Difference in difference

In the macro workshop last week, two professors argued the efficacy of running regression on inflation targeting countries. (to be continued.)



(Picture: answers.com)

Baby models don't sell

I was sitting in a talk by a Stanford graduate and suddenly realized how true my adviser's comment on writing a simple model to explain puzzles was. That paper presented was extremely difficult to assimilate, not that his heavy accent helped. But no one in that room would think the guy was dumb.

Then the comment struck me. He said in a previous meeting, "Baby models don't sell." It is harder and harder to use a simple model to explain economics. Most of the baby models are already in principle and intermediate textbooks. It won't be easy to come up with one more popular baby model. Besides, you put yourself in a dangerous situation that real economists might think you are not up to difficult reasoning when you can only talk about simple stuff.

So my lesson is when you are talking to professionals, it is always better to be boring and incomprehensible than to be a see-through. You can talk about baby models any way you want when you are judged by no one.

(Picture: Elite Photography)

My head is spinning

The Nobel Prize in economics goes to Leonid Hurwicz,Eric S. Maskin, and Roger B. Myerson. My head was spinning when I first heard of the news, just like when I was in Prof. Singh's advanced micro class. In the very last part of the lecture, Prof. Singh devoted a great deal of time to mechanism design theory. "What is this (beep) ?" was constantly in my mind at that time. I am just so glad that I am done with micro theories.

For those advanced readers, you should check out Alex Tabarrok's explanation of mechanism design theory.

(Picture: Prof. Hurwicz by University of Minnesota)

Double parentheses?

The other day Lauren, a fellow Ph.D. student, asked about how to cite an article when the citation was not part of the sentence. I didn't know how to do that, of course. I just kept persuading her to write another sentence for the citation because I know double parentheses were ugly.

Well, like Lauren said, I didn't read enough and my answer was ugly, too. So I came back and surfed the Internet. To my surprise, there is a clear guideline out there. Check out this citation guide provided by Prof. Parker at Reed College. You can know how to avoid double parentheses by reading page 3 of the guide.

(Picture: www.brill.nl)

Dude, where is my dataset?

I asked a stupid question when meeting with a professor. I said, "Is it possible to publish something without empirics." In empirics, I meant testing the theory with real world data. It is of course possible, but not when you are just a graduate student.

My stupid question came from my frustration of locating data when doing my econometrics project. We social scientists are not like natural scientists: we rarely can run experiments on our subjects. All we can do is have nature do the experiment for us. The downside of it is we usually don't know where nature stores its experiment results.

No matter how elegant your theory is, it is nothing without empirics backing it up. Seeing the difficulty, many economists do it backward. Instead of constructing a model first and testing it later, some get a hold of a good dataset first and then figure out a way to use it.

I don't know which way suits me better, but let me tell you one thing: if I can have access to a really good exchange rate dataset, I will for sure beat it to death.

(Picture: The University of Edinburgh)