China Economics Education – “attracted me”
On how to develop postgraduate teaching in China, I outline the abuse of one word – “attracted me.” eye high, that is the goal and vision to be high, focus on world's best schools, to train best economists, to find the most important economic issues, found that the most important challenge to encourage our graduate students can become independent observation, critical and creative, to find talent. Hand low, that can do things from the start, especially students. What could be done? Need serious discussion. In short, China's current strict entrance examination system is great for students screened, and institutions of higher learning, especially in the strongest country, such as Beijing University, Nankai, Fudan University, Tsinghua University, etc., the best students in school background and trained may be very close to the French system. Learning French is actually good training method is relatively easy to do. This is equivalent to China's economic reform is gradual, this step should be, at least can be trained. Given the characteristics of China under one condition: Economics is still falling behind, catch up with how to train? China should focus more on economics education rigorous mathematical training to develop a tidy team. Sum of all the conditions, the current stage is the most easy-to-French bias of the emphasis on training, especially in mathematics and statistics. This is because the Chinese have a good enough mathematician and statistician. Of course, we eye the high and should not be limited to these, but also to target the ability of trained economists have observed on.
economics of five “no relevance” of theoretical basis
I put economics on the most important part of the system overview of the five on the “not relevant” in theoretical basis. This is just my personal opinion, it does not all economists agree that all my claims. But I express my spirit is widely shared by many economists.
As mentioned earlier, an economist with a good observation, analytical skills and creativity of the core conditions (necessary) is very clear grasp of economics to the theory of reference. Economics of the most important content on the system, the following five benchmarks: 1, Arrow – Debreu's general equilibrium model. 2, Modigliani – Miller Theorem (MM theorem). 3, Coase Theorem. 4, Lucas neutral on monetary theory. 5, Becker – Stigler on optimal deterrence theory of the judicial system (this is my opinion, I think this is a benchmark for understanding the theory of the judicial system). After these five benchmarks make sense and economics in general to grasp the essence. The five benchmarks have in common is “not relevant” (irrelevant), that each is a system of non-relevant. Of course, the economics outlined into five non-related benchmarks is my personal opinion.
first theoretical base, Arrow – Debreu's general equilibrium model. This theory means that the economic system is not related with the economic benefits. Discussion of market economy, this theory has a very important basic conditions: First, complete the market; Second there is no asymmetric information. In these conditions, only this is not relevant. This is actually far beyond the contents of general equilibrium itself. In the economics literature, although Arrow and Debreu that they did not discuss the planned economy, but the literature has the Arrow – Debreu conditions of the planned economy, and concluded that the Arrow – Debreu conditions planned economy with market economy results are the same. Arrow – Debreu theorem of the two basic social welfare implications of this layer actually contains. In fact, the general equilibrium and Pareto optimal mutual relationship is not a simple technical result. Economic system they say is not related to the same benefits. That is, in Arrow – Debreu conditions, the Pareto optimal results do not necessarily need to use the market economy can be achieved by other institutions. In order to prove that the technical conditions required for the planned economy with a market economy are the same. Arrow – Debreu general equilibrium model is a model of neo-classical economics approach, although the assumptions and the reality of this theorem is not exactly the same thing, but it provides a benchmark, it can be a basis for further analysis and understanding . A very important understanding is: any explanation a planned economy with market economy, the basic difference between the theory must be beyond the Arrow – Debreu model range.
second theoretical basis, Modigliani – Miller (MM) Theorem. Returns associated with financial instruments. Companies are not issued with bonds or stocks be financed from the profit point of view the result is the same. MM Theorem the set of basic assumptions are – no asymmetry between the firm and investors of information; dividends and capital gains are not taxed; trading in securities is no cost. MM theorem awareness of financial instruments, the financial system to provide a theoretical basis. When financial instruments are not relevant with profits, the financial system are not associated with benefits. In order to understand why the real income of different financial instruments, not the same as to guide the MM theorem, we must look for what in reality is a violation of the conditions assumed in this theorem. The importance of MM Theorem is far beyond the scope of corporate finance. In fact, money itself is a financial tool, it also guides us in understanding the functions of money.
third theoretical basis, Coase theorem is the function of guiding our understanding of the theory of property rights benchmark. It concluded that: as long as the transaction cost is close to 0, the initial legal allocation of property rights has nothing to do with efficiency. Coase Theorem, as long as the definition of good ownership, whether it is state-owned or state-owned, who owns the property is not related to the benefits. In reality, the property ownership is concerned with efficiency. Strength of the Coase Theorem is that it guides our way to find the answer: What important realities in violation of the premise of the Coase Theorem, making property rights and benefit-related.
fourth theoretical basis, Lucas currency neutral theory. This is economics, one of the most important theoretical basis. Currency neutral from a narrow point of view, means that in the long run monetary policy with economic efficiency, economic growth has nothing to do. In a broad sense, it means that financial instruments, the financial system with the economic benefits, economic growth is not related. This is the rational expectations model of the important conclusions are derived. In fact the theory of rational expectations hypothesis with the Arrow – Debreu model is similar, but Arrow – Debreu model is simply not the currency. Lucas model for understanding the monetary and financial system provide an important theoretical benchmark. Economists have for the understanding of monetary and financial system and work hard. With this theoretical basis, people know that the functions of monetary and financial system is the real function of a certain violation of the Lucas model where the basic conditions, to find the conditions that guide the search for theoretical breakthroughs of the road.
fifth of theoretical basis, Becker – Stigler model. BS model to guide our understanding of the judicial system. The model's basic reasoning is: In addition to law enforcement outside the court system, not related with efficiency. The theory of direct conclusion is that a good judicial system, law enforcement as long as the court was sufficient to find other law enforcement approach does not make sense. Provided that the law should define clearly what is against the law, the punishment of the offenders for the optimal design. Under the law in this optimal, assuming that all people are rational, all know the best legal penalties, all reasoning, all of them may break the law before in terms of the offense the expected benefits and possible disadvantages of each comparison. Optimal law-making may have the best deterrent to break the law to all of us more harm than good, the results of this society, people do not break the law. As long as the laws are the best, method is performed by independent courts, there is no other better way. In other words, the law enforcement system is not related with the efficiency of law enforcement. But in reality, the rule of law, the most traditional countries in parallel with the courts and other law enforcement also have a monitoring form. In order to understand them, we have to find what Becker – the basic conditions for Stigler model was violated in reality, this is the benchmark of power.
In my view, economics is the crystallization of the contents of the five benchmark. They are “not relevant” in the form of a theoretical basis to guide our understanding of reality, the most important and relevant social, economic and legal systems.
people are not familiar with the economics theory of reference might produce five two extreme misconceptions: first, the mistaken theory can provide solutions to practical problems of ready-made answers. However, the fact that these are not relevant on the theory does not provide ready-made answers. All of these theories say irrelevant things are particularly relevant in the real world, even the most relevant. Is the guiding role of theory, theory is not to provide ready-made answers, simply follow the theory to practice, most cases fail. Second, that economic theory completely unrealistic, or that the theory is dependent on assumptions, and those who assume that is simply not realistic. In fact, a good assumption that the theory of strength, not weakness. As benchmarks by the development of these theories can help us determine in what areas have problems from the start. For example see the economic structure, the Arrow – Debreu model to tell you the economic system is not relevant, it helps us look at the Arrow – Debreu model, the performance of the economy is something, such as whether the contract is not complete whether there is asymmetric information. In order to examine why the ownership is relevant is what we have to look for violations of conditions of the Coase Theorem. This is the theoretical basis of the strength of the main theory is to teach people this. Observation capabilities, to train some of the main theoretical basis is that, with the “base”, you know the direction to find the problem, this is the theory of help.
economics, universality and particularity
people are concerned about how economic development issues in China – the universality of Economics and the relationship between the particularity of the Chinese economy. Here we have extreme views are negative. One extreme is completely ignored China's special, that economics is generally applicable, can be copied everywhere. This is a misunderstanding of economics. Find the universal law of economics. As a theory must be abstract, “abstract” means that theory must be to leave the details of many economic phenomena. A common reason is to provide people with ways and ideas to the problem. So, economics is a major problem for the clues, but not on all the specific issues ready answer. The other extreme is that China is unique, so there is no way of economics applied to China's specific circumstances. But as mentioned above, provided that the idea of economics, in particular to provide a theoretical basis, with benchmarks to help analyze.
to combine universality and particularity, as an economist, what kind of work is good work? There are two important standards in general, if the policy work, then the standard policy if that helps. Academic standards is questionable whether the ability to explain the phenomenon. From an academic perspective, the standard is to explain the phenomenon in China, what can their contribution to economics. Good economics, not just study things in China, but to explain things in China by helping the world's economists to understand something new. This is a contribution to economics. In other words, by addressing specific problems, find common solutions, this is a very high standard. China is a special phenomenon, generally content to find, up to the economics, in turn, development economics. This is very important.
universality and particularity of the other problem is that cross-disciplinary research. For example, Economics and Law. Economics and Law seem to be fundamentally different disciplines. But in the real social issues and economic issues, the two have never been separate. For example, in economics, classical economics only discuss how the market is running well, perfect competition, perfect competition never discuss what the social conditions behind. What is the social conditions? All the contracts can be implemented, all distribution of property rights can be protected better. Classical economics simply do not worry about these things, since they have been in dry these things. This is the classical economics can separate economics and other subjects important assumptions (conditions). When faced with economic problems, especially in developing countries or transition economy, from one economic system to another change in the system, ignore the outside market factors, in the absence of these conditions, the conclusions offered by classical economics has changed. Another example of law, to define clearly the definition of economic issues tend to go out, what can be assumed that economic self-running perfect, narrowing the scope of the discussion, only concerned with law. Everyone assumes the other is perfect. What kind of system can operate, the conditions must be met someone else, which is usually separate from economics and the history of law. Now create a new discipline: Law and Economics, to help the two together.
many areas of economics, the specialization and the resulting economic problems of the overall conflict. Specialization in modern economics developed, with access to the growing number of economics is relevant. The more people there will be more and more division of labor. This specialization is often the subject of development is good. But it must be recognized that there are costs. The price is already in the field of specialization only for the convenience of discussion, is the artificial division. The real world is not such a man separate. Many major economic and social issues, originally separated the inconvenience. So bring in very good specialized consequences. For example, Microeconomics and Macroeconomics separately, but the reality is not in accordance with the separation of macro and micro. The most typical example is the monetary system, what is the currency. The function of the currency led to how to choose the financial system. Division of labor in economics, the discussion of currency called the macro, but the system is microscopic. So in the end the financial system are macro or micro do? If a scholar in the field is very narrow, all of them are very narrow, only knew the so-called micro-micro, macro macro only knew, then no one can make sense of monetary and financial system. This is actually really ironic. Economists have in fact what is the function of the currency can not have a good understanding. Economists are still looking for money function, and it exists in truth. This nature can imagine, what if the currency is no good understanding of what is a good monetary policy? What is a good financial system do? Traditionally, money has been understood as a medium of exchange, accounts and media, this is an old explanation. But this ancient understanding, the old currency and the currency today, there is no difference between the. Good understanding of any currency to coins and ancient coins can explain the importance of this distinction. From today's perspective, the currency of the importance of the core function is to help the economy in resolving the “broad liquidity” (liquidity) problem, which is a modern economy can determine the basic elements of normal operation. It led to the understanding of monetary policy. Monetary policy is trying to adjust the money supply to affect the whole economy of liquidity. If the function of money not clear how regulation through central bank liquidity in the economy do? Through what mechanisms can we change the money supply to pass to the economy? Economics of these so far is one of the most troublesome problem. What a lot of macro-economists to skip the issue of currency and pretend I do not know, or never know. But the best macro-economists know that this is a very important issue, and this problem going to understand that it was not possible to micro-and macro separate experts do. Teaching to the students, the benefits of separate fields is to help train. But to help face the observation, analysis of the major economic issues, often to break this limit, including doing research. Research work is defined in a specialized field, depends on the nature of the work. What is the contribution to the field or on the economics and the effects of a significant contribution. If the contribution of the field, you can define a good area to comply, but if it is a basic effect on the whole economy, the boundaries would break.
understand the importance of comparative economic systems
Here I would also like to emphasize, how to understand the economics, comparative economic systems is particularly important to understand side. When people talk about comparative economic systems, they often think that this area is the capitalist market economic system and the centrally planned economic system compared to the overall lack of understanding of the system. Then, is associated with how to reform a planned economy. The so-called shock therapy, it is by such ignorance of the economic system generated. When we discuss the economic reforms, some say, because there is a strong assumption in economics, economics apply to China? To answer this question, can go back and look at this issue of anti-American. Most economists in the United States, as long as the anti-back look at the situation of economics in the United States, can help us better understand the relationship between economics and economic system is how one thing. Recently occurred in a major Enron. To what extent economists can help us to understand Enron. I recently attended a joint jurists and economists, the meeting, one of the topics is the Enron situation. The meeting discussed the corporate governance structure. Economics provides a number of things that help us understand the corporate governance structure, in fact, already made a very good analysis of ideas, but a direct quote, or very far away. Enron shows that simple to apply economic theory to explain the U.S. economy does not work, even if the discussion of American business is no different. It is difficult to put it simply, economics is suited to the Chinese, whether because of the assumptions in economics, economics is not suitable for China. In fact, as a social science of economics to provide the way of thinking, analytical methods, to help us analyze the problem. If people do not analyze problems, moved to the economics textbooks as a policy, on the bad. Shock therapy is typical. Just look at what the advocates of shock therapy background to know. They have never studied the comparative economic systems, not studied a centrally planned economy, do not know how a centrally planned economy is going, just moved from textbook economics conclusion. Therefore, this problem is not caused by economics itself. In any one discipline, the conclusion if only to copy a certain confusion. For example, physics is the most successful science, but will simply move to the reality of the project, must have been confusion. For any engineering problem has its own characteristics. Physics, engineering science and provides the basic analysis, but does not provide ready-made answers.
whether corporate governance structure, or China's economic reforms, each specific issue, there are some important special factors to be discussed. When economists face special problems, the conclusions are often not readily available from the economics of copying. Whether the head of economics, the key is whether the ability to face problems for analysis. The observation and analysis, very important issue is how to understand the system is going on, what happened, from what to look for the kind of Jia She is Geshi, what methods to analyze it. Comparison is to help understand the economic system we observe, analyze important aspects of the problem. o
