Here is the simulation of the queuing system for you.
I bet you wont found a better simulation than this for free.
All you need to do is to send me an email @ abhisemail@gmail.com and I will share it with you.
Here is the link:
http://spreadsheets.google.com/ccc?key=pfPq27zjVWvRcgY1aelmZKQ&hl=en
But I haven't shared it yet. So send me an email if you want it.
Wednesday, March 18, 2009
Advanced excel tutorial
Linking worksheets
You may want to use the value from a cell in another worksheet within the same workbook in a formula. For example, the value of cell A1 in the current worksheet and cell A2 in the second worksheet can be added using the format "sheetname!celladdress". The formula for this example would be "=A1+Sheet2!A2" where the value of cell A1 in the current worksheet is added to the value of cell A2 in the worksheet named "Sheet2".
Few Links:
http://spreadsheets.about.com/od/advancedexce/Advanced_Topics_in_Excel_Spreadsheets.htm
http://www.beyondtechnology.com/tips.shtml
Creating a Drop Down List in Excel 2007
http://spreadsheets.about.com/od/datamanagementinexcel/qt/20071113_drpdwn.htm
http://spreadsheets.about.com/od/datamanagementinexcel/qt/080504dropdown2.htm
Macro tutorial
http://spreadsheets.about.com/od/advancedexcel/ss/excel_macro.htm
vlookup
http://spreadsheets.about.com/od/excelfunctions/ss/vlookup.htm
hlookup
http://spreadsheets.about.com/od/excelfunctions/ss/hlookup.htm
Goalseek
http://spreadsheets.about.com/od/advancedexcel/qt/080802goal_seek.htm
Database
http://spreadsheets.about.com/od/datamanagementinexcel/ss/080608_database.htm
Removing duplicate records
http://spreadsheets.about.com/od/excel2007tips/qt/data_duplicates.htm
Advanced filter
http://spreadsheets.about.com/gi/dynamic/offsite.htm?zi=1/XJ/Ya&sdn=spreadsheets&zu=http%3A%2F%2Fwww.docnmail.com%2FExcelFilter%2Ffilter4.htm
Import text files
http://spreadsheets.about.com/gi/dynamic/offsite.htm?zi=1/XJ/Ya&sdn=spreadsheets&zu=http%3A%2F%2Fwww.docnmail.com%2FExcelFilter%2Ffilter4.htm
Pivot table
http://video.about.com/spreadsheets/Create-Excel-Pivot-Tables.htm
This will give you an idea of using vb script in excel
http://spreadsheets.about.com/gi/dynamic/offsite.htm?zi=1/XJ/Ya&sdn=spreadsheets&zu=http%3A%2F%2Fwww.contextures.com%2FxlUserForm01.html
You may want to use the value from a cell in another worksheet within the same workbook in a formula. For example, the value of cell A1 in the current worksheet and cell A2 in the second worksheet can be added using the format "sheetname!celladdress". The formula for this example would be "=A1+Sheet2!A2" where the value of cell A1 in the current worksheet is added to the value of cell A2 in the worksheet named "Sheet2".
Few Links:
http://spreadsheets.about.com/od/advancedexce/Advanced_Topics_in_Excel_Spreadsheets.htm
http://www.beyondtechnology.com/tips.shtml
Creating a Drop Down List in Excel 2007
http://spreadsheets.about.com/od/datamanagementinexcel/qt/20071113_drpdwn.htm
http://spreadsheets.about.com/od/datamanagementinexcel/qt/080504dropdown2.htm
Macro tutorial
http://spreadsheets.about.com/od/advancedexcel/ss/excel_macro.htm
vlookup
http://spreadsheets.about.com/od/excelfunctions/ss/vlookup.htm
hlookup
http://spreadsheets.about.com/od/excelfunctions/ss/hlookup.htm
Goalseek
http://spreadsheets.about.com/od/advancedexcel/qt/080802goal_seek.htm
Database
http://spreadsheets.about.com/od/datamanagementinexcel/ss/080608_database.htm
Removing duplicate records
http://spreadsheets.about.com/od/excel2007tips/qt/data_duplicates.htm
Advanced filter
http://spreadsheets.about.com/gi/dynamic/offsite.htm?zi=1/XJ/Ya&sdn=spreadsheets&zu=http%3A%2F%2Fwww.docnmail.com%2FExcelFilter%2Ffilter4.htm
Import text files
http://spreadsheets.about.com/gi/dynamic/offsite.htm?zi=1/XJ/Ya&sdn=spreadsheets&zu=http%3A%2F%2Fwww.docnmail.com%2FExcelFilter%2Ffilter4.htm
Pivot table
http://video.about.com/spreadsheets/Create-Excel-Pivot-Tables.htm
This will give you an idea of using vb script in excel
http://spreadsheets.about.com/gi/dynamic/offsite.htm?zi=1/XJ/Ya&sdn=spreadsheets&zu=http%3A%2F%2Fwww.contextures.com%2FxlUserForm01.html
Devaluation of Thai Baht
Below is the chat transcript between me and one of my friend on the currency and banking crisis that happened in Thailand between 1997-99.
12:51 AM me: dekh liya tune apna portion?
koi problem to nahi hai na?
Sumit: hmmm dekha toh,elkin link nahi kar paa raha tha
so readin d entire ppt
kab tak online rahega?
12:52 AM me: almost puri rat
ruk main batata hu flow
jam
Sumit: ohhhk
12:53 AM me: dekh sabse pehle liberalization ke karan economy bahut open ho gaya...to pehle liberalization me kye kya hua ye bataya hai...
12:54 AM Sumit: hmmm
me: open hone ke karan aur interest rate jyada hone ke karan capital inflow hone laga
usme BIBF ka bhi bahut bara role tha...
12:55 AM Sumit: hmmm
me: bibf ka bahar me branches tha...wo bahar ke country se saste me loan leke thailand me loan deta tha higher interest rate pe...
uske karan hi mainly capital inflows ho raha tha
12:56 AM Sumit: hmmm bt C/A deficit was huge too? due to change in XR>?
BIBF: is Bahrain Institute of Banking and Finance
?
12:57 AM me: bangkok international banking facility
Sumit: :D ohhhk
12:58 AM me: jab capital inflow hota hai...to country grow karti hai...logo ka income badhta hai and import is a function of income...to import badhta hai...agar export nahi badegha proportionately to current act deficit hoga...
Sumit: ohhhhk
me: dusri bat export mainly japan ko kar rahe the...japan ki maa waise hi chudi hui thi 1990s...to export hurt ho raha tha
Sumit: ohhhhk
1:00 AM me: aur inflation bhi bash raha tha...kyunki mainly bahar ka paisa log real estate aur baki asset me laga rahe the...consumption demand bhi jyada tha...economy efficient nahi tha...supply ki gand lagi hui thi...kyuki paisa to sala asset kharidne me ja raha tha...is sab ke karan inflation bhi tha...
*badh
1:01 AM aur jo capital inflow ho raha tha wo mainly short term tha
u thr?
Sumit: hmmm
me: hot money jisko kehte hai
Sumit: samajh raha tha bhai...time lagta hai na
me: yahan tak thik hai?
1:02 AM Sumit: inflation is raised wen there is increased in money supply and velocity and output is not raised
but you sayin cap inflw hua toh consumption bada
consumpn bada toh IS curve toh lehta hai ki output bada
1:03 AM me: capital inflow se income badha...basically investment ho raha hai na...Y=C+I+G+X-M
yes
when income increases or output increases...C also increases...
Sumit: hmmm toh output bada na be...den hw can we day inflation was couased due to increased cap inflw?
me: as it is a function of Y
Sumit: hmmm
1:04 AM me: kab tak sawal hai
ek stage ke bad jab sab employed ho jayenge to supply nahi badhega
Sumit: hmm ye sahi hai
1:05 AM den inflation aayega
me: lekin demand to hai hi due to rising income
yes
Sumit: hmmm sahi
toh hot money aa raha tha aage...
1:06 AM me: haan to hot money aur japan ke gand lagne ke karan inflation aur current account deficit badh gaya tha
1995 me 8% deficit tha
Sumit: hmmm
1:07 AM me: aur inflation bhi us ke comparision me high tha
Sumit: hmmm
me: agar apne desh me jyada mehgayi hogi to log aur import karenge...kyunki bahar sasta hai...
usse aur current account deficit hoga
Sumit: hmmm
1:08 AM me: ye fixed exchange rate ke ek aur panga hai
Sumit: sahi jha, u gud in teaching :)
1:09 AM Toh C/A deficit aur badd gaya (Inflation, Japan..sab badad diye)
me: sarkar bhi ek dekh rahi thi...usne kuch thik karne ka try kiya by taking some measures
Sumit: Expot chuda, import utha (C/A Deficit utha)
hmmm
den..
1995 mein lya kuch monetary measures
1:10 AM me: haan 95 me deficit 5 se 8 percent ho gaya tha
Sumit: of GDP?
me: haan
c/a deficit = 8% of gdp
Sumit: ohhhk so ab?
1:11 AM me: un measures ka kuch asar nahi hua...basically money supply ko kam karna chahti thi sarkar...liquidity aur credit ko bhi kam kar na chahti thi...
par monetary policy effective nahi hoti if fixed exchange rate and perfect capital mobility is there
Sumit: oohhhk
1:13 AM me: sarkar ne loan deposit ratio kam kar diya...par usse usi bank ko phadak padega jisko deposit nahi mil raha...jiske customers kam hai...pade bank me to paisa deposit hoga hi...no one holds cash...
Sumit: I know y, coz of imp trinity :D
1:15 AM me: dusri bat yeh hai ki...usually contractionary monetary policy me interest rate badhate hai
yahan interest rate to jyada tha hi
paisa mainly bahar se aa raha tha
Sumit: ohhhk
me: to basically sarkar kuch kar nahi payi
1:16 AM Sumit: ohhhk
me: ab jab current account deficit bahut ho jata hai...to logo ko lagta hai ki currency overvalued hai...
kyunki usse import sasta padta hai
Sumit: ohhhk speculation
1:18 AM kahan gaye? sutta maarne?
1:19 AM me: ek min
haan speculative attack
1:20 AM Sumit: den..
me: are sonu ko mail nahi mila tha
wo bhej raha tha
1:21 AM Sumit: ohhk
me: thailand ki sarkar ne currency defend karne ki koshish ki pehle
1:22 AM speculative attack me log baht ke badle apni currency mangte hai
Sumit: ohhk
me: jisse baht jyada ho jyada hai market me aur uski value kam
1:23 AM Sumit: ohhhk
me: uskko bachane ke liye central bank ko baht kharidna hoga foreign exchange deke
par kab tak
Sumit: ohhk forex reserve ki lagne lagi
me: tabhi tak jab tak uske pas foreign exchange hai
Sumit: so finally FERR toota?
me: haan pura forex deplete ho gaya
1:24 AM Sumit: Fixed exchange rate regime
me: uske bad currency float karna pada
haan
Sumit: gud :)
me: ye hua 2nd july ko
Sumit: 1997?
me: yes
Sumit: abe bankg or nonbankg outflowa ka kya funda hua tha?
1:25 AM me: ek bar jab baht apni asli aukat pe aa gaya logo ne paisa nikalna band kar diya
Sumit: ohhk
me: jo paisa nikal raha tha wo mainly short term loan me diya paisa tha
jinhone fdi kiya tha wo withdraw nahi kar rahe tha
*the
fdi ya portfolio
Sumit: ohhk
1:26 AM me: jo paisa BIBF ke jariye aya tha wahi nikal raha tha
wo bank category wala paisa tha
Sumit: ohhhk
me: jo commercial banks aur bibf ne bahar se loan leke thailand me loan diya tha
ok?
Sumit: hmmm
1:27 AM toh iska matlab dono kind of flows the.....banking (BIBF) ke zariye n Non banking portfolio ke zariye
lattter was v less
me: dekh jo capital inflow hota hai wo bahut tarike ka hota hai
1:28 AM main samjhata hu
Sumit: :) ohhhk
smjha :)
me: fdi ka matlab ho ta us country ke company ka 10% se jyada share kharidna
portfolio bhi equity investment hota hai
Sumit: ohhk
ohhk
me: ye sab non banking category me ata hai
isme bank involve nahi
Sumit: ohhhhk
hmmm
1:29 AM me: bank kab involve hota jab company loan leti hai
debt
Sumit: hmmm
me: jo commercial banks the unki subsidiary thi foreign me
wo sale wahan se paisa lete the aur yahan pe loan de dete the
Sumit: hmmm so...
ohhhk
1:30 AM me: to ye bank category ka capital flow hua
Sumit: hmm hua
me: ab jo fdi karega wo company ko chudne nahi dega
Sumit: ohhhk
me: wo aur capital layega comapny ko atleat bachane ke liye
wo owner hai
Sumit: hmmm
me: to crisis ke dauran ye log paisa nahi nikal rahe the
1:31 AM Sumit: ohhhk
bankg wale nikaal rahe the
?
me: paisa wo nikal rahe the jinhone ya to loan diya tha ya jinka chota stake tha company me
Sumit: hmmm
1:32 AM me: yani loan wale aur portfolio investment karne wale...
portfolio investment matlab jo share market me invest karte hai
Sumit: ohhhk
me: jaise india se paisa nikal rahe hai
FFI
FII
1:33 AM Sumit: hmmm
me: lekin chuki singapore aur hongko wale share market paisa laga bhi rahe the portfolio investment utna affect nahi hua tha
net me
kuch log gire hue share price ka fayda bhi uthana chahte hai
ye singapore aur hongkong wale the
Sumit: ohhhk
1:34 AM me: any doubts?
puch le
Sumit: nahi ab tak jitna mujhe samajh aaya non bankg n bankg ko leke is dat ki...
bankg hua bank related flow: which is generally loans
1:35 AM non bankg hua invested by foreigners direclty thru equity investment
rt?
me: haan
Sumit: equity investment was nt hit a lot coz it was bothways. bankg was hit more severely?
outflows mostly
1:36 AM n bankg mein mostly wo hot money wale log the
me: lekin ye laon me lafda kya hai...ki bank jo loan de rahi thi wo thai logo ke deposit se nahi tha...bank khud bahar loan le rahi thi aur yahan comapnies ko loan de rahi thi...
1:37 AM Sumit: who wanted to earn a lot out of high interest being offered by Thai banks (inhi logon se loan le rahi thi? )
me: dekh man le ki ek thai bank hai
uska ek branch india me hai
Sumit: k
me: india me interest rate hai loan ka 5%
aur thailand me 10%
1:38 AM Sumit: ohhhk so main ind mein loan leke usko bhej diya
me: to india wala branch kya karega ki indian bank loan le lega..
Sumit: hmm
me: aur usi paisa ko thailand ke logo ko loan pe de dega
Sumit: hmmm
me: ab india se loan mil raha tha wo short term tha
1:39 AM Sumit: hmmm
me: aur jo loan thailand me de rahi thi wo long term tha
Sumit: ohhhk
me: to ab jab indian bank loan chukane ko bol rahi thi...to capital outflow ho raha tha...
ye banking ctegory ka outflow hua
1:40 AM jab loan le ke paisa aya to inflow jab loan chukane ke liye paisa gaya to outflow
thik hai?
Sumit: hmmm
me: banking is alright now?
Sumit: samajh gaya
hmm
1:41 AM non banking toh direct equity investment ho gaya
me: non banking hota hai fdi, portfolio investment, supplier credit, trade credit etc
Sumit: okies
me: nahi trade credit aur ye sab bhi hota hai
Sumit: chalo ab aage badte hain..
ohhhk
me: jo thai log bahar kar kar rahe hai wo jo paisa bhej rahe hai wo bhi hoga
matlab non resident thai accounts
1:42 AM *reh
Sumit: 'hmmm
me: to mainly jo capital outflow ho raha tha wo banking tha
thik hai
Sumit: hmm thik hai
1:43 AM den FERR toot gaya
n eco stabilise kaise hui?
1:44 AM NPAs ko hataya gaya tha kuch toh
me: jab FERR nahi raha...aur log paisa nikalte gaye...to currency bhi girne lagi...is tarike currency reached its real value
Sumit: ohhk
me: jo actually uska exchange rate hona chahiye wo ho gay
it stabilised
Sumit: ohhk
me: sarkar ne bhi kuch measures liye
1:45 AM Sumit: bas khattam crisis? aur kuch bhi jaanna hai?
me: restructuring kiya financial sector...bail out kiya...
kahan gaye?
1:47 AM Sumit: hmm
1:48 AM ab iske baad toh eco analysis hi hai
?
me: haan
usme ja
fdi wale me ja
Sumit: ohhk
me: dekh export performance sab se imp factor aa raha hai usme
1:49 AM Sumit: hmmm
- ka sig kya hota tha?
1:50 AM me: aisa isliye hota hai usually agar koi company kisi bahar ke company me invest karti hai...bada stake kharidti hai...to uska main reason hota hai cheap labour,capital etc ka fayda uthana
dusre country me saste me produce karke apne country me import karna
Sumit: ohhhk
1:51 AM me: to export performance ek tarike se signal hota hai fdi ka
Sumit: exp value kya hua?
hmmm
me: export value matlab jitna export kiya
1:52 AM usually export wahi hota hai jahan se fdi ata hai
Sumit: ohhhk
me: to agar export nahi ho raha hai to fdi bhi nahi aa raha hai
Sumit: 3rd pt kya hai us slide mein?
me: kyunki fdi ka purpose hi hota hai dusre country me produe karna
at lower cost
1:53 AM Sumit: ohhk
me: chuki japan sabse major contributor tha fdi ka...to volatility against yen sabse imp factor hoga...as compared to other currencies...
1:54 AM dekh aaj main america me 100 rupees lagaya
that is say equal to 2 $
Sumit: k
me: us 2 $ pe mere ko 50 % return mil raha hai
Sumit: k
me: say 1 $ or 50 Rs
Sumit: hmm
1:55 AM me: ab $ gir gaya rs ke against
Sumit: oki
me: mere ko abhi bhi 2 $ aa raha hai
par uska rupee ke term me kam value hai
Sumit: oki
me: to volatility of currency affects foreign investment
Sumit: hmmm
1:56 AM me: any other thing in that slide?
Sumit: in dis case kya ho raha hai
ki jus volatity hai toh affect ho raha hai chk kar rahe hain
oi
oki*
1:57 AM me: dekh baht dollar ke sath pegged tha
ab dollar appreciate ho raha tha
Sumit: yeah
me: to baht bhi appreciate ho raha tha
Sumit: hmm bt nt in true sense
so overvalued ho gaya
so japan baht se deal nahi karna chahega
me: jab currency appreciate ho rahi hai to log aur invest karna chahenge...
1:58 AM Sumit: ohhk
me: nahi karna chahega
kyunki usko fayda hoga...agar aaj 5 baht mil raha jiska value 100 yen aur kal wahi 5 baht ka value 200 yen ho jata hai to main invest karna chahunga
1:59 AM lekin main aur chiz bhi dekhunga
Sumit: hmm
me: agar kal baht devalue ho gaya to
Sumit: hmmm
me: agar thailand ka foreign reserve deplete ho gay to
Sumit: ohhk
me: so an investor will think all that
Sumit: n dat is wat v r capturing thru dat variable?
me: to kis chiz ka kitna impact hai wo is econometric analysis se pata chalega
2:00 AM Sumit: oki
Port inv pe aa jate hain ab
me: usme ek facor foreign reseve bhi hai
Sumit: hmm
me: k
2:01 AM us analysis se pata chalta hai ki jo log stock market me invest kar rahe the unko sabse jyada thailand ke growth prospect se matlab tha
gdp growth rate
2:02 AM aur purane stock market performance se
Sumit: hmmm
bt usme tum Eco fundamental factors kyun likhe ho den?
me: aur sab se jyada chuki us wale invest kar rahe the...to baht ki dollar ke sath volatility bahut imp factor jo jata hai
2:03 AM baht appreciate karega to kam dollar milega
Sumit: these are groeth perfo indicators? (you used elec consumpn in last case)
me: depreciate karega to jyada dollar milega
isliye coefficient negative hai
Sumit: ek ek ek min
2:05 AM me: dono growth ke indicators hote hai
Sumit: baht apprec kiya toh jyada dollars US investors ko milega
me: u can use any
nahi kam dollar milega na
100 baht milna hai
2:06 AM pehle 1$ = 50 baht
so they will get 2$
now 1 $ = 25 baht
Sumit: ohh haan
me: so they will get 4 $
similarly the opposite
Sumit: ohhhk
2:07 AM hmm -ve kyun bol raha tha kyunki inv relationship hai?
2:08 AM me: yes
Sumit: bt yahan toh apan bas volatility bol rahe hain iske ye matlab thode hi hai ki..... When dollar increases baht increases means Baht per dollar volatitly)
2:09 AM me: see regression hamne 1998 tak ke data ko use karke kiya hai
1997 me floating ho gaya tha
Sumit: ohhk
me: to after 1997 that relation doesnt hold
Sumit: ohhk
2:10 AM me: to it will get reflected in regression
Sumit: k
me: is me aur kuch?
Sumit: 2nd pt?
2:11 AM me: yehi fayda hota hai regression karne ka
Sumit: The adequacy of foreign exchange reserves (in terms of import expenses) ...ye kaunsa var hai?
me: typically hame lagta hai ki foreign reserve har tarah ke invest ko affect karna chahiye
wo bhi barabar
par ye fdi me jyada significant hota hai
2:12 AM aisa regression show kar raha hai
foreign exchange reserve ko usually imports ke term me likhte hai
manle ki avg imp 100 $ hai sal ka country ka
aur reserve 1000$
2:13 AM to tu bolega ki reserve is sufficient for 10 months of import
aise hi express karte hai usually
Sumit: k
bt yaar koi variable toh denote kar raha hoga na? Forex ko
me: yes forex/import
2:14 AM see agar main sidha bolo ki mere pas 100$ forex hai to it doesnt make any sense
Sumit: 32 slide mein kahan hai wo?
me: agar ek din me main 100$ import kar raha hu to wo forex to ek din me khatam ho jayega
Sumit: arre wo samajh gaya jha bhai i thiink tu 33rd slide pe bol raha hai
2:15 AM me: are wo 32 slide me nahi hai kyunki wo top 5 factors me se nahi hai
Sumit: wait a sec....
2:16 AM 12 baje tak saath de do jab itna sahe ho toh :D
me: wahi to wo point bol raha hai
ki fdi ke liye wo bahut significant factor hai
but not fii
fii me uska koi role nahi hota
it is not among the top 5 imp factor that determines fii flow
k?
Sumit: dekho 32nd slide mein 2nd point is: The adequacy of foreign exchange reserves (in terms of import expenses) is not very meaningful to foreigners in the stock market as well as direct investment
ohhhk
sry
i wasnt gettin it
me: oh ok
2:17 AM Sumit: mujhe laga list ofvar exhaustive hai
chalo den 33rd ko
me: haan it means it is not an imp factor for both fdi and fii and hence not shown
k?
Sumit: hmm k
me: 33 now
Sumit: k\
me: isme kya batao bata?
Sumit: thik ha ye
2:18 AM swap rate bhul gaya, wo upar ke kisi slide mein tha ...
padd leta hun
me: swap rate net pe dekh ke thik se samjh le
2:19 AM Sumit: thnku hai :) ho jaayega
me: main bhi bahut ache se abhi nahi samjha paonga
derivative contract hota hai ek tarah ka
dekh le net pe?
Sumit: hmm dekh lunga
cho tum aaraam karo ab :)
me: thik hai
Sumit: samajh aa gaya poora PPT which mujeh nahi lag raha tha aayega :D
thnku
2:20 AM me: send the chat transcript to everyone for reference
Sumit: chalo den... ohhhk
me: so that everyone will be clear
k
Sumit: hmmm
me: tu bhej dega ya main bheju
gmail me store ho jata hai
Sumit: hmm bhej dunga
2:21 AM me: sonu ke mdi act pe bhej dena...usko mail mil nahi raha tha...i just sent the ppt on her mdi act
chal bye then
Sumit: oki bbye tc
12:51 AM me: dekh liya tune apna portion?
koi problem to nahi hai na?
Sumit: hmmm dekha toh,elkin link nahi kar paa raha tha
so readin d entire ppt
kab tak online rahega?
12:52 AM me: almost puri rat
ruk main batata hu flow
jam
Sumit: ohhhk
12:53 AM me: dekh sabse pehle liberalization ke karan economy bahut open ho gaya...to pehle liberalization me kye kya hua ye bataya hai...
12:54 AM Sumit: hmmm
me: open hone ke karan aur interest rate jyada hone ke karan capital inflow hone laga
usme BIBF ka bhi bahut bara role tha...
12:55 AM Sumit: hmmm
me: bibf ka bahar me branches tha...wo bahar ke country se saste me loan leke thailand me loan deta tha higher interest rate pe...
uske karan hi mainly capital inflows ho raha tha
12:56 AM Sumit: hmmm bt C/A deficit was huge too? due to change in XR>?
BIBF: is Bahrain Institute of Banking and Finance
?
12:57 AM me: bangkok international banking facility
Sumit: :D ohhhk
12:58 AM me: jab capital inflow hota hai...to country grow karti hai...logo ka income badhta hai and import is a function of income...to import badhta hai...agar export nahi badegha proportionately to current act deficit hoga...
Sumit: ohhhhk
me: dusri bat export mainly japan ko kar rahe the...japan ki maa waise hi chudi hui thi 1990s...to export hurt ho raha tha
Sumit: ohhhhk
1:00 AM me: aur inflation bhi bash raha tha...kyunki mainly bahar ka paisa log real estate aur baki asset me laga rahe the...consumption demand bhi jyada tha...economy efficient nahi tha...supply ki gand lagi hui thi...kyuki paisa to sala asset kharidne me ja raha tha...is sab ke karan inflation bhi tha...
*badh
1:01 AM aur jo capital inflow ho raha tha wo mainly short term tha
u thr?
Sumit: hmmm
me: hot money jisko kehte hai
Sumit: samajh raha tha bhai...time lagta hai na
me: yahan tak thik hai?
1:02 AM Sumit: inflation is raised wen there is increased in money supply and velocity and output is not raised
but you sayin cap inflw hua toh consumption bada
consumpn bada toh IS curve toh lehta hai ki output bada
1:03 AM me: capital inflow se income badha...basically investment ho raha hai na...Y=C+I+G+X-M
yes
when income increases or output increases...C also increases...
Sumit: hmmm toh output bada na be...den hw can we day inflation was couased due to increased cap inflw?
me: as it is a function of Y
Sumit: hmmm
1:04 AM me: kab tak sawal hai
ek stage ke bad jab sab employed ho jayenge to supply nahi badhega
Sumit: hmm ye sahi hai
1:05 AM den inflation aayega
me: lekin demand to hai hi due to rising income
yes
Sumit: hmmm sahi
toh hot money aa raha tha aage...
1:06 AM me: haan to hot money aur japan ke gand lagne ke karan inflation aur current account deficit badh gaya tha
1995 me 8% deficit tha
Sumit: hmmm
1:07 AM me: aur inflation bhi us ke comparision me high tha
Sumit: hmmm
me: agar apne desh me jyada mehgayi hogi to log aur import karenge...kyunki bahar sasta hai...
usse aur current account deficit hoga
Sumit: hmmm
1:08 AM me: ye fixed exchange rate ke ek aur panga hai
Sumit: sahi jha, u gud in teaching :)
1:09 AM Toh C/A deficit aur badd gaya (Inflation, Japan..sab badad diye)
me: sarkar bhi ek dekh rahi thi...usne kuch thik karne ka try kiya by taking some measures
Sumit: Expot chuda, import utha (C/A Deficit utha)
hmmm
den..
1995 mein lya kuch monetary measures
1:10 AM me: haan 95 me deficit 5 se 8 percent ho gaya tha
Sumit: of GDP?
me: haan
c/a deficit = 8% of gdp
Sumit: ohhhk so ab?
1:11 AM me: un measures ka kuch asar nahi hua...basically money supply ko kam karna chahti thi sarkar...liquidity aur credit ko bhi kam kar na chahti thi...
par monetary policy effective nahi hoti if fixed exchange rate and perfect capital mobility is there
Sumit: oohhhk
1:13 AM me: sarkar ne loan deposit ratio kam kar diya...par usse usi bank ko phadak padega jisko deposit nahi mil raha...jiske customers kam hai...pade bank me to paisa deposit hoga hi...no one holds cash...
Sumit: I know y, coz of imp trinity :D
1:15 AM me: dusri bat yeh hai ki...usually contractionary monetary policy me interest rate badhate hai
yahan interest rate to jyada tha hi
paisa mainly bahar se aa raha tha
Sumit: ohhhk
me: to basically sarkar kuch kar nahi payi
1:16 AM Sumit: ohhhk
me: ab jab current account deficit bahut ho jata hai...to logo ko lagta hai ki currency overvalued hai...
kyunki usse import sasta padta hai
Sumit: ohhhk speculation
1:18 AM kahan gaye? sutta maarne?
1:19 AM me: ek min
haan speculative attack
1:20 AM Sumit: den..
me: are sonu ko mail nahi mila tha
wo bhej raha tha
1:21 AM Sumit: ohhk
me: thailand ki sarkar ne currency defend karne ki koshish ki pehle
1:22 AM speculative attack me log baht ke badle apni currency mangte hai
Sumit: ohhk
me: jisse baht jyada ho jyada hai market me aur uski value kam
1:23 AM Sumit: ohhhk
me: uskko bachane ke liye central bank ko baht kharidna hoga foreign exchange deke
par kab tak
Sumit: ohhk forex reserve ki lagne lagi
me: tabhi tak jab tak uske pas foreign exchange hai
Sumit: so finally FERR toota?
me: haan pura forex deplete ho gaya
1:24 AM Sumit: Fixed exchange rate regime
me: uske bad currency float karna pada
haan
Sumit: gud :)
me: ye hua 2nd july ko
Sumit: 1997?
me: yes
Sumit: abe bankg or nonbankg outflowa ka kya funda hua tha?
1:25 AM me: ek bar jab baht apni asli aukat pe aa gaya logo ne paisa nikalna band kar diya
Sumit: ohhk
me: jo paisa nikal raha tha wo mainly short term loan me diya paisa tha
jinhone fdi kiya tha wo withdraw nahi kar rahe tha
*the
fdi ya portfolio
Sumit: ohhk
1:26 AM me: jo paisa BIBF ke jariye aya tha wahi nikal raha tha
wo bank category wala paisa tha
Sumit: ohhhk
me: jo commercial banks aur bibf ne bahar se loan leke thailand me loan diya tha
ok?
Sumit: hmmm
1:27 AM toh iska matlab dono kind of flows the.....banking (BIBF) ke zariye n Non banking portfolio ke zariye
lattter was v less
me: dekh jo capital inflow hota hai wo bahut tarike ka hota hai
1:28 AM main samjhata hu
Sumit: :) ohhhk
smjha :)
me: fdi ka matlab ho ta us country ke company ka 10% se jyada share kharidna
portfolio bhi equity investment hota hai
Sumit: ohhk
ohhk
me: ye sab non banking category me ata hai
isme bank involve nahi
Sumit: ohhhhk
hmmm
1:29 AM me: bank kab involve hota jab company loan leti hai
debt
Sumit: hmmm
me: jo commercial banks the unki subsidiary thi foreign me
wo sale wahan se paisa lete the aur yahan pe loan de dete the
Sumit: hmmm so...
ohhhk
1:30 AM me: to ye bank category ka capital flow hua
Sumit: hmm hua
me: ab jo fdi karega wo company ko chudne nahi dega
Sumit: ohhhk
me: wo aur capital layega comapny ko atleat bachane ke liye
wo owner hai
Sumit: hmmm
me: to crisis ke dauran ye log paisa nahi nikal rahe the
1:31 AM Sumit: ohhhk
bankg wale nikaal rahe the
?
me: paisa wo nikal rahe the jinhone ya to loan diya tha ya jinka chota stake tha company me
Sumit: hmmm
1:32 AM me: yani loan wale aur portfolio investment karne wale...
portfolio investment matlab jo share market me invest karte hai
Sumit: ohhhk
me: jaise india se paisa nikal rahe hai
FFI
FII
1:33 AM Sumit: hmmm
me: lekin chuki singapore aur hongko wale share market paisa laga bhi rahe the portfolio investment utna affect nahi hua tha
net me
kuch log gire hue share price ka fayda bhi uthana chahte hai
ye singapore aur hongkong wale the
Sumit: ohhhk
1:34 AM me: any doubts?
puch le
Sumit: nahi ab tak jitna mujhe samajh aaya non bankg n bankg ko leke is dat ki...
bankg hua bank related flow: which is generally loans
1:35 AM non bankg hua invested by foreigners direclty thru equity investment
rt?
me: haan
Sumit: equity investment was nt hit a lot coz it was bothways. bankg was hit more severely?
outflows mostly
1:36 AM n bankg mein mostly wo hot money wale log the
me: lekin ye laon me lafda kya hai...ki bank jo loan de rahi thi wo thai logo ke deposit se nahi tha...bank khud bahar loan le rahi thi aur yahan comapnies ko loan de rahi thi...
1:37 AM Sumit: who wanted to earn a lot out of high interest being offered by Thai banks (inhi logon se loan le rahi thi? )
me: dekh man le ki ek thai bank hai
uska ek branch india me hai
Sumit: k
me: india me interest rate hai loan ka 5%
aur thailand me 10%
1:38 AM Sumit: ohhhk so main ind mein loan leke usko bhej diya
me: to india wala branch kya karega ki indian bank loan le lega..
Sumit: hmm
me: aur usi paisa ko thailand ke logo ko loan pe de dega
Sumit: hmmm
me: ab india se loan mil raha tha wo short term tha
1:39 AM Sumit: hmmm
me: aur jo loan thailand me de rahi thi wo long term tha
Sumit: ohhhk
me: to ab jab indian bank loan chukane ko bol rahi thi...to capital outflow ho raha tha...
ye banking ctegory ka outflow hua
1:40 AM jab loan le ke paisa aya to inflow jab loan chukane ke liye paisa gaya to outflow
thik hai?
Sumit: hmmm
me: banking is alright now?
Sumit: samajh gaya
hmm
1:41 AM non banking toh direct equity investment ho gaya
me: non banking hota hai fdi, portfolio investment, supplier credit, trade credit etc
Sumit: okies
me: nahi trade credit aur ye sab bhi hota hai
Sumit: chalo ab aage badte hain..
ohhhk
me: jo thai log bahar kar kar rahe hai wo jo paisa bhej rahe hai wo bhi hoga
matlab non resident thai accounts
1:42 AM *reh
Sumit: 'hmmm
me: to mainly jo capital outflow ho raha tha wo banking tha
thik hai
Sumit: hmm thik hai
1:43 AM den FERR toot gaya
n eco stabilise kaise hui?
1:44 AM NPAs ko hataya gaya tha kuch toh
me: jab FERR nahi raha...aur log paisa nikalte gaye...to currency bhi girne lagi...is tarike currency reached its real value
Sumit: ohhk
me: jo actually uska exchange rate hona chahiye wo ho gay
it stabilised
Sumit: ohhk
me: sarkar ne bhi kuch measures liye
1:45 AM Sumit: bas khattam crisis? aur kuch bhi jaanna hai?
me: restructuring kiya financial sector...bail out kiya...
kahan gaye?
1:47 AM Sumit: hmm
1:48 AM ab iske baad toh eco analysis hi hai
?
me: haan
usme ja
fdi wale me ja
Sumit: ohhk
me: dekh export performance sab se imp factor aa raha hai usme
1:49 AM Sumit: hmmm
- ka sig kya hota tha?
1:50 AM me: aisa isliye hota hai usually agar koi company kisi bahar ke company me invest karti hai...bada stake kharidti hai...to uska main reason hota hai cheap labour,capital etc ka fayda uthana
dusre country me saste me produce karke apne country me import karna
Sumit: ohhhk
1:51 AM me: to export performance ek tarike se signal hota hai fdi ka
Sumit: exp value kya hua?
hmmm
me: export value matlab jitna export kiya
1:52 AM usually export wahi hota hai jahan se fdi ata hai
Sumit: ohhhk
me: to agar export nahi ho raha hai to fdi bhi nahi aa raha hai
Sumit: 3rd pt kya hai us slide mein?
me: kyunki fdi ka purpose hi hota hai dusre country me produe karna
at lower cost
1:53 AM Sumit: ohhk
me: chuki japan sabse major contributor tha fdi ka...to volatility against yen sabse imp factor hoga...as compared to other currencies...
1:54 AM dekh aaj main america me 100 rupees lagaya
that is say equal to 2 $
Sumit: k
me: us 2 $ pe mere ko 50 % return mil raha hai
Sumit: k
me: say 1 $ or 50 Rs
Sumit: hmm
1:55 AM me: ab $ gir gaya rs ke against
Sumit: oki
me: mere ko abhi bhi 2 $ aa raha hai
par uska rupee ke term me kam value hai
Sumit: oki
me: to volatility of currency affects foreign investment
Sumit: hmmm
1:56 AM me: any other thing in that slide?
Sumit: in dis case kya ho raha hai
ki jus volatity hai toh affect ho raha hai chk kar rahe hain
oi
oki*
1:57 AM me: dekh baht dollar ke sath pegged tha
ab dollar appreciate ho raha tha
Sumit: yeah
me: to baht bhi appreciate ho raha tha
Sumit: hmm bt nt in true sense
so overvalued ho gaya
so japan baht se deal nahi karna chahega
me: jab currency appreciate ho rahi hai to log aur invest karna chahenge...
1:58 AM Sumit: ohhk
me: nahi karna chahega
kyunki usko fayda hoga...agar aaj 5 baht mil raha jiska value 100 yen aur kal wahi 5 baht ka value 200 yen ho jata hai to main invest karna chahunga
1:59 AM lekin main aur chiz bhi dekhunga
Sumit: hmm
me: agar kal baht devalue ho gaya to
Sumit: hmmm
me: agar thailand ka foreign reserve deplete ho gay to
Sumit: ohhk
me: so an investor will think all that
Sumit: n dat is wat v r capturing thru dat variable?
me: to kis chiz ka kitna impact hai wo is econometric analysis se pata chalega
2:00 AM Sumit: oki
Port inv pe aa jate hain ab
me: usme ek facor foreign reseve bhi hai
Sumit: hmm
me: k
2:01 AM us analysis se pata chalta hai ki jo log stock market me invest kar rahe the unko sabse jyada thailand ke growth prospect se matlab tha
gdp growth rate
2:02 AM aur purane stock market performance se
Sumit: hmmm
bt usme tum Eco fundamental factors kyun likhe ho den?
me: aur sab se jyada chuki us wale invest kar rahe the...to baht ki dollar ke sath volatility bahut imp factor jo jata hai
2:03 AM baht appreciate karega to kam dollar milega
Sumit: these are groeth perfo indicators? (you used elec consumpn in last case)
me: depreciate karega to jyada dollar milega
isliye coefficient negative hai
Sumit: ek ek ek min
2:05 AM me: dono growth ke indicators hote hai
Sumit: baht apprec kiya toh jyada dollars US investors ko milega
me: u can use any
nahi kam dollar milega na
100 baht milna hai
2:06 AM pehle 1$ = 50 baht
so they will get 2$
now 1 $ = 25 baht
Sumit: ohh haan
me: so they will get 4 $
similarly the opposite
Sumit: ohhhk
2:07 AM hmm -ve kyun bol raha tha kyunki inv relationship hai?
2:08 AM me: yes
Sumit: bt yahan toh apan bas volatility bol rahe hain iske ye matlab thode hi hai ki..... When dollar increases baht increases means Baht per dollar volatitly)
2:09 AM me: see regression hamne 1998 tak ke data ko use karke kiya hai
1997 me floating ho gaya tha
Sumit: ohhk
me: to after 1997 that relation doesnt hold
Sumit: ohhk
2:10 AM me: to it will get reflected in regression
Sumit: k
me: is me aur kuch?
Sumit: 2nd pt?
2:11 AM me: yehi fayda hota hai regression karne ka
Sumit: The adequacy of foreign exchange reserves (in terms of import expenses) ...ye kaunsa var hai?
me: typically hame lagta hai ki foreign reserve har tarah ke invest ko affect karna chahiye
wo bhi barabar
par ye fdi me jyada significant hota hai
2:12 AM aisa regression show kar raha hai
foreign exchange reserve ko usually imports ke term me likhte hai
manle ki avg imp 100 $ hai sal ka country ka
aur reserve 1000$
2:13 AM to tu bolega ki reserve is sufficient for 10 months of import
aise hi express karte hai usually
Sumit: k
bt yaar koi variable toh denote kar raha hoga na? Forex ko
me: yes forex/import
2:14 AM see agar main sidha bolo ki mere pas 100$ forex hai to it doesnt make any sense
Sumit: 32 slide mein kahan hai wo?
me: agar ek din me main 100$ import kar raha hu to wo forex to ek din me khatam ho jayega
Sumit: arre wo samajh gaya jha bhai i thiink tu 33rd slide pe bol raha hai
2:15 AM me: are wo 32 slide me nahi hai kyunki wo top 5 factors me se nahi hai
Sumit: wait a sec....
2:16 AM 12 baje tak saath de do jab itna sahe ho toh :D
me: wahi to wo point bol raha hai
ki fdi ke liye wo bahut significant factor hai
but not fii
fii me uska koi role nahi hota
it is not among the top 5 imp factor that determines fii flow
k?
Sumit: dekho 32nd slide mein 2nd point is: The adequacy of foreign exchange reserves (in terms of import expenses) is not very meaningful to foreigners in the stock market as well as direct investment
ohhhk
sry
i wasnt gettin it
me: oh ok
2:17 AM Sumit: mujhe laga list ofvar exhaustive hai
chalo den 33rd ko
me: haan it means it is not an imp factor for both fdi and fii and hence not shown
k?
Sumit: hmm k
me: 33 now
Sumit: k\
me: isme kya batao bata?
Sumit: thik ha ye
2:18 AM swap rate bhul gaya, wo upar ke kisi slide mein tha ...
padd leta hun
me: swap rate net pe dekh ke thik se samjh le
2:19 AM Sumit: thnku hai :) ho jaayega
me: main bhi bahut ache se abhi nahi samjha paonga
derivative contract hota hai ek tarah ka
dekh le net pe?
Sumit: hmm dekh lunga
cho tum aaraam karo ab :)
me: thik hai
Sumit: samajh aa gaya poora PPT which mujeh nahi lag raha tha aayega :D
thnku
2:20 AM me: send the chat transcript to everyone for reference
Sumit: chalo den... ohhhk
me: so that everyone will be clear
k
Sumit: hmmm
me: tu bhej dega ya main bheju
gmail me store ho jata hai
Sumit: hmm bhej dunga
2:21 AM me: sonu ke mdi act pe bhej dena...usko mail mil nahi raha tha...i just sent the ppt on her mdi act
chal bye then
Sumit: oki bbye tc
Friday, February 20, 2009
Macroeconomic theories
Keynesianism
History
Keynesianism is named after John Maynard Keynes, a British economist who lived from 1883 to 1946. He was a man of many contradictions: an elitist whose economic theories would be embraced by liberals the world over; a bisexual who enjoyed a happy and lifelong marriage to a Russian ballerina; a genius with an uncanny ability to predict the future, but whose works were often badly organized and sometimes very wrong. I mention this only because many of Keynes' critics try to refute his theories by pointing to the man himself. This is worse than irrelevant, of course; such criticisms are often prejudiced.
What is not in contention is that even Keynes' critics call him the greatest and most influential economist of the 20th century. For this reason, he is known as "the father of modern economics."
When the Great Depression hit worldwide, it fell on economists to explain it and devise a cure. Most economists were convinced that something as large and intractable as the Great Depression must have complicated causes. Keynes, however, came up with an explanation of economic slumps that was surprisingly simple. In fact, when he shared his theory and proposed solution with Franklin Roosevelt, the President is said to have dismissed them with the words: "Too easy."
Theory
In a normal economy, there is a high level of employment, and everyone is spending their earnings as usual. This means there is a circular flow of money in the economy, as my spending becomes part of your earnings, and your spending becomes part of my earnings. But suppose something happens to shake consumer confidence in the economy. Worried consumers may then try to weather the coming economic hardship by saving their money. But because my spending is part of your earnings, my decision to hoard money makes things worse for you. And you, responding to your own difficult times, will start hoarding money too, making things even worse for me. So there's a vicious circle at work here: people hoard money in difficult times, but times become more difficult when people hoard money.
The cure for this, Keynes said, was for the central bank to expand the money supply. By putting more bills in people's hands, consumer confidence would return, people would spend, and the circular flow of money would be reestablished.
But what would happen if the Fed expanded the money supply too much? For example, let's suppose the Treasury printed so much money that it made every American a millionaire. After everyone retired, they would notice there would be no more workers or servants left to do their bidding… so they would attract them by raising their wages, sky-high if necessary. This, of course, is the essence of inflation.
If this is the proposed definition and cure for recessions, then what about depressions? Keynes believed that depressions were recessions that had fallen into a "liquidity trap." A liquidity trap is when people hoard money and refuse to spend no matter how much the government tries to expand the money supply. In these dire circumstances, Keynes believed that the government should do what individuals were not, namely, spend. In his memorable phrase, Keynes called this "priming the pump" of the economy, a final government effort to reestablish the circular flow of money.
Critique
Keynes' advice on ending the Great Depression was rejected. President Roosevelt tried countless other approaches, all of which failed. Almost all economists agree that World War II cured the Great Depression; Keynesians believe this was so because the U.S. finally began massive public spending on defense. This is a large part of the reason why "wars are good for the economy." Although no one knows the full secret to economic growth (the world's top economists are still working on this mystery), wars are an economic boon in part because governments always resort to Keynesian spending during them. Of course, such spending need not be directed only towards war -- social programs are much more preferable.
In seven short years, under massive Keynesian spending, the U.S. went from the greatest depression it has ever known to the greatest economic boom it has ever known. The success of Keynesian economics was so resounding that almost all capitalist governments around the world adopted its policies. And the result seems to be nothing less than the extinction of the economic depression! Before World War II, eight U.S. recessions worsened into depressions (as happened in 1807, 1837, 1873, 1882, 1893, 1920, 1933, and 1937). Since World War II, under Keynesian policies, there have been nine recessions (1945-46, 1949, 1954, 1956, 1960-61, 1970, 1973-75, 1980-83, 1990-92 ), and not one has turned into a depression. The success of Keynesian economics was such that even Richard Nixon once declared, "We are all Keynesians now."
The re-emergence of Keynesianism is testimony of its staying power.
Milton Friedman – Monetarism
Theory
Government should butt out of the business of expanding or contracting the money supply. It should keep the money supply steady, expanding it slightly each year only to allow for the growth of the economy and a few other basic factors. Inflation, unemployment and output would adjust themselves according to market demands.
Critique
During the 70s, monetarism reached the peak of its popularity among conservative economists. Today, however, Friedman stands virtually alone among top economists in his belief that it contains any merit. Monetarism was tried in Great Britain during the 80s and it proved to be a disaster. For almost seven years, the Bank of England tried its best to make it work. According to monetarist theory, the British economy should have enjoyed low inflation and high stability. But in fact, it went berserk. The economy sank into a deep recession, while the lead economic indicators zigged and zagged. Although inflation came down, this was at the price of rising unemployment, which soared from 5.4 to 11.8 percent. Between 1979 and 1984, manufacturing output fell 10 percent, and manufacturing investment fell 30 percent. Eventually, the Bank of England came under overwhelming pressure to abandon monetarism, which it did in 1986. The experiment was such a failure that not even conservatives abroad wish to repeat it.
Along with Great Britain, President Reagan announced that the U.S. would also follow a monetarist policy. However, this was simply a cover story, meant for public consumption only. In reality, the government's policies were thoroughly Keynesian. Government borrowing and spending exploded under Reagan, with the national debt climbing to $3 trillion by the time he left office. Paul Volcker, Chairman of the Federal Reserve Board, battled inflation during the severe recession of 1980-82 through the Keynesian method of raising interest rates and tightening the money supply. When inflation looked defeated in 1982, he abruptly slashed the prime rate and flooded the economy with money. A few months later, the economy roared to life, in a recovery that would last over seven years. The American experience was in direct contrast to Great Britain's. As a result, most economists abandoned monetarist theory.
Milton Friedman’s second theory – The natural rate of unemployment
Theory
Imagine an economy where the cost of everything doubles. You have to pay twice as much for your groceries, but you don't mind, because your paycheck is also twice as large. Economists call this the neutrality of money. If inflation worked this way, then it would be harmless. Indeed, most presidents after World War II decided to accept high inflation if it meant low unemployment, and therefore urged the Federal Reserve to conduct an expansionary monetary policy. But why is it that when the Fed expands money by, say, 5 percent, that all prices and wages everywhere do not go up by 5 percent as well? Why is it that the neutrality of money does not make this expansion meaningless? Friedman argued that it was because the public was unaware of the expansion, or what it meant, or by how much if it did. In other words, they didn't know that they should raise their prices by 5 percent. When the extra money was pumped into the economy, therefore, it was unwittingly translated into more economic activity, not higher prices.
Of course, if businessmen knew that a 5 percent increase was coming, it would be in their best interest to just raise their prices 5 percent. That way, they would make the same increased profits without having to work for them. If everyone did this, then the Fed's monetary increases would become meaningless -- instead of resulting in more jobs, it would just create higher inflation. Friedman and others argued that as businessmen became savvier and learned to follow the Fed's actions, they would build their inflationary expectations into their prices. Not only would this make inflation worse, but the nation would be left with no tool to fight unemployment, which would eventually rise as well. The twin dragons of inflation and unemployment would therefore grow together, forming "stagflation."
Friedman showed that monetary policy could not be used to wipe out unemployment, one of the optimistic goals of the Keynesians shortly after World War II. Instead, the most monetary policy could do was keep unemployment at about 6 percent, which is the rate normally achieved when the inflation rate is what the market expects it to be. Friedman called this the "natural rate of unemployment," and it secured his fame. But Keynesian policies are still useful in keeping the unemployment rate as close to 6 percent as possible.
Robert Lucas – Theory of rational expectation
Theory
There are two main parts to rational expectations. First, Lucas believed that recessions are self-correcting. Once people start hoarding money, it may take several quarters before everyone notices that a recession is occurring. That's because individual businessmen may know that they are making less money, but it may take awhile to realize that the same thing is happening to everyone else. Once they do recognize the recession, however, the market quickly takes steps to recover. Producers will cut their prices to attract business, and workers will cut their wage demands to attract work. As prices fall, the purchasing power of the dollar is strengthened, which has the same effect as increasing the money supply. Therefore, government should do nothing but wait the correction out.
Second, government intervention ranges from ineffectualness to harm. Suppose the Fed, looking at the leading economic indicators, learns that a recession has hit. But this information is also available to any businessman in any good newspaper. Therefore, any government attempt to expand the money supply cannot happen before a businessman's decision to cut prices anyway. Keynesians are therefore robbed of the argument that perhaps the Fed might be useful in hastening a recovery, since Lucas showed that the Fed is not much faster than anyone else in discovering the problem.
Lucas then gave a slightly fuller version of the Milton Friedman argument outlined above. Suppose the Fed established a predictable anti-recession policy: for every point the unemployment rate climbs, it increases the money supply by a certain percent. Businesses would come to expect these increases -- hence the term, rational expectations -- and would simply raise their prices by the anticipated amount. In order to be effective, monetary policy would have to surprise businesses with random increases. But true randomness would make the economy less stable, not more so. The only logical conclusion is that the government's efforts to control the economy can actually be harmful.
Critique
Lucas' work enjoyed incredible prestige in the 70s. But today we know there are at least two major flaws in the theory.
First, it is not reasonable to believe that business owners determine their prices by following macroeconomic trends. Can you cite the Federal Reserve's rates and policies at the moment? The inflation and unemployment rates? Growth in the GDP? Even more improbably, do you set your prices and wage demands by these indicators? Only an economist (who knows all these statistics anyway) would think this is natural behavior.
Second, recessions last for years, which is far longer than people's ignorance of their onset. Lucas and his followers searched for every model imaginable that would keep businessmen aware of the leading economic indicators and yet ignorant of the fact that they were in a recession. Needless to say, they failed.
The recessions of 80-82 and 90-92 were clear refutations of Lucas' theory. Jimmy Carter was explicitly voted out of office for a misery index (unemployment plus inflation) that crested 20 percent. Yet it was not until 1987 that the unemployment rate fell back to 1979 levels. It is ludicrous to believe that it took the public eight years to figure out that they were in a recession and that they needed to cut prices back to the required level. And voters were highly aware that they were in a slump for most of the 90-92 recession; James Carville found a resonating campaign slogan for an entire election season with "It's the economy, stupid." Yet the economy did not even start to recover until the summer of 92, with employment taking even longer to rebound.
New Keynesian
History
By the mid-80s, it was already apparent that neither monetarism nor rational expectations were adequate theories, and neo-Keynesianism started making a comeback. One of the basic problems of conservative theories is that they place an almost religious faith in the belief that leaving markets alone always results in the best. How, in that case, does one explain recessions and depressions? Or the fact that depressions have disappeared since government started taking an active role? Besides, the belief that we should let national disasters like the Great Depression run unchecked for years while waiting for the economy to correct itself borders on the immoral.
Theory
Today, neo-Keynesianism has returned to prominence. At the heart of this updated version is the theory that people are not perfectly rational, but nearly rational. That is, they do not carefully weigh the unemployment rate, inflation rate and monetary policy before deciding to cut their monthly prices by, say, $24.13. Instead, people have only a fuzzy idea of where their prices should be, and make their best guesses. But because people are self-interested animals, they tend to err in their own favor, underestimating how much they really need to cut. This results in a long lag between the recognition of a recession and the decision to cut prices in earnest. In fact, the lag is so long that discretionary monetary policy is warranted in cutting the recession short.
But won't a businessman's rational expectations negate the Fed's actions? The answer, it turns out, is not completely. The Fed's decision to expand the money supply in 1982 was widely debated and highly publicized. Yet businessmen generally did not compensate for the Fed's announced moves by raising their prices. There are many reasons: a large percentage of businessmen could still be expected to remain unaware of the Fed's actions, or what they mean. For many, raising prices incurs certain costs (reprinting, recalculating, reprogramming, etc., not to mention a dip in business) that eat into the increases and may not make them worth it. And even if they do deem the price hikes worth it, it takes many companies quite some time to put them into effect. (Sears, for example, has to reprint and remail all its catalogues.) Also, remember that the impulse to raise prices cancels out the impulse to lower them, which is also how Lucas believed markets cured recessions. Others may be engaged in price wars with their competitors. So, for these and other reasons, expanding the money supply still results in job-creation, despite the counter-effect of rational expectations.
History
Keynesianism is named after John Maynard Keynes, a British economist who lived from 1883 to 1946. He was a man of many contradictions: an elitist whose economic theories would be embraced by liberals the world over; a bisexual who enjoyed a happy and lifelong marriage to a Russian ballerina; a genius with an uncanny ability to predict the future, but whose works were often badly organized and sometimes very wrong. I mention this only because many of Keynes' critics try to refute his theories by pointing to the man himself. This is worse than irrelevant, of course; such criticisms are often prejudiced.
What is not in contention is that even Keynes' critics call him the greatest and most influential economist of the 20th century. For this reason, he is known as "the father of modern economics."
When the Great Depression hit worldwide, it fell on economists to explain it and devise a cure. Most economists were convinced that something as large and intractable as the Great Depression must have complicated causes. Keynes, however, came up with an explanation of economic slumps that was surprisingly simple. In fact, when he shared his theory and proposed solution with Franklin Roosevelt, the President is said to have dismissed them with the words: "Too easy."
Theory
In a normal economy, there is a high level of employment, and everyone is spending their earnings as usual. This means there is a circular flow of money in the economy, as my spending becomes part of your earnings, and your spending becomes part of my earnings. But suppose something happens to shake consumer confidence in the economy. Worried consumers may then try to weather the coming economic hardship by saving their money. But because my spending is part of your earnings, my decision to hoard money makes things worse for you. And you, responding to your own difficult times, will start hoarding money too, making things even worse for me. So there's a vicious circle at work here: people hoard money in difficult times, but times become more difficult when people hoard money.
The cure for this, Keynes said, was for the central bank to expand the money supply. By putting more bills in people's hands, consumer confidence would return, people would spend, and the circular flow of money would be reestablished.
But what would happen if the Fed expanded the money supply too much? For example, let's suppose the Treasury printed so much money that it made every American a millionaire. After everyone retired, they would notice there would be no more workers or servants left to do their bidding… so they would attract them by raising their wages, sky-high if necessary. This, of course, is the essence of inflation.
If this is the proposed definition and cure for recessions, then what about depressions? Keynes believed that depressions were recessions that had fallen into a "liquidity trap." A liquidity trap is when people hoard money and refuse to spend no matter how much the government tries to expand the money supply. In these dire circumstances, Keynes believed that the government should do what individuals were not, namely, spend. In his memorable phrase, Keynes called this "priming the pump" of the economy, a final government effort to reestablish the circular flow of money.
Critique
Keynes' advice on ending the Great Depression was rejected. President Roosevelt tried countless other approaches, all of which failed. Almost all economists agree that World War II cured the Great Depression; Keynesians believe this was so because the U.S. finally began massive public spending on defense. This is a large part of the reason why "wars are good for the economy." Although no one knows the full secret to economic growth (the world's top economists are still working on this mystery), wars are an economic boon in part because governments always resort to Keynesian spending during them. Of course, such spending need not be directed only towards war -- social programs are much more preferable.
In seven short years, under massive Keynesian spending, the U.S. went from the greatest depression it has ever known to the greatest economic boom it has ever known. The success of Keynesian economics was so resounding that almost all capitalist governments around the world adopted its policies. And the result seems to be nothing less than the extinction of the economic depression! Before World War II, eight U.S. recessions worsened into depressions (as happened in 1807, 1837, 1873, 1882, 1893, 1920, 1933, and 1937). Since World War II, under Keynesian policies, there have been nine recessions (1945-46, 1949, 1954, 1956, 1960-61, 1970, 1973-75, 1980-83, 1990-92 ), and not one has turned into a depression. The success of Keynesian economics was such that even Richard Nixon once declared, "We are all Keynesians now."
The re-emergence of Keynesianism is testimony of its staying power.
Milton Friedman – Monetarism
Theory
Government should butt out of the business of expanding or contracting the money supply. It should keep the money supply steady, expanding it slightly each year only to allow for the growth of the economy and a few other basic factors. Inflation, unemployment and output would adjust themselves according to market demands.
Critique
During the 70s, monetarism reached the peak of its popularity among conservative economists. Today, however, Friedman stands virtually alone among top economists in his belief that it contains any merit. Monetarism was tried in Great Britain during the 80s and it proved to be a disaster. For almost seven years, the Bank of England tried its best to make it work. According to monetarist theory, the British economy should have enjoyed low inflation and high stability. But in fact, it went berserk. The economy sank into a deep recession, while the lead economic indicators zigged and zagged. Although inflation came down, this was at the price of rising unemployment, which soared from 5.4 to 11.8 percent. Between 1979 and 1984, manufacturing output fell 10 percent, and manufacturing investment fell 30 percent. Eventually, the Bank of England came under overwhelming pressure to abandon monetarism, which it did in 1986. The experiment was such a failure that not even conservatives abroad wish to repeat it.
Along with Great Britain, President Reagan announced that the U.S. would also follow a monetarist policy. However, this was simply a cover story, meant for public consumption only. In reality, the government's policies were thoroughly Keynesian. Government borrowing and spending exploded under Reagan, with the national debt climbing to $3 trillion by the time he left office. Paul Volcker, Chairman of the Federal Reserve Board, battled inflation during the severe recession of 1980-82 through the Keynesian method of raising interest rates and tightening the money supply. When inflation looked defeated in 1982, he abruptly slashed the prime rate and flooded the economy with money. A few months later, the economy roared to life, in a recovery that would last over seven years. The American experience was in direct contrast to Great Britain's. As a result, most economists abandoned monetarist theory.
Milton Friedman’s second theory – The natural rate of unemployment
Theory
Imagine an economy where the cost of everything doubles. You have to pay twice as much for your groceries, but you don't mind, because your paycheck is also twice as large. Economists call this the neutrality of money. If inflation worked this way, then it would be harmless. Indeed, most presidents after World War II decided to accept high inflation if it meant low unemployment, and therefore urged the Federal Reserve to conduct an expansionary monetary policy. But why is it that when the Fed expands money by, say, 5 percent, that all prices and wages everywhere do not go up by 5 percent as well? Why is it that the neutrality of money does not make this expansion meaningless? Friedman argued that it was because the public was unaware of the expansion, or what it meant, or by how much if it did. In other words, they didn't know that they should raise their prices by 5 percent. When the extra money was pumped into the economy, therefore, it was unwittingly translated into more economic activity, not higher prices.
Of course, if businessmen knew that a 5 percent increase was coming, it would be in their best interest to just raise their prices 5 percent. That way, they would make the same increased profits without having to work for them. If everyone did this, then the Fed's monetary increases would become meaningless -- instead of resulting in more jobs, it would just create higher inflation. Friedman and others argued that as businessmen became savvier and learned to follow the Fed's actions, they would build their inflationary expectations into their prices. Not only would this make inflation worse, but the nation would be left with no tool to fight unemployment, which would eventually rise as well. The twin dragons of inflation and unemployment would therefore grow together, forming "stagflation."
Friedman showed that monetary policy could not be used to wipe out unemployment, one of the optimistic goals of the Keynesians shortly after World War II. Instead, the most monetary policy could do was keep unemployment at about 6 percent, which is the rate normally achieved when the inflation rate is what the market expects it to be. Friedman called this the "natural rate of unemployment," and it secured his fame. But Keynesian policies are still useful in keeping the unemployment rate as close to 6 percent as possible.
Robert Lucas – Theory of rational expectation
Theory
There are two main parts to rational expectations. First, Lucas believed that recessions are self-correcting. Once people start hoarding money, it may take several quarters before everyone notices that a recession is occurring. That's because individual businessmen may know that they are making less money, but it may take awhile to realize that the same thing is happening to everyone else. Once they do recognize the recession, however, the market quickly takes steps to recover. Producers will cut their prices to attract business, and workers will cut their wage demands to attract work. As prices fall, the purchasing power of the dollar is strengthened, which has the same effect as increasing the money supply. Therefore, government should do nothing but wait the correction out.
Second, government intervention ranges from ineffectualness to harm. Suppose the Fed, looking at the leading economic indicators, learns that a recession has hit. But this information is also available to any businessman in any good newspaper. Therefore, any government attempt to expand the money supply cannot happen before a businessman's decision to cut prices anyway. Keynesians are therefore robbed of the argument that perhaps the Fed might be useful in hastening a recovery, since Lucas showed that the Fed is not much faster than anyone else in discovering the problem.
Lucas then gave a slightly fuller version of the Milton Friedman argument outlined above. Suppose the Fed established a predictable anti-recession policy: for every point the unemployment rate climbs, it increases the money supply by a certain percent. Businesses would come to expect these increases -- hence the term, rational expectations -- and would simply raise their prices by the anticipated amount. In order to be effective, monetary policy would have to surprise businesses with random increases. But true randomness would make the economy less stable, not more so. The only logical conclusion is that the government's efforts to control the economy can actually be harmful.
Critique
Lucas' work enjoyed incredible prestige in the 70s. But today we know there are at least two major flaws in the theory.
First, it is not reasonable to believe that business owners determine their prices by following macroeconomic trends. Can you cite the Federal Reserve's rates and policies at the moment? The inflation and unemployment rates? Growth in the GDP? Even more improbably, do you set your prices and wage demands by these indicators? Only an economist (who knows all these statistics anyway) would think this is natural behavior.
Second, recessions last for years, which is far longer than people's ignorance of their onset. Lucas and his followers searched for every model imaginable that would keep businessmen aware of the leading economic indicators and yet ignorant of the fact that they were in a recession. Needless to say, they failed.
The recessions of 80-82 and 90-92 were clear refutations of Lucas' theory. Jimmy Carter was explicitly voted out of office for a misery index (unemployment plus inflation) that crested 20 percent. Yet it was not until 1987 that the unemployment rate fell back to 1979 levels. It is ludicrous to believe that it took the public eight years to figure out that they were in a recession and that they needed to cut prices back to the required level. And voters were highly aware that they were in a slump for most of the 90-92 recession; James Carville found a resonating campaign slogan for an entire election season with "It's the economy, stupid." Yet the economy did not even start to recover until the summer of 92, with employment taking even longer to rebound.
New Keynesian
History
By the mid-80s, it was already apparent that neither monetarism nor rational expectations were adequate theories, and neo-Keynesianism started making a comeback. One of the basic problems of conservative theories is that they place an almost religious faith in the belief that leaving markets alone always results in the best. How, in that case, does one explain recessions and depressions? Or the fact that depressions have disappeared since government started taking an active role? Besides, the belief that we should let national disasters like the Great Depression run unchecked for years while waiting for the economy to correct itself borders on the immoral.
Theory
Today, neo-Keynesianism has returned to prominence. At the heart of this updated version is the theory that people are not perfectly rational, but nearly rational. That is, they do not carefully weigh the unemployment rate, inflation rate and monetary policy before deciding to cut their monthly prices by, say, $24.13. Instead, people have only a fuzzy idea of where their prices should be, and make their best guesses. But because people are self-interested animals, they tend to err in their own favor, underestimating how much they really need to cut. This results in a long lag between the recognition of a recession and the decision to cut prices in earnest. In fact, the lag is so long that discretionary monetary policy is warranted in cutting the recession short.
But won't a businessman's rational expectations negate the Fed's actions? The answer, it turns out, is not completely. The Fed's decision to expand the money supply in 1982 was widely debated and highly publicized. Yet businessmen generally did not compensate for the Fed's announced moves by raising their prices. There are many reasons: a large percentage of businessmen could still be expected to remain unaware of the Fed's actions, or what they mean. For many, raising prices incurs certain costs (reprinting, recalculating, reprogramming, etc., not to mention a dip in business) that eat into the increases and may not make them worth it. And even if they do deem the price hikes worth it, it takes many companies quite some time to put them into effect. (Sears, for example, has to reprint and remail all its catalogues.) Also, remember that the impulse to raise prices cancels out the impulse to lower them, which is also how Lucas believed markets cured recessions. Others may be engaged in price wars with their competitors. So, for these and other reasons, expanding the money supply still results in job-creation, despite the counter-effect of rational expectations.
Life @ MDI
This is the introductory paragraph. I will try to keep it short. I read somewhere that simplicity wins reader’s attraction, so I will try to keep it simple too as I would like it to be liked by people of your like. Simple!!!
I just had my 2nd term exams and there is a 10 day vacation for which I have come home. Before I left, a few people asked me what I am going to do in the vacation. And this is what I am doing - thinking over and reflecting upon the last 6 months @ MDI Gurgaon.
This is necessary especially when you are surrounded by objective people with different philosophies than yours. It gives you an opportunity to justify the premises on which you base your actions. Ayn Rand has said “Check your premises; Contradictions don’t exist”. So let me check my premises as contradictions do exist not just around me but within me as well. May rational prevail!
Apart from subjecting my premises to the objectivity of others around me, I will drop a line here and there (actually everywhere) on my experiences in the past 6 months.
The First Term
The First Seven Days
For the first seven days, Induction process went on. The purpose of the induction was to make us ready for the grueling PGPM program of MDI. Six months have passed and I am still wondering which grueling program were they talking about? Forcing one to attend all the lousy sessions doesn’t prepare him for anything. It is just for the fun of the senior batch particularly the student council. I am against it and I will do everything to make it a flop next year. A bunch of slightly toned up versions of Ankit Sisodia in the junior batch can do the trick.
That brings me to the next topic – The Ankit Sisodia. This is one of the most vivid memories of the first week. I didn’t talk a lot to him which is usual of me but we used to exchange hellos at the sutta joint outside the college gate. This guy had guts. He could easily have spoilt the entire drama of the student council had he been a little less casual and a little more earthy. Had it not been his air of superiority and dare for drugs, he could easily have been the hero of the drama scripted, directed, and produced by the student council. I still remember the conversation I had with him during the lousy ad making event.
Well this event was for bringing out the creativity in us. Let me test your general knowledge at this stage. Who was Newton? Newton was a MDI student who when asked to be creative by the student council discovered the law of gravity. Newton was great. I am not. I can’t think out of the box whenever I am asked to. So I decided to be a silent non-performing member of the team. But soon I realized I can’t be a silent spectator and listen to all the goosey ideas that my team was coming up with. So I decided to leave the team itself. I told one of my group mates that I am leaving and he can say this to the student council. Then I met Ankit Sisodia who (I think) was doped. He was trying to switch on a cooler. I went up to him as he was the only familiar and idle one out there. To start the conversation, I asked him why he is starting the cooler. I know it was a stupid question but never in my dreams had I thought that I would get such a punishment for asking it. He said, “Why? Who are you? Are you going to punish me for that? Are you going to complain to the student council?” I asked him, “Why is he overreacting?” He asked me to leave saying that he is not in a position to figure out who I am. Being fully aware of my interpersonal skills, I thought it better to leave. I went out and left towards the golf course expecting that no one would find be there and I would be spared from answering the questions related to my non-participation in the event. But I was wrong. I met OJ. He asked me, “Why am I standing there?” I said, I don’t want to participate and I am not creative. I said that in an aggrieved mood. So I guess, he didn’t ask any further questions and left. But he didn’t give me attendance and I had to pay a fine but I was ready for that the moment I left my team.
I will now talk about two of my most liked event of the Induction week. The first one was the treasure hunt event. I am a very instinctive person. My brain and heart are never at conflict. They never contradict each other. When they do, I check my premises as I am doing now. Somehow the moment I interacted with my team for the treasure hunt event, I felt good and I felt like contributing and giving my best shot. Maybe it was due to cheerful HR girl in my team:). Almost everyone in the team was lively and contributing. Further no one was trying to be a leader. There was a sense of mutual admiration and believe in each other’s abilities. We gave our best shot and had it not been due to a bunch of senior HR guys sitting in the arcus, we would have won that event. Nevertheless I enjoyed it a lot especially proposing to a girl of the senior batch as a part of a task and the musical chair. The next one is the accounting exercise which we did in auditorium. The good thing in this event was that the team was small and there was no conflict as to the role everyone wanted to take (or was there?). I was made the CFO. What else could I have asked for? We came second and I really enjoyed those 2-3 hours of that dull lousy week. There was a team building event as well. I don’t want to dedicate a full paragraph to it as I didn’t really enjoy it a lot except for few tasks like free fall. The problem again was the presence of too many leaders and a lot of chaos whenever a decision had to be made.
This section would be incomplete if yoga sessions are not talked about. I don’t regret getting up early in the morning and attending it. But again it’s a matter of choice and I wouldn’t force it on to the junior batch if the decision is left over to me. There is not much of a contradiction in what I did and what I would like to have done in the first week. Let’s move on to the next topic.
Cricket @ IDPL
What is cricket? Is it just a game? Maybe for you but not for those who follow it with passion. Fortunately enough, most of the India follows it with passion and the mutual admiration for the game binds the country together. Most of my acquaintances @ MDI are either from playing cricket or by sharing sutta. Cricket @ IDPL made me known as Manoj (Manoj Prabhakar) in IDPL. I used to be an attacking player in my school days and have broken many a glasses of my colony but apparently that touch is gone. Trust me or not but sutta does affect your reaction time. Atleast it has affected mine. I used to be a sweet timer of the ball. Where is that touch now? Though the touch is gone, the ability to stay at the crease is still intact and that earned me the name Manoj Prabhakar. Just like any other player in the crack of doom, I too hope to regain the Midas touch that used to bring the hell on earth for the bowlers.
The Marketing Project
The memory of this project is going to remain alive for a long time. Our group was probably the best and definitely the most diverse. It had a perfect blend of intense and comic personalities. It had NPAs also:). But all in all it was a nice entertaining group. Another reason for remembering this project is the flash animation I made. Not that the flash animation was out of the world, but the process of making it was very satisfying. Coding it was tough but justifying the reason for making it to the people around was tougher. Even more annoying was the comment of one of the team members who said, “Why are we doing it?” when it was almost done. I already had spent not less than 6-7 hours on it. Further I was not seeking any help. All I was asking was a bit of cooperation. But I think it was just a passing remarks and I would like to mention that I would not have been able to finish it without the support of my fabulous team.
Unnati Interview
I had my own reasons for applying to Unnati. I had a penchant for stock market but I knew I will never follow it up unless I have reasons for doing so. Though liking in itself is a good enough reason, but it asks for discipline which I lacked. Further here I could play with someone else’s money:). Considering all this I applied in Unnati. Auto & Telecommunication were the two sectors I chose. Written exam was a piece of cake but Interview was real tough. Though I did well in the interview (The proof of which I got a few days ago) but that wasn’t good enough for selection. But it gave me a lot of confidence and I knew after the interview that if I work slightly harder relative to the fin studs, I can be on the same page as them before I leave MDI.
The Mid Term
The start wasn’t particularly delighting as I messed up big time in the Microeconomics paper. The next was the Marketing paper which was any way not my cup of tea. The Accounting paper went satisfactory. Had it been slightly tougher, it would have been better for me in terms of RG. The Statistics paper in which I scored 28 on 30 was the only performance to cherish and it will remain fresh in my memory for a long time.
Academic Club Interviews
The only clubs I applied in were Monetrix (The finance club) and Sports club. The other club I would have liked to apply was ThinC but somehow I missed the deadline. The Monetrix story must be told. I had a pretty decent interview and was expecting to get selected. The next day, one of the interviewers came up to me and said that I am in. Out of joy, I shared this with most people I knew. The biggest surprise came when my name was not in the list of selected candidates. Instead it was in the waiting list. It was a real shocker of an event. I don’t have a problem with not getting selected but the person who told me should have been a little more mature in conveying news which was subject to change. I don’t have any regrets though. The club wouldn’t really have added much value to me except giving me something to write in my resume. But the cost in the form of attending useless meetings would have been much higher. It was a decision made in haste and I am happy that I didn’t get selected. All well that ends well!
The Sports Tournament
I was looking forward to representing my section in Chess, Cricket, and TT. Getting into Chess team wasn’t tough as I had hyped my chess playing abilities during one of the WAC classes. I am a good chess player but lapse of concentration has always been my problem. In the past, I use to work a lot on my games and moves and that used to help me in games. Nothing of that sort happened here. Moreover my concentration and hence my chess playing abilities has only deteriorated over the years. To add to that the qualifying game wasn’t tough enough to give me a real taste of the challenges ahead. The first match I played ended in a draw. I was a bishop down from the very beginning and I had to try real hard to stay in that match. But I played well in the middle and managed to draw the match by three fold repetitions. I was completely exhausted by the time the match got over but immediately after I had to play another game against a really strong opponent who had lost his previous game and was desperately seeking a win. I committed a lot of blunders and lost easily and that was the end of the chess tournament for me.
I could have played TT but since I was playing so many other games, I volunteered not to play. I also knew that there are some weaknesses in my game and it wouldn’t be suitable to represent the team without first working on them for which there was no time.
The first cricket match that we played was a knock out match against PGPIM. We had to win that game to go to the next round. My role in the team was that of an opener. I had practiced a bit the previous night but I was not 100% confident and was feeling really nervous when I went out to bat. After playing cricket in IDPL for sometime, I knew that my reaction time has deteriorated and I am not sighting the ball that well. I was trying hard to connect the bat with the ball but it was not happening. I decided to stay there till the end which I successfully did and made 27 valuable runs which eventually turned out to be crucial for team’s victory. The next match I opted to sit out which I think was a mistake. I should have probably played down the order and tried to hit the ball to get back my lost confidence. The second match we lost and we had to win the third match so as to reach the finals. There is not much I would like to remember about the third match except for the catches I took and the brilliant inning played by the other opener.
Another game which I played was Volleyball. It was not on my list initially. When I went for the selection, all I wanted to see was the quality of my section’s team. I must admit, it was pathetic and much worse than my expectation. I had no option but to play so as to atleast give a fight to other teams. We played two and lost two:). I wish we had few decent players. But that was not going to be and it too ended in disappointment like all other sports I participated in. Maybe next time I will do better and help my team win the tournament.
The End Term
Well! I am tired of writing now. So let me finish it in as few lines as possible. The end term went really well and I was among the top five in almost every paper. I think Marketing was the only exception. I couldn’t have done better. It helped me pull my CGPA against many others who has done better than me in Mid-Term.
The Second term and more will come soon...
I just had my 2nd term exams and there is a 10 day vacation for which I have come home. Before I left, a few people asked me what I am going to do in the vacation. And this is what I am doing - thinking over and reflecting upon the last 6 months @ MDI Gurgaon.
This is necessary especially when you are surrounded by objective people with different philosophies than yours. It gives you an opportunity to justify the premises on which you base your actions. Ayn Rand has said “Check your premises; Contradictions don’t exist”. So let me check my premises as contradictions do exist not just around me but within me as well. May rational prevail!
Apart from subjecting my premises to the objectivity of others around me, I will drop a line here and there (actually everywhere) on my experiences in the past 6 months.
The First Term
The First Seven Days
For the first seven days, Induction process went on. The purpose of the induction was to make us ready for the grueling PGPM program of MDI. Six months have passed and I am still wondering which grueling program were they talking about? Forcing one to attend all the lousy sessions doesn’t prepare him for anything. It is just for the fun of the senior batch particularly the student council. I am against it and I will do everything to make it a flop next year. A bunch of slightly toned up versions of Ankit Sisodia in the junior batch can do the trick.
That brings me to the next topic – The Ankit Sisodia. This is one of the most vivid memories of the first week. I didn’t talk a lot to him which is usual of me but we used to exchange hellos at the sutta joint outside the college gate. This guy had guts. He could easily have spoilt the entire drama of the student council had he been a little less casual and a little more earthy. Had it not been his air of superiority and dare for drugs, he could easily have been the hero of the drama scripted, directed, and produced by the student council. I still remember the conversation I had with him during the lousy ad making event.
Well this event was for bringing out the creativity in us. Let me test your general knowledge at this stage. Who was Newton? Newton was a MDI student who when asked to be creative by the student council discovered the law of gravity. Newton was great. I am not. I can’t think out of the box whenever I am asked to. So I decided to be a silent non-performing member of the team. But soon I realized I can’t be a silent spectator and listen to all the goosey ideas that my team was coming up with. So I decided to leave the team itself. I told one of my group mates that I am leaving and he can say this to the student council. Then I met Ankit Sisodia who (I think) was doped. He was trying to switch on a cooler. I went up to him as he was the only familiar and idle one out there. To start the conversation, I asked him why he is starting the cooler. I know it was a stupid question but never in my dreams had I thought that I would get such a punishment for asking it. He said, “Why? Who are you? Are you going to punish me for that? Are you going to complain to the student council?” I asked him, “Why is he overreacting?” He asked me to leave saying that he is not in a position to figure out who I am. Being fully aware of my interpersonal skills, I thought it better to leave. I went out and left towards the golf course expecting that no one would find be there and I would be spared from answering the questions related to my non-participation in the event. But I was wrong. I met OJ. He asked me, “Why am I standing there?” I said, I don’t want to participate and I am not creative. I said that in an aggrieved mood. So I guess, he didn’t ask any further questions and left. But he didn’t give me attendance and I had to pay a fine but I was ready for that the moment I left my team.
I will now talk about two of my most liked event of the Induction week. The first one was the treasure hunt event. I am a very instinctive person. My brain and heart are never at conflict. They never contradict each other. When they do, I check my premises as I am doing now. Somehow the moment I interacted with my team for the treasure hunt event, I felt good and I felt like contributing and giving my best shot. Maybe it was due to cheerful HR girl in my team:). Almost everyone in the team was lively and contributing. Further no one was trying to be a leader. There was a sense of mutual admiration and believe in each other’s abilities. We gave our best shot and had it not been due to a bunch of senior HR guys sitting in the arcus, we would have won that event. Nevertheless I enjoyed it a lot especially proposing to a girl of the senior batch as a part of a task and the musical chair. The next one is the accounting exercise which we did in auditorium. The good thing in this event was that the team was small and there was no conflict as to the role everyone wanted to take (or was there?). I was made the CFO. What else could I have asked for? We came second and I really enjoyed those 2-3 hours of that dull lousy week. There was a team building event as well. I don’t want to dedicate a full paragraph to it as I didn’t really enjoy it a lot except for few tasks like free fall. The problem again was the presence of too many leaders and a lot of chaos whenever a decision had to be made.
This section would be incomplete if yoga sessions are not talked about. I don’t regret getting up early in the morning and attending it. But again it’s a matter of choice and I wouldn’t force it on to the junior batch if the decision is left over to me. There is not much of a contradiction in what I did and what I would like to have done in the first week. Let’s move on to the next topic.
Cricket @ IDPL
What is cricket? Is it just a game? Maybe for you but not for those who follow it with passion. Fortunately enough, most of the India follows it with passion and the mutual admiration for the game binds the country together. Most of my acquaintances @ MDI are either from playing cricket or by sharing sutta. Cricket @ IDPL made me known as Manoj (Manoj Prabhakar) in IDPL. I used to be an attacking player in my school days and have broken many a glasses of my colony but apparently that touch is gone. Trust me or not but sutta does affect your reaction time. Atleast it has affected mine. I used to be a sweet timer of the ball. Where is that touch now? Though the touch is gone, the ability to stay at the crease is still intact and that earned me the name Manoj Prabhakar. Just like any other player in the crack of doom, I too hope to regain the Midas touch that used to bring the hell on earth for the bowlers.
The Marketing Project
The memory of this project is going to remain alive for a long time. Our group was probably the best and definitely the most diverse. It had a perfect blend of intense and comic personalities. It had NPAs also:). But all in all it was a nice entertaining group. Another reason for remembering this project is the flash animation I made. Not that the flash animation was out of the world, but the process of making it was very satisfying. Coding it was tough but justifying the reason for making it to the people around was tougher. Even more annoying was the comment of one of the team members who said, “Why are we doing it?” when it was almost done. I already had spent not less than 6-7 hours on it. Further I was not seeking any help. All I was asking was a bit of cooperation. But I think it was just a passing remarks and I would like to mention that I would not have been able to finish it without the support of my fabulous team.
Unnati Interview
I had my own reasons for applying to Unnati. I had a penchant for stock market but I knew I will never follow it up unless I have reasons for doing so. Though liking in itself is a good enough reason, but it asks for discipline which I lacked. Further here I could play with someone else’s money:). Considering all this I applied in Unnati. Auto & Telecommunication were the two sectors I chose. Written exam was a piece of cake but Interview was real tough. Though I did well in the interview (The proof of which I got a few days ago) but that wasn’t good enough for selection. But it gave me a lot of confidence and I knew after the interview that if I work slightly harder relative to the fin studs, I can be on the same page as them before I leave MDI.
The Mid Term
The start wasn’t particularly delighting as I messed up big time in the Microeconomics paper. The next was the Marketing paper which was any way not my cup of tea. The Accounting paper went satisfactory. Had it been slightly tougher, it would have been better for me in terms of RG. The Statistics paper in which I scored 28 on 30 was the only performance to cherish and it will remain fresh in my memory for a long time.
Academic Club Interviews
The only clubs I applied in were Monetrix (The finance club) and Sports club. The other club I would have liked to apply was ThinC but somehow I missed the deadline. The Monetrix story must be told. I had a pretty decent interview and was expecting to get selected. The next day, one of the interviewers came up to me and said that I am in. Out of joy, I shared this with most people I knew. The biggest surprise came when my name was not in the list of selected candidates. Instead it was in the waiting list. It was a real shocker of an event. I don’t have a problem with not getting selected but the person who told me should have been a little more mature in conveying news which was subject to change. I don’t have any regrets though. The club wouldn’t really have added much value to me except giving me something to write in my resume. But the cost in the form of attending useless meetings would have been much higher. It was a decision made in haste and I am happy that I didn’t get selected. All well that ends well!
The Sports Tournament
I was looking forward to representing my section in Chess, Cricket, and TT. Getting into Chess team wasn’t tough as I had hyped my chess playing abilities during one of the WAC classes. I am a good chess player but lapse of concentration has always been my problem. In the past, I use to work a lot on my games and moves and that used to help me in games. Nothing of that sort happened here. Moreover my concentration and hence my chess playing abilities has only deteriorated over the years. To add to that the qualifying game wasn’t tough enough to give me a real taste of the challenges ahead. The first match I played ended in a draw. I was a bishop down from the very beginning and I had to try real hard to stay in that match. But I played well in the middle and managed to draw the match by three fold repetitions. I was completely exhausted by the time the match got over but immediately after I had to play another game against a really strong opponent who had lost his previous game and was desperately seeking a win. I committed a lot of blunders and lost easily and that was the end of the chess tournament for me.
I could have played TT but since I was playing so many other games, I volunteered not to play. I also knew that there are some weaknesses in my game and it wouldn’t be suitable to represent the team without first working on them for which there was no time.
The first cricket match that we played was a knock out match against PGPIM. We had to win that game to go to the next round. My role in the team was that of an opener. I had practiced a bit the previous night but I was not 100% confident and was feeling really nervous when I went out to bat. After playing cricket in IDPL for sometime, I knew that my reaction time has deteriorated and I am not sighting the ball that well. I was trying hard to connect the bat with the ball but it was not happening. I decided to stay there till the end which I successfully did and made 27 valuable runs which eventually turned out to be crucial for team’s victory. The next match I opted to sit out which I think was a mistake. I should have probably played down the order and tried to hit the ball to get back my lost confidence. The second match we lost and we had to win the third match so as to reach the finals. There is not much I would like to remember about the third match except for the catches I took and the brilliant inning played by the other opener.
Another game which I played was Volleyball. It was not on my list initially. When I went for the selection, all I wanted to see was the quality of my section’s team. I must admit, it was pathetic and much worse than my expectation. I had no option but to play so as to atleast give a fight to other teams. We played two and lost two:). I wish we had few decent players. But that was not going to be and it too ended in disappointment like all other sports I participated in. Maybe next time I will do better and help my team win the tournament.
The End Term
Well! I am tired of writing now. So let me finish it in as few lines as possible. The end term went really well and I was among the top five in almost every paper. I think Marketing was the only exception. I couldn’t have done better. It helped me pull my CGPA against many others who has done better than me in Mid-Term.
The Second term and more will come soon...
Subscribe to:
Posts (Atom)
