August 2, 2010 § 1 Comment
It is unofficial, but the data seems to indicate that China has finally passed Japan as the second biggest economy in the world. Additionally, the country is expected to surpass the United States in the next decade or two. This news actually makes me pretty sad. As a country becomes more well-off economically, its human rights situation tends to improve. It is safe to say that China will be an anomaly. In fact, the situation will worsen as the authorities are likely to step up their suppression of the Internet, religious freedom, and other basic human rights to confront greater awareness of such.
January 27, 2010 § 2 Comments
Click the link below to read my preview of Obama’s State of the Union address. The speech will take place at 6 PM EST today.
January 23, 2010 § 3 Comments
May 25, 2009 § 6 Comments
One thing I have never been able to understand is the public burning of national flags. It is absolutely fine to be against a government or a country’s policies, but can people burn something else instead? A national flag is more than just a national symbol; it represents the blood and soul of those who died for their country. These people deserve our praise and not our scorn. Put the blame where they are due.
May 14, 2009 § 14 Comments
One of the common mistakes people often make is to equate equality to efficiency. While equality can certainly enhance social efficiency, it can also lead to greater inefficiency. Confused? Perhaps a few examples will help you understand this concept a little bit better.
The first example is a simple one. A box of chocolates is to be shared by two children. The box contains 10 milk chocolates; both children like milk chocolates. Each child is given 5 chocolates. Well, it doesn’t take a rocket scientist to realize that the allocation of the chocolates is both fair and efficient.
The second example is bit more complicated; the numbers in this example have been normalized for greater clarity. There was a fruit sale at the local farmers market; my sister was able to buy 8 bananas and 4 mangoes. The bananas cost $1 each and the mangoes cost $5 each. My sister has two daughters, Julie and Christine. Julie loves to eat mangoes, while Christine loves to eat bananas. My sister doesn’t eat fruits.
March 16, 2009 § Leave a comment
by Simon N. (economist)
In the summer of 1997, the continent of Asia awoke to an economic firestorm that started in Thailand and quickly spread to the rest of continent leaving the once booming Asian economies shaken and devastated. In a fashion that could very well be described as overnight, country after country watched helplessly as the values of their currencies, assets, and stocks plummeted to unprecedented levels. Subsequently, millions of people were reduced to poverty and numerous businesses and corporations succumbed to insolvency.
The Asian Financial Crisis came as a real surprise to most observers of the international monetary system. Unlike past financial crises which were caused by over-expansionary fiscal policies leading to large public debts and severe shortages of foreign investments, the crisis of 1997 was instigated by the inability of countries to handle substantial influxes of foreign investments and capital–particularly short-term investments. In the absence of adequate prudential regulations coupled with rising U.S. interest rates, Asian financial systems as well as regional corporations that had been borrowing in U.S. dollars were living on edge. The ensuing financial and corporate failures dealt a serious blow to the credibility of affected countries. What followed were major flights of capital and forced devaluations of many currencies.
In hope of averting the financial calamity, many Asian countries looked to the International Monetary Fund (IMF) for guidance and assistance. Unfortunately, the IMF’s role in the crisis would become a magnet for controversies and contentions. While the institution provided the down-trotted countries with much needed funds as well as enhanced their financial credibility, the list of reforms that recipient countries had to comply to in order to secure the loans were met with both skepticisms and criticisms. Many argued that these reforms were the wrong prescriptions for the economic situations in the affected countries; they believe that having these sovereign states undergoing a complete restructuring of their financial system was too drastic and might have further aggravated the problems. In addition, the IMF’s requirement that countries had to tighten their fiscal and monetary policies was often criticized for having exacerbated the social costs experienced by their citizens. Proponents of the IMF’s actions, on the other hand, credited the institution for bringing about long overdue reforms that are essential to the region’s economic future.
Nonetheless, the IMF was perceived as one of the primary losers in the financial crisis. The image of Michel Camdessus–the former director general of the IMF– watching over the shoulder of Suharto, the then president of Indonesia, as he signed an IMF austerity pact was often pointed to as the symbol of a new form of imperialism–one that intrudes the sovereignty of debt-strapped countries.
The main objectives of this paper are to examine the root causes of the Asian Financial Crisis through the lens of South Korea, and to discuss the merits and demerits of the IMF’s actions in the country. I chose to focus on the case of South Korea because of the unique dynamics of the country’s economy prior to and during the crisis.
**Copies of the full text are available upon request