Den unikke Riga

Den unikke Riga

Rigas DNA gemmer en sammensætning af nordiske og russiske gener. Historisk set var Riga altid været under vestlig og russisk indflydelse, hvilket har resulteret i kulturelle sammenstød. Sammenstødet gør Riga til en meget unik en by på verdens plan. Den russiske dominans særligt under Sovjet har nødvendiggjort skabelsen af en særlig hjælpsomhedskultur.  Men i dag er Riga i høj grad under indflydelsen af vesten. Hvordan har det påvirket folkets vilje til at hjælpe hinanden, under de nye muligheder som murens fald har åbnet for?

Af Olena Denysyuk

Kultursammenstød kan føre mange ting af sig. Det kan føre til politiske og samfundsmæssige diskussioner om indvandring, tørklæder og religiøse hensyn. I værste fald kan det ende i krig. I bedste fald kan det skabe berigende oplevelser og åbne anderledes tilgange til livet.

 Mit sidste kultursammenstød var i Riga, sidst i august til et bryllup. Sammenstødet var af den positive slags. Fredeligt. Behageligt. Lykkestimulerende. 

 Et sammenstød mellem det ”fredelige og harmoniske” nordiske og den ”vilde og kaotiske” russiske kultur. Det gav mig følelsen at have et ben i hver banehalvdel.

Interest Rate: Money with a Discount Harms the Economy More Than Necessary

The European Central Bank, followed by Danmark’s Nationalbank, has started pushing interest rate down with primary goal to stimulate the economy growth in the euro zone and Denmark.  However, loose monetary policy in time of crisis can also have a negative effect: it stimulates over-pessimism, under-investment and high unemployment.

By Olena Denysyuk

On 2 May 2013, The European Central Bank has announces that “The interest rate on the main refinancing operations of the Eurosystem will be decreased by 0, 25 percentage points to 0.50%, starting from the operation to be settled on 8 May 2013.”  The next day, Denmarks Nationalbank has announced a reduction by 0, 10 percentage point and therefore reaching a new record low: in attempt to pull the euro economy out of the recession (seen from the graph).

 I fear a rather damaging – more than fixing- effect on the economy.

Your Life Can Be Proved to Be Illusory

We constantly construct stories about our reality in our minds. They may not be true – the future reality will show. Only when shown to be true, we say “I knew” it. But what if they are not shown to be true? We ignore. We build our understanding on what is known, but not on what is ignored. I have discovered the world of illusions!

By Olena Denysyuk

At night, this is one of the scariest areas for a single girl to enter. It might be dangerous, like a night with a vampire; devastating, like a fire in a nursing home; scaring like a wolf’s cry.  If you need a scary spice- you just go there. Anyhow, she got the courage to step in into this-by any standards- controversial area. Instead of buying any illegal substances she is buying scientific knowledge and a cocktail. Welcome to Christiania.

Economics vs.The Crime of Our Time

The economic indicators and equations are no longer with us. Economists have not yet raised the gaze of the “dark side of economic fundamentals”- the criminal and dodgy side of economics.

Economic Modeling vs. Crime of Our Time: Where Does the Economic Darkness Come From?

The financial crisis we live in now is the outcome of the Dark Age of Economics of our time- was the conclusion after reading and writing (here) about the book by Farmer R.E.A “How economy works: Confidence, Crashes and Self-Fulfilling Prophecies”. The unreliability of economic thoughts is to blame for all the political, banking and leading economists’ sins in the 30’s, the 70’s and the 08-09’s financial crisis. At the same time, crisis and shocks are desirable- they transform our economic thoughts (hopefully for the better), the time of crisis is the time for changes. All this create economic uncertainly, which makes the economic recovery slower than desired.

In my next blog I will reflect on the following: where does the source of the “darkness” of economics come from? Where are limits of economic modeling? And what is to be fixed to recover/transform the economy?

Different schools of thinking - different policies: Who is right and who is wrong?

Classical and Keynesian economics are the two main economy schools, which in turn, form different understandings of how the economy works. These different economic paths have different impact on our lives, because economists create different proposals and politicians create different policies, depending on which economy school they believe in.  

If classical economics is right, then no intervention is needed: markets will eventually return into equilibrium. Any governmental intervention (such as bailouts, legislations) shifts markets even further out of the equilibrium. According to classical economics, any stock market crash is the correction according to future fundamentals, anticipated by investors. Any intervention in form of capital injections and bailout is thus just wasting taxpayers’ money.

Time for Change

I believe, soon we will see the most valuable economy transformations ever triggered by the 2008 financial crisis.

The positive outcome of all financial crises is that it gives us new data, facts, perspectives to create new business models and ideas, as well as transform our theoretical knowledge of economics.

Historically, the threshold events for the changes in economy thoughts were financial crises. 

How the Economy Works (Review and a Summary of the Book by Farmer R.E.A “How the Economy Works: Confidence, Crashes and Self-Fulfilling Prophecies”)

After studying economics for many years, I still ask myself a question- why do we need to make profits and create growth in order to generate a good life? Sure, it creates more jobs, increase competitiveness, stimulate start-ups, and revolutionize products. But is that the only way economy works? This brings me to the next question: what is the real core of economics? Is it housing, finance, consumption, import, investments, finance, production? Had we known the answer, we could well have fixed economy problems without creating new problems.

  

Historically, economists strived to describe how economy works, by applying logical reasoning, simplified modeling, statistical and mathematical modeling. Technogical progress within computing greatly favored this development.

For example, In 1949, Bill Phillips (William Phillips), the father of the well-known Phillips curve, created The MONIAC (Monetary National Income Analogue Computer) also known as the Phillips Hydraulic Computer, a device that gave a ‘feel’ for economic behavior, by presenting visual (rather than numerical) results, which were accessible without prior knowledge of explicit advanced mathematics.(on the picture). 

In 1969, the first Nobel Prize within economics was awarded, thus consolidating economy as a science equal to chemistry, physics and mathematics.  However, the praise the economists received often got dwarfed decades later, as fellow peers rejected the validity of these same models and “old” economic thoughts” were abandoned.  

New understandings were formed, which influenced the politicians’ decisions

Economics is a mechanism, which cannot be defined by any model, graph or definition. However, understanding of economics is still crucial for our survival. It’s a mechanism, driven by our needs, desires, interactions, perceptions and emotions. From another side, the economy makes the final decision what life we should live. Paradoxically, the economy outcomes depend upon the actions of everyone in society, and the same time, economy dictates our actions. So, as peoples’ behavior cannot be predicted, and understood properly, neither can economics behavior.

  

"Thinking, fast and slow"

My class mates used to tell me that the reason I got high grades in oral exams was because of my confident argumentation. I used to believe it was true. However, it was schooling, it was easy to make assumptions, to prove a theory, or apply a specific formula, and consequently, sound certain.

However, recently I have noticed that unfortunately, in some situations I was misguided by my own perceptions of reality, my own argumentations, or even my own knowledge on a particular subject. Especially now, after being employed for one of the biggest Danish companies, I have completely changed my perception of certainty, after having experienced “real-world” uncertainty.  Because of business complexity, my own intuitive and not-intuitive perceptions can be misguiding. Not that my understanding or solution to a given problem are wrong, but as the world becomes more complex and information more limited, my own decisions become more biased, and arguments less powerful.