84 thoughts on “Weekend reflections

  1. I have just listened to the last Soros lecture and he makes many good points http://www.ft.com/indepth/soros-lectures Soros has long argued that stable equilibrium as a model does not reflect reality and he continues to make a lot of money because policy makers act as though it does.

    I have also listened to a talk by Tim Jackson and read his book – Prosperity without Growth. http://www.earthscan.co.uk/?tabid=92763

    Jackson says to solve the GFC we must invest in ways to reduce the growth in consumption of finite resources while still growing the economy. He says that the current economic system is one where growth comes from consuming more finite resources and that this is unsustainable. Soros says that the global financial system is unsustainable as it has what he calls reflexive feedback in the way we invest in existing assets. What he means by reflexive is positive feedback.

    There is a single solution to both these problems and it does not require any change in the existing economic system – only an addition.

    The addition is to provide zero interest loans for greenhouse gas reduction investment or other investments that reverse consumption of finite resources.

    This will not change the existing economic system – only favour investments in a particular area of the economy. It solves Soros reflexive problem because the loans increase the amount of productive assets rather than push up the price of existing assets. Our current system is one where it is financially cheaper to borrow money to buy existing assets than it is to build a new asset. Reverse this (with some – not all) assets – particularly where we have asset bubbles – and we would find the reflexive forces diminish and financial markets stabilise so making the stable equilibrium hypothesis better reflect reality.

    I would most appreciate any comments on the following slide show. It takes 8 minutes and it shows a financially responsible way to give zero interest loans without causing excessive loans to be created and ensuring that most of the loans get repaid. It can also be constructed to be equitable and reduce the influence of vested interests (those who already possess wealth) while at the same time fairly compensating those (like the fossil fuel burners) whose asset values are destroyed.

    It is practical, can be quickly implemented and can be constructed so that the whole of society shares in the increase in wealth from the new investments. This should make it politically saleable.

  2. @SeanG
    having read your latest stream on “the guvmint caused the bubble” all I can suggest is an appropriate shiboleth for you

    “liberty, inequality, egocentricity.”

  3. Actually Alice, I pointed out that the government’s policies will i.e. future rather than past tense.

    Maybe you should also read where I feel that the best place will be to place our scarce resources of money, time and people – in creating a pipeline of renewable energy projects in order to shift towards a efficient renewable energy supply.

  4. @SeanG
    Sean – who creates the pipe for the pipeline?? Do we all wait for all those free market private sector profit hungry merchants to extract the last of the cheap coal oil and uranium before they ask Gunns for wood to burn cheaply spilling their negative externalities on us all as they go… and then and only then consider renewables…

    As Keynes said, in the long run we are all dead.

  5. Seeing as this is “no topic” – Im going to sidetrack. Ive had reason lately to visit HSC economics papers and Ive come across some ideological clunkers of questions. Who the hell selects the syllabus??

    Which is an example of reform in a factor market?
    a) intyroduction of a quota on imports
    b) expansion of government welfare programs
    c) removal of minimum wage levels for specific industries
    d) Implementation of quality control testing fo finished goods.

    Now I know all you economists can find the right (baloney) answer. How fashions change eh? It was a mere decade and a half ago that the Japanese were being hailed the production management kings of the universe. Poor old Total Quality Control . Its apprently not efficient any more….

    Believe me…it gets much worse

    Such as (from 2007 paper) –

    “Discuss the impact of sustained fiscal surpluses on resource use and economic activity in the Australian economy”

    With a nice little blurb added in a box saying “The federal budget has moved from deficit to surplus. The ongoing savings have changed the government debt burden and allowed changes in government spending and taxation.”

    You get the picture on the sort answers they want from students – surplus always good deficit always bad.

    Ha ha ha – shame its SO out of date across the globe.

  6. A good student in subjects like economics should presumably be able to argue both sides of the fence, as many issues have an array of things to consider. A great student should be able to then quantify to some extent the impacts of the various things considered, and arrive at an “all things considered” conclusion. They don’t necessarily have to arrive at the “right” answer, but at least demonstrate that have the skills to think through an economics problem. My guess here is that multiple choice style examination questions encourages both student and exam creators to play the Beauty Contest game, which is a bit discouraging.

    In an area where I know (a bit :-b ) more about the subject – mathematics – I have never seen any great value in multiple choice for problems that require some reasoning skills. Perhaps a multiple choice question for testing student’s knowledge of pertinent definitions; even there though the examiner loses insight into why students fail to get definitions correct, beyond the self-evident failure to successfully memorise the definition. A written answer may reveal which parts of a definition students get confused by, and indicates where a lecture course might need a bit of refinement, perhaps.

    When it comes to proving a mathematical theorem, a written answer allows the better students to demonstrate better proofs to whatever one was expected by the examiner. A slightly incorrect proof that uses a novel or powerful line of reasoning that is capable of proving the theorem is worth a high mark, as it illustrates that the student has a mature grasp of the subject matter, and the capacity to take the subject matter further. On the other hand, specious reasoning by struggling students may reveal gaps in the lecture material where some refinement may bring out the ideas more clearly.

    The sometimes cynical part of me thinks that multiple choice slipped into inappropriate areas because: a) it allows a computer to mark exams, or fewer people at least; b) it is impossible to demonstrate cheating by copying the students around you; c) it makes cheating off of the students around you much easier – no more messy writing to read, just look for the big tick or cross; d) statistically speaking, there is a floor on the mark that a student will get, since they have the option of randomly picking an answer.

    Item (d) means that there is nearly always a non-zero mark to scale up to a pass, whereas a written exam is sometimes passed in as blank. Trying to pass a blank exam paper takes serious creative effort ;-b

    Then there is the related issue of grade inflation – thanks HECS, thanks private funding models, thanks PR and marketing.

  7. @Donald Oats
    One problem with teaching has been the introduction of criterion based assessment. Ostensibly brought in to improve transparency the result has been to reduce response variability – effectively penalising the student who provides a clever tangential answer through an individual interpretion of the question. The critical thing now is for total obediance and servitude by the student to the teacher’s intentions.
    A mirror really for a broader social movement.

  8. @nanks
    Nanks – I agree. The “remove the minimum wage” response occurs year after year somewhere in the multiple choice section. Its always the correct (programmed ideological obedience required) response plus I dont agree with it and nor could additional welfare not be considered a factor market reform when considering those displaced by unemployment if it helps them to return to employment or another income egnerating activity such as self employment faster.

    These responses are a load of one way blinkered nonsense along the “any de-regulation is good and any regulation is bad” lines.

    Myopic, unsophisticated, erroneous, full of cliches (factor market “reform”) and just plain dumb.

    No wonder the profession gets laughed at. No subtlety at all. No room for the smart students to move.

    Just deliver the pap and pat responses they want to hear and leave.

  9. @nanks
    Nanks = yes to the “criterion based assessment” which is why I always ignore marking guides. In unis I know hours and hours are sepnt on these things and they can run to pages and the distribution of half marks even and Ive never found one to be a good predictor of the range of student reponses. Had I stuck dutifully to all the marking guides Ive read I would long ago have been sacked for exceptionally high failure rates – when the only person that should have been sacked was those who ever imagined they could anticipate the full range of correct responses in a student essay style question.

    Don – the correct answer to the mc advance is a) it can marked by computer.

  10. @nanks
    I know why marking guides came into existence supposedly to standardise differences between markers in the mid to late 1990s but since then their volume has risen exponentially, they are probably part of accreditation and are in my opinion an enormous waste of time.
    I once had a lecturer who predated the dastardly things (marking guides) and he used a fantastic little macro that adjusted for differences in the std deviation of markers very nicely and it all took two seconds so the one hideous marker in our team …stopped getting complaints about him to the students association (which never seemed to have any affect at all on his extreme stinginess with marks).

  11. SJ :Terje, the US has the kind of tenure for senators that you are suggesting. And, as you suggest, the tenure causes them to act in a less “populist” fashion. In fact, they have little to no regard for what their populations want at all, preferring to be one of the most corrupt institutions in modern times.

    SJ – US senators currently serve six year terms, the same as Australian senators. If they are more corrupt than our senators it has nothing to do with length of tenure.

  12. @nanks

    Interesting piece Donald. Speaking as a teacher, there are always challenges when devising marking schemes. One wants

    a) a valid measure of the student’s grasp of the key skills and content in the program
    b) a maintainable system — i.e. not too demanding of markers’ time
    c) one that would be as consistent as possible regardless of the marker so as to ensure procedural fairness
    d) one capable of providing constructive feedback to students, since reporting and assessment are parts of student learning

    I would argue that criterion-based assessment is the structure that offers the best prospect of achieving all of the above. That said, one needs to be especially thoughtful in devising and specifying the evidence sought in assessible items. Inevitably, there is a trade-off between explanatory detail in the rubric and (b) and (a) above, since, (if explicit pace (d)) it affords greater scope for assessment to be challenged. Sometimes less is more.

    Of course complete marker discretion can be very subjective and can subvert (a) and (d). Cross marking and resort to sample papers in which markers evauate them and exchange opinions on how to weigh evidence can be useful if all of the markers are familiar with the course outcomes and the context in which they are delivered, but this begins to subvert (b) may not assist (d) and may not be technically feasible in all settings.

    On the question of multiple choice, it is possible to design these things so as to make them challenging and resist copying. Online with one question per page with, for example, 8 subtly different options, it would be difficult to get much advantage either. A problem here is that for those whose first language is not English, one might be testing language rather than substantive course content. For some courses however, MC would not be apt — a course called Exploring the PostModern in narratives of gender probably would loiok silly with one.

  13. @Fran Barlow
    Fran, having devised many such assessments at the tertiary level myself, spoken at innovation in teaching conferences, sat on the faculty boards introducing criterion based assessment at UQ etc etc I am still suspicious of the actual – rather than the potential – impact.
    There is a lot to like about criterion based assessment and the attendent scaffolding that good course design provides. However I have noted – particularly in secondary teaching – an interpretive rigidity can easily creep in whereby by reliability of assessment (in the statistical sense) is given priority. The upshot of which is that creative responses are stymied – and entire classes of response are invalidated.
    A classic example would be in media studies/art or English or similar where the criteria demand a particular set of attributes are used to create a product eg in English one would be asked to use many different sentence structures. However the use of many different sentence structures in a piece of critical or creative writing is not necessary for the production of high quality work. So a brilliant piece of writing (or film etc) can get a poor mark because it failed on a particular critierion (formal variety). Now one may argue that bad luck – the criteria are there for all to see – but this misses the point, the point being that an entire class of valid responses are removed from the response set. In other words reliability has been mistaken for or stands in place of validity. A similar problem – more or less subtle – can take place even in what appears to be a straighforward technical subject like IT.

  14. @nanks

    A classic example would be in media studies/art or English or similar where the criteria demand a particular set of attributes are used to create a product eg in English one would be asked to use many different sentence structures. However the use of many different sentence structures in a piece of critical or creative writing is not necessary for the production of high quality work. So a brilliant piece of writing (or film etc) can get a poor mark because it failed on a particular critierion (formal variety).

    I quite take your point, though the challenge here is to map the criteria both to the course outcomes and to weight them in some consistent fashion. I’m not sure why having a variety of sentence structures says much about the creativity of a particular piece, beyond what might be dervied from the structure of the passage as a whole. Structures appropriate to the text type likely audience, purpose of the text along with the felicity of sentence and paragraph collocation etc. would surely be most salient.

    On the other hand, if one were evaluating the work of a LOTE/ESL/limited literacy student for literacy purposes, demonstrated capacity to shape and locate clauses would be pertinent.

  15. I agree Fran – in practice however I have seen the sort of ‘error’ I identify quite often. I’m not really saying toss the baby out with the bathwater as I think there are great strengths to the modern criteria based systems. However the problem I point out is serious and I believe needs to be discussed more widely. My experience is that it occurs more often than not. A challenge I often put forward to other teachers was – could you give both ‘maximalist’ and ‘minimalist’ students the highest grade?

  16. I have done nanks – if the mathematics of macro is done properly it can be effective and minimalist. Alas modern macro texts have dumbed down and removed large chunks of the maths….

  17. One problem with teaching has been the introduction of criterion based assessment. Ostensibly brought in to improve transparency the result has been to reduce response variability…

    This semester I started taking some econ courses for the first time. I almost spewed when I saw that my Micro lecturer had given me zero marks for an exam question because I had reversed the price and quantity axes (on an extremely simple diagram) from what was in the textbook – even though all of the details were fully correct. answers have to be so “standard” that the lecturer is spared the intellectual labor of flipping axes on a 2D graph!

  18. @gerard
    In fact your lecturer was wrong and you were right Gerard. Thinking matehmatically they would be reversed in terms of the independent and dependent variable. Tthat was an error in early mathematical models (the mistaking of price and quantity in terms of dependence) but they had done so much work they kept it. A unique abberattion that persisted through time. Perhaps you should appeal.

  19. @gerard
    Except Gerad – youb have economics texts and should have noted the difference early in the semester (unless you didnt see the diagrams – how else can it be explained?). I wouldnt give you extra marks even if you did appeal.

    Convention dictates you follow economic methodology!

  20. @Alice
    lol – but you should appeal as you were correct – however you shouldn’t expect a lecturer to notice that sort of mix up – marking can be quite boring and onerous,leading to auto pilot. Problems can arise when a lecturer gets defensive – and also when students do too!

  21. well I’m not sure that when it comes to price and quantity either can be singled out as a dependent or independent variable generally speaking. but in any case it shouldn’t make a difference. the information contained in the stupid graph is exactly the same, it’s just like switching the right and left sides around an equals sign. of course now I realize that convention is more important in economics than simple reasoning. the lecturer needs to do very little real work since the whole course is bought from a US supplier – textbook, slides, exams and answers, all conveniently pre-packaged for the paying consumer.

  22. of course I assumed the lecturer was marking on auto-pilot so had made a mistake. I did see the lecturer about it but was told that if it looks different from the textbook then it’s wrong. If this were a real subject I would appeal but it’s just Basic Micro so I couldn’t be bothered.

  23. Terje Says:

    SJ – US senators currently serve six year terms, the same as Australian senators. If they are more corrupt than our senators it has nothing to do with length of tenure.

    That’s the theory, but it doesn’t translate well into practice. I know, I know, you’re a libertarian and so are unconcerned about such things, but anyway, there it is.

    Byrd has been there for 50 years, Inouye for 46, Kennedy 46 (until his death this year). A quarter of them have been there for 20 years or more.

  24. @nanks
    Gerard – you would have been skating on thin ice with your lecturer. Didnt you notice all the other graphs in the text with P on the vertical and Q on the horizontal (come on there is more than one and it should go through at least the first 6 chapters except where you put costs on the vertical (so – its still in dollars)…
    Gerard – its like labelling the curves demand and supply round the wrong way!! And Gerard I agree

    “whole course is bought from a US supplier – textbook, slides, exams and answers, all conveniently pre-packaged for the paying consumer.”

    Unfortunately often the case. Even Bernanke has put his name to a hollow lite little prepackaged textbook with no mathematical explanations (or few and grossly insufficient) doing the rounds now…Alas the pushy intrusion of the market for crappy textbooks into unis..as long as there is a new edition every semester so you lot (students) cant buy a second hand version. There is not enough time for any academic to write a decent one (go back to the past for that and keep them as collectors items).

  25. Gerard – its like labelling the curves demand and supply round the wrong way!!

    No, it’s not. Re-labelling the curves would change the information in the graph. Switching the axes does not change the information, as long as everything else in the graph is also flipped. It’s like saying 2=1+1 instead of 1+1=2, exactly same information as long as you’re not an idiot. No I didn’t read the textbook because there weren’t enough copies in the library and there’s no way in hell I’m forking out $110 for that piece of rubbish (uni textbooks are a complete scam industry especially it seems in econ). anyway I understand there’s a convention, but in the question Q was the left side and the convention in maths is that the left-side of the equation corresponding to the y axis so I assumed… but anyway I think I’ve done enough whining about this matter for now

  26. gerard, IMO you should ask for a remark, stating your case clearly. I assume that the question did not include something like: Draw the picture of A as shown in textbook B. In other words, I assume that the purpose of an introductory micro subject is still to introduce students without a mathematical background to the idea of finding a mathematical object to make an idea precise. Copying a diagram from a text is obviously not consistent with this objective.

  27. @gerard

    ” but in the question Q was the left side and the convention in maths is that the left-side of the equation corresponding to the y axis so I assumed…”

    I do think you have an arguable case based on this information here then..

  28. @Alice

    What on earth makes you think that the government can act even faster? The ETS is about forcing the private sector to make those changes. A carbon tax etc etc is all about forcing private sector forces to make a switch. Instead of saddling an economy in a way which can reduce overall growth and prosperity and reduce the capacity for investment in renewables, we should do everything we can to invest today, to build up a pipeline of human talent at universities to work on projects to make solar, wind, geothermal etc more efficient.

  29. Actually, Australia has had a dedicated few that have quietly chipped away at research problems in alternative energy technology, design, and even policy. In fact we have had (and still do have) a number of excellent research academics who have attracted and helped some very capable students to master the field. It is the next step that is a big hurdle – those successful students who wish to build and sell alternative energy products find it necessary to go to other countries, like China for example, in order to obtain the funding for their entrepeneurial plans.

    My opinion on this is that our policies concerning the promotion and development of alternative energy manufacturing and development are chopped and changed in unpredictable ways, often without much in the way of justification. It doesn’t provide a sufficiently stable policy environment for companies to risk startup in Australia, or for financers to provide initial capital.

    It takes a huge investment of time and energy to establish a company and to move beyond potential to profitable business, so risking the marriage and family life against it is best done in a supportive environment, and Australia doesn’t offer such an environment except in fits and starts. More’s the pity.

  30. @SeanG
    Refer to the latest thread Sean. Im tired of debating the benefits and costs of Govt with you freedom fighters. You only see the costs and want to go on about them incessantly.

    I see bigger costs in the markets without a government Sean. I especially dont want to discuss the ETS with people who are ideologically opposed to it rather than intelligently opposed to it (because they have done some research). Its just too boring Sean.

    Same old same old. No regulation, no government intervention, no ETS in any way shape or form, no taxes.

    In short, its a boring predictable formula. I dont want to debate with a pre packaged fomula of objections. Been there, done that.

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