I finished my work on migration simulation for the Research-Unit Economics.

It's based on a Two-Sector Migration Model inspired by Harris and Todaro and applied Agent Based Simulation aligned to Axtell’s Emergence of Firms to build "An n-Sector Migration Simulation".

Here is the abstract:
"Workers, considering costs of migration, tend to migrate to sectors where they expect higher wages. In revers, firms trying to increase profits, migrate to sectors with lower wages. The result of their combined movement determins wages in each sector. This Agent Based Simulation applies an inductive behavior models with various strategies for wage expectations, and yields patterns of migration in an n-sector scenario."

Here are some results:

Download: http://www.derbaum.com/n-sector-migration.pdf

Labels: Economics, Patrick, TU

This weeks issue of The Economist is running a special report on mobile telecoms: Nomads at last.

The report describes how today's ubiquitous mobile technology allows us to work, live and love like nomads (wanderer), without staying long in the same place.

Our documents, spreadsheets, contacts, calenders,... are always available online in the cloud. So unlike previous nomads, we don't have to carry much weight. An iPhone like device may do. Where ever we are we can sit down, do some work, play around with ideas or catch-up with customers, coworkers, or friends and family.

Who wants to be at the office from 9 to 5? If I'm working, does it matter if I sweat in a cubicle or enjoy fresh air in the park? Of course it does! And reading this report just gave me additional encouragement to stay out of that cubicle.

For some an office may be great to get focused, while others prefer a beach. If you find yourself bored or in need for inspiration, get moving. (Right now, I'm in a coffee shop, but that beach looks inviting). In the end, where we are becomes secondary. What counts is that we get things done and spend time with those we love.

Or, as Sigmund Freud put it, Menschen müssen arbeiten und lieben um Erfüllung zu finden (humans must work and love in order to find fulfillment). Mmm, I love it when The Economist runs quotes like that.

Labels: Economics, Patrick

Another fun illustration of China's economic relations with the USA.

Labels: Asia, Economics

I always keep an eye on cheap flights to Asia. I hailed Lufthansa's "Ready to Fly" for it's 300€ flights to China, but this offer seems to be expired. Anyway, help is on it's way: Oasis Hong Kong Airline promises flights from London to Hong Kong for 50€.

Checking flights for next week showed nothing below 400€. But a month later, flights show up for about 130€. Adding a discount flight to London Gatewick, and one should get from about anywhere in Europe to Hong Kong for under 200€ (one-way).

Now if I just buy a nicely trailered suit and a few gadgets, I can quickly save 2x200€ in the tax-free-shopping-haven also known as Hong Kong. Which leaves me a free flight to Hong Kong. Right?

Labels: Asia, Economics

Twice a year (next on May 22nd) the economic leadership of China and America meets for a Strategic Economic Dialogue to disuse trade relations.

The dialogue was coined by Hank Paulson, America's treasury secretary and ex CEO of Goldman Sachs. He will welcome Wu Yi, the woman behind China's economic policy since 1991 and current vice-premier of China.

Unfortunately discussions are overshadowed by increasing hostility against China. The American congress accuses China among other things of stealing their economic leadership, natural resources and jobs. (This weeks issue of The Economist runs a survey about America's fear of China.)

First, China's population is more than four times bigger than America's population. Obviously China should command a bigger economy at some point (as it did in the past).

Second, natural resources are bought and sold internationally. As the world economy grows and more people live a decent life, so does demand for resources and their price. America could easily improve a thing or two in its efficiency of using resources. A higher price (and regard for the environment) provides the right incentives. The same counts for China.

Lastly: jobs. Is China stealing American jobs? Some members of congress seem to believe that world trade (or trade in general) is a zero-sum game. One job more in China's export industry means one job less in America.

That's not the case. As America imports from China, China imports from America. Jobs lost in one sector, will be gained in another. If America imports more than it exports (as it currently does), it pays with dollars. A promise of value which China can use for imports in the future. If China does not redeems those dollars, America basically imports for free. Hardly something to complain about.

In today's China Daily I read a smart statement by Ms. Wu: "The United States, as a global leader in science and technology, should give full play to its comparative advantage, enhance mutual trust and relax export controls to boost the competitiveness of American companies, revers the trend of dwindling market share of American hi-tech products in China, and reduce its trade deficit with China."

With comparative advantage, David Ricardo's theory on trade, Ms. Wu reminds us that even if America is far ahead in science and technology, it could still gain from trade in those fields.

As a previous investment banker, Mr. Paulson knows just as well about the gains from trade. That's why he should resist pressure from congress and further open the US economy. Ms. Wu would certainly welcome him.

Labels: Asia, Economics

10RMB = 1Euro

Labels: Asia, eat+drink, Economics

My friend Konrad and I occasionally compare our living costs in German and Austria. Communication costs are particular interesting. Since years, we find broadband internet to be cheaper in German, while mobile telephony is cheaper in Austria. Why that?

Let's try some back-of-the-envelope calculations:

• Population density and broadband internet: Wiring a highly populated area is cheaper (per head) than wiring a low populated area. Population density turns out to be more than double in Germany than in Austria. 231 people/km² in Germany vs. 99 people/km² in Austria.
• Competition and mobile telephony: Higher competition means lower prices. Austria has a 12 times higher ratio of mobile phone companies per people. 4/82m in Germany vs. 5/8m in Austria.

If we follow the Voice-over-Internet trend, it's save to say that telephony is moving online. So cheaper internet, gives Germany an edge. But new technologies like HSDPA offer broadband on a mobile device. So, Austria with cheaper mobile communication, may have the better deal after all.

Labels: Economics

China's share of world GDP is nearly four times more than it was in 1980. Measured at purchasing power parity, it approaches that of the world's rich countries. It's just a matter of time* before China returns to it's ancient status as the Central Kingdom.

*Goldman Sachs predicts that China's GDP will overtake the US GDP (in PPP terms) by 2011.

Labels: Asia, Economics

Labels: Asia, Economics

When I was 16, my friend Cornelius and I, bought three billiard tables. We convinced a coffee shop owner to let us put the tables in the back of his café. We told him how much money we expected to earn and promised him half. We were sure the shop owner would have a look, since it was his money as well. Everyday after school we went to the cafe and thought about ways to improve our business. We cleaned up, bought better cues, a coin changer and even installed new lightning (the green ones in the picture). We where highly motivated because we saw the reward in the coin collector every day.
Intuitively we understood the working of the free market. We improved the lot of our players and the coffee owner, simply by pursuing our own self-interest. It was a win-win-win situation.
Unfortunately after only a year we had to stop our business. Our parents insisted that school was more important. (Through this, we learned how regulations can limit the market.)
After high school, I decided to study information systems but never left economics. I took all available economics courses and read every book I could get my hands on. Now, after being close to finishing my master in information systems, I want to proceed with a master in economics.
In my future career I hope to pursue both, my interests in economics and computer science.

Labels: Economics, Patrick

On February 18th started the Year of the Pig in China. I was in Beijing and enjoyed the spectacle but hated the firework. In Austria I don't mind. I enjoy the free ride, when other people spend there money lighting up the sky.

But Beijing firework isn't about illuminating the sky, its about who makes the biggest bang. At moments its a pain to be outside and uncomfortable loud inside.

Only last year was the bane on fireworks lifted in Beijing for the days surrounding new-year celebrations. It seems people needed to make up for the 12 years it was forbidden. But unlike a smart boy, who carefully drives when his father gives him the first opportunity, Beijing people seemed to try to get it banned again as soon as possible (some 270 people were injured and one 25-year-old was killed during this years celebration in Beijing).

Of course a single Beijinger doesn't make the difference. Only the combined overshooting causes risk of banning. A negative externality of fireworks. Putting the Econ101 textbook example for public goods (a firework for everyone to enjoy) on the head.

Labels: Asia, Economics

I remember walking around GangNam, in Seoul, where I passed a fashion store. The store and the exhibited clothes appealed, so I walked in for a closer look. I liked there shirts. They used a surprisingly comfortable material, which just felt good. But there it was, a shocking slogan: Made in Downtown LA, Organic. Gosh, another anti-globalization environmentalist. No, I can't support this company. I left the store feeling a bit sorry for the missed shirt.

Half a year later, today. I'm reading about this guy, Dov Charney, who runs a global fashion company focusing on the needs of the young, well-travelled crowd that he calls the “world-metropolitan culture”. While reading I figured this company called American Apparel, is the one I visited in Seoul.

From The Economist:
DOV CHARNEY courts controversy. The 37-year-old founder and chief executive of American Apparel, the largest T-shirt manufacturer in America, has been called a brilliant businessman, an amateur pornographer, a Jewish hustler and a man with a social mission. He is admired for single-handedly creating one of America's most successful fashion retailers, for devising his company's sexually suggestive approach to advertising and for treating his workers much better than his rivals. He is also envied, loathed and criticised for all of these things.
Read the entire Face Value.

This article and an interview by Charlie Rose showed me that Mr Charney is a likeable person, indeed a capitalist and very much pro-globalisation. The Economist calls him The Hustler. An aggressively enterprising person. A go-getter.

I guess I can return to GangNam and buy that Shirt without a guilty conscience.

PS.: I wanted to show a picture of Mr Charney. But American Apparel has a beautiful Photo Collections where I stumbled over a picture of Ji-Sung, an employee from the Seoul store, which I liked better.

Labels: Asia, Economics

Mr. Bethe was a leading figure in quantum physics. He won the Nobel Prize in 1967. At the age of 93 he gave a lecture called Quantum Physics - Made Relatively Simple. I'm glad Cornell University brought it online. It's a joy to watch.

Watching his lecture, one can see he still enjoys quantum physics. 93 years and he still likes his job! To me, that's even more impressive than his Nobel Price.

Forget state pension. If your country signs you up automatically, opt-out. Get a job you like, and enjoy it till the your end. You may safe some money for latter. But stay away from state pension. This pension money will become hard to resist when you are 60. Forcing you to quite in the middle of your career. Don't take that risk. Act now. The less money in your pension fund the better.

Labels: Economics, Incentives

Eggs from happy Farmers.
I like to cook. I buy my food at Billa, an Austrian grocery, for no other reason than it's location. Across the street. If there was an Aldi, a cheaper grocery from Germany, I would go there.
But some people drive a great distance to find a farmers market where they pay not less but more for local, organic food.
I frequently get into fights with my sister, when we cook together, since she too insists on organic and local food.
But I don't want to pay more and support farmers in Austria over farmers in, say Chile.
"But those are more happy farms", she insists.
Of course those Austrian farm(er)s are more happy. They get vast amounts of subsidies and protection from the European Union as well as the Austrian government. The little competition left, is further reduced by strict import regulation. Additionally, even the Austrian population favors them for almost any price. Someone really did some great marketing (and lobbying) here.

The Economist offers some arguments why

• Organic Food doesn't help the environment (Without pesticides twice as much land is needed for farming).
  
• Local Food increases pollution (Small trucks from each farm pollute more than efficient international cargo).
  
• and Fair Trade hurts farmers in Africa (The price for coffee is low because of overproduction, subsidizing some farmers with "Fair Trade" will lead to even more production. Decreasing the price for others even further).
  

BTW, ! If you want green webhosting, you can get a 30% discount from dreamhost by entering DERBAUM as promotion code.

Labels: eat+drink, Economics

From Princeton's University Channel:

• Beyond Freakonomics: New Musings on the Economics of Everyday Life
  Steven Levitt, co-author of "Freakonomics" and professor in economics at the University of Chicago, discusses his latest research
• The Sun Also Rises: How a Recovering Japan Could Change Asia
  Bill Emmott, former Editor-in-Chief of The Economist
• Working Across Cultures in a Global Company
  Dominique Thormann, senior vice president, Nissan North America Inc.
• Lessons from China in preparation for the 2008 Beijing Olympics
  Madame Li Guanzheng, Commissioner, Beijing Municipal Education Commission and President, Beijing Association of Education, and Mary Conneely, Regional Director of Regeneration, London Learning and Skills Council.
• Pakistan's Role in Regional Peace and Development
  Shaukat Aziz, Prime Minister of Pakistan

From Massachusetts Institute of Technology's MITWorld.

• Earth's Most Customer Centric Company: Differentiating with Technology
  Jeff Bezos, Founder and CEO of Amazon.com
  Robert Frederick, Manager of Amazon Net Services
• When to Seed, When to Harvest: The Four Quads of Innovation, Growth
  Michael L. Eskew, Chairman & Chief Executive Officer, United Parcel Service
• The Akamai Story: From Theory to Practice
  F. Thomson Leighton, Co-Founder and Chief Scientist, Akamai
• The Power of the Network to Change the Way We Work, Live, Play, and Learn
  John Chambers, President and CEO, Cisco Systems

Find more great lectures in this collection.

Labels: Economics, movies

Prices for flying in Asia, just like in Europe, are falling. But it is still expansive to get to there in the first place. At least is was. Until Lufthansa asked: Are you Read to fly? Including Asia for less than 300Euro. For a roundtrip, that's cheap. They have different destinations every Wednesday. You can book one week ahead. Last week Beijing. Which I'm trying on the weekend. Next week HongKong? Tempting. But I hope for Seoul.

Labels: Asia, Economics

Four weeks ago, Samuel and I started to run. Five times a week. 30minutes each. From the start we knew, motivation is key. We both want to run. Why not motivate each other? If Samuel runs, I pay him 10€. If I run, he pays me. If we both run, no one has to pay. A very simple schema, but surprisingly motivating. Each week we kept running. Attracted by our success, this week, Johannes joined and I hope more will follow.

Last week I bought additional motivation. It's called Nike+iPod and snaps on your iPod and in your running shoe (doesn't have to be a Nike). It measures your time, speed and distance. And it gives sexy voice feedback on the run. After running when you connect your iPod with your PC (doesn't have to be a Mac), you get stats which of course you have to beat next time.

With Nike+iPod I set myself three goals for the next four weeks:

• 20 runs
• with an average speed of less then 5min30sec/km
• and 100km in total

I will report back on how it went. read it

Labels: Apple, Economics, Incentives, Patrick

Impressions from Peking University and Fudan University.

by Patrick Öhlinger

This summer started for me with an invitation by my good friend Andreas Kraml. He told me about his application to a summer university and knowing about my interested in China and economics, he recommend me to apply as well.
Already close to the application deadline, I contacted Mr. Böhm, my economics professor. Thankfully did he help me right away with a letter of recommendation for the Modern China Studies for Scientists and Economists in Beijing und Shanghai.
With little formalities, the application was quick and much easier than I worried. I even received a scholarship. And with the kind help of Ms. Höfler, I was soon heading for Beijing.

In Beijing with the first lectures ahead, I was exited to find out about the university, the lectures and our group.
In every regard my expectations where soon exceeded.
Peking University and Fudan University both have a beautiful campus. With trees and lakes and motivated students all over. Walking under the trees, one constantly feels like sitting down for a chat or to enjoy a book.

Right from the start we had inspiring lectures. Given from the top professors at the various departments. Usually from 10 till 12 and 2 till 4, with occasional trips to famous sights and foreign companies in the surrounding of Beijing and Shanghai.

On those trips our group got closer together. Soon friendships developed, which I’m sure, will hold much longer than the four weeks in China.

The impressive growth of China

Reading about the growth of China is impressive by itself. But actually being at the scene to experience what is happening is a different thing. China grows fast. So fast, that we in stagnating Europe can hardly understand what’s going on. For most, China still seems far away. To really understand, one has to be part of it. We weren’t. But we got to talk with professors and students who are and they explained as much as they could about the implications of the growth for China, Asia and the rest of the World.
It was as funny as it was shocking when I followed the comparisons the professors were showing. They were not comparing China with another developing country. Not even America. They were comparing China with the rest of the world:

• 50% of cement consumption
• 36% of steel consumption
• 30% of coal consumption
• 20% of the population
• 20% of foreign exchange reserves (1trillion US $)
• 7.3% of all exports
• 6.4% of GDP (just behind USA in PPP terms)
• 6.3% of all import
• 5.4% of cell phone subscribers (400 million)
• ...

Again, those numbers are in comparison with the rest of the world!

China’s economy grows with 10% a year. Since 20 years and with no clear reason why this shouldn’t continue for the next 20 years. And that’s how it should be. Still too many are poor, with growth as their only hope. With 20% of the world population, China should approach 20% of the world GDP. Like it had before the industrial revolution gave western countries a headstart.
America's time as leading (economic) world power is numbered. China will take that role. That’s known. Unknown is when. Economic forecasts predict 2030, as the year when China’s GDP will overtake Americas (in PPP terms).

For those numbers and further reading on Chinas economics I recommend: The China Miracle by Lin, Cai, Li and two recent surveys from The Economist (Sep 16th 2006 and Oct 21th 2006).

The big industries, banking, insurance and infrastructure, are still state owned or strictly regulated. But the free market is working in millions of small and mid-size business all over the country. While hiking the Great Wall of China, there where always people selling bottled water. Just when sweating tourists needed it most.

When I reached the highest point of the wall, I was looking for a trashcan to throw away my empty bottle. At that moment a men collect my empty bottle. He collected hundreds. I had no idea what’s going on. But later I found out there is a market for trash to be sold. Impressive how markets develope seemingly everywhere.

We students in cozy Europe sometimes relax that students in China (and India) are no competition. But just as chinese blue-collar works challenge their competitors in Europe so do white-collar works. China has more graduate students then Europe and America combined. We may (for now) comfort us with believing their education is not as good and misses critical skills like innovative thinking. But while European universities feel sorry about being overtaken by American universities, Asian schools are overtaking European schools as well. Japanese, Korean and Indian universities are already ranked above European and next to American universities. And China is following fast.

Criticizing China’s innovative thinking, one only has to look at the streets to find very innovativ solutions to everyday problems.

China is still a poor country. It has a long and challenging way ahead. But it is on the right track. Millions are lifted out of poverty every year. It’s an exiting moment for China and the world. I’m glad I could see a bit of what’s happening.

Labels: Asia, Economics

Getting some time off, from our classes at Beida (that's Peking University), Andreas and I where lucky to have a smart fellow showing us the new Olympia stadium. Which looks like a bird's nest. The 2008 Beijing Olympics mark a new high point since Chinas open-up up in 1979 and it's accession to the World Trade Organisation (WTO) in 2001.

Deng Xiaoping pioneered "Socialism with Chinese characteristics" and Chinese economic reform, also known as the "socialist market economy". He opened up China and reunited it with Hong Kong as "one country with two systems". He laid the foundation for the market economy, which lifts millions out of poverty every year.

A smart fellow indeed.

Labels: Asia, Economics

From the classic Milton Friedman television series Free to Choose (1980):

Hong Kong never stops. There's always some business to be done, some opportunity to be seized. Its long been a tourist center and a shoppers paradise and it's now one of the business centers of the East. It's the ordinary people of Hong Kong who benefit from all this effort and enterprise.

This thriving, bustling, dynamic city, has been made possible by the free market indeed the freest market in the world. The free market enables people to go into any industry that they want; to trade with whomever they want; to buy in the cheapest market around the world; to sell in the dearest around the world. But most important of all, if they fail, they bear the cost. If they succeed, they get the benefit and it's that atmosphere of incentive that has induced them to work, to adjust, to save, to produce a miracle. This miracle hasn't been achieved by government action by someone sitting in one of those tall buildings and telling people what to do. It's been achieved by allowing the market to work. Walk down any street in Hong Kong and you will see the impersonal forces of the market in operation.

And so it is today. 26 years later.

Hong Kong today is among the richest countries of the world. Just behind Austria. But unlike Austria, Hong Kong keeps growing. Surpassing those countries who discourage working with overblown regulations and high taxes.

After watching the first volume Free to Choose, continue with the remaining nine. Irresistible!

Volume 2: The Tyranny of Control
Volume 3: Anatomy of a Crisis
Volume 4: From Cradle to Grave
Volume 5: Created Equal
Volume 6: What’s Wrong With Our Schools?
Volume 7: Who Protects the Consumer?
Volume 8: Who Protects the Worker?
Volume 9: How to Cure Inflation
Volume 10: How to Stay Free
Want more? Enjoy Milton Friedman on Limited Government

Milton Friedman died Thursday Nov 16th at age 94.

Labels: Asia, Economics, movies

Reading about North Korea I found this revealing video about the arrogant imperialists from the west. It shows a bit about North Korea as well. A nice place, with bountiful treasures, I would love to visit.

Labels: Asia, Economics

I just finished a work about Wal-Mart's Data Warehouse.

From the Abstract:
Wal-Mart is an exceptional company. As professor Strassmann [Stra06] says, "Mal-Mart is a an information system integrator. Not a merchandising company. They are just selling goods as a by-product. Fundamentally when you look at the value added by Wal-Mart, it is knowledge assets and how they are able to establish a global information network."
Wal-Mart's data warehouse, the biggest in the world, enabled it to become a very successful company.

As part of my research for this paper I read Data Warehousing: Using the Wal-Mart Model. by Paul Westerman. The book has great insights on Wal-Mart's data warehouse design and some very useful guidelines on designing software for cooperation.

Labels: Economics, TU

I was lucky to get a scholarship for the Modern China Studies for Economists at Peking University and Fudan University.

Beeing in Asia, I decided to visit some friends in Korea as well as Peter, Joe and Stefan who are in Ko Pha-Ngan.

More and more cheap airlines penetrate the world. I used EVA Air to get to Asia and Bangkok Air to fly around in Asia. Both are cheap and proved flexible enough to all the alterations I demanded.

Labels: Asia, Economics

I used to complain about Starbucks. A lot. I worried competition from the wrong coffee culture could hurt wonderful old Viennese coffeehouses.

Today, I worry no more. Starbucks could turn out beneficial for coffee lovers like myself. Even if I never go to Starbucks.

Measuring by success, Starbucks must do something right. For one thing, they have great coffee. Something not always true with tradional coffeehouses.

But, coffee is not everything. I would not leave my favorite Wiener Cafe even if the coffee is better at Starbucks. But some consumers might. Putting pressure on Wiener Kaffeesieder to improve coffee quality.

Labels: eat+drink, Economics, Incentives

An Agent based Simulation

My first dismal approach to Human Migration and Migration of Firms based on

• Inductive Reasoning and Bounded Rationality (The El Farol Problem)
  by Arthur
• Migration, Unemployment and Development: A Two-Sector Analysis
  by Harris, Todaro (1970).

Abstract
Workers, considering migration costs, will change location if expected wages are higher. The same counts for firms. Trying to increase profits, firms switch location if they expect wages to be lower.
I try to simulate both. Human migration and migration of firms. Both influencing wages in their respective location.
The focus of this work is on the effects of migration costs. I expect high cost of migration to increase wage separation across different locations. While moderate migration costs should over time reduce wage separation.

Labels: Economics, TU

I just finished a work on migration in Europe. It's a summary of three papers on the subject.

• Migration, Unemployment and Development: A Two-Sector Analysis by Harris, Todaro
• Potential Migration from Central and Eastern Europe into the EU-15 - An Update by Brücker, Alavarez-Plata, Siliverstovs
• Growth and Immigration Scenarios: Turkey-EU by Erzan, Kuzubas, Yildiz

Certainly good material for my master thesis.

Labels: Economics, TU

This week Johannes, Stefan, Konrad and Patrick took off to visit Luzi in Hamburg. A fun and thanks to sparnight quite cheap trip. But the city was a mess (see below). Trash everywhere. Garbage collectors are striking to protect there 38.5 hour work week against a 40 hour work week. At first sight unrelated, Stefan found some great underwear at Wal-Mart. Why is that exiting? Well Wal-Mart itself is exiting. I just started collecting facts for a paper about Wal-Mart's data warehouse and I'm blown away. This single company drives world wide productivity in ways never seen before. Simply by demanding everyday low prices. Sadly this pressure scars workers all over Europe into striks aging the open economy. Addition: After eight years in Germany, WalMart announced in July 2006 that they will aboundant their business in Germany. Happy Birthday Lutzi!

Labels: Economics, Patrick

Stiction, stands for "static friction" or Haftreibung, conveniently sounding a bit like "sticki". It is the amount of force needed to start to move an object. Usually higher than is needed to keep the same object moving at a content rate.

Place a block on one end of a board. Lift the end with the block until the slope of the board is sufficient for the block to begin sliding downward. Then lower the board slightly.
Placing the block again at the top, it will not begin to slide on its own. However, it will begin and continue to slide if given a small initial push. The push adds the necessary force to overcome stiction. Once the block is moving, it no longer requires the larger force.

Johannes first brought my attention to this powerful term in relation to humans. We too experience stiction. Everyday. Like, for example, in the morning when you wake up. Getting on our feets seems so much harder than jumping on that tree when you are already running.

Now the subject got me again. While thinking about migration (I'm writting my masters thesis about migration). I thought about stiction. I'm building this simulation of migration where workers and firms move around based on wages in various locations. Now stiction increases travel costs over time if an agent doesn't change location. This could help me model some of those soft facts like family, friends,...

Now, get over that stiction and start running.

Labels: Economics

The WEF in Davos used to be hyped quite a bit. I almost missed it. It seems like lost on page 6. But I wonder why. Some of those talks are worth there time. It's great listening, when our leaders talk about challenges and opportunities ahead.

• Opening Address by Angela Merkel
• Special Address by Zeng Peiyan by Zeng, Schwab
• China Goes Global by Adrani, Chu, Gadiesh, Roach, Tian, Sing, Bartiromo, Zhou
• Labour Migration: How Far Is Too Far? by Argüden, Evans, Kauppi, Ramphele, Rhinow, Luginbühl
• Next Steps for Africa by Brown, Bono, FitzGerald, Obasanjo, Wolfowitz, Anderson
• Digital 2.0: Powering a Creative Economy by Chambers, Gates, Schmidt, Zennström, Moore

Labels: Economics

I just finished a work on the Intertemporal Effects of Deregulation. It's based on a paper called Macroeconomic Effects of Regulation and Deregulation in Goods and Labor Market from Blanchard and Giavazzi.

In a Nutshell: Deregulation in the labor market yields lower wages and possible higher unemployment in the short run. Truly a negative effect for workers. However, in the long run those higher profits for firms will attract new firms to enter the market. Increased competition will drive the number of products, prices and employment up. This should bring real wages back to the level before deregulation.
An intertemporal tradeoff indeed.

A Definition of Deregulation from The Economist:
Cutting red tape. The process of removing legal or quasi-legal restrictions on the amount of competition, the sorts of business done, or the prices charged within a particular industry. Dur- ing the last two decades of the 20th century, many governments committed to the free market pursued policies of liberalisation based on substantial amounts of deregulation hand-in-hand with the privatisation of industries owned by the state. The aim was to decrease the role of government in the economy and to in- crease competition. Even so, red tape is alive and well. In the United States, with some 60 federal agencies issuing more than 1,800 rules a year, in 1998 the Code of Federal Regulations was more than 130,000 pages thick. However, not all regulation is necessarily bad. According to estimates by the American Office of Management and Budget, the annual cost of these rules was $289 billion, but the annual benefits were $298 billion.

Labels: Economics, TU

Trades Unions are still tweaking there machinery.
With combined European power they will soon find a fair deal.

Illustration by Rube Goldberg.
Build your own Rube Goldberg machine with The Incredible Machine.

Labels: Economics

Standard Books, used by Universities all over the world.

Macroeconomics by Nicholas Gr. Mankiw The undergraduate and the...

Foundations of International Macroeconomics by Obstfeld, Rogoff ...graduate text on Macroeconomics.

Labels: Economics

CNN has a dept calculator for out of control Credit Cards.

The question is, when will you be debt free?
Find out how long it will take to become debt free and how much you'll pay in interest by making the minimum monthly payments. You can also crunch the numbers using any fixed payment of your choice. And...if you tell us when you'd like to pay off the plastic, we'll tell you what payments you'll have to make to achieve that goal. You might be surprised.

I tried my luck with a balance of $20,000. If I pay $230 a month. It will take me 86 years and 11 months to pay off my credit cards. During that time I will pay a total of $220,393 in interest.

Luckily, at the bottom of the page, Google Adsense provides some help:

Now seriously, America is running a huge budget deficit, private and state wise. The risk of losing the dollars valuable position as the worlds currency is imminent. But losing to who? Europe? We just gave up the stability and growth pact and with an aging society there is even more political pressure on government spending. All this borrowing will push up interest rates.

Now, I guess, I will have to recalculate those interests.

Labels: Economics

A wonderful and maybe still the best PDA. Psion.

I'm currently selling those cult machines and more. So get over to eBay and place your bid.

Labels: Economics

This quote, from Capitalism and Freedom, is the fundament Friedman builds for a liberal (meaning free) society. The key insight of this book is that capitalism ultimately leads to freedom. Governments should be very careful when regulating the market. They risk freedom.
I read this book while I traveled thru China and it made me think about the political system there. Opening the country to capitalism, should -following Friedman- lead to more freedom for the people in China. This is truly happening. And with luck, someday it may even lead to free democracy.

Labels: Economics

I just finished my first paper in operation research. The work is about a shift scheduling problem. It solves the problem of staffing for fictional problem of a check processing center. Based on a work by Krajewski, L. J., Ritzman, L. P., & McKenzie, P. (1980) Shift scheduling in bank operations: a case application. Interfaces, 10(2), 1-8.

Operational Research ("OR"), also known as Operations Research or Management Science ("OR/MS") looks at an organisation's operations and uses mathematical or computer models, or other analytical approaches, to find better ways of doing them.

The OR Society

Labels: Economics, TU

EndingOnlineAuctions [pdf] is a seminar paper I recently wrote for Experimental Economics.
It's about the rules of ending an online auction and how it influences the bidders behaver.

Labels: Economics, TU

mov, summer quarter, good bye Marokkanergasse, scheduling and OR

• As shown at derbaum.com, I brought back some fun movie clips: Wiesenski, Caribbean and The Secret Ingredient.
• During this summer (June 20th till Aug 17th) I'm going back to Stanford to study Physics.
• That's why I give up my apartment in Marokkanergasse. It was good place, but now I have to move on.
• Currently I'm working on an LP on scheduling, which I may inlcude in future version of Caltella. In short, this should find an optimal schedule for one or more person, regarding a certain task, with the goal to maximise spare time.
• Looking at the above task, the field of Operation Research seems very interesting to me. A field where I can combine my interst in math, economics and computer science.

Labels: Economics, movies, Patrick, Stanford, TU

This semester (SS04) I'm going into modeling of business processes. I got to read some quite interesting papers from this field and most of my courses are related with this topic. If I try to loosely bring together some of my courses I could say that: We analyze a business in ORG, then we model it in UM and finally we optimize it in OR.

Labels: Economics, TU

Today as usually I read the Frankfurter Allgemeine Zeitung in my favorite Cafehaus.
On page 41 (FAZ 2nd Oct 2002) I found a very powerful essay by the Indian writer Arundhati Roy*.
The essay was titled with Wie man eine Krieg verkauft and featured the translated version of Why America Will Fail by Arundhati Roy.

The last paragraph really made me think: "A world run by a handful of greedy bankers and CEOs who nobody elected can't possibly last. Soviet-style communism failed, not because it was intrinsically evil, but because it was flawed. It allowed too few people to usurp too much power. Twenty-first-century market capitalism, American-style, will fail for the same reasons. Both are edifices constructed by human intelligence, undone by human nature."

Read more essays by the same autor: The algebra of infinite justice or Under the nuclear shadow

*Arundhati Roy is known for her book "The God of Small Things"

Labels: Economics

From this article in the Media Guardian: According to Irish-based industry monitor Nua.com, Europe has almost 186 million users, while Canada and the US register 182 million. The difference may not seem substantial, but Europe is still a growing market.

Also from Nua: Asia-Pacific will have more Internet users than either Europe or North America by the end of 2002, according to a new forecast from eMarketer. The study indicates that there will be more than 180 million Internet users in Asia-Pacific by the end of the year, compared with 175.7 million users in Europe and 167.7 million in North America.

Also interesting to see the languages used on the internet (found on Google's Zeitgeist*).
*...zeitágeist | Pronunciation: 'tsIt-"gIst, 'zIt | Function: noun | Etymology: German, from Zeit (time) + Geist (spirit) | Date: 1884 | Meaning: the general intellectual, moral, and cultural climate of an era

Labels: Economics

John von Neumann stellte einmal folgendes kleines Raetzel auf uns die Mathematische Spieltheorie etwas naeher zu bringen: Ein Triell ist im wesentlichen ein Duell mit drei statt zwei Beteiligten. Eines Morgens beschliessen Herr Schwarz, Herr Grau und Herr Weiss, einen Streit duch ein Pistolentriell zu beenden, bei dem am Ende nur einer Ueberleben wird. Herr Schwarz ist der schlechteste Schuetze, denn er trifft sein Zeil durchschnittlich nur einmal in drei Versuchen. Herr Grau schiess schon besser, bei drei Versuchen trifft er zweimal. Herr Weiss ist der beste Schuetze, er trifft immer. Um das Triell fairer zu gestallten, darf Herr Schwarz als erster schiess, danach Herr Grau (wenn er noch lebt), dann Herr Weiss (wenn er noch lebt). Schliess beginnt das Ganze von vorne, bis nur noch einer von ihnen am Leben ist. Die Frage lautet nun: "Wo sollte Herr Schwarz beim erstenmal hinzielen?"

Labels: Economics

Efforts to Track Foreign Students Are Said to Lag By KATE ZERNIKE and CHRISTOPHER DREW Despite promises to tighten controls on student visas after Sept. 11, the government is at least a year from making the system safer from terrorists, who used the visas while plotting the 1993 World Trade Center bombing and the September attacks, immigration officials say. A computer network to track foreign students in the country, originally ordered by Congress six years ago, is still being tested and will not be running fully until next year. Even then, immigration service officials said, there will not be enough enforcement agents to check on all of the visa violators flagged by the system. Moreover, colleges that see foreign students as a lucrative market are raising concerns about how the system will be paid for and operated, and their objections could delay it even further. Officials concede they do not know for sure where the 547,000 people holding student visas are attending school, or whether they actually are.

Labels: Economics

Adrian Thompson has publications about Evolutionary Electronics (here). He tries to answer: What can evolutionary design do that conventional methods can't? He is faculty of the School of Cognitive & Computing Sciences: COGS.
He is associated with the Evolutionary & Adaptive Systems group (here), the Cente for Computational Neuroscience & Robotics (here), and the Centre for The Study of Evolution (here).
All this is going on at University of Sussex. And somewhere else I found this paper: Design of single-electron systems through artificial evolution
by Adrian Thompson and Christoph Wasshuber
Abstract We show how evolutionary methods can help in the design of single-electronic circuits with an example of evolving a simple NOR gate. Evolutionary algorithms, capturing the bare essentials of Darwinian evolution, work differently from conventional design methods, and have the potential to explore new territory. Our preliminary evolved circuit is far from an ideal NOR gate, but has interesting properties. It was evolved to work at a temperature of 340mK, and its performance deteriorates if the temperature is lowered, as well as if it is increased. This is contrary to the usual behaviour of single-electronic circuits, which generally improve with decreasing temperature. We hypothesise that the circuit exploits or relies upon the simulated effects of the particular thermal energies of the electrons at around 340mK.

Keywords: Nanoelectronic circuit design, evolutionary algorithms, design automation, single-electron circuit simulation, physics of computation.

Labels: Economics