Economic Rockstar

Connecting Brilliant Minds in Economics and Finance

030: Kim Holder on Rockonomix and Teaching Economics Through the Lens of Sport, Music and Movies

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030: Kim Holder on Rockonomix and Teaching Economics Through the Lens of Sport, Music and Movies

Kim Holder is founder of Rockonomix and is an economics educator from the University of WesternKim Holder Georgia and teaches principles of macro and micro. Kim is passionate about economics, music, media, pop-culture and sports and loves using technology and social media in the classroom to get her students excited about learning. Kim is founder of Rockonomix, an inter-university contest held in the USA that encourages students to compose economic-themed lyrics to a popular song.

Find Out:

  • how Kim Holder uses music to assess her students taking micro and macro classes.
  • about Kim’s passion for economics and how she uses sports to explain economic concepts.
  • how you can become an ‘Economic Rockstar’ in the annual Rockonomix contest.
  • how to motivate students to study economics.
  • how selfies and memes can make students aware of economics around them.
  • about Kim’s decision to study economics because of true love.
  • about Kim’s summer course ‘Economics Is Everywhere’ which introduces you to micro and macro, as well as personal finance.
  • about the Centre for Economic Education at University of West Georgia and how it is for the wider community and not just for students.
  • how K-12 teachers can avail of the workshops put on by the Centre for Economic Education at University of West Georgia.
  • about Pop Econ and why more should be done to introduce it to students at a principles of micro and macro level.
  • why students should be pushed to seek out economic themes in movies.
  • how to use Twitter for the classroom and the best practices to communicate with students.
  • what Kim’s top 3 movies are that contain economic themes.
  • the importance of financial literacy for students who are faced with taking out college loans.
  • how Kim Holder escaped poverty through education.

Economics:

In this interview, Kim mentions and discusses: Microeconomics, macroeconomics, health economics, substitute goods, complementary goods, GDP and monetary indicators.

Economists:

In this interview, Kim mentions and discusses: Kenneth Arrow, Dirk Mateer and Brian O’Roark.

Favorite Economist:

  • Kenneth Arrow

Affirmation:

“Enjoy the journey”

On Potential:

People have a lot more potential than we give credit for. There’s just something small that’s holding them back. It might be money. It could be the absence of schools in the local area. It could be personal circumstances. Kim Holder.

On Economics:

Econ is very distinct from the other business disciplines because it’s more of a philosophy or a way to view the world than just a specific tool. Economics is a little bit business, a little bit social science, a little bit science. It has something of everything in it and that’s kind of my personality. Kim Holder.

About Rockonomix:

The following is an excerpt taken from Kim Holder’s Rockonomix website. I couldn’t explain it better than the actual founder, Kim:

Many of today’s students arrive in class with headphones on, listening to the latest hit song or watching the newest viral video. They often question learning material that they can simply “Google” and struggle with applying textbook concepts to the world around them. As educators, we are continually struggling to find ways to reach each of these students by engaging them in the learning process. Rockonomix, a student-produced music video parody project, helps motivate student learning by using popular media to reinforce basic economic principles.  Here is our story of how we brought Rockonomix to our students.

 As a brand new lecturer in the Department of Economics at the University of West Georgia in the fall of 2010, I was faced with the daunting task of engaging new business students as well as those in the general population who were completing either their required economics sequence or part of the core requirements. I developed a number of activities designed to help students learn to “see” economics in their everyday lives in order to help solidify the concepts that we learned in our lectures and readings. These smaller projects helped prepare students for the end of semester finale known as Rockonomix, a group based project where students are asked to write new lyrics to a popular song and produce their own original music video.

Since my introductory courses tend to contain a mix of students with a variety of skill sets, majors and interest levels, this project allows each student the unique opportunity to highlight talents that are not readily apparent in the traditional classroom. In addition, student feedback at UWG has been overwhelmingly positive with many indicating that they now view the subject of economics in a different way, that the assignment motivated them to read their textbook and actually learn the material so that they could write their song lyrics, and that linking economic concepts to music helped them remember difficult key concepts.

To increase student interest and collaboration across campuses, we have created the National Rockonomix Contest. Currently in its second semester, the national competition allows students from different universities across the country to compete with each other for the best overall video.  This additional level of interactivity has added a unique dimension to student submissions and pushed them to produce works that are truly amazing works of economic art!

 Kim Holder

Vote now for your favorite student music video.

Favorite Internet Resource:

  • YouTube: 
  • The Critical Critics: A website dedicated to the critical review of movies.
  • St Louis Fed: The Federal Reserve Bank of St. Louis was established in 1914, after the creation of the Federal Reserve System in 1913.

Kim’s Top 3 Economic-Themed Movies:

  • Moneyball
  • In Time
  • Hunger Games

Recommended Book:

Where to find Kim:

 

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029: John Cochrane on the Future of Finance, MOOC Education, Regulation and the Case for Free Markets

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029: John Cochrane on the Future of Finance, MOOC Education, Regulation and the Case for Free Markets

John Cochrane is the AQR Capital Management Distinguished Service Professor of Finance at the University of Chicago Booth School of Business and is currently Senior Fellow at the Hoover Institution.

Professor Cochrane is a Research Associate of the National Bureau of Economic Research and past director of its asset pricing program, and an Adjunct Scholar of the CATO institute.

John is past President and Fellow of the American Finance Association, and a Fellow of the Econometric Society. He has been an Editor of the Journal of Political Economy, and associate editor of several journals including the Journal of Monetary Economics.

John’s is the author of 3 books including the book Asset Pricing. Other  finance publications include articles on stock and bond markets, exchange rates, interest rates, liquidity premiums and option pricing.

John’s monetary economics publications include articles on the relationship between deficits and inflation, the effects of monetary policy, and on the fiscal theory of the price level.

John currently teaches the MBA class Advanced Investments and a variety of PhD classes in Asset Pricing and Monetary Economics.

John earned a Bachelor’s degree in Physics at MIT, and earned his Ph.D. in Economics at the University of California at Berkeley.

In addition to research and teaching, John is a competitive sailplane pilot and windsurfs.

John blogs as ‘The Grumpy Economist’.

Find Out:

  • why Professor Cochrane is known as the Grumpy Economist.
  • about John’s Proposed New Structure for US Debt.
  • how to create financial stability with a currency fit for the 21st century.
  • about the advantages of government debt.
  • what happened when Ireland guaranteed the bondholders and entered into a bailout.
  • the limitations to a eurozone country when faced with a bailout.
  • why countries should be allowed to act like companies and default.
  • why Greece should have defaulted and why Ireland should not have bailed out the bondholders.
  • about Professor Cochrane competing in the World Gliding Championship for the USA.
  • why Professor Cochrane delivered his Asset Pricing PhD course as a MOOC.
  • the costs and benefits of delivering a MOOC.
  • how MOOCs will become the textbook of the future.
  • how to monetize a MOOC and which type of course would have mass market appeal.
  • Ireland’s aim to become the capital of MOOCs.
  • how to create a social environment for students using MOOCs.
  • why Professor Cochrane went from a degree in physics to a PhD in Economics.
  • why people are stuck in the welfare system.
  • about the over-regulated US economy that restricts the development of competitive markets.
  • how Uber gave supply-side competition in the US taxi market.
  • what should be done to the US healthcare industry which is protected from competition.
  • if the US Federal Reserve should end its monopoly on the dollar and allow other currencies, such as Bitcoin, compete.
  • about the unique feature of US government debt – it cannot default!
  • who are Professor Cochrane’s heroes due to their no bullshit approach to research.
  • why the the 2008 financial crisis was proof that the efficient market hypothesis works.
  • what annoys Professor Cochrane.

Influencers:

  • University of California: George Akerlof, Roger Crane, Jim Pearce and Tom Roffenburg.
  • University of Chicago: Robert Lucas, Lars Hansen, Gene Fama, Ed Prescott and Tom Sargeant.

Defining Moment

A professor was showing an economics class that John attended in which he explained, using the Budget Constraint, why people are stuck in welfare. Up to that point, John had read that it was due to people being lazy or that it was due to moral, sociology or cultural. However, the analysis showed that any normal person who was stuck below an income threshold and receiving benefits would not welcome a moderate pay rise as they would lose entitlements.

Here was a value-free, and ethics-free, a morality-free discussion of a social problem that showed exactly where it came from, exactly how to fix it, exactly how the perverse design of the well-intentioned welfare was causing people to get stuck. That was my conversion moment.

Economics:

In this interview, John mentions and discusses: Asset Pricing, unintended consequences, free markets, incentives, budget constraints, welfare, competition, supply-side competition, regulation, monopoly, natural monopoly, bitcoin, debt, default, Gold Standard, fractals and efficient market hypothesis.

Economists:

In this interview, John mentions and discusses: George Akerlof, Roger Crane, Jim Pearce, Tom Roffenburg, Robert Lucas, Lars Hansen, Eugene Fama, Ed Prescott, Tom Sargeant, Benoit Mandlebrot

“What makes free markets work is the discipline of competition, of the ability of new entrants to come in and disrupt things” – Professor Cochrane.

“Regulation is stifling the ability of  new people with great ideas, with cost control ideas to come in and make healthcare both better and a lot cheaper” – Professor Cochrane.

The Future of Finance:

Professor Cochrane likens the financial crisis as a ‘good old-fashioned’ run on the banks. Twenty years ago, the world economy developed ‘electronic interest-paying money’. Most of the financial system uses overnight repurchase agreements, money market funds and short-term government bonds. These became very liquid and have been prone to runs just like bank notes. For financial stability, the crucial thing is to get away from this run-prone system.

John proposed that governments should provide interest-paying electronic money that will not experience a run in the 21st Century. This would look something like a money-market fund. It will always be worth $1, pays interest and will always be electronically transferable. Financial stability would be achieved and we would have more efficient payments.

On Ireland Bailing Out All Depositors

Irish banks took a lot of German deposits and invested them in US sub-prime mortgages. The money passed through Ireland and it’s not quiet clear why the taxpayers of Ireland who footed the bill for that. Why couldn’t the depositors from Germany lost a little bit of their money along the way. That would have seemed to make sense. Cyprus and Iceland made their depositors take haircuts.

When you’re a small country with an open banking system, the model of the government who bails out all depositors including foreign depositors is not one that can go on. That’s a troublesome system. Ireland maybe regretting bailing out all of the depositors in the process.

Since Ireland is part of the EU and the eurozone, it cannot print money to bailout people. Government debt in that situation becomes private debt. Ireland would not be in as much trouble if it didn’t bailout the depositors in its bank.

Greece certainly should have just defaulted the way a company defaults. If a company defaults on its debt it doesn’t have to leave the eurozone, so why shouldn’t countries become like companies.

MOOCs: The Future but Not a Substitute for Formal Education

Professor Cochrane delivered his PhD class ‘Asset Pricing’ as a MOOC. He felt that such ‘cut and dry’ material would be easier to get started with, particularly when he also had a book of the same name, rather than a more discussion-based empirical class. There were numerous challenges along the way. “It turned out being a lot more work than I thought it was going to be but it also turned out very rewarding”. It allows Professor Cochrane to leverage his delivery going from teaching 20 students to upward of thousands of students.

MOOC

Like any new technology, there are lots of unanticipated ways in which it can be used, unanticipated markets that are going to find it that nobody thought about it how that was going to work out. MOOCs were originally intended to deliver ‘introductory-type’ classes which would have mass appeal. However, John believes that the way forward for MOOCs is in the delivery of ‘distinctive-type’ classes where the class is more specialised and in greater variety.

Creating a MOOC can be costly in terms of time, resources and the infrastructure that needs to be built to deliver the course. “Like all technology, if you’ve ever made a webpage, it has a high fixed cost but low marginal cost.” The secret to putting a MOOC together is it has a high fixed cost to put it together. Creating the video content for lectures is easy. It’s putting together the significant typo-free problem sets and other materials like that that’s hard. But once the MOOC is done, it is scalable in terms of multiple years and to a lot of people.

Professor Cochrane views MOOCs as a way of creating a ‘flipped classroom’. They will not be a substitute for formal education but one of the ways that MOOCs will develop into is that they will become the modern textbook. “The MOOC is a self-contained class outside the university but it’s a textbook for my classroom”. Professor Cochrane’s Asset Pricing class at Stanford is a much less formal experience due to the flipped nature of his classroom.

MOOCs have allowed his students to review the material and answer the questions in his series of videos before they arrive to class. Subsequently, Professor Cochrane can deliver more advanced material, as well as have an in-dept discussion on the material the student reviewed on his MOOC. The class becomes a much more rewarding, personal, interactive experience.

MOOCs will be beneficial to the university in so far as creating a brand so as to attract more students to attend. Being online with a MOOC will be useful for the university to connect with their alumni who may be interested in doing an executive education. The MOOC will be paid for indirectly by attracting people into the executive programmes since the flipped classroom model would work very well for this cohort of people.

The social environment of the class turns out to be very important to getting people to stick with the course on MOOC. MOOCs need to move from its current form to a version “2.0 Social Internet and to re-create that social structure that gets people going. The next round of MOOC will need to integrate social media so that the learning experience becomes part of a community of students just like it is on campus”.

How to Create a Social Environment for Students on MOOCs

  • Scheduled classes so that students attend together.
  • Discussion forums where students are encouraged to participate after the class.
  • Weekly Google Hangouts

http://youtu.be/U5CfYQw4X7k

How Similar the Study of Physics is to Economics

Physics teaches you quantitative analysis as well as modelling.

There is some truth in the physics joke: “Physics is the study of massless elephants going down a frictionless sandpaper”. You have to find the elements of a problem, simplify it down to what’s solvable and intuit how it works, not only mathematical. It’s about the intuition of seeing something work and describing it mathematically.

Economics is similar to undergraduate physics – everything before Quantum Theory. If you’re good at mechanics and electricity of magnetism, then that structure is what’s behind economics and you should be equally good at economics. You will also be good at the modelling part of economics which is all about throwing out all the real-world details that don’t really matter to a particular problem. If the mass of the elephant wasn’t particularly important to that problem, then just assume the mass of sumables. That’s the key to economics.

Economics is full of quantitative parables and you have to make them vivid by making them simple and clear. And then understanding intuitively how to put the pieces together.

On discovering economics, Professor Cochrane believed that he could use the tools of Physics to understand all the hard social problems that everybody is fighting and getting so excited about in a value-free way.

On Bitcoin:

“The design of Bitcoin is fundamentally flawed. We have lost anonymity. That worries me for political reasons as well as economic reasons”. Anything that is done electronically, then the National Security Administration knows what you bought if you use your credit card. Cash allows you to do things anonymously. “Bitcoin promised anonymity but didn’t really deliver it in the first place.”

Bitcoin is based on the Gold Standard model where we need a fixed supply of something rather than a steady price of something.

Where to Find John Cochrane:

The Grumpy Economist

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028: Alice Louise Kassens on Nudging Students to Study Economics and Why Mainstream Media Should Publish Research on Mental Health

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028: Alice Louise Kassens on Nudging Students to Study Economics and Why Mainstream Media Should Publish Research on Mental Health

Dr. Alice Louise Kassens is an Economics Professor at Roanoke College and has already built a notable
reputation in her profession.

Alice is the current recipient of Roanoke’s John S. Shannon Professorship in Economics, which honors and supports a faculty member who is an outstanding teacher and accomplished scholar and who is thoroughly committed to enriching the lives of Roanoke students.

Dr Kassens’ work at Roanoke includes creating and maintaining an economics program blog and a biannual newsletter, Roanomics. She also serves as the faculty advisor for the College’s Economics Club.

Alice’s areas of expertise include labor and health economics. She has won several awards and fellowships, and her work has been published in numerous academic journals.

Alice is one of three economists who won Cengage Learning’s 2013 Economist Educators Best in Class Award for her method of teaching using Twitter.

Dr Kassens is president of the Virginia Association of Economics, has recently been appointed by Governor McAuliffe to his Joint Advisory Board of Economists, is a senior analyst for the Institute for Policy and Opinion Research and is a Referee for the Journal of Economic  Education, the Journal of Economics and Finance Education, and the National Council on Undergraduate Research.

Alice is the author of Changing Perceptions and Waistlines – A Bayesian and Behavioral Approach and is known as the ‘Running Economist’ not because of her busy lifestyle but because she is a competitive runner.

Alice earned her bachelor’s degree from the College of William and Mary and her Ph.D. from North Carolina State University.

Personal Habits:

  • Running, swimming and looking after her five dogs and an 18 year old cat!

Economic Themes:

In this interview, Alice mentions and discusses: 

Supply-side and demand-side of the housing market, primary research methods, sample selection bias, surveys, employment, unemployment, the Great Recession and regression discontinuity design models.

Economists:

In this interview, Alice mentions: 

Milton Friedman, Thomas Sowell, William Rogers, Mark V. Pauly, Alvin Headen, Yana van der Meulen Rodgers, Luther Lawson, Dean Baker and Jadrian Wooten.

Takeaway:

Do a little something everyday, even if it’s as simple as downloading a dataset, making an outline for a paper, talking to a colleague about a project. Do something small and all of it adds up overtime.

Find out:

  • how Alice’s secrets to increasing an economics class size.
  • how Alice uses social media to encourage students to learn economics more effectively.
  • how Twitter can be used to remove the limitations to classroom-specific learning.
  • how Dr. Kassens collects data for the Consumer Sentiment Report for Virginia.
  • how to remove sample selection bias when collecting primary data.
  • how to analyse unobservables using observed data.
  • about the benefits of small-class sizes for learning.
  • which economist Dr. Kassens would love to collaborate with.
  • how being an athlete helped with a career decision to become a health economist.
  • why Dr. Kassens wrote a report on gender disparities in health care in Papa New Guinea.
  • about the gender disparity in depression levels upon losing a job.
  • whether men or women respond better to losing their jobs by continuing to job search.
  • if people lose their job because they were depressed or are they depressed because they’re unemployed?
  • how Dr. Kassens’ research can help people with depression if the media can report her findings to the masses.
  • if people reduce their expectations to live longer once they are diagnosed with Type II diabetes.
  • if obese people who are diagnosed with Type II diabetes respond by losing weight.
  • how writing a blog makes you accountable for what you do and helps you get things done.
  • the importance of why organisations should make their data freely accessible to academics.

Nudging Students to Study Economics at Roanoke College

  • Running Economist Blog.
  • Twitter Feeds.
  • Roanonomics Newsletter.
  • Economics Club.
  • Economics Reading Group.
  • Economics Study Trip.
  • Create a sense of community among Economic Students.
  • Working with Advanced Placement Teachers at High School.
  • Inviting High School students to Roanoke College Campus.

Dr. Kassens offers her best students the opportunity to teach economics weekly at the local Patrick Henry High School in Roanoke to help teach Mr. Hartman’s Advanced Placement Economics course. This is part of Dr. Kassens’ Service Learning Independent Study in which participating seniors are awarded academic credit for meeting the course requirements. Students teach the economics lesson plan of the day and sometimes run simulations, do group-work or show movies or tv programs like House of Cards, extracting economic concepts and themes from them. This helps reinforce the learning process both for the economic seniors and for the High School students.

To fulfil a whole credit, Dr. Kassens’ students are required to write reflective pieces based on a number of questions such as ‘What did you learn about yourself?’, ‘How do you think you’re helping the community?’ and ‘What challenges did you face?’. Dr. Kassens has identified research which shows that employers need students to be able to articulate what they learned and why their independent study or internship was important, not that they actually did one.

The Service Learning Independent Study at Roanoke College fulfils such a need. Not only does it give students the opportunity to gain invaluable experience but also prepares the student to be self-motivated, confident and above-all being able to demonstrate, in an articulate fashion, to potential employers what they have gained from such an experience.

This program is a win-win both for the senior at Roanoke College and the student at Patrick Henry High School. The senior, who is at this stage studying intermediate micro and macro, will go over principles of economics to teach the High School students. This only reinforces the learning process and makes them a more accomplished student. By reinforcing the material of principle micro and macro, the student can create a solid foundation to build upon, which will become invaluable at intermediate level economics.

Using Twitter in the Classroom to Teach Economics

Dr. Kassens uses Twitter as part of her assignments for her Principles of Micro and Macro classes. Students are given 10 different tasks to fulfil during this semester-long assignment in which they need to write and articulate an economic-related tweet based on the pre-assigned guidelines. For example, students are required to tweet about economic policy as outlined in the State of the Union address by the US President. Following this, students must then comment on or answer a question made by a fellow student. The hashtag #kassensecon122 must be used in order to keep the conversation going and for ease of tracking the students work. This can be challenging due to the limitation of articulating a tweet of up to 140 characters in length.

The students also helped Dr. Kassens in the development of a rubric so they knew how they were going to be graded. It was a short but well-defined rubric, which was important as it allowed Dr. Kassens to be responsive leading to a fast turn-around in grading results. This was considered vital since “the goal was to improve their writing”. Using Twitter to improve writing skills may, at first, appear a failed experiment but it is surprisingly “difficult to put into 140 characters something meaningful that’s going to score well on the rubric because they can’t use funny abbreviations”.

[Tweeting your way to improved writing, reflection, and community by Dr. Alice Louise Kassens]

The rubric was therefore important so that students could get feedback quickly allowing them to make improvements in their next assignment. Finding topics that Dr. Kassens believes her students would find interesting was also important. Dr. Kassens reached out to other economists on Twitter, some she didn’t know personally such as Dean Baker, and asked them to engage with her students by asking  a question. Once students answered this question, Dr. Kassens sent the answers back to the economist.

The benefits Dr. Kassens found with using Twitter in assessing economics was that students’ writing skills improved as evidenced by how the rubric scoring went but “it also broke down these barriers that you have with a classroom so that they could beyond the classroom walls and interact with well-known economists”.

The semester-long project at Roanoke College is worth 20 to 25% of the students’ final grade. However, Dr. Kassens found it interesting that half of her students did not have a Twitter account. She had believed that most young kids use Twitter. This statistic seemed consistent for each of the three semesters in which the assignment was delivered. Consequently, the first week of the semester was devoted to setting up an account, informing students of how to use Twitter and sending out ‘practice’ tweets that reflects an economic argument, concept or point-of-view within 140 characters.

Using Twitter to sharpen critical thinking and writing skills by Dr. Alice Louise Kassens

Favorite Internet Resource:

Recommended Book:

Where to Find Alice Kassens:

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027: Craig Medico on How Economics Saved My Career, How I’m Embracing Technology in the Classroom and Why I’m off to Wrestling School

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027: Craig Medico on How Economics Saved My Career, Using Technology in the Classroom and Why I’m off to Wrestling School

Craig Medico is an Economics and History educator in New York with 11 years ofCraig Medico classroom experience. Craig is doing amazing things to get young people to understand and become interested in economics.

He is the author of No Bull Review – Macroeconomics and Microeconomics: For use with the AP Macroeconomics and AP Microeconomics Exams (2012) and No Bull Review – Macroeconomics and Microeconomics: Top 10 Guide (2014). 

Craig is the developer of several best-selling iPhone test prep apps from Study By App, LLC, including Economics AP (2010), Economics AP Free (2011), and Economics Flashcard Review (2011). 

In 2010, he contributed to WNYC Radio/Public Radio International’s morning news program The Takeaway. 

Craig is the Macroeconomics instructor for the Junior State of America summer school at Princeton University and teaches Advanced Placement Economics at Paul D. Schreiber High School in Port Washington, New York.

He recently completed an economics educator study tour of Peru with the Global Economic Education Alliance in association with the University of Colorado-Colorado Springs and the Peruvian University of Applied Sciences.

In his spare time, Craig records and produces educational music videos for The Social Studs.

Economic Themes:

In this interview, Craig mentions and discusses: Teaching economics, Advanced Placement program, opportunity costs, supply and demand and the Philips Curve.

Economists:

In this interview, Craig mentions: 

John Brock.

Find out:

  • about Craig Medico’s education trip to Peru.
  • about the class distinction in Peru and how it is upsetting the quality of education for the poor.
  • how technology can be so beneficial to learning.
  • how Peruvian kids are excited about the country’s economic future.
  • how a trip to Peru will become part of Craig’s lessons at High School.
  • about Craig’s opinions about using technology in education.
  • why Craig embraces technology in education both for himself and for his students.
  • if there is a disruptive technology that exists that could compromise the traditional bricks-and-mortar way of education.
  • what upset Craig when he saw a mother and son at a donut shop.
  • how economics saved Craig’s career.
  • how idiot-proofing economics allowed Craig to master the concepts.
  • about Craig’s philosophy in his teaching methods and how it helps students to learn effectively.
  • about the Advanced Placement programs in the United States and how to earn college credit.
  • about Craig’s philosophy which is based on the thoughts of Roman Emperor Marcus Aurelius.
  • who are George Washing-tone and Abrajamz Lincoln and what are they teaching kids?
  • why Craig Medico transforms into Mr Medi-KO and why he’s off to wrestling school.
  • about the technological challenges facing all schools today.
  • about some of the apps you can use to create educational content.

Defining Moment:

Craig self-proclaimed that he “was actually an economic moron up to about 12 years ago”.

Craig was originally a World History instructor and his school wanted to offer an Advanced Placement program. In order to keep his job, Craig had to “figure out economics. So, in a desperate attempt to keep my job  that year, I’d to figure out how to make economics work for me. I’d to figure out a way to idiot-proof the content of the curriculum since I was a complete economic idiot.”

“I was pretty much in my students’ shoes moments before trying to teach them and I used that to my advantage. I knew what it was to be like in their shoes.”

“When you teach something, you reinforce the material for yourself and perhaps take the most important step toward mastery of that content”.

Affirmation/Philosophy:

It’s important to reserve some quite time for myself each day. I try to workout a few days each week even if it’s for 30 minutes. It helps clear the mind. It helps me feel good and if you feel good you look good.

I have this 3 hour window every morning where my mind feels extra sharp and this is where my creative ideas typically originate. Ultimately the goal is just to be a happy person. Be happy with what I do everyday.

“The happiness of your life depends on the quality of your thoughts” – Roman Emperor Marcus Aurelius.

Influencers:

My students influenced Craig the most when it came to writing the books and apps.

“When it comes to developing material for the classroom, my influencers are Metallica, KISS, Aerosmith and the Rolling Stones. I used to view each lesson as a performance – like a rock show.”

Takeaway:

No matter how old you are or where you are in life, always be an active learner. There’s nothing more rewarding than learning new ideas, new activities, taking on new hobbies. And then once you learn something, become a teacher. Share it with the people around you.

About the Use of Technology in Education:

I love it. I don’t think it necessarily replaces the classroom experience. But it supplements it in such a great way. I view the online stuff as just another way of diversifying how we learn.

MOOCs are the big thing in education right now. To take a class with 80,000 other students – how cool is that? And do it on your own terms, do it at low or no cost.

“I got into technology because it’s fun. It’s so much fun to put the websites together and the apps, the books and the videos on YouTube. I do it to keep things interesting for me. If I taught the classes the same way every single year I would end up in a huge rut. My goal is to constantly improve and be as great as a teacher as I can for my students.”

“I think human interaction is very important. Especially in the workplace where we still have to deal with human beings. We’ve gotta create students who can handle that down the line.”

Tools Educators Can Use to Help with Teaching:

  • Powerpoint: Allows diagrams to show movement such as changes to curves.
  • Twitter
  • Snapchat
  • Apps:
    • Explain Everything – Used to make YouTube videos.
    • AppShed – create your own apps or get students to create their own.
    • Socrative – Socrative lets teachers engage and assess their students with educational activities on tablets, laptops and smartphones.
    • studybyapp – provides an intuitive web-based platform that enables you to build apps that fit your needs.

Education in Peru: A Tale of Two Standards but a Key Determinant to Long-Term Economic Growth

A recent trip by Craig Medico and 11 other educators from the USA was organised by the Global Economic Education Alliance in partnership with Dr. John Brock, Director of the Center for Economic Education at the University of Colorado, Colorado Springs (UCCS) and Claudia Sicoli, Director of the Centro de Educación Económica de la Universidad Peruana de Ciencias Aplicadas (UPC) in Lima, Peru.

Mr. Medico embarked on a tour of Peru’s educational system as well as experiencing some of the economic development that has been going on in Peru over the last few decades. This trip was a great opportunity both for Peru and the USA to forge an education alliance and to open up a teacher-exchange in the future and to improve the education system in both places.

Craig visited wealthy private schools, middle-class private schools and poor public schools, as well as meeting with students at the local university. He, along with the other educators met with representatives of the Central Bank of Peru and the ministry of education.

Craig found a lot of challenges and inequities throughout Peru’s educational system. A visit to one upper-class private school in Lima was an ‘eye-popping experience’. This was a trophy school that epitomised the trappings of wealth and symbolized the success of Peru’s economy. “It resembled more of a country club than a school – large outdoor swimming pools, soccer fields, lots  of open space. Lots of technology in the classroom, every student had their own computer”.

The construction of new buildings on the grounds of this private school confirmed its continued and rapid expansion and is analogous to the determination of Peru to be the best in attaining educational standards. Students are granted a lot of academic freedom through project-based learning. “Most of the instructors are foreign that would come in from overseas and teach for a couple of years. They seem to be high-level teachers.”

It was a totally different story for a poor public school outside Lima. “That school was surrounded by dirt and dilapidated housing. I didn’t see a single computer in a classroom. The closest thing was a dusty broken TV set that didn’t work anymore. The students seemed very unengaged and many were confused. I observed one teacher who was teaching students completely incorrect information.”

In that particular lesson, students were working in groups to understand bar graphs. Their prop were wooden boards with nails sticking out from them and they were creating bar graphs with rubber bands. Craig is shocked at how this school has fallen behind in standards, particularly failing to embrace technology due to the lack of funding it receives. 

“Many struggle through it and I’m thinking, WOW, this is a great example of where technology, like an interactive white-board, would greatly enhance these kids’ classroom experience.”

The thing that struck Craig the most, in addition to the technology, was the teacher’s approach to teaching math. She wasn’t teaching math using the ‘Order of Operations’ – the PEMDAS Rules that are applied to learning in 3rd and 4th Grade. She was just solving problems on the board left to right. Craig was so concerned about a math problem that was being solved incorrectly by the teacher at this point that he imagined mistakes and incorrect information being taught at other schools, not only in Peru, but also in the US.

Craig interacted with kids from a Middle School in Cusco, Peru who where so excited about their country’s economy and what it means for them. When they asked Craig and the other educators about their personal thoughts, Craig, in true economic fashion, highlighted the key underlying strengths and benefits that are determining factors to a successful economy: the valuable inputs and factors of production, property rights are better protected, buildings and infrastructure is being built to accommodate growth and sustain future economic development.

However, Craig gravitated toward education being the number one catalyst for maintaining a healthy, vibrant and opportunistic economy, which is a reflection of his true-calling as a passionate and dedicated educator. “Improving education and human capital is going to be the main determinant as to whether Peru is going to be a true economic powerhouse over the longer term.”

Craig is an champion and a hero, not just in the wrestling ring, but in the classroom. His passion and dedication exudes and shines through his continued and dynamic approach to making learning (and teaching) fun and accessible. Craig is an early adopter of the use of technology and social media in the classroom, which embraces the needs of both student and teacher. His students are extremely lucky to have a teacher so dedicated to giving it all and I sincerely hope they realise this. It seems that he has unlocked the true meaning of life: help others and find happiness in the things you do each day.

Recommended Books:

Apps by Craig Medico:

All three apps by Mr Medico can be found on the iTunes store but here is a link that will take you to his website showing the apps on the right of the homepage.

Where To Find Craig Medico:

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025: Dan Hamermesh on the Economics of Beauty: Attractive People Are More Successful

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025: Dan Hamermesh on the Economics of Beauty: Attractive People Are More Successful 

Dan Hamermesh is Professor in Economics at the Royal Holloway University of London and at thePortraitHamermeshwithoutJacket University of Texas at Austin. Dan researches the economics of beauty. He received his Ph.D. from Yale and has since taught at Princeton, at Michigan State, and at Texas. He has held visiting professorships at universities in North America, Europe, Australia and Asia, and lectured at almost 250 universities in 48 states and 33 foreign countries. His research, published in nearly 100 refereed papers in scholarly journals, has concentrated on time use, labor demand, discrimination, academic labor markets and unusual applications of labor economics (to beauty, sleep and suicide).

Professor Hamermesh has received many notable and distinguished honors and awards in recognition for his contribution to the field of economics. These include the Mincer Award and the IZA Prize in Labor Economics, the John R. Commons Award, as well as many teaching of excellence awards.

Daniel’s teaching include Microeconomics; Macroeconomics; Econometrics; Economics of Labor and Economics of Life.

Daniel is the author of many books including Demand for Labor: The Neglected Side of the Market, Beauty Pays: Why Attractive People Are More Successful, The Economics of Time Use and Economics Is Everywhere. He is also a regular contributor to the Freakonomics blog and podcast.

Economic Themes:

In this interview, Dan mentions and discusses:

Speculation, inter-temporal maximisation, labor economics, incentives, wages, welfare payments, comparative advantage and externalities.

Economists:

In this interview, Dan mentions:

 John Maynard Keynes, Gary Becker, Gregg Lewis, Robert Lucas and Michael Lewis.

Influencers:

Gary Becker and Gregg Lewis

A lot of my stuff is the weird kind of stuff that Becker pioneered – Dan Hamermesh.

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Gregg Lewis had a concern about data – about doing it right, making sure you were right. That’s a crucial thing. One has to take data seriously – Dan Hamermesh.

Advice:

Do what you think you’ll enjoy, because if you think you’ll enjoy it the odds are pretty good you’ll do well at it. You’ll be motivated to work hard and to succeed – Dan Hamermesh

Find out:

  • how economics can be used beyond the theoretical framework we see in textbooks.
  • why we should think about economics in things we see or do in the real world.
  • how students of economics can inspire their professors in a two-way mutual learning process.
  • how economics is everywhere – we just need to think, see and interpret.
  • how economics is enjoying a revival in reaching to mass audiences.
  • why we should read interesting books on economics.
  • if happiness is related to how beautiful or attractive you are.
  • why better-looking men are happier.
  • how to recognise if you are beautiful.
  • what good-looking attorneys, prostitutes, politicians and NFL quarter-backs have in common.
  • if economists should be studying the effects of being attractive and ugly.
  • if people have an increased need to become beautiful.
  • whether increased spending on cosmetics, hair and clothing by women will have a pay-off in the labor market.
  • if plastic surgery to alter beauty results in higher earnings.
  • about the disability benefits available to obese people.
  • if an obese person is perceived to be less beautiful than a slim person.
  • if there is a relationship between ugliness and where a person lives.
  • why Dan was interested in studying the economic impact of beauty.
  • which economic markets show evidence of the impact of beauty.
  • how Dan first met his wife of 42 years.
  • what Dan thinks of Abercrombie and Fitch’s ‘six-pack’ hiring policy.
  • if being attractive prohibits opportunities in the labor market.
  • if you should work in the private or public sector if you are good-looking.
  • how to identify an externality on the side-walk.
  • why you should do what you’ll enjoy rather than chasing the money.

Why Attractive People Are Happier and Economically Better-Off.

Attractive people have been found to be happier than not-so-good-looking people. Better-looking men receive higher incomes, which make them happier overall. Attractive women are also happier, but their happiness is more direct in that their happiness is the result of knowing that they are good-looking. Attractive women do receive higher incomes but this is not a direct link to their happiness as it is for men.

“The beauty itself is directly more salient to them than it was for men, even though the overall effect was identical for both genders” – Dan Hamermesh.

How someone realises if they are attractive or not is due to the reinforcement by other people in making you aware whether you are good-looking or ugly. “Better-looking babies are treated better by their parents and by other people. Better-looking 5 year olds are treated better in kindergarten than ugly ones. When you’re chosen for teams or go out in High School, the better-looking people do better. And they also, given even the amount of education they attained, they’ll do better in the labor market. They’ll get better jobs, make higher pay, even within the same occupation” (Dan Hamermesh). Good-looking attorneys, prostitutes, politicians and National Football League quarter-backs make higher pay than their uglier colleagues.

In the labor market, the top one-third of people who are considered good-looking will earn 10 to 12% more in income independent of any differences that might exist between them and those not considered good-looking.

A woman’s increased spending on cosmetics, hair and clothing will not increase her perceived beauty and will also have a minimal pay-off on the labor market for her. Plastic surgery for cosmetic reasons does not have a benefit in terms of increasing earnings in the labor market. You do it to feel good. It’s not an economic investment, it’s a feel-good investment.

“Unless a person is morbidly obese, people do not view him or her as being any uglier than anybody else, all things taking together” – Dan Hammermesh.

Does Location Determine Whether You Are Beautiful or Ugly?

I ask Dan whether a person’s good looks are determined by the area in which they live. The reason I ask this is based on our earlier discussion on why attractive people typically earn a higher income. It can be fair to suggest that cities or regions that pay more would consequently attract good-looking people.

Dan states that “if you’re a good-looking person, you’re going to flock to an area where your looks pay off more. And if you’re a bad-looking person, you might want to go away from an area where looks pay off. In the UK, where people who were born in Scotland and Wales, if they’re good-looking, are more likely to migrate to South-East England (London) than other people”.

Also, “people who were born in South-East England (London) who are bad-looking appear to move to outlying areas where their looks aren’t so important”.

“Looks not only affects where we live in terms of what we make, but where we choose to live in terms of where we spend out adult lives. You’ll go where you get the biggest bang for your buck or, in this case, the biggest pounds for your beauty.”

Economic Markets Where Beauty and Attractiveness Are Present:

  1. Labor Markets: Higher wages and better conditions.
  2. Marriage Markets: A good-looking woman will attract a man who earns more.
  3. Market on Unsecured Loans: Attractive people are more likely to get a loan and on better terms.

Recommended Books:

Where To Find Dan Hamermesh:

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024: Greg Davies on Behavioral Finance and Controlling Your Emotions When Making Trading Decisions

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024: Greg Davies on Behavioral Finance and Controlling Your Emotions When Making Trading Decisions

Greg Davies is Managing Director and Head of Behavioral Finance at Barclays.  He joined the firm in December 2006 to develop and implement commercial applications drawing on behavioural portfolio theory, the psychology of judgment and decision making, and decision sciences.

Today Greg leads a global team of behavioural and quantitative finance specialists, and is responsible for the design and global implementation of Barclays’ Investment Philosophy.

Greg is an Associate Fellow at Oxford University’s Saïd Business School and his first (co-authored) book, ‘Behavioral Investment Management: An Efficient Alternative to Modern Portfolio Theory’, was published in January 2012.

He is co-curator and co-creator of Open Outcry – a reality opera based on the stock market trading floor.

Greg has authored papers in multiple academic disciplines, presents at academic and industry conferences, and is a frequent media commentator on Behavioural Finance.  He is an Editorial Board Member of the Journal of Behavioural and Experimental Finance.

Greg studied at the University of Cape Town and obtained a degree in Economics, Philosophy and Finance. He followed this with an MPhil in Economics and a PhD in Decision Theory and Behavioural Finance from the University of Cambridge.

Economic Themes:

In this interview, Greg mentions and discusses:

Behavioral economics, behavioral finance, rationality, irrational behavior, heuristics, cognitive biases, system 1, system 2, homo economicus, trade-off, home bias, familiarity bias, risk, return, portfolio, efficient frontier, stochastic model, trading floor, noise, herding, bubbles, booms, bust, returns, standard deviation, deterministic model, decision theory, expected utility theory, mean variance and portfolio theory.

Economists:

In this interview, Greg mentions:

Danial Kahneman, Amos Tversky, Terence Odean, Warren Buffet, Charlie Munger and Harry Markowitz.

Influencers:

Jon Elster and Amos Tversky.

Advice:

Be multi-disciplinary. Look for links between fields. Be continuously curious.

Keep learning. Stay curious. Say ‘yes’ to things that are outside your comfort zone.

Find out:

  • what is Behavioral Economics/Finance
  • the disconnection between economics and psychology.
  • how Kahneman and Tversky were ‘swimming up-stream’ to bring common sense to economics.
  • why viewing the world through biases is harmful to behavioral finance.
  • why the ever-increasing list of biases may not be good for the behavioral finance field.
  • about System 1 and System 2 as popularised by Daniel Kahneman.
  • why it’s good to allow emotions to part of the portfolio decision-making process.
  • how to acquire the emotional comfort you need for your long-term financial objectives.
  • how to buy emotional insurance for your long-term investment portfolio.
  • how to avoid costly short-term emotional mistakes.
  • how psychometric tests can extract measures of financial personality.
  • why a set of nudges are designed to help high net-worth individuals to make better decisions.
  • how to build a tailored portfolio to meet your clients needs.
  • why you should consider including expected anxiety into your portfolio building along with risk and return.
  • what an opera experiment has to do with replicating the open outcry system of a trading floor.
  • how music can control your emotions while trading markets.
  • how Barclays Capital are improving the understanding of their clients by turning the lens on themselves.

Behavioral economics is the combination of finance theory and behavioral psychology. It’s about trying to understand how people actually do go about making financial decisions and, as a result, how we might make them better financial decisions.

Problems with Biases in Behavioral Finance:

  • Biases are only often biases if you view them through the lens of what economic theory very narrowly and mathematically deems to be rational.
  • There’s nothing irrational about having the need for a  short-term immediate emotional comfort.
  • A lot of deviations from narrow economic thinking are not irrational at all. They are perfectly reasonable. It is just that other people are bringing other objectives to bear on the decision.
  • The other problem is the tendency to look at the world through a list of biases.

Classical Finance would typically remove irrational behavior from its theories and models. However, the position of Behavioral Finance is much more subtle. As humans, we need emotional comfort. We need to be comfortable with the decisions we make and with the portfolio we hold. There is nothing irrational about that.

You need to find a way of not switching off your emotions but utilising them effectively – Greg Davies

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Emotions are actually a very good source of information for us if we use them in a thoughtful way – Greg Davies

Resources:

Farnam Street by Shane Parish 

Recommended Books:

Where To Find Greg Davies:

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023: Loretta Napoleoni on Financing Terrorism and the Creation of the Islamic State

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023: Loretta Napoleoni on Financing Terrorism and the Creation of the Islamic State

Loretta Napoleoni is an expert on terrorist financing and the IslLoretta Napoleoniamic State. She advises several governments and international organizations on counter-terrorism and money laundering.

As Chairman of the countering terrorism financing group for the Club de Madrid, Loretta brought heads of state from around the world together to create a new strategy for combating the financing of terror networks.

Loretta is a regular media commentator for CNN, Sky and the BBC and advises several banks on strategies to counter the current ongoing crisis. She lectures regularly around the world on economics, terrorism and money laundering.

Loretta is also a columnist and writes about terrorism, money laundering and the economy for several European financial papers including El Pais, The Guardian and Le Monde.

Loretta began her career as an economist, working for several banks and international organizations in Europe and the US. She has a Phd in economics and a Masters of Philosophy in International Relations and one in terrorism.

She is the bestselling author of numerous books including The Islamist Phoenix, Maoanomics, Rogue Economics, Terror Incorporated and Insurgent Iraq.

Her books are translated into 18 languages including Chinese and Arabic.

“I studied economics because I thought that economics was the way to change the world” – Loretta Napoleoni.

Economic Themes:

In this interview, Loretta mentions and discusses: Islamic Finance, gold, barter, quantitative easing, reserve currency, consumerism, the Marshall Plan, labor, wages, sex trade, slavery, demand, profit, trade unions, capitalism and growth.

Economists:

In this interview, Loretta mentions: Adam Smith, David Ricardo, Karl Marx, John Stuart Mills and John Maynard Keynes.

Advice:

The key is to always search for the truth. It is important to listen to the experts because otherwise you get the wrong picture – Loretta Napoleoni.

Find out:

  • about Loretta’s involvement in the feminist revolution in the 1970s in Italy where she was one of the founding members of the Italian Feminist Movement.
  • why she studied economics and the subsequent irony of working for a Russian bank.
  • why Loretta sold her company to do a PhD in terrorism at the London School of Economics.
  • about Loretta’s contact with the Italian Marxist organisation, The Red Brigade.
  • how terrorists fund their activities.
  • who initially sponsored ISIS or the Islamic State initially and how they may regret this.
  • why Jihadi John and others were attracted to the Islamic State.
  • how Saudi Arabia’s sponsor of a war by proxy against the Assad regime in Syria resulted in the creation of IS.
  • about The Caliphate and why IS wants to re-create a modern version of this region.
  • about the functioning economy of the Islamic State.
  • if the Islamic State has a functioning banking system.
  • if the Islamic State is using gold coins, dollars or a bartering system.
  • about the how women are treated in the Islamic State.
  • why Loretta believes that the feminist movement ultimately failed.
  • if the US policy of quantitative easing is making it easier to finance terrorism due to the increase in the money supply.
  • the meaning of the Patriot Act and how every transaction made in US dollars is tracked and traced everywhere in the world.
  • whether the US should stop their foreign policy in the Middle East and North Africa.
  • how the world is being shaped by dark economic forces based on the fantasy world of consumerism.
  • how an increase in the number of democratic countries has resulted in an increase in modern-day slavery.
  • about the sex trade and the fall of the Berlin Wall.
  • how the Chinese are better capitalists than Western countries.
  • how we can learn from the Chinese economy.
  • whether Africa will benefit from the Chinese model of capitalism.
  • why there is a ‘race to the bottom’ in todays economy.
  • why Loretta believes that we need a new theory in economics.
  • about the problem of mathematics in economics.
  • the advice Loretta gives for writing a book.

The Caliphate and Islamic State

The Caliphate is a way to formulate the Muslim political utopia, whereby for centuries, Muslims have dreamt of the creation of a State but have failed. The political reality of their world has been dictatorship, foreign power, colonization or the tribal system.

The Caliphate is the only political expression that the Muslims have produced. The ancient Caliphate was a splendid civilization, very different from the Caliphate of the Islamic State because it was very tolerant. Jews, Christians and Muslims lived together in peace without any problems.

Today, the economy of the Islamic State is a closed economy in which the trading of goods and services is done within the State. There is some degree of smuggling going on. Loretta Napoleoni believes that the rise of the Islamic State is a European problem because of colonialization.

Quantitative Easing, the US Dollar and the Illegal Arms Market

The US can borrow against the stock of dollars in circulation all over the world since the dollar is the reserve currency. What this means is that the US prints more dollars, not only for the demand inside the US but also for the demand outside the US. The illegal arms market is run in dollars. Since this is a market that grows, it therefore needs to be fed an increasing supply of dollars. If the Islamic State is using dollars, then they will benefit indirectly from the printing of money inside the United States.

Slavery and the Link with Consumerism

This economy, this rogue economics, is very much an economy that is driven on one end by consumption, this endless consumption. And to feed this monster of endless consumption, you have to produce at a cheaper level. So you use anything you can.  – Loretta Napoleoni.

The sex trade boomed with the fall of the Berlin Wall. Some women had no alternative but to prostitute themselves to feed their family because of the collapse of the Communist economy.

On economics:

“There is too much maths. Everything is reduced to mathematical models. They want to predict everything with numbers. Economics is a social science so you can’t predict people’s behavior.”

Advice:

“If you want to write a book, you start now and you stop when you finish. You don’t stop in the middle, you don’t do many things. All you do is work, work, work.” – Loretta Napoleoni.

Resources:

Recommended Books:

Where To Find Loretta Napoleoni:

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022: Josh Angrist on Taking the Con Out of Econometrics – Kung Fu Style

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022: Josh Angrist on Taking the Con Out of Econometrics – Kung Fu Style

Master Joshway, better known as Josh Angrist, is the Ford Professor of Economics at MIT and a ResearchAssociate in the NBER’s programs on Children, Education, and Labor Studies. Josh received his B.A. from Oberlin College, spent time as an undergraduate studying at the London School of Economics and as a Masters student at Hebrew University. He completed his Ph.D. in Economics at Princeton.

Angrist’s research interests include the effects of school inputs and school organization on student achievement; the impact of education and social programs on the labor market; the effects of immigration, labor market regulation and institutions; and econometric methods for program and policy evaluation.

Josh is a Fellow of the American Academy of Arts and Sciences, The Econometric Society, and has served on many editorial boards and as a Co-editor of the Journal of Labor Economics.

Josh is the author (with Steve Pischke) of Mostly Harmless Econometrics as well as Mastering ‘Metrics.

Find out in this episode how Josh went from High School drop-out to Professor of Economics at MIT.

Never forget that, at the most, the teacher can give you fifteen percent of the art. The rest you have to get for yourself through practice and hard work. I can show you the path but I can not walk it for you – Kung Fu Master Tan Soh Tin

Economic Themes:

In this interview, Josh mentions and discusses: econometrics, clinical trials, randomized trials, instrumental variables, regression, health insurance, longitudinal studies, selection bias, fairness, human capital, the quantity-quality trade-off, specification testing, robustness, time series, BLUE, Gauss-Markov, labor economics, regression, reverse causality, spurious correlation and data mining.

Economists:

In this interview, Josh mentions: Gary Becker, Shoshana Grossbard, Marina Adshade, Steve Pischke, Chris Blattman, Matt Holian, Christopher Sims, Russell Roberts, Greg Mankiw, Amy Finkelstein, Nancy Qian, Erlich, Ed Leamer, Steven D. Levitt, Stephen J. Dubner, Phil Oriopolis, Alan Kreuger, Orley Ashenfelter, David Card, Whitney Newey, Guido Imbens, Gary Chamberlain, Allan Meltzer, Scott Richard and Daniel Hamermesh.

On Mastering ‘Metrics: The intersection of the highway is a metaphor for causality. This is the theme of the book – ‘you’re facing a choice you’ll never know what the counterfactual was. You can imagine it’. The goal of econometrics is to reveal that in some way through statistical methods or experimentation. – Josh Angrist.

Josh and Steve’s book, Mastering ‘Metrics, is Kung Fu themed and they use that as a vehicle for humour.

MasterJoshwayMasterStevefu

Find out:

  • about Master Joshway and Master Steveway – the Kung Fu Economists.
  • how Josh went from working in a mental hospital to working in MIT.
  • why and how the Kung Fu theme was adopted by Josh and Steve.
  • where the names Master Joshway and Master SteveFu came from.
  • why Josh is a critic of macroeconomics.
  • the difference between traditional applied micro and applied micro today.
  • Josh’s views on using assumptions in microeconomics.
  • how to design an microeconomics experiment using randomized trials.
  • about health insurance in the US.
  • about Obama Care or the Affordable Care Act.
  • the Oregon Health Experiment where health insurance was offered as a lottery.
  • about Ireland’s upcoming health insurance policy change.
  • about the ‘Furious Five’ – not Kung Fu Panda – but the core research methods.
  • what’s a good economics experiment for family size.
  • where babies come from – Storks?
  • what are the chances of US married couples having a 3rd child if the first two are the same gender.
  • if people who come from large family sizes have worse outcomes?
  • about Gary Becker’s quantity-quality trade-off and how it relates to family size in China.
  • if capital punishment deters homicide.
  • why and how econometrics and specification tests are better today than they were in the past.
  • why Freakonomics is a must read for students or potential students of economics.
  • why being born later in the year is good for your educational attainment.
  • about Josh’s lucky breaks in life.
  • why Josh dropped out of school at 16 and about his army sergeant stripes.
  • about Josh’s hyper Jim Kramer-like teaching style.
  • about an amazing list of economists that have personally influenced Josh.
  • what helps Josh clear his head and keep in shape.

Macro v Micro

“Macro is a very theory-driven, model-driven field. They don’t run enough regressions or collect enough data and look for good experiments” – Josh Angrist.

“There’s nothing wrong with assumptions. That’s a misguided criticism. We have to simplify the world to learn anything about it. Otherwise you’re lost in the details.” – Josh Angrist.

“Every research project begins with the question. I have to convince my students of this and sometimes my colleagues – it isn’t let data come first, even though we’re very data-driven people. The first step is the question where it’s likely to lead me to a good research design.”

“In US census data, if you take married two-parent families who’d have at least two children, , the probability of having a 3rd child when they have a mixed sex is 0.37, and that goes to 0.43 or 0.44 when they either have two boys or two girls.”

“Ed Leamer in his paper, Let’s Take the Con Out of Econometrics, stated that nobody takes anybody else’s data analysis seriously. Nobody believes anything anybody else does.” Steve Pischke and Josh Angrist, in their paper, argue that that’s no longer true.

“The purpose of our book is to try to bring the way econometrics is taught in line with the way applied micro, at least, is done.” – Josh Angrist.

The traditional econometrics canon is built around a heavy mathematical framework that focuses on technical concerns, assumptions and many issues that are second-order statistics concerns, like heteroskedasticity or whether the model is really linear, that makes little sense and has nothing to do with modern empirical practice.

Recommended Books:

Josh Angrist on Freakonomics: “ It’s so engaging and well written and covers such interesting questions that I think it wins us a lot of converts to studying economics. My daughter got interested in economics by reading Freakonomics and she majored in economics.”

Papers:

Datasets:

Blog Posts:

Podcast Episodes:

Where To Find Josh Angrist:

Resources Used in the Episode:

www.incompetech.com Cartoon Battle Kevin McLeod Far East

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021: Paul Dolan on the Economics of Happiness

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021: Paul Dolan on the Economics of Happiness

Paul Dolan is an internationally renowned expert on happiness, behaviour and public policy. He is currently a Professor of Behavioural Science in the Department of Social Policy at the London School of Economics and Political Science.

Paul has previously held academic posts at York, Newcastle, Sheffield and Imperial and he has been a visiting scholar at Princeton University, working with Daniel Kahneman.

Professor Dolan has over 100 peer-reviewed publications which cover many topics including behavioural science, subjective wellbeing, equity in health and health valuation.

Paul is currently a Member of the World Economic Forum Panel on Behavioural Science, the Chief Academic Advisor on Economic Appraisal for the UK Government’s Economic Service. He is also a member of National Academy of Sciences Panel on Wellbeing and of the Measuring National Wellbeing Advisory Forum for the Office for National Statistics in the UK.

Paul is the author of ‘Happiness by Design’.

Economic Themes:

In this interview, Paul mentions and discusses:  behavioral economics, happiness, nudging, trade-off, pleasure-purpose principle, production function, utility models, causal relationships, priming effects, System 1, System 2

Economists:

In this interview, Paul mentions: Daniel Kahneman, Amos Tversky, Irving Fischer and Gregory Mankiw.

“2,500 years of ethical discourse hasn’t resolved the question what is the source of happiness” – Paul Dolan

Find Out:

  • how Paul evolved from a health economist to a behavioral economist.
  • how many years of your life would you be willing to give up to avoid being anxious or being down.
  • if Aristotle and other philosophers are right in saying that happiness can only be defined on a death-bed when reflecting upon your life.
  • how to create a pleasure-purpose balance that’s right for you.
  • how you can use the production function process to produce happiness.
  • what is this production process that makes us happy.
  • if money makes you happier.
  • how happiness studies influence policy decision-making.
  • about the limitations to happiness research and what can be done to make better research.
  • what nudging is.
  • how nudging by policy-makers can make you happier.
  • about the morality of nudging.
  • how supermarkets can nudge you into buying their breads and cakes.
  • why self-help books are a waste of money as they try to change your mindset.
  • why Paul’s book, ‘Happiness By Design’ will help you to change what you do.
  • about Paul’s ‘3 Pillars of Happiness’ – Deciding, Designing and Doing.
  • how designing your life to make things simple and easy can help you achieve your goals.
  • about the essence of mindfulness.
  • why people who are easily distracted are more likely to be less happy.
  • if your phone can make you unhappy and what you should do about it.
  • why Paul is a ‘Happy Hammer’ (West Ham fan) despite never winning the league.
  • how the power of ‘hope’ can make you happy by allowing your imagination run freely.

Pleasure-Purpose Principle

Alongside pleasure sits purpose. Happy lives are ones that have a good balance between experiences that are pleasurable on the one hand and purposeful on the other. You need to find out the right balance between pleasure and purpose that is right for you.

The creation of happiness is like a product function of a firm. A firm uses inputs, puts them through a production process to create outputs.  A person can equally use inputs like money, marriage, sex, jobs and watching television that are stimuli and we can convert them into happiness by a production process.

What is that production process? According to Paul this production process is called ‘Attention’. Attention is the ‘glue’ that keeps our lives together in terms of behaviour and happiness. The answer to the question ‘Does money make you happier?’ depends on how much attention you pay it.

“Most of economic modelling is based on looking at what people do, not what people say”

Challenges with Happiness Economics: “A lot of what we think we know comes from making inferences from associations. We need to to do more research and field experiments where we look at the causal impact of interventions on people’s happiness.”

You can beg, borrow and steal money, but you’re never going to get time that’s lost – Paul Dolan

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Lost happiness is lost forever – Prof Paul Dolan

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Nudging

Nudging can sometimes be overt and sometimes covert. It can take the form of financial incentives or below-conscious stimuli such as sounds, tastes and smells. The latter is known as priming effects.

According to Paul Dolan, the definition of a successful nudge is one where people, who are being nudged toward a particular direction with the expectation that they would be better-off, become happier as a result of being nudged.

Policy-makers assume after a nudge that people are better off, but research hasn’t captured the after-effects of these nudges to find out if they are indeed better off. Paul is all for designing nudges that make people happier, not by how he judges how they should be happier but according to what large datasets tell him what affects people’s happiness.

Listen to Paul’s 3 Pillars of Happiness: Deciding, Designing and Doing 

The Essence of Mindfulness: “We’re generally happier when we’re paying attention to what we’re doing and who we’re doing it with – living in the moment” – Paul Dolan.

“When you’re switching activities, your brain is using energy and it makes you more tired and less happy” – Paul Dolan.

“Being a football fan is a bit like faith. You can’t really change it once you’ve got it” – Paul Dolan.

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020: George Magnus on The Age of Ageing, China and the EU

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020: George Magnus on The Age of Ageing, China and the EU

George Magnus is an independent economist, consultant and commentator. He has a distinguished career that started with some teaching assignments but was spent mostly in the financial services industry.UBS INVESTMENT GROWTH

Before going solo in 2012, George was the Senior Economic Adviser at UBS Investment Bank having previously been the Chief Economist for 10 years. In almost 30 years of working experience in the City, he has held senior positions at SG Warburg, Chase Manhattan Bank and Bank of America. He is a well-known and highly regarded economist in the financial community and has won many accolades in professional surveys as one of the top global economists.

George is well known for his commentaries and interviews in newspapers, journals, TV and radio, most notably for the Financial Times, CNBC and Bloomberg.

George, gained widespread acclaim for declaring in early 2007 that we would face a Minsky Moment – or systemic banking crisis – and a decade of slow growth, has extensive experience of writing on, explaining and speaking about the global economy.

His first book, The Age of Ageing: How Demographics Are Changing The Global Economy And Our World was published in 2008. His latest book, Uprising: Will Emerging Markets Shape or Shake the Global Economy was published at the end of 2010, and assesses, in particular, whether China is set to dominate the world system.

Economic Themes:

In this interview, George mentions and discusses: bubbles, crashes, business cycles, demography, pensions, labor, emerging markets, life expectancy, debt-to-GDP, monetary union and fiscal union.

Economists:

In this interview, George mentions: Hyman Minsky, Thomas Malthus, J.K. Galbraith, James Galbraith (son), Thomas Picketty and Michael Pettis.

Influencer:

J.K. Galbraith

In this episode, you will learn: 

  • about bubbles and why we never learn from them.
  • how demographics are changing the world economy through declining fertility and rising life expectancy.
  • about the need for a policy agenda to cope with an ageing society.
  • why age-related commitments and promises such as pensions and health care schemes are unaffordable.
  • why there is a pension crisis to come and how it mimics a Ponzi-scheme.
  • about the fastest ageing country – China – and what problems will exist in the future.
  • if economies can experience positive growth rates if population declines by relying on robotics.
  • how the second machine age may bring problems to those whose jobs have been automated.
  • if there will be a strong Luddite presence in the future given the pace of technological change.
  • about the failure of the BRIC emerging countries to live up to their expectations.
  • if China is all hype.
  • what the real problem is in Europe in terms of its monetary union.
  • why the EU should have started with a fiscal and political union first and then build a monetary union on top.
  • about George Magnus’ band ‘Prisom’ and his love of Led Zeppelin and Pink Floyd.
On China: We have to decide whether reform is hope or hype. In many cases it’s hype. – George Magnus

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