Top ten reasons to study graduate economics at Minnesota

These days heated debates about our economy among economists have become our new daily ritual. Followed then by a much smaller scaled debate as whether these economists really know what they are talking about. When a particularly angry economist attacked another group of economists, he commented: “They should now at least admit that their mathematical models are an elegant waste of time.”

For readers, however, “the choice is out there”. The truth is, given that there are so many schools of economics, and so many economists, you can always find the answers that you want to believe. 

But do not simply assume that these who derive “elegant but useless” mathematical models live only in their own virtual reality. A couple of years ago, the doctoral students at the Department of Economics, University of Minnesota designed a T-shirt print. I’d say this is the most creative and humorous T-shirt design that I have ever seen.

The front of the T-shirt says: “Veni, Vidi, Solvi!” (I come, I see, and I solve). The back of the T-shirt lists the top ten reasons to study graduate economics at Minnesota.  

10. Adversity (prelims, winters, Math 5612-13-14) builds character.

9. General equilibrium rules!

8. It is the best n years of my life, where inf{n}=5, and sup{n} does not exist.

7. Faculty-subsidized happy hours.

6. Don’t blame me; I’m just the representative agent!

5. Keynes? Who’s Keynes?

4. We’ve got fixed point theorems for your every mood.

3. Simulating data is NOT an oxymoron!

2. Establish existence and uniqueness of the Real World.

1. If you’re going to do economics, you ought to do it right!

The economics department at Minnesota is known for its math economics. I have to say, even economists have a sense of humor.

Keep the blaming game going

Ten years ago, the doctoral students at the Department of Economics, University of Minnesota made a popular T-shirt print, titled “Top Ten Reasons to Study Graduate Economics at Minnesota“. One reason on the list: “Do not blame me; I am just the representative agent.”

If you are familiar with the macro economics school there, you will sense the humor behind immediately.

It is amazing just how the entire finger-pointing blaming game has become such an integral part of our culture. One friend once summarized this routine to me: “It is never my fault. It therefore must be someone else’s fault. Once we are clear about this point, we can argue whose fault it actually is.”

The New York Time’s recent blog article “Don’t Blame Us” (by Catherine Rampell) adds just another spin in the game. I copied the article below. The original URL is here. http://economix.blogs.nytimes.com/2009/03/25/dont-blame-us/

Don’t Blame Us

By Catherine Rampell

The media — especially as embodied by  Jim Cramer — has been accused of starting, perpetuating or inflating bubbles. A new study looks at the dotcom bubble of the late 1990s and declares otherwise.

The study — by Utpal Bhattacharya, Neal Galpin, Rina Ray and Xiaoyun Yu — is forthcoming from the Journal of Financial and Quantitative Analysis. In the study, the authors examined news articles released from 1996 to 2000 on 458 Internet initial public offerings and 458 non-Internet public offerings. Each of the 171,488 relevant news items was classified as good news, neutral news or bad news.

Not surprisingly, the news coverage of dotcom initial offerings was more positive than that of non-dotcom initial offerings during the bubble, and more negative compared to non-Internet counterparts during the bust. The paper finds, though, that the actual effect this coverage had on stock prices was tiny after the first couple days:

After controlling for lagged abnormal returns, market capitalization, contemporary market trading conditions, and contemporary and past news, we find that net news today is positively related to today’s and tomorrow’s risk-adjusted returns. However, the net news effect dies out after these two trading days for both Internet and non-Internet I.P.O.s. We find that the effect of today’s net news on today’s risk-adjusted return is lower for Internet I.P.O.s than for non-Internet I.P.O.s during both the bubble and post-bubble periods. The effect of today’s net news on tomorrow’s risk-adjusted return is also lower for internet I.P.O.s, especially during the bubble period. In addition, since net news on average is positive during the bubble period and is negative post-bubble, this implies today’s good (bad) news matters less for today’s and tomorrow’s risk-adjusted returns for Internet I.P.O.s during the bubble (post-bubble) period. Our results are robust to whether we risk-adjust individual stocks, or whether we risk-adjust a portfolio consisting of either Internet or non-Internet stocks.

In the end, the authors say:

[M]edia coverage was not a significant factor in the Internet bubble. The media explains only 2.9% of the difference in between Internet and non-Internet firm returns from January 1, 1997 to March 24, 2000 (the day the Nasdaq peaked). This is because the market downplayed media sentiment: though today’s net news affected today’s and tomorrow’s risk-adjusted returns for both groups of I.P.O.s, the effect was lower for Internet I.P.O.s, especially in the bubble period.

O.K., this doesn’t totally let the media off the hook — especially since the research looked only at news coverage of I.P.O.’s, not stories about the wisdom of investing in dotcoms in general. But it’s still an interesting complement to the debate about how much responsibility (or blame) journalists should take for “irrational exuberance” directed toward dotcoms, housing or anything else: Yes, the media basically behaved badly, but its bad behavior did not appear to have much influence.

I was reading the comments posted after the article, and kept smiling. O.K., it seems to be the finger-pointing between the mass media and the public now…

Spring in China

The weather today is much better than yesterday: Brighter and warmer. It could also be the fact that I had a long but stimulating day. The seminar went well. In fact, a couple of people walked to me and told me how they enjoyed the lecture. It could be the haircut, I thought.

Now I really miss the spring. This winter has been way too long. In somewhere southern part of China, flowers should be booming everywhere.

My friend Toshi took these beautiful photos near her hometown of JiangXi last spring, when the cole flowers blossomed into an amazing scenery in the countryside.

They are everywhere, on the hills, down the hills. Beautiful.

Along the country road…

And behind the yard of old houses…

I love these old towns and villages.

And beautiful antique doors.

A shot of the cole flower field from the side of the country road.

More flowers.

Fresh and beautiful color of the spring.

First day of spring

Finally, the spring has arrived. I am so sick of endless snow, rain and wind.

Google just did another doodle for the spring of 2009, designed by artist Eric Carle.

From train station to Zurich airport: Step by step

This morning is the last day of my stay at Zurich. Instead of taxi, I took the train to the airport. The Swiss keeps insanely accurate schedule with their trains. Virtually every 10 minutes there is a train heading from the main train station to the airport.

The railcity inside the busy main train station (Zurich Bahnhof) is empty for now. Yesterday when we arrived, there was even a farmer’s market.

The bulletin board shows every train schedule. Among all the trains, IR and IC trains are my favorite.

A picture of a train “parking” at its own track. In front of the track, the board shows the departure time, track number, and the allocation of first and second class seating (apparently, Sector A is for the first-class carts, and Sectors B and C are for the second-class carts).

I am waiting for my 9:01AM IR train to Zurich airport (Zurich Flughafen) near the track 3.

Approximately 8:55AM, the train approaches to the station. Once again I am rather impressed with the Swiss efficiency. This picture is my favorite because I love the “dirty look” from the train operator.

It was in the morning so the train was not crowded. This IR train has two levels. I tried the top level for the view.

It took about 13 minutes to get to the airport. Yes, they do make a clear announcement in English when the train arrives at the airport. Then I relaxed and surfed Internet at the Zurich airport’s Air France lounge. To find the lounge, however, takes some walking. The signs for directions, however, are very clear. No way you can get lost.

A random walk along Zurich river

When my colleague and I arrived in Zurich, my hotel room is not ready yet. So we stored our luggage and headed directly for lunch, at his favorite Kantorei Restaurant. The restaurant hides among buildings in a narrow valley of the old town. The pasta that I ordered is fantastic.

After a nice lunch, an afternoon coffee at Teecafe is essential. This coffee house roasts their own coffee.

Then my colleague took off to catch a flight back to Amsterdam. I went back to my hotel, and got ready to explore Zurich.

Zurich is a very “walkable” city. Cross the river, I climbed to the Lindenhof Park. The view from the hilltop park is beautiful.

The park has an interesting fountain.

And people play chess with each other. This is one of the most popular scenes featured in any guidebook about Zurich.

I continued from the park via a steep downhill pebble stone trail to the alleys of the old town.

Further down the road the grand St. Peter’s church peeked from the alley.

This Italian restaurant — Cantinetta Antinori – used to be my favorite. Their hand-made pasta is delicious. For some reason this time when I visited them again, I was not that impressed.

The Widder square.

The Fraumunster’s clock tower. A famous landmark of Zurich.

The other side of the Fraumunster. Magnificent.

The details of the balcony of a building nearby.

The details of the columns of a building near the Fraumunster.

The St. Peter Church, a famous landmark of Zurich. There is also a painting of this church on the wall of my hotel room.

I crossed the Munster Bridge and headed towards the famous Grossmunster platz, which is located on the east side of the old town.

The details of the Grossmunster towers are amazing.

At the Grossmunster Platz, even their water fountains are rather creative. This one reminds me of the Sagrada Familia of Barcelona.

Some of these alleys can be so narrow and packed, that even in a sunny afternoon it can be quite dark inside the alley. However, you can still see the bright colors of the buildings.

The old-styled, colorful houses along the river are the most pleasant experience of this short walk.

I also love Zurich’s wide-spread tram system. The tram adds a cheerful color to the life and scenes of the city. 

This one, however, really goes to the extreme. It definitely fits the description of “eye-catching”.

At the boat dock of the lake. It was sunny and windy, and the doves were having fun with bread crumbs.

Behind the statue is the famous Zurich lake (Zurichsee). Anyone can take a boat ride to see the lake.

On the way back to my hotel, I walked along the Bahnhof Street. Here is the infamous UBS.

My hotel in Zurich

Hotel Adler has a very high rating at the TripAdvisor.com. And it is indeed lovely. The location is superb. A 5-minute walk from the main train station, and the hotel itself hides in the narrow alleys of the old town.

Each room is decorated with a painting of a Zurich’s famous landmark on the wall. I stayed at room 408, and the scene is the St. Peter church.

The double-bed, a typical European style (that I am not a fan of).

But the good news is, there is LCD TV (news only), and there is Internet! I am on the 4th floor. Walking down to the lobby I can see the details of this painting. Rather creative.

First day in Hasliberg

How did I end up in a ski resort in the middle of nowhere in Switzerland? It still puzzles me.

After seven hours of the tran-atlantic flight from Newark to Amsterdam, and then one hour and half of flight from Amsterdam to Zurich, plus two and half hours of train ride, and a twenty-minute uphill walk dragging my luggage all the way, I finally arrived at Hotel Hasli-Zentrum of SNB.

The hotel is rather basic. Great view of snowy mountains, but no TV and no internet in the room. To get through the reception without stepping along the slippery road, you need to go under this house through a long and dark hallway to reach the reception.

However, the view is magnificant. It always amazes me how people manage to live so high in the mountains.

This year the snow is great. Great for ski. Although I do not ski, I can see why this sport is so popular in this country. Yes, there is snow, but the temperature is around 40s.

What can 22 data points do to you

What a frustrating day, although it does have a happy ending.

Out of over 2700 data observations, only 22 of them are needed to screw up our results. In the past two weeks, my colleague and I have been trying all the methods and analyses that we can think of to figure out why.

After sitting in front of the computer for the whole day today, my legs started to feel numb, so I took a walk. The weather was so nice. Windy, but warm.

Then it occurred to me, since there are only 22 observations, why not check these firms for potential data error? I immediately called my colleague, who developed a fever today (probably because of the intensity of the work). She did manage to send me the crucial information of these firms, however, and I started to manually cross-check with all three major data sources.

My hunch was right. Out of these 22 observations, 18 were contaminated by data errors. The rest 4 I am not sure, as I do not have enough external sources to verify them. Because of the underlying model is very sensitive, a 1% error rate is strong enough to affect our results. Now I really want to cry…

Data up, data down

I enjoy developing ideas for new projects much more than endless data collection and analyses. Yet I just spent the whole day today again on data. I could not remember how many cups of coffee that I had for today. Speaking of which, I truly missed the gourmet coffee made by Stinky Monkey.

The good news is, at least we finalized the main theme of the interal project: My colleague is nice but extremely careful, part of the reason that I often got side-tracked by details. Afraid of losing the big picture, I have been driven crazy by these back and forth debates.

Once the title and theme were nailed, however, my dragged-and-tired soul stopped whining and started to running wild. Good ideas of implementations flooded in one after the other. Which must have amazed my colleage, as she hardly kept the pace of noting them down.

I know, in our profession it is not easy to come up with fresh ideas for great projects, and a lot of time how the idea plays out depends on the data. Regardless, I am happy that she is convinced and that the entire outline of the work has become very clear.

Meanwhile, of course, there were endless phone calls from other colleague across different states and different time zones, wanting me to pin down step by step for the development of the joint projects.

Another day of my life. Another day of what the intuition says versus what the data eventually says.