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February 18, 2008
The weekend from 15th to 18th February saw Warwick play host to the entirely student run 2008 Warwick Economics Summit – the largest academic conference of its kind in Europe. The Summit has been going strong for seven years since its inception in 2002. Attracting high profile speakers from the world of business and economics, such as John Kay (returning to the Summit after his first appearance in 2004) and Tim Harford, author of the ‘The Undercover Economist,’ and delegations of students across different universities and countries, the Summit aimed to provide a platform for the exchange and debate of economic ideas and the establishment of links across universities.
With the motto of “inspiring students to shape tomorrow’s world by engaging with today’s,” the Summit, opting for breadth rather than any single, overarching theme, addressed a myriad of issues, ranging from debates over the postulate of the rational utility-maximising agent, to immigration and globalisation. In addition to organising high-quality talks, the Summit also sought to enhance the social dimension through the Summit Dinner and Dance event.
The success of the event is attributable to the dedication and tremendous efforts of the 40-strong Summit team which has been working hard since May of last year. Attention will no doubt soon be turning towards the work for next year’s Summit.
Philippe Legrain, economist and author of Immigrants: Your Country Needs Them, has criticised the government’s points-based system for migrants seeking to enter Britain, accusing it of being “shameless populism.”
Speaking at the Warwick Economic Summit, he says that it was against New Labour’s core principle of equality of opportunity.
“They are denied the opportunity to better themselves,” said Legrain, “It is global apartheid.”
“It is easier to bring your foreign pet then your foreign girlfriend or boyfriend.”
He also criticised US immigrations policies to tighten up its Mexican border, saying that it is “driving people to die,” citing the high death rate of Mexican illegal immigrants trying to enter the US.
He called on governments around the world to remove immigration restrictions.
“Diversity is not something to be tolerated, but cherished.”
He says that migrants are not competing with natives for jobs because migrants tend to go for jobs in low value-added industries which could not be outsourced and unpopular with natives, such as elder care and transportation.
Legrain says that migrants bring big economic gains as they are more likely to be innovative because they have a different perspective.
Britain, he insists, was losing out by imposing immigration restrictions.
21 of Britain’s Nobel laureates were refugees, while half of America’s capitalists and co-founders are migrants, says Legrain.
He criticised migration sceptics of being hypocritical and “economically illiterate.”
He accused them of making “it for issues to be discussed rationally” by laying out “seemingly rational arguments.”
Perhaps one of the most anticipated of the talks was that given by Tim Harford, famous for his book, ‘The Undercover Economist’ (2006) in which he examines the economic ideas behind everyday situations in the world. At this year’s Warwick Economics Summit, Tim Harford launched his new book, ‘The Logic of Life’ in which he argues that, in spite of the seemingly irrational behaviour we often see, we are in fact considerably rational.
By drawing on basic rational choice theory and ideas from his book, Harford constructed engaging, compelling and oftentimes humorous narratives and anecdotes to elucidate the rationality and logic behind common but puzzling phenomena. From speed-dating, smokers and drug-addicts to the decision to engage in crime and almost everything in between, Harford delivered a lively and fascinating presentation. His audience was well engaged and, to the delight of enthusiasts, he was also present after the talk to sign copies of his new book, ‘The Logic of Life.’
Stephen King, the chief economist of the HSBC Group, has said central banks of rapidly emerging economies have a part to play in the recent sub-prime crisis around the world.
In his talk, King said that globalisation has a crucial role in the crisis.
He says that those central banks were keen on buying government bonds from developed countries as they were eager to attach their economies with the economic framework of those developed economies.
This has increased foreign reserves in these emerging economies, which are used to invest in government bonds in the US and Euro area, which lowers the returns for such bonds.
Other funds, such as pension funds, are driven to invest in riskier funds with higher returns, such as sub-prime mortgages.
He warns that there could be “a complete collapse of trust within the financial market” as there is not enough liquidity to substitute all such funds.
“Up until December, it is possible to feel relaxed about the UK,” said King.
“There was one redeeming feature: The UK did not have a large balance of payment current account deficit.”
However, recent revisions by the Bank of England have shown that UK is facing its largest current account deficits since the “Lawson Boom” in the late 1980s.
King warned that the UK did not have the safety nets established in the US, and there was limited rule on the fiscal side due to the government’s Golden Rule, saying that the only ways to solve the problem was to quickly reduce interest rates and engineer a fall of the sterling.
He also highlighted that globalisation was not guaranteed, pointing out to the many examples where globalisation has reversed after the First World War.
“Regardless of the economics of globalisation, politics is crucial as well.”
He emphasised the role on how China accelerated globalisation, saying that China’s economic reforms and the fall of the Berlin Wall “rocked the competitive equilibrium that used to exist in the political equilibrium.”
He also warned that even though globalisation did bring greater equality between nations, inequality might arise within nations, as shown in China and the US, which might offset the benefits of globalisation.
What do you make of the Economics Summit? Is it a good idea? Did you attend it? Leave your comments below: