2nd Year Subjects
Like I promised the other day, I am here to write about my 2nd
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.
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……
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