A Random Walk
Capitalism, Socialism, Martial Arts and Mountaintops
Nelson Santhosh, '09
Issue date: 5/8/08 Section: GSB News
LIFE ON MARS: A short article on the reclusive dynasty that has bought Wrigley this year. "The Kremlin", as it is called for its secretive ways, Mars a $22 billion company run privately by, well, nobody knows exactly who! With fascinating trivia about the company's lobbying Congress to change the Daylight Savings Time and its refusal to let M&Ms be used for the movie ET, this article makes for a fascinating read - http://tinyurl.com/5qyrmv
A GUIDE TO FEDSPEAK: Given that the Fed has some announcement now or every other week, this site could come in as a handy aid to understanding Fedspeak: the seemingly impenetrable rhetoric that seems to accompany every press release. For example, when the Fed says, "The Committee judges that some inflation risks remain. The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth," what it actually means (according to Adam Kritzer) is: "Firming/ tightening is another pretentious phrase, used to indicate a hike, or rise, in interest rates. "Tight" monetary policy is synonymous with high interest rates, and "loose" monetary policy refers to low interest rates. The reasoning is that when rates are high, businesses and consumers are less willing to borrow, which slows the expansion of the money supply. Here, the Fed has issued a direct warning that it may have to raise interest rates if inflation fails to stabilize. An old one but a good one - check it out at http://tinyurl.com/5bj445
ROCKET SCIENCE AND RURAL EDUCATION: Many Asian historians remain puzzled about how the first prime minister of India, Nehru could have had an eminently open mind about science and a closed mind about market economies. Despite heavy criticism, Nehru vigorously pursued the Indian Space program investing billions to build rockets when basic infrastructure like roads and public transport weren't even in place. But Andy Mukherjee of Bloomberg argues that posterity has borne out this decision - despite needing to transport rocket heads on bicycles, the space program has helped India surge ahead through varied initiatives like setting up electronic stock markets to establishing property rights - an example that might help developing economics with setting their priorities between investing in science and technology versus investing in more basic infrastructure - read it at http://tinyurl.com/6rb8ee
ONE OF OUR OWN: In "Nudge: Improving Decisions about Health, Wealth and Happiness," Richard Thaler and Cass Sunstein make an interesting case for behavioral economics and its applications to everyday life. By creating appropriate "choice architecture," you can actually make better decisions about your career, girlfriend(s?), money…and voila, change your life! This book lays out a structure which encourages sensible default choices and "nudges" that will make a significant difference to the actual outcomes of our decisions. Ever wondered why the tip glass at a restaurant is never empty even if you are the first client of the evening? Other random reasons to buy the book include 1. Something inspired by "Noodles" on 57th street has to be good. 2. Stephen Leavitt (Freakonomics) says that it "fundamentally Changes the way he thinks about the world." 3. Admit it. You always were confused about decisions 4. RBS price for Thaler = 35000 bidpoints. Send your absolutely, awesome feedback to nsanthos@chicagogsb.edu.
A GUIDE TO FEDSPEAK: Given that the Fed has some announcement now or every other week, this site could come in as a handy aid to understanding Fedspeak: the seemingly impenetrable rhetoric that seems to accompany every press release. For example, when the Fed says, "The Committee judges that some inflation risks remain. The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth," what it actually means (according to Adam Kritzer) is: "Firming/ tightening is another pretentious phrase, used to indicate a hike, or rise, in interest rates. "Tight" monetary policy is synonymous with high interest rates, and "loose" monetary policy refers to low interest rates. The reasoning is that when rates are high, businesses and consumers are less willing to borrow, which slows the expansion of the money supply. Here, the Fed has issued a direct warning that it may have to raise interest rates if inflation fails to stabilize. An old one but a good one - check it out at http://tinyurl.com/5bj445
ROCKET SCIENCE AND RURAL EDUCATION: Many Asian historians remain puzzled about how the first prime minister of India, Nehru could have had an eminently open mind about science and a closed mind about market economies. Despite heavy criticism, Nehru vigorously pursued the Indian Space program investing billions to build rockets when basic infrastructure like roads and public transport weren't even in place. But Andy Mukherjee of Bloomberg argues that posterity has borne out this decision - despite needing to transport rocket heads on bicycles, the space program has helped India surge ahead through varied initiatives like setting up electronic stock markets to establishing property rights - an example that might help developing economics with setting their priorities between investing in science and technology versus investing in more basic infrastructure - read it at http://tinyurl.com/6rb8ee
ONE OF OUR OWN: In "Nudge: Improving Decisions about Health, Wealth and Happiness," Richard Thaler and Cass Sunstein make an interesting case for behavioral economics and its applications to everyday life. By creating appropriate "choice architecture," you can actually make better decisions about your career, girlfriend(s?), money…and voila, change your life! This book lays out a structure which encourages sensible default choices and "nudges" that will make a significant difference to the actual outcomes of our decisions. Ever wondered why the tip glass at a restaurant is never empty even if you are the first client of the evening? Other random reasons to buy the book include 1. Something inspired by "Noodles" on 57th street has to be good. 2. Stephen Leavitt (Freakonomics) says that it "fundamentally Changes the way he thinks about the world." 3. Admit it. You always were confused about decisions 4. RBS price for Thaler = 35000 bidpoints. Send your absolutely, awesome feedback to nsanthos@chicagogsb.edu.
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