2nd Year Subjects

Like I promised the other day, I am here to write about my 2^nd year experience. First, let us start with the academics. Back in September, I had quite a struggle deciding what modules to take. My first choices were MSIN7003: Organisational Change and ECON7006: Economics of Regulation, but because MSIN7003’s lectures clashes with my Macro lectures, I had to let it go. Then after a few days of looking and asking here and there, I finally decided to go with ECON7010: Economics of Development and up to this day, I am glad that I did.

      ECON7006
This is where I learnt about how to regulate a monopoly business, because the stylized fact is that a monopoly does not act in the best interest of the public, or as we economists like to say it, monopolies are bad for social welfare. I was exposed to the ways how the regulators here in the UK, namely OFWAT, OFGEM, CAA come up with a practical framework in order to make these monopolies work for the betterment of the society. The theories are not too difficult, most of them were pretty intuitive since they were mostly built on basic economics ground.  

During term time, I could have sworn that for the most part, I was lost. I understood the concepts, like how Laffont and Tirole’s model works to incentivize low cost firm not to pretend to be a high cost firm just so that it could get way with making profit from the higher price allowance, you see I am able to get all of that, but the thing was, I was lost on the structure of the course. I failed to see the bigger picture, because for a subject like this, I believe that it would be helpful if I could comprehend how they connect, therefore knowing where the subject might be heading to. Fortunately, as the exams grew nearer I managed to see that, amazing what exams can do to you, the added pressure and all.

In a nutshell, I would say that this subject managed to shed me some light on how a developed country such as the UK attempts to regulate monopoly firms especially among network industries, namely electricity, gas and water. But will the practices here be of much use back at home?’ one could ask. Take the case of electricity generation sector for example, given our resource base we have no nuclear power or wind turbines to help with offshore energy transmission like they have it here in the UK. Having said that, who knows, maybe the subject would be useful someday, maybe when I get to be involved in policymaking or something, maybe then I could utilize what I’ve learnt here.

·     ECON7010

Here’s another interesting subject I’ve learnt this year. If I were to sum it up in a short sentence, I would say that it’s ‘more than just about poverty’. It encompasses growth, factors that affect the economic growth of a country jumbled up with the analysis explaining why most of the sylised facts on poverty are misleading, such as why giving out insecticide treated bednets for free are no more effective than putting a price tag on them, why microfinance, one of the most prominent topics in recent years may not as miraculous as we thought it to be, plus many more.

This subject is relatively simpler to ECON7006 in the sense that there are less theories and graphs to be understood, but do not be fooled by, for this subject we were required to develop solid arguments for both sides of the case. Take for foreign aid for example, on one hand we have Jeffrey Sachs who firmly holds on to the idea that the poor is poor because they have limited resources, hence why he came up with the Millennium Village initiatives; on the opposite side of the spectrum we have William Easterly who’s book, The Elusive Quest for Growth centers upon the notion that foreign aid is not the remedy for economic growth simply because people respond to incentives, if the proper incentives are not made aligned, then pouring in as much foreign aid as possible will have no effect to the poor. Interesting topics, aren’t they?

So you see, in my second year I coincidentally picked two very opposing modules, Regulation which more or less applies to developed countries, while Development which centers more on how can we get developing countries move forward for the better. All in all, they are both very exciting subjects to learn about and I am so grateful to have been bestowed with the opportunity to be able to study them this year.

I leave the rest to you……