachers) complained that existing textbooks didn’t do a good job of explaining what was happening. In many countries, groups of students demanded an overhaul in how economics was taught, with less emphasis on free-market doctrines and more emphasis on real-world problems.

Traditional, wallet-busting introductory textbooks do cover topics like pollution, rising inequality, and speculative busts. But in many cases this material comes after lengthy explanations of more traditional topics: supply-and-demand curves, consumer preferences, the theory of the firm, gains from trade, and the efficiency properties of atomized, competitive markets. In his highly popular “Principles of Economics,” Harvard’s N. Gregory Mankiw begins by listing a set of ten basic principles, which include “Rational people think at the margin,” “Trade can make everybody better off,” and “Markets are usually a good way to organize economic activity.”

The CORE approach isn’t particularly radical. (Students looking for expositions of Marxian economics or Modern Monetary Theory will have to look elsewhere.) But it treats perfectly competitive markets as special cases rather than the norm, trying to incorporate from the very beginning the progress economists have made during the past forty years or so in analyzing more complex situations: when firms have some monopoly power; people aren’t fully rational; a lot of key information is privately held; and the gains generated by trade, innovation, and finance are distributed very unevenly. The CORE curriculum also takes economic history seriously.

The e-book begins with a discussion of inequality. One of first things students learn is that, in 2014, the “90/10 ratio”—the average income of the richest ten per cent of households divided by the average income of the poorest ten per cent—was 5.4 in Norway, sixteen in the United States, and a hundred and forty-five in Botswana. Then comes a discussion of how to measure standards of living, and a section on the famous “hockey stick” graph, which shows how these standards have risen exponentially since the industrial revolution.

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The text stresses that technical progress is the primary force driving economic growth. Citing the Yale economist William Nordhaus’s famous study of the development of electric lighting, it illustrates how standard economic statistics, such as the gross domestic product, sometimes fail to fully account for this progress. Befitting a twenty-first-century text, sections devoted to the causes and consequences of technological innovation recur throughout the e-book, and the information economy receives its own chapter. So do globalization, the environment, and economic cataclysms, such as the Depression and the global financial crisis.

Given the breadth of its coverage, the CORE curriculum may be challenging to some students, but it takes advantage of being a native online product. (In Britain, a paperback version of the e-book is also available.) The presentation features lots of graphs and charts, and, in some cases, students can download data sets to create their own. The quizzes are interactive, and the presentation is enlivened by potted biographies of famous dead economists (Smith, Keynes, etc.) as well as video interviews with eminent living ones, such as Thomas Piketty.

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Unlike most textbooks, the CORE e-book was produced by a large team of collaborators. More than twenty economists from both sides of the Atlantic and from India, Colombia, Chile, and Turkey contributed to it. (Two of them, Suresh Naidu and Rajiv Sethi, teach at Columbia and Barnard, respectively.) The coördinators of the project were Wendy Carlin, of University College London, Sam Bowles, of the Santa Fe Institute, and Margaret Stevens, of Oxford University. The Institute for New Economic Thinking provided some funding to help get things off the ground.

The members of the CORE team deserve credit for responding to the critics of economics without pandering to them. They have produced a careful but engrossing curriculum that will hopefully draw more young people into economics, and encourage them to continue their studies. (At University College London, students who took the CORE course did better in subsequent economics classes than earlier cohorts who took a more traditional introductory course.)

But the CORE material isn’t just for incoming students. It will also reward the attention of general readers and people who think they are already reasonably conversant with economics. (Personal testimony: Having gone through some of the material in detail, I think I might finally understand the Malthusian model and how to calculate bank leverage ratios!) All this, and the price can’t be beat.

 

BolehLand (CanLand)’s Towering Academic–Dr. Kamarul Yusoff


May 30, 2017

BolehLand (CanLand)’s Towering Academic–Dr. Kamarul Yusoff

by Dr. Lim Teck Ghee@www.malaysiakini.com

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Dr. Kamarul Yusoff was surely modest when he posted a small part of his credentials in responding to critics of his lambasting of Hannah Yeoh.

In fact, building on his ‘lofty’ American undergraduate achievements, he has returned to our tanah air to become a ‘highly productive’ scholar and academic.

His academic and intellectual track record can be discerned from his employer, Universiti Utara Malaysia’s website. He is listed as a Senior Lecturer and presently Director of the Malaysian Institute of Political Analysis (MAPAN) as well as is attached to The Ghazali Shafie Graduate School of Government.

In the website, he has described his work and career in capital letters in the following way

I AM A POLITICAL SCIENTIST SPECIALIZING IN MALAYSIA POLITICS. MY DOCTORATE THESIS WAS ON PARTI ISLAM SE-MALAYSIA (PAS) MAKING ME AN EXPERT ON PAS. MY MAIN INTEREST IS ON THE DEVELOPMENT OF MALAYSIAN OPPOSITION POLITICAL PARTIES. I HAVE RECEIVED GRANTS FROM UUM TO CONDUCT OPINION POLLS ON MALAYSIAN CURRENT POLITICAL ISSUES AND WILL BE RECEIVING A FEW MORE FROM VARIOUS RESEARCH AGENCIES TO STUDY CURRENT MALAYSIAN POLITICAL DEVELOPMENT. I HAVE BEEN FEATURED QUITE REGULARLY IN THE MALAYSIAN MEDIA COMMENTING ON MALAYSIAN POLITICAL DEVELOPMENT.

Members of the public interested in his work can view his ‘prolific’ scholarly output at UUM’s repository website – http://repo.uum.edu.my/profile/kzaman.

From it we can see that he has been a contributor to the country’s Malay print media – notably Berita Harian and Utusan Malaysia during the past three years. Even with his columns printed in the country’s leading media, Dr. Kamarul, alas, does not appear to have been able to generate much of an audience for his political analysis.

According to the repository portal’s records his ten most viewed articles have received a total of some 700 hits or an average of 70 hits per article. Perhaps now that he has emerged prominently in the public radar screen, he will be attracting more readers to his writing.

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His research output to date is even less prolific and appears to be focused on opinion polls. He has listed only one publication (with other collaborators) in an obscure – and what is likely to remain an insignificant – journal, The Malaysian Journal of Youth Studies.

Perhaps the most interesting part of his academic career is his current leadership of an institution, MAPAN, which is aspiring, in its words:

  • To become the eminent political research centre related to political issues, specifically in Malaysia.

  • To become a political research centre and a poll centre that is professional, independent, credible, transparent, and respected at both the national and international levels.

  • To become a political research centre that is capable of giving consultation services and becoming a reference for individuals, groups, and the nation.

  • To become a political research centre that is referred to by political adopters, analysts, researchers, and observers from all over the world, and thus enhancing the image of the college and university in the global arena.

  • To become a research centre that can assist the university to generate financial income, specifically through organising conferences, performing research consultation, and producing publications.

Although established in 2010 with these ambitious/lofty objectives, MAPAN appears to have undertaken little research.

This cannot be due to a lack of research funding or government support since the gallery section of the institute’s website shows the Director in September 2013 in prominent proximity with the Mentri Besar of Perlis, and with the latter shown opening up one of the Institute’s reports.

One can understand how impressed the MB must have been with the work of this “alternative, credible, and rational source having scientific value, high reputation, and being well respected by the general public” (http://mapan.uum.edu.my/index.php/en/corporate-info/mapan-background).

However, to date there is only one title found in MAPAN’s online publication page. In 2013, on the eve of the General Election, it co-published a 19 page poll research report jointly produced by MAPAN and the Majlis Profesor Negara (MPN) Tinjaun Pendapat Umum Di Kawasan Utara: Calon & Parti Pilihan Rakyat Dalam PRU 2013.

It will not be surprising if MAPAN led by Dr. Kamarul soon awakens from its academic hibernation to undertake opinion polls relating to the coming election, and engages in a fresh burst of activity and pro- Barisan and UMNO election analysis that will be “referred to by political adoptors [what this term refers to is anybody’s guess] analysts, researchers and observers from all over the world.”

Incidentally, the Majlis Profesor Negara which co-authored the 2013 poll report is the pre-eminent academic body in the nation. It is currently comprised of over 2,000 professors. Surely the day is coming soon when academics such as Dr. Kamarul Yusoff and his Ph. D colleagues supporting him in his memorandum to the Registrar of Societies calling on it to de-register the Democratic Action Party, will also join this august body to further strengthen the ranks of our “super gurus”.

 

GW Establishes Program to Bring more STEM Teachers to High-Need Schools


May 20, 2017

 

https://gwtoday.gwu.edu/gw-establishes-program-bring-more-stem-teachers-high-need-schools

by GW Today

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The George Washington University’s Center Courtyard–Making History at GWU

Read the full Strategic Plan (PDF)

The George Washington University has evolved into one of the nation’s leading universities. To continue advancing, the university has produced Vision 2021, an educational vision that reflects our aspirations to provide a unique, rigorous education to every one of our students and to secure our position as one of the world’s premier research universities.

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GW Establishes Program to Bring more STEM Teachers to High-Need Schools

Scholarships will contribute to two years of college tuition in exchange for teaching after graduation.

A new program at the George Washington University will offer science, technology, engineering and mathematics majors the opportunity to receive teacher training and scholarships for agreeing to teach in high-need school districts across the country after graduation from GW.

The new initiative is made possible by a grant through the National Science Foundation and the Robert Noyce Teacher Scholarship Program. The five-year, $1.5 million grant will begin at the start of the 2017-18 academic year and is expected to assist more than 25 students total with $20,000 per year toward the cost of tuition and teacher training in their junior and senior years.

Once students complete the GWNoyce program, they will be prepared to apply for licensure with the D.C. public school system, which would make them eligible to teach in 48 states.

“Producing high-caliber secondary math and science teachers for high-need schools is essential to support our nation’s increasingly STEM-driven economy,” said Larry Medsker, research professor of physics and director of GWNoyce. “This work on behalf of our high-need communities aligns well with the GW mission statement goal of improving the quality of life in D.C.”

Dr. Medsker said the program will be particularly strong because it will recruit students who are already studying STEM-based fields and offer them courses, workshops, seminars and service projects to prepare them to be teachers in high-need schools.

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It also will offer preparatory stipends and projects for freshmen and sophomores who are interested in applying to the program, in conjunction with activities offered by the Honey W. Nashman Center for Civic Engagement and Public Service, GWTeach, a separate GW undergraduate program that prepares STEM majors to become teachers, and a new partnership between GWTeach and the Smithsonian Science Education Center.

Because of these additional offerings, the program is expected to reach more than 500 GW students by 2022.

High-need schools are defined as having at least one of the following characterizations: high percentage of individuals from families with incomes below the poverty line; high percentage of secondary school teachers not teaching in the content area in which they were trained to teach; or high teacher turnover rate. These school districts can be found in urban, suburban and rural settings.

“The GWNoyce program will enable our students to more easily transition into STEM teaching in high-need schools, a cause that is critical to meeting the needs of colleges, graduate schools and ultimately our nation’s STEM workforce,” said Ben Vinson, dean of the GW Columbian College of Arts and Sciences where GWNoyce is housed. “The goal of the GWNoyce program is a timely one and aligns with our vision for an engaged liberal arts, one that will bring our education and research to a new level of excellence.”

The GWNoyce program also will create a new relationship with Northern Virginia Community College, Loudoun Campus, allowing students accepted into the program to transfer to GW for the start of the junior year. The scholarship will help ease some of the financial burdens in pursuit of their bachelor’s degrees. The program is expected to create new opportunities for Virginia students interested in studying STEM fields at GW.

 

The Padang Rengas Debate


March 20, 2017

COMMENT: I liken this Padang Rengas debate to  Gunfight at OK Coral. It is an encounter between old gunfighter looking for his last hurrah and a young, ambitious and astute gunslinger who knows that his adversary is no longer fast on the draw.  Advantage Nazri Aziz.

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The debate has been aptly described as a proxy fight between Tun Dr. Mahathir (Mentor) and our incumbent Prime Minister Najib Razak (Mentee).  For Najib, this debate is  also a convenient diversion from his massive political troubles arising mainly from his failure to come to grips with  the 1MDB fiasco and the lies he and his supporters told the Malaysian public and the world .

I have never agreed with Nazri’s politics, and  neither have I understood the motives of the former Prime Minister who ruled Malaysia with an iron fist for 22 years and left office in a huff leaving in his wake a shattered nation whose institutions of governance have been irreparably damaged.Why the need for this debate in the first place?

It was my good fortune to know both Tun Dr. Mahathir Mohamad and Datuk Seri Nazri Aziz.  I followed their political careers very closely over several years. I  admired their political survival skills and  recognize their service to our country.  Both are strong and competent people -centered leaders. However, I think,  Tun Dr. Mahathir has finally met his match. By exploiting  the man’s oversized ego, the younger politician is able to draw his nonagenarian opponent to his home ground, thereby giving himself a psychological advantage.  That Tun Dr. Mahathir should take the bait surprises me. 

I know the Tun to be a  sharp strategic thinker. It is clear  to me that  age has caught up with the former Prime Minister as it must with men and women of his and my generation.We are all slowing down and taking stock of and reflecting on our lives but not the Tun.

My intellectual friend, Dr Khoo Boo Teik, who authored  a book, Paradoxes of Mahathirism: An Intellectual Biography of Mahathir Mohamad, is right in saying that Tun Dr. Mahathir Mohamad is an engima. –Din Merican

The Padang Rengas Debate: A Verbal Lambast  between Two Generations

by Jocelyn Tan @www.thestar.com.my

The debate between Tun Dr. Mahathir Mohamad and Datuk Seri Nazri Aziz next week is expected to be fiery but not as explosive as the former PM’s confrontation with the Otai Reformasi gathering.

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PADANG Rengas in Perak is hardly the sort of place where one would expect a political debate to take place, much less, a debate between a former Prime Minister and the Tourism Minister.

The debate, if it goes ahead, could be the most happening event Padang Rengas has ever witnessed.

Datuk Seri Nazri Aziz is the outspoken and rather capricious MP for Padang Rengas which sits somewhere between Kuala Kangsar and Taiping.  As for Tun Dr. Mahathir Mohamad, there are few words that can adequately describe him these days so let’s just say he is even more vocal and mercurial than his would-be debater.

These two big personalities will face off in a grudge fight on March 25. All eyes will be on them even though no one has a clue as to what they intend to talk about because this debate is going to be about the personalities rather than the subject matter.

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This debate idea was not sparked off by any issue. Instead it was something that evolved following news that Parti Pribumi Bersatu Malaysia President Tan Sri Muhyiddin Yassin would be there on March 23, followed by Dr. Mahathir on March 25.

Now, Nazri is a macho alpha male politician, with a sort of machismo that is quite unrivaled among his fellow politicians. The Parti Pribumi folk were entering the lion’s den and he responded in typical macho fashion. He said the two big-wigs were gunning for him because they considered him a great threat.

“I welcome them, selamat datang. But don’t just come for a visit, why not contest in Padang Rengas? It would be better if Mahathir were to contest but if he cannot, then Muhyiddin can do it.”

The old lion in Dr. Mahathir bared his fangs and challenged Nazri to take him on in Langkawi. There were gasps because it sounded like Dr. Mahathir was throwing down the gauntlet in Langkawi. A day later, he clarified that he would not be contesting the general election. But Dr. Mahathir has made so many U-turns that it is best to keep an open mind on whatever he says.

Nazri offered to roll out the red carpet but Dr. Mahathir said he did not mind walking in the mud.It was a rather childish exchange between two grown men or what a Penang politician described as “two Mickey Mouse characters”. But Nazri was merely taking from the Mahathir playbook. During his time as Prime Minister, Dr. Mahathir was famous for challenging his critics to contest in elections instead of just talking.

This is not the first war of words between them. A few years ago, they had clashed over the Biro Tata Negara, which Nazri claimed promoted racial sentiments but Dr. Mahathir defended as an organisation that promoted good values.

Nazri called the former Premier a “racist” and was summoned to the Prime Minister’s office. Things then were still hunky-dory between Datuk Seri Najib Tun Razak and Dr. Mahathir, and Nazri was told to back off the elder man.

Nazri, who had been likened to a Samurai committing hara-kiri for taking on Dr Mahathir, emerged from Najib’s office with the quip, “My Shogun has spoken”.

Suffice to say that this time around, the Shogun will not be telling his Samurai to pull back.“Nazri is loyal to the boss of the day,” said Pahang tourism exco member Datuk Sharkar Shamsudin who was with the Tourism Minister in Berlin last week.

Sharkar said Nazri had also stood by Dr. Mahathir during the sacking of Datuk Seri Anwar Ibrahim. Nazri came to the defence of Tun Abdullah Ahmad Badawi when he was under attack by Dr. Mahathir. Likewise, he is standing by Najib now.

Nazri’s nickname in UMNO is “Chief”. He is younger than Najib by a year, they were contemporaries in UMNO but Nazri was too indepen­dent to be part of any camp.

Shortly after Najib became Prime Minister there was pressure from those around Dr. Mahathir for Najib to drop Nazri from the Cabinet. The political animal in Najib knew that people like Nazri could be problematic but they have their uses and his instincts have been spot on.

No one has had the audacity to tackle Dr. Mahathir the way Nazri does. He does not give a damn about conventions, he can be quite irreverent about rules and stature and he is the only UMNO politician who has publicly referred to Dr. Mahathir as “senile”. He occasionally comes across as too much and even rude, but he is never boring.

Dr Mahathir has been drawing good crowds in Malay areas. He is still a novelty, and the rural Malays want to hear what he has to say. On the other hand, the debate could turn out to be another political fiasco. Dr. Mahathir had a rough time at the Otai Reformis convention in Shah Alam recently.

The Otai Reformis comprises hardcore veteran supporters of Anwar. Their loyalty to him has not wavered from the day he was sacked by Dr. Mahathir. The group, led by Hulu Klang assemblyman Saari Sungip, had endured tear gas and rough treatment by the FRU when they took to the streets to protest Anwar’s imprisonment.They are still critical of Dr. Mahathir and were upset that Anwar has reconciled with his oppressor.

Dr. Mahathir turned up at the convention thinking that he could slow-talk them to come along with him on the grounds that the real enemy is Najib. Unfortunately, many of those in the audience also regard Dr.  Mahathir as the enemy.

Dr. Mahathir was greeted by cries of “reformasi” and “bebas Anwar” (free Anwar) as he made his way to the rostrum. He could sense that this was far from an adoring crowd and he attempted some reverse psychology, saying that a politician has to accept that he cannot be loved by all. He said he knew that some called him “mahafiraun” (great pharoah) and “mahazalim” (tyrant).

He appealed to them to put aside other issues and focus on toppling Najib because without power, their struggle would fail. “After that, if you want to act against me, you can do so,” he said.

He was flanked by Saari and Anwar’s younger brother Rusli Ibrahim whose presence on stage was to signal that Dr. Mahathir was there with the blessings of Anwar. But the Otai Reformis is a seasoned group of people who have seen it all. They were cynical about Dr. Mahathir and his simplistic reasoning failed to wash on them. Besides, they did not trust him and the respect was not there.

There have been too many life-changing experiences between then and now and the emotional scars are still there.

Moreover, said an Otai Reformis politician from Terengganu, the audience was expecting no less than an apology from the former Premier and they had called out for him to “minta maaf” (ask for forgiveness).

When it became clear that he had not come to apologise, they broke out into jeers and heckled him.Dr. Mahathir tried to smile his way through it but there were moments when the mask dropped and he looked shaken.

“It was quite humiliating. I think he cut short his speech, it was over real fast,” said the Terengganu politician. On top of all that, Dr. Mahathir had to sit through a video detailing the Reformasi movement – Anwar addressing a sea of people from the balcony of the national mosque, the infamous black eye, the angry street protests and the controversial trial. It was a political chapter that he would rather forget.

When everyone in the audience raised their fists to cries of “reformasi”, Dr. Mahathir made a half-hearted attempt to do the same but his hand barely reached his chest. The event was quite a farce and some of those present said the organisers had deceived them by allowing Dr. Mahathir to take to the stage when he had no intention of asking for forgiveness.

“There is still a lot of anger. They want him to apologise to Anwar’s family who suffered so much,” said the same Terengganu politician. It is obvious that even the chief personalities like Saari and Rusli were not bowled over by Dr. Mahathir because they could be seen trying to control their amusement at the height of the jeering.

The gathering then passed several resolutions, one of which stated that “this convention is not a forum to seek Dr. Mahathir’s views on the reform agenda”. It was as good as a disavowal of Dr. Mahathir.

Dr. Mahathir ought to have an easier time in Padang Rengas. Hordes of his supporters will probably make a beeline to the debate to lend moral backing. This is traditional UMNO territory and the audience will not be anything like what happened at the Otai Reformis event. But this is also Nazri’s home ground. He is the most senior minister after Najib and has served under three Prime Ministers.

People often forget Nazri’s political seniority because of his contemporary image, from the way he dresses to the way he addresses issues. For instance, he sometimes turns up for official events in a sports shirt worn rapper-style, with the collar turned up. Nazri understands the local sentiments and is more than familiar with Dr, Mahathir and his lines of attack.

Two big personalities known for their wit and laser tongues, their fighting spirit and dislike for each other – it should be pure entertainment even if it yields little of consequence.

World Economic Forum–Davos 2017–On Leadership


January 21,2017

World Economic Forum–Davos 2017

What does it take to be a great leader in times of change? We asked six experts @ WEF, Davos, 2017

Written by Stéphanie Thomson Editor, World Economic Forum

Watch a Compact for Responsible Business Leadership and Responsive and Responsible Leadership in 2017 from the World Economic Forum’s Annual Meeting 2017.

Image result for wef klaus schwabWEF Founder and Intellectual Innovator Professor Klaus Schwab

“Leaders must understand that we are living in a world marked by uncertainty, volatility and deep transformational changes,” World Economic Forum founder Klaus Schwab wrote at the start of the year.

As thousands of global leaders descend on the Swiss village of Davos to discuss these very issues, we asked six of them this question: what does it take to lead in these times of turbulence?

Adam Grant, Professor, Management and Psychology, Wharton School

In times of uncertainty, a critical skill for responsible leaders is to say “I might be wrong” – and mean it. I work with too many leaders who cling to their convictions with an iron will. As intoxicating as that confidence can be, it’s a huge barrier to making wise decisions and pivoting as circumstances change.

 Adam Grant quote:

The leaders who fare best at predicting the future are the ones who recognize that the future is unpredictable. By embracing doubt, they stay open to new ideas. As a result, they’re ready to act when headwinds turn into tailwinds. So I have a simple message for leaders: if you want to increase the odds that you’ll be right, accept that you’re probably wrong.

Phil Tetlock and Dan Gardner, Authors of Superforecasting

Heightened uncertainty puts a premium on good judgement. And nothing is more fundamental to good judgement than intellectual humility.

Note the adjective. This isn’t self-denigration. Intellectual humility simply means appreciating both the infinite complexity of reality and the fallibility of human beings. It’s invaluable because, taken seriously, three consequences follow.

One, intellectual humility causes the wise leaders to distrust quick-and-easy answers. The intellectually humble always want to learn more and explore different perspectives, in hopes of finding additional bits and pieces of truth.

Two, intellectual humility spurs introspection. Mistakes are inevitable. Only relentless critical examination of one’s own thoughts can catch and correct them.

Three, and perhaps most importantly, intellectual humility dispenses with certainty. Indeed, for the intellectually humble leader, “nothing is certain” is axiomatic. All judgements are matters of probability only, with the goal of this “probabilistic thinking” being to accurately distinguish ever-finer degrees of uncertainty.

Want to know if you could predict future trends? Take the survey at http://wef.ch/forecasting

Linda A. Hill, Professor of Business Administration, Harvard Business School

Leaders must be able to build organizations that are agile and can routinely innovate. People don’t want to follow a leader to the future – that is yesterday’s model. They want to co-create it.

 Linda A. Hill quote:

Innovation is a collective activity, one in which different people – depending on their particular talents – come forward at different times to move the group where it needs to go. Leading innovation is intellectually and emotionally taxing work, much of which takes place behind the scenes. It requires a belief in others’ slices of genius and a sense of generosity to share power, control and credit. Leading innovation is more about being the stage-setter than the performer, not always easy for leaders with star talent themselves.

Kishore Mahbubani, Dean, Lee Kuan Yew School of Public Policy

One key skill that all responsible leaders need to have today is a deep understanding of the key global trends driving change. Three tidal forces are sweeping across our world simultaneously.

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The first is the return of Asia and the end of Western domination of history. The second is accelerated globalization creating a small, interdependent, borderless world. The third is explosive change in technology, which is driving the Fourth Industrial Revolution that Klaus Schwab has spoken so eloquently about. Each of these tidal waves must be understood in depth.

That’s the easy part. The hard part is working out how each tidal wave affects the other. This is why it is so difficult to work out the future of US-China relations. Globalization and technology are creating a deep interdependence between them. The shift of power is driving them apart. Hence, it is not enough to watch personalities like Xi Jinping or Donald Trump. We also need to understand the deeper forces driving their behaviour. Any leader who fails to understand this unique complexity of our time is ill-equipped to provide leadership to their society.

Lynda Gratton, Professor of Management Practice, London Business School

The path to leadership is both an inner and outer journey.

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The role of the inner journey is to create within the leader a deep sense of their values, a narrative that is unique to them, and the courage to act on their values.

The outer journey connects the leader to the world, to understanding the place of their leadership in this time of extreme change, and to use wisely the power and resources that are at their disposal.

Listen to  Philip Tetlock:

Economic Crises and the Crisis of Economics


January 17, 2017

Economic Crises and the Crisis of Economics: Economists should learn to be humble and accept their own limitations

by Paola Subacchi@www.project-syndicate.org

Paola Subacchi is Research Director of International Economics at Chatham House and Professor of Economics at the University of Bologna. She is the author of The People’s Money: How China is Building an International Currency.

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Is the economics profession “in crisis”? Many policymakers, such as Andy Haldane, the Bank of England’s chief economist, believe that it is. Indeed, a decade ago, economists failed to see a massive storm on the horizon, until it culminated in the most destructive global financial crisis in nearly 80 years. More recently, they misjudged the immediate impact that the United Kingdom’s Brexit vote would have on its economy.

Of course, the post-Brexit forecasts may not be entirely wrong, but only if we look at the long-term impact of the Brexit vote. True, some economists expected the UK economy to collapse during the post-referendum panic, whereas economic activity proved to be rather resilient, with GDP growth reaching some 2.1% in 2016. But now that British Prime Minister Theresa May has implied that she prefers a “hard” Brexit, a gloomy long-term prognosis is probably correct.

Unfortunately, economists’ responsibility for the 2008 global financial crisis and the subsequent recession extends beyond forecasting mistakes. Many lent intellectual support to the excesses that precipitated it, and to the policy mistakes – particularly insistence on fiscal austerity and disregard for widening inequalities – that followed it.

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Some economists have been led astray by intellectual arrogance: the belief that they can always explain real-world complexity. Others have become entangled in methodological issues – “mistaking beauty for truth,” as Paul Krugman once observed – or have placed too much faith in human rationality and market efficiency.

Despite its aspiration to the certainty of the natural sciences, economics is, and will remain, a social science. Economists systematically study objects that are embedded in wider social and political structures. Their method is based on observations, from which they discern patterns and infer other patterns and behaviors; but they can never attain the predictive success of, say, chemistry or physics.

Human beings respond to new information in different ways, and adjust their behavior accordingly. Thus, economics cannot provide – nor should it claim to provide – definite insights into future trends and patterns. Economists can glimpse the future only by looking backwards, so their predictive power is limited to deducing probabilities on the basis of past events, not timeless laws.

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And because economics is a social science, it can readily be used to serve political and business interests. In the years leading up to the financial crisis, global economic growth and profits were so strong that everyone – from small investors to the largest banks – was blinded by the prospect of bigger gains.

Economists employed by banks, hedge funds, and other businesses were expected to provide a short-term “view” for their employers and clients; and to dispense their “wisdom” to the general public through interviews and media appearances. Meanwhile, the economics profession was adopting more complex mathematical tools and specialized jargon, which effectively widened the gap between economists and other social scientists.

Before the financial crisis, when so many private interests and profitable opportunities were at stake, many economists defended a growth model that was based more on “irrational exuberance” than on sound fundamentals. Similarly, with respect to Brexit, many economists confused the referendum’s long-term impact with its short-term effects, because they were rushing their predictions to fit the political debate.

Owing to these and other mistakes, economists – and economics – have suffered a spectacular fall from grace. Once seen as modern witch doctors with access to exclusive knowledge, economists are now the most despised of all “experts.”

Where do we go from here? While we should appreciate Haldane’s candid admission, apologizing for past mistakes is not enough. Economists, especially those involved in policy debates, need to be held explicitly accountable for their professional behavior. Toward that end, they should bind themselves with a voluntary code of conduct.

Above all, this code should recognize that economics is too complex to be reduced to sound bites and rushed conclusions. Economists should pay closer attention to when and where they offer their views, and to the possible implications of doing so. And they should always disclose their interests, so that proprietary analysis is not mistaken for an independent perspective.

Moreover, economic debates would benefit from more voices. Economics is a vast discipline that comprises researchers and practitioners whose work spans macro and micro perspectives and theoretical and applied approaches. Like any other intellectual discipline, it produces excellent, good, and mediocre output.

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But the bulk of this research does not filter into policymaking and decision-making circles, such as finance ministries, central banks, or international institutions. At the commanding heights, economic-policy debates remain dominated by a relatively small group of white men from American universities and think tanks, nearly all of them well-versed devotees of mainstream economics.

The views held by this coterie are disproportionately represented in the mass media, through commentaries and interviews. But fishing for ideas in such a small and shallow pond leads to a circular and complacent debate, and it may encourage lesser-known economists to tailor their research to fit in.

The public deserves – and needs – a marketplace of ideas in which mainstream and heterodox views are afforded equal attention and balanced discussion. To be sure, this will take courage, imagination, and dynamism – particularly on the part of journalists. But a fairer, more pluralistic discussion of economic ideas may be just what economists need as well.