International Economics Update February 2002 Copyright (C) 2002 The International Economics Network http://www.internationaleconomics.net Marginal Notes. A Beautiful Equilibrium Although a salient argument can be made about the tendency for Hollywood to sensationalize and thereby possibly mislead audiences in the name of artistic license, 'A Beautiful Mind', the recently-released movie about John Nash (starring Russell Crowe as Nash) is clearly a poetic rendering of a primary contributor to economic theory as it stands today, and deserves a viewing for any economist, mathematician, or game theorist that have been acquainted with Nash's Nobel Prize-winning ideas. Clearly, the Nobel Prize does possess a somewhat checkered history, and the Nobel committee's rules that it never be awarded posthumously has come under criticism before. Yet, to dismiss its importance and prestige by listing personal favorites who failed to attain the Prize or comparing it to accolades offered by the entertainment industry denies and implicitly discredits the intellectual brilliance of the scientists and authors who have invested a lifetime seeking to make significant contributions to their respective fields. Hence, perhaps, there is some justification for the omission of certain more glaring, and perhaps, embarrasing aspects of Nash's personal life. Although it has become the common rant of nonacademics to assert that the unfortunate reality of academic research is simply a steeplechase of wealth and fame (recall, "publish or perish"), it vastly oversimplifies and insults the vast majority of academics who tirelessly devote their lives to shaping young minds, and the effort and dedication that these individuals expand in that endeavor. Furthermore, contrary to the common misconception that academics live in ivory towers and not in the real world, there is clear evidence that the informed contributions of these scholars have led to improvements in our quality of life, a better knowledge of the world around us, and - even - a superior approach to conservation and sustainable development. And although the awarding of the Nobel in economics is, by definition, a subjective affair, few economists would begrudge the receipients their due honor. Nobellists have been instrumental in shaping the vast body of work that has proceeded since (and indeed, before) the first awardees in 1969, and the work of these economists, as well as their peers, have afforded a better life to millions of people around the world - from that of helping the developing world (Theodore Schultz and Arthur Lewis, Nobellists '79), to increasing economic growth (Robert Solow, Nobellist '87), to improving the welfare of the poor (Armartya Sen, Nobellist '98). And of course, the work that led to John Nash's shared Prize in '94, as well as his other pioneering contributions in game theory, is today the basis for understanding an entire range of strategic behavior - from the interactions between corporations and nations to biological processes. Not least, recent extensions have also made use of game theory in international economics (especially strategic trade behavior) and political economy. Hence, in summary, do watch and enjoy the movie. And if it inspires and informs, then go the next step and read the book (Nasar 1998). References Nasar, S. (1998). A Beatiful Mind: The Life of Mathematical Genius and Nobel Laureate John Nash. Faber and Faber. Website Additions. No major new additions this month, unfortunately, although updates continue to be made on the news and research papers section. Interesting Readings. 1. A Now For Something Completely Different: As the euro has finally come of age in its physical introduction ('Small change, giant leap', http://tm0.com/sbct.cgi?s=185070289&i=440935&d=2158940), there are those who are looking to Asia to do the same. But such talk remains very much just that - talk ('Asia Looks To Zones of Free Trade', http://tm0.com/IHT/sbct.cgi?s=131847734&i=441111&d=2161092). 2. Globalization for the Poor: The latest thread in the globalization debate appears to be the benefits or costs of globalization to the poor - as David Dollar and Aart Kraay argue ('Spreading the Wealth', http://www.foreignaffairs.org/articles/Dollar0102.html). 3. Technicalities: Some technical notes on the elasticities of exchange rates in Asian currencies might be of interest to those who are turned on by this sort of thing ('Currencies: Exchange Rate Elasticities in Asia', http://www.morganstanley.com/GEFdata/digests/20020104-fri.html#anchor5). 4. Cooking with Yen: Tokyo has clearly signalled a desire to maintain a weak Japanese yen policy. Is this justified, and how will it impact the rest of Asia? Stephen Jen ('Currencies: Is a Weak JPY Really Bad for Asia ex Japan?', http://www.morganstanley.com/GEFdata/digests/20020107-mon.html#anchor6) believes that it is not; moreover it will negatively impact the rest of Asia. FEER has its own take on the issue ('Risks of a Weak Yen', http://www.feer.com/articles/2002/0202_07/p044money.html). 5. Crossroads for Argentina: Asia Times presents a series of essays on the crisis in Argentina and provides an emerging market prespective on the different aspects of the current - indeed, unfolding - crisis. See 'After the fall: Repercussions of the Argentine crisis' (http://www.atimes.com/global-econ/DA12Dj01.html), 'Economic debacle: The IMF strikes again', (http://www.atimes.com/global-econ/DA12Dj02.html), and 'Argentina, the neo-liberal washout' (http://www.atimes.com/global-econ/DA12Dj03.html). 6. Inflated Expectations: Looks like inflation might crash the euro's party, according to IHT ('Inflation Could Crash the Euro's Party', http://tm0.com/IHT/sbct.cgi?s=131847734&i=452656&m=1&d=2221866). Endnotes. This update is sent by request to subscribers. 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