ECONOMICS OF REGULATION (by Crispulo Marmolejo)

En su edición de diciembre, la prestigiosa revista Foreign Policy ha dado a conocer su ya conocida lista de 100 intelectuales públicos globales. Esta nómina se elabora a partir de una encuesta a numerosos académicos y personas de relevancia en el ámbito económico, político y de las relaciones internacionales y propone, en forma de ranking, los grados de influencia de importantes actores en el medio global.

Los cinco primeros lugares de este ranking 2010 lo encabezan Warren Buffet y Bill Gates, seguidos por Dominique Strauss y Robert Zoellick, posteriormente, el Presidente Barack Obama, Zhuo Xiachuany (Chairman del Banco Popular chino) y finalmente, en el quinto lugar, Ben Bernanke, presidente de la Reserva Federal de los EE.UU.

¿Qué llama la atención en este ranking? En primer lugar, la lista, cuyo nombre en inglés es “100 top global thinkers”, está encabezada por personalidades del ámbito empresarial, político y financiero que estuvieron de algún modo conectadas con la reciente crisis económica internacional. Esto revela la magnitud que ella generó en la forma de pensar, analizar y evaluar las políticas públicas referidas a ese ámbito. Por tanto, hay una señal evidente que los liderazgos de empresarios y políticos se fundan en la eficiencia y en el trabajo arduo para combatir dificultades.

En segundo lugar, elaborar rankings de personas influyentes es una costumbre en la sociedad actual, pero ello debe considerar la forma cómo los grupos de interés pueden capturar la conformación de esos rankings, aun cuando Foreign Policy, sin ser una revista académica, goza de un gran prestigio por la seriedad de sus artículos. Coincide esta publicación con la difusión del affaire WikiLeaks, que involucra no sólo al sostenedor de este sitio, sino también a quienes han proporcionado el acceso a documentos estratégicos, a los medios de prensa que han recogido esa información.

En estos dos hechos se produce, en mi modesto entender, una curiosidad dramática, como la ha tratado el cientista político Joseph S. Nye en su famosa obra “The paradox of American power”. Se trata, según el autor, de comprender que el gran poder de un país como Estados Unidos, en la época de la revolución de la información, no podrá transitar solo, y que la centralización excesiva de la información tiende progresivamente, a través de numerosas vías, a expandirse a la sociedad global. Nye distingue tres dimensiones de la información: a) los abundantes flujos de datos presentados como estadísticas; b) el uso para ventajas competitivas que la información ha cobrado agresivamente en política internacional, incrementado por las nuevas tecnologías, y 3) la noción estratégica de la información, que sitúa a los estados como competidores en un mercado que se aprecia cada vez más disputado.

El cruce de ambos hechos recientes -ranking de Foreign Policy y WikiLeaks- plantea algunos desafíos: el dominio sobre la información estratégica es cada vez más vulnerable y difuso; las nuevas tecnologías de la información y la demanda creciente por transparencia de la sociedad global modificarán la forma de llevar las relaciones internacionales.

You can read my latest column in “El Mercurio” of Valparaiso, about ” Rankings, Influence and Wikileaks” ( In Spanish)

http://portada.diariosregionales.cl/prontus_blogs/site/artic/20101208/pags/20101208090336.html?s=www.mercuriovalpo.cl

Paul A. Samuelson, Economist, Dies at 94
MICHAEL M. WEINSTEIN NYT
Published: December 13, 2009
Paul A. Samuelson, the first American Nobel laureate in economics and the foremost academic economist of the 20th century, died Sunday at his home in Belmont, Mass. He was 94.

Paul A. Samuelson received the National Medal of Science as former President Bill Clinton looked on in Washington in 1996.

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DealBook: Remembering Samuelson, Who Forever Fused Economics with Math

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Paul A. Samuelson at M.I.T. in 1950, where he used mathematics to analyze complex economic theories.
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Read All Comments (115) »His death was announced by the Massachusetts Institute of Technology, which Mr. Samuelson helped build into one of the world’s great centers of graduate education in economics.

In receiving the Nobel Prize in 1970, Mr. Samuelson was credited with transforming his discipline from one that ruminates about economic issues to one that solves problems, answering questions about cause and effect with mathematical rigor and clarity.

When economists “sit down with a piece of paper to calculate or analyze something, you would have to say that no one was more important in providing the tools they use and the ideas that they employ than Paul Samuelson,” said Robert M. Solow, a fellow Nobel laureate and colleague of Mr. Samuelson’s at M.I.T.

Mr. Samuelson attracted a brilliant roster of economists to teach or study at the university, among them Mr. Solow as well as others who would go on to become Nobel laureates like George A. Akerlof, Robert F. Engle III, Lawrence R. Klein, Paul Krugman, Franco Modigliani, Robert C. Merton and Joseph E. Stiglitz.

Mr. Samuelson wrote one of the most widely used college textbooks in the history of American education. The book, “Economics,” first published in 1948, was the nation’s best-selling textbook for nearly 30 years. Translated into 20 languages, it was selling 50,000 copies a year a half century after it first appeared.

“I don’t care who writes a nation’s laws — or crafts its advanced treatises — if I can write its economics textbooks,” Mr. Samuelson said.

His textbook taught college students how to think about economics. His technical work — especially his discipline-shattering Ph.D. thesis, immodestly titled “The Foundations of Economic Analysis” — taught professional economists how to ply their trade. Between the two books, Mr. Samuelson redefined modern economics.

The textbook introduced generations of students to the revolutionary ideas of John Maynard Keynes, the British economist who in the 1930s developed the theory that modern market economies could become trapped in depression and would then need a strong push from government spending or tax cuts, in addition to lenient monetary policy, to restore them. Many economics students would never again rest comfortably with the 19th-century view that private markets would cure unemployment without need of government intervention.

That lesson was reinforced in 2008, when the international economy slipped into the steepest downturn since the Great Depression, when Keynesian economics was born. When the Depression began, governments stood pat or made matters worse by trying to balance fiscal budgets and erecting trade barriers. But 80 years later, having absorbed the Keynesian teaching of Mr. Samuelson and his followers, most industrialized countries took corrective action, raising government spending, cutting taxes, keeping exports and imports flowing and driving short-term interest rates to near zero.

Lessons for Kennedy

Mr. Samuelson explained Keynesian economics to American presidents, world leaders, members of Congress and the Federal Reserve Board, not to mention other economists. He was a consultant to the United States Treasury, the Bureau of the Budget and the President’s Council of Economic Advisers.

His most influential student was John F. Kennedy, whose first 40-minute class with Mr. Samuelson, after the 1960 election, was conducted on a rock by the beach at the family compound at Hyannis Port, Mass. Before class, there was lunch with politicians and Cambridge intellectuals aboard a yacht offshore. “I had expected a scrumptious meal,” Mr. Samuelson said. “We had franks and beans.”

As a member of the Kennedy campaign brain trust, Mr. Samuelson headed an economic task force for the candidate and held several private sessions on economics with him. Many would have a bearing on decisions made during the Kennedy administration.

Though Mr. Samuelson was President Kennedy’s first choice to become chairman of the Council of Economic Advisers, he refused, on principle, to take any government office because, he said, he did not want to put himself in a position in which he could not say and write what he believed.

After the 1960 election, he told the young president-elect that the nation was heading into a recession and that Kennedy should push through a tax cut to head it off. Kennedy was shocked.

“I’ve just campaigned on a platform of fiscal responsibility and balanced budgets and here you are telling me that the first thing I should do in office is to cut taxes?” Mr. Samuelson recalled, quoting the president.

Kennedy eventually accepted the professor’s advice and signaled his willingness to cut taxes, but he was assassinated before he could take action. His successor, Lyndon B. Johnson, carried out the plan, however, and the economy bounced back.

Adding Bite to Academia

In the classroom, Mr. Samuelson was a lively, funny, articulate teacher. On theories that he and others had developed to show links between the performance of the stock market and the general economy, he famously said: “It is indeed true that the stock market can forecast the business cycle. The stock market has called nine of the last five recessions.”

His speeches and his voluminous writing had a lucidity and bite not usually found in academic technicians. He tried to give his economic pronouncements a “snap at the end,” he said, “like Mark Twain.” When women began complaining about career and salary inequities, for example, he said in their defense, “Women are men without money.”

After a long time without posting, Economicsofregulation.blogsome.com is back… Attention to the new post and…here we go again!!!!!!!!!!!

Hace algunos días se ha confirmado la noticia que el recién electo Presidente los Estados Unidos Barack Obama ha propuesto en el cargo de director de la Oficina de Información y Asuntos Regulatorios de la Casa Blanca al destacadísimo profesor de la Universidad de Harvard y prolífico autor Cass Sunstein. Debiendo confesar mi predilección por la lectura de los libros y papers de Sunstein, el caso es que se trata de una de las figuras académicas más destacadas, prolíficas y citadas no solo en Estados Unidos sino que en el cada día más globalizado mundo de la enseñanza legal. Cass Sunstein fue profesor de la Escuela de Derecho de la Universidad de Chicago por 27 anos hasta su reciente traslado a Harvard, ha escrito más de 20 libros sobre Derecho Constitucional, Teoría del Derecho y Law and Economics, en su vertiente más orientada al comportamiento de los individuos. La relación de amistad entre Obama y Sunstein viene desde los años en que el electo Presidente ensenaba Derecho Constitucional en Chicago, y con esta nominación, aun cuando se trate de una autoridad con un perfil intermedio, pareciera darse algunas señales importantes. En primer lugar, Obama está consciente que un ingrediente importante de la actual crisis financiera es el regulatorio, en el sentido que los controles fueron ineficientes y que algo más profundo ocurrió en la compleja trama de fiscalización y funcionamiento del mercado financiero americano. En segundo lugar, la nominación de un académico de la altura de Sunstein significa que el nuevo gobierno aspira a integrar en su staff a personas de categoría profesional relevante, a diferencia de lo que muchas veces ocurre en países menos desarrollados y democracias de menor calidad, en que priman la raigambre política y la asignación de cuotas a partidos. En tercer lugar, es de esperar que con la nominación de Sunstein se inicie un proceso de reflexión profunda acerca de la estructura de fiscalización y regulación de mercados en estados Unidos, incentivando un debate más orientado al perfeccionamiento de modelos y no a la búsqueda frenética - y a veces ilusoria - de los responsables de la crisis. La tradicional inclinación demócrata a aumentar los volúmenes regulatorios se puede ver, a primera vista, ponderada por la presencia de Sunstein como el próximo zar regulatorio de Obama, pues siendo un liberal declarado, Sunstein también apoyo algunas nominaciones del Presidente George W. Bush en la Corte Suprema, lo cual da muestra de su moderación. No cabe duda que las democracias consolidadas se fortalecen con la incorporación de académicos de la talla de Cass Sunstein, estableciendo con ello un interesante referente para las futuras designaciones en Chile y el resto de América Latina.

Professor of Universidad Catolica del Peru, Alfredo Bullard explains in an interesting interview the main issues of Law and Economics.

http://www.youtube.com/watch?v=mgqCiNrhnH4

Visit an amazing interview to Prof. and Nobel Prize 1992 Gary S. Becker and Prof. of Law and Economics Richard Posner about the Becker-Posner blog. Check in:

http://www.mefeedia.com/entry/replay-gary-s-becker-and-richard-posner-joint-discussion/6244626/

For these days, the situation on items relating to the Free Competition has had two interesting examples, in different sides of the world. Here in the United States the controversial takeover offer by 44 billion dollars that Microsoft has done by Yahoo.com has shaken the market today and is the subject of analysis among antitrust experts and financial specialists, as the operation will be analyzed in detail by American regulators. Across the world, in Chile, the Chilean Antitrust Court ruled finally on the merger of two major retail companies as DS and Falabella, rejecting the operation. In its foundations of the decision, the Court says that “the adoption of the operation consulted, would produce a substantial and lasting decline in the conditions of competition in a market that involves very important part of the decisions of consumption of all Chileans …. harmful expected - in terms of welfare - the prices, quality and quantity of products”. It says that of Microsoft offer by Yahoo.com - with all businesses involved - is the reaction of the giant of Windows fronting the relevant undisputed position that Google now occupies in the advertising and search contents on the Internet. In both cases, these are operations called M & A (Mergers and Acquisitions) that generate concentrations of market participation and certainly in the size and influence of companies. The major index of M & A in a market means, in general, adjustments to the size of them and greater influence of the dominant players, which should aim to benefit the consumer, so that the efficiency and dynamism own market, it also added the consumer welfare, as fundamentals of a serious analysis of each operation. The work of the regulators should be technical and accurate, but that its decisions involving a disincentive to free market development. Also, the huge Internet market is very shaken by the new antitrust case will affect Microsoft and which may affect the relevance of the company that holds Windows; then, a good number of factors relating to the practice and actual functioning of this important segment could de studied. Now the American “trustbusters” will give their opinion on what may be one of the most important operations for the year in the Internet market. Both cases, one Chilean and one American, are great opportunities for the analysis of Free Competition and regulation, without a doubt, an incentive for joint study, not only for economists and lawyers, but for a general public, which increasingly demand more information, but it also has the duty to reach out to the new realities that the dynamic market structures pose for their own benefit.

VITTORIO CORBO, one of the most important chilean economist, highlighted in international markets, will not continue another period as a Chair of Central reserve in Chile. President Bachelet appointed JOSE DE GREGORIO, current Vice President of Central Bank. Corbo is worldwide recognized as an expert in financial theory and an important actor in the currency stability in Chile.