Category Archives: Computer Economics

Economic Electives

Economics courses are taught with lecture types and urges scholastic economists to adopt more active, hand-on teaching techniques. Salemi (2002) makes a strong case for active participation of students in the classroom, mentioning work of instructional psychologists and educational professionals, while Simkins suggests likewise that ‘significant knowing’ requires the student to actively participate in the experience. While these and numerous other short articles provide proof for the need for active earning normally, a number of other articles go over particularly the use of computer system applications or labs in the economics curriculum. King and LaRoe describe the economics curriculum at Denison University that requires students to take a variety of laboratory courses as part of the economics significant and provides some informal proof about the effectiveness of this departure from the standard curriculum. The approach described in this paper shares lots of resemblances with the strategy explained in King and LaRoe. However, the exercises described here are slightly more advanced and take place within the course, not in a separate laboratory duration. In the same vein, Santos and Lavin (2004) describe a research curriculum that teaches students the best ways to find and chart macroeconomic information, access journal posts and compose papers on economic problems. They present some evidence that this method helps students attain ‘deep learning’. One final example of the efficiency of computer applications is found in Kendrick, Mercado and Amman. They supply a series of examples making use of computational economics that enable students to be imaginative and end up being more deeply involved in their own education. With this literature in mind, this paper describes one method, incorporating computer applications, that likewise encourages active learning economics electives courses. The 2nd section of this paper describes the total structure of a laboratory based course. The third area talks about functions of an excellent laboratory assignment for an optional class. The fourth area offers advantages and disadvantages of this approach. The fifth section goes over some information of this method applied to a course in financial development. The sixth section provides some initial examination of this technique, and the 7th area provides a concluding thought. Example projects are included in the appendices. Structure of a lab-based optional although laboratories play a central role in a lab-based course, they do not have to control the class. In my course in economic growth (explained in even more information later on), students total 4 laboratories during the course of the term with a partner and afterwards finish one lab on their own in lieu of a last test. In complete, all five laboratories count for 25 % of the course grade. In addition, students are designated a 15 to 20.

Page final paper (25 % of the course grade) where they are required to utilize regression analysis as proof for a minimum of among the points made in the paper. In this upper-level optional, students are also given a take-home midterm, which takes the kind of a five-page essay (20 % of the grade), designated to offer an oral presentation of a journal post (10 %), take two tests early in the semester (5 %) and are offered a participation grade (15 %). Most of the students in the course are accustomed to the lecture/exam format in their economics classes and the quizzes serve the purpose early in the semester to transition them to a format that relies more greatly on papers, presentations and involvement (i.e. bad performance on the tests indicates the requirement for enhanced effort). This structure is helped with by the reality that the class is reasonably little, with approximately 20 students. This particular course is taught at an extremely selective liberal arts college and the prerequisites consist of intermediate macroeconomics and microeconomics as well as economic statistics. Instructors with less able or ready students might want to substitute extra tests, in-class exams or issue sets that count on the more simple book product for some of the paper and presentation assignments.

In addition, laboratory tasks can be tailored to the elegance of the students; assignments can focus more on descriptive stats and graphing for students who are not knowledgeable about numerous regression anlaysis.
Only 5 class periods are designated as labs, with the function of the lab periods being merely to obtain the students started on the project. The subject of regression analysis does overflow into other class periods in a variety of ways and some adjustment to standard lecture notes is needed to incorporate the lab experience into the course content. Initially, students commonly ask questions about the lab in subsequent class periods, especially when the topic of the class is related to their labs. In addition, in order to integrate the labs into the course material, existing and previous laboratories are often referenced in relation to the concept being discussed. The nature of the lecture is also geared in the direction of students who will do empirical work as some time is invested going over the empirical effects of the theory talked about. Furthermore, the articles that students provide are carefully selected to consist of relatively simple however creative empirical strategies that the students explain to their classmates. Lastly, econometric problems are gone over in class on an as-needed basis. Students in the class make use of the menu-driven STATA, which they learned in their financial statistics class. The class requires access to a computer system lab at least 5 times during the term. Students work in pairs throughout the lab duration so only one computer system for each two students is required.

The laboratory projects in such a course include a small number of open-ended concerns that students are required to answer utilizing regression analysis. The nature of economics indicates that much of exactly what is taught in economics courses has empirical implications and the secret to creating a great project is to have students think about the proof for these effects. The growing accessibility of complimentary or affordable economic data on the Internet makes empirical work possible in almost any economics optional. In creating the tasks, a crucial principle to keep in mind is that the function of the assignments is not to teach econometric types, nor is it for students to produce undeniable, publishable outcomes, but to teach the students the material of the elective course. The overarching principle of this approach is that it is the process of empirical investigation that creates the finding out chances. For that reason, the projects ought to emphasise the ramifications of concept talked about in course, as opposed to the application of a ‘method of the week’ as can take place too typically when the focus is on learning data. Depending upon the ability levels of the students, the assignments might ask the students to duplicate, with description, a lead to their textbook or in a course reading. This very same project can be made a little harder by asking the concern in a different way than students have seen in course product prior to. For more advanced students, the question could need them to extend product beyond that which was gone over in course. Tasks can likewise be made more difficult by providing less direction on the information and variables that ought to be utilized. In particular, projects for which students are expected to make use of all the data in an information set supplied by the instructor without improvements ought to be stayed clear of because these kinds of projects can be finished by students without an understanding of the material.

As an example, in a macroeconomics, cash and banking, or financial policy course, students might be offered a reading on inflation/output tradeoffs where evaluation of the Phillips curve is talked about. For instance, Lansing (2002) offers a discussion accessible to lots of undergrads that demonstrates how the slope of the Phillips curve might be different depending on the time period analyzed. A relatively simple task would ask the students to replicate this work with data from various time periods than that made use of by the author, or various measures of inflation, to verify that the conclusions are durable. A somewhat more difficult task might ask the students to read the exact same post however ask a less directed concern, i.e. estimate the cost of a one portion point decrease in the inflation rate. Obviously, to answer this question, the students have to approximate a Phillips curve, however they initially need to recognize that they do as well as to wrestle with the issue of altering slopes. Additionally, one might be thinking about having Integrating Computer system Applications into Economics Electives students examine these relationships for a subgroup of the population (e.g. utilizing joblessness rates for teens, females, Hispanic males, etc.) and go over the policy effects of their results.

Lastly, a much more difficult task might ask students a similar concern, but would not offer a reading and would require the students to either reason through an empirical specification based on course conversations or discover a pertinent article themselves. For students who are inexperienced in using empirical evidence for their ideas, these kinds of assignments are very tough since the method economics is presently taught does not often need students to conside ways to form empirical requirements constant with their concepts. Much of the value in teaching content via labs originates from this really exercise– establishing and justifying an empirical spec needs students to believe very exactly about their concepts. A good source for timely and interesting laboratory concerns for a variety of courses can be found in publications meant for a policy-oriented audience (e.g. Fed publications, World Bank publications, many papers composed at public policy think tanks). Numerous of these sort of posts present empirical analysis that is extremely available to students who have actually had one data course.

~~ These are notes from my UoM Computer Economics Class ~~


Computing Economics And IT Operational Budgets

Computer system Economics has actually been doing a thorough study of a couple hundred North American IT buy Twenty Years now, as well as with that skinny amount of data compared to the millions of companies in the area, the trend information across those years is interesting. In the most current survey, 202 IT officers were surveyed and asked a load of questions referring to their IT budgets and staffing expectations for 2009 and 2010. The study was performed in March, and the report came out in late June, and I simply found out about it recently, so there is a rather big lag. Because the survey concerns were asked, the American economy seems to have supported some, and now economists are forecasting that we could even exit the recession that began in December 2007 by the end of September. (We won’t know if this has actually happened till early next year thanks to all this lagging.).

Computer Economics states that in a normal recession, fewer than half of IT executives polled state they will certainly be enhancing their IT operational spending plans, and undoubtedly, in the spring when the study was done, 38 percent of those polled said they were cutting budgets and just 45 percent said they were increasing IT spending; 17 percent stated they would spend about the very same quantity this year as they did in 2008. The report states that this is not as bad as the situation was in 2002, in the wake of the dot-com and ERP busts and the 9/11 terrorist attacks, which sent out the world into an economic crisis. Back then, only 36 percent of IT shops polled by Computer system Economics stated they would increase IT budgets. Oftentimes, companies were currently drunk with excess capability thanks to IT binge spending, and it took many years to burn off that capability. (That’s my analysis. Computer system Economics had some fuzzy reasoning about the decline being led by innovation in 2002-2003 and the 2007-2009 recessions being led by real estate and financial collapses. Who got all of those servers back in 2000 and 2001? Every company in every industry on earth was stressed that the Web was going to leave them behind.

When average throughout all business checked by Computer system Economics, IT budget plans are expected to be flat as a pancake in 2009, much like they were in 2004. The company reckons that, based upon exactly what survey participants said the average IT functional budget in North America grew 2.5 percent in 2005, rose by 4.1 percent in 2006, peaked at 5 percent growth in 2007, and declined to just 4 percent growth in 2008. As you can see, IT managers and their managers in the boardrooms of North America are keeping IT spending plans on a shorter leash than in the late 1990s, when spending plans were growing at double-digit rates.

If there is a distressing metric, it is that some 49 percent of IT execs said they would actually spend less dough than they had actually assigned to them for the budget plan in 2009, meanings that more pressure to cut costs than they are already under. Only 9 percent of the officers checked stated they would invest more than they were budgeted.

IT budgets are also on the decrease versus company earnings, according to Computer Economics. In 2004, the IT budget plans of the companies surveyed averaged 1.9 percent of profits, which reduced to 1.7 percent in 2005 and rose to 2 percent of profits in 2006. In 2007, that ratio between the IT budget plan and business sales slipped to 1.8 percent, and fell additionally to 1.5 percent in 2008. It is anticipated to be 1.5 percent in 2009. The quantity of IT spending plan cash invested per user is likewise on the wind down. In 2012, business invested $6,924 per user for IT operations, below $7,583 in 2006 and $8,010 in 2006. (Those are inflation-adjusted figures.) For 2009, Computer system Economics was informed that the typical IT investing per user would rise to $7,284, however it remains to be seen if companies attack those targets– particularly with numerous IT managers expected to make much deeper cuts than their then-current budget plans back in March had currently done.

As you may expect, producing and retail companies have been attacked the hardest in terms of IT spending plans, while energy, healthcare, services, and banking and funding firms have held up. (Banks didn’t actually take the hit– bear in mind, we bailed their sorry properties out.) Discrete producers report a 5.5 percent decrease in IT spending plans, and process manufacturers are taking a 2.5 percent hit. As a group, retailers are expecting to take a 1 percent budget hit in 2009. Energy business report a 1 percent increase in IT spending plans, services companies anticipate to invest 4 percent more, healthcare companies are looking at a 4.7 percent boost, and those banks are anticipating to spend 4.9 percent more. If I didn’t call your name there, your IT operational budget plans throughout your market are flat. Sorry.

So that was the functional budget. The capital budgets have already been frozen. In 2006, IT capital budgets throughout the business polled by Computer system Economics increased by 5 percent, and enhanced by 4 percent in 2007. In 2008, capital budgets were flat, and they are anticipated to be flat this year, too. Server spending is down, however might recover in the 2nd half of the year. (We’ll see. I stay skeptical.) Some 48 percent of the IT execs polled said they would be able to spend all the hardware and software application budget plans they have actually been designated, however 43 percent said back in March they most likely would not have the ability to. Only 9 percent state they will have the ability to spend more. I wanna know who these business are.

When it comes to staffing, Computer Economics states that almost half of those business polled (46 percent) are cutting personnel this year, and a quarter are making cuts of 10 percent or much deeper in 2009. Some 27 percent of those polled say they are keeping their IT staff member ranks the very same, and another 27 percent report that they are working with. It is unclear how the numbers will certainly rinse.

Usually, undergraduate economics electives focus on content instead of approaches, in spite of the truth that empirical work is essential to the practice of economics. This short article describes an alternative approach to teaching material by utilizing computer system applications that emphasise the empirical testing or applications of the theory. Students enjoy economics courses more when they are taught in this way and laboratory projects provide chances to teach a broad skill set that is important to lots of undergraduate economics majors.

In spite of persuasive arguments in favor of moving away from lecture/exam formats for undergraduate economics courses, the substantial bulk of economics classes are still taught in the ‘chalk-and-talk’ format.1 Some classes, a lot of frequently stats or econometrics, have an add-on lab element in which students do participate in active knowing of analytical strategies, while a few economics programs include different, laboratory courses. On the other hand, electives in an economics curriculum usually focus on material, rather than empirical techniques. The essential feature of all these approaches is that the manner in which material is typically taught in an economics elective is divorced from exactly what students find out in their approaches classes. This post describes an alternative technique that utilizes computer applications that integrate content and empirical techniques. This approach attempts to assist students establish an understanding of content in a manner that more closely resembles the understanding of an empirical research economist. The economics education literature supports using alternative teaching types.

~~ These are notes from my UoM Computer Economics Class ~~


Computing Economics And Social Structure

Today’s financial markets experience larger swings partly because of program trading, where large shareholders utilize computers to choose when to purchase or offer stock in big amounts. When the defined conditions are fulfilled and the programs trigger, the big deals can trigger other programs to trigger, leading to a spiral of selling and purchasing that produces the huge swings in the market.

On the other hand, computer system trading has actually also enabled more people to participate in the stock exchange with low-priced Internet stock trading sites.

There has actually been a meteoric rise in online company, a phenomenon that is termed e-commerce. Many consumers now pay their expenses totally online. Online shopping at websites like Amazon has actually ended up being routine for many consumers. It did not take many years for online auctions at sites such as eBay to become enormously popular.

Electronic commerce, commonly known as (electronic marketing) e-commerce or eCommerce, includes the trading of products or services over electronic systems such as the Net and other computer networks. The amount of trade performed digitally has actually grown extraordinarily with extensive Net use. Using commerce is conducted in this way, spurring and making use of innovations in electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic information interchange (EDI), stock management systems, and automated data collection systems. Modern electronic commerce normally uses the Internet at least at some point in the transaction’s lifecycle, although it can include a larger variety of innovations such as email too.

A huge percentage of electronic commerce is carried out completely online for virtual products such as access to premium material on an internet site, however many electronic commerce includes the transport of physical products in some way. Online merchants are occasionally called e-tailers and online retail is often called e-tail. Almost all big sellers have electronic commerce presence on the Net.

Electronic commerce that is carried out in between businesses is described as business-to-business or B2B. B2B can be open to all interested parties (e.g. commodity exchange) or restricted to specific, pre-qualified participants (private electronic market). Electronic commerce that is performed between companies and consumers, on the other hand, is referred to as business-to-consumer or B2C. This is the sort of electronic commerce performed by business such as

Electronic commerce is typically thought about to be the sales aspect of e-business. It also consists of the exchange of data to help with the financing and payment facets of business deals.

The significance of electronic commerce has changed over the last 30 years. Initially, electronic commerce meant the assistance of commercial deals online, using innovation such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT). These were both presented in the late 1970s, enabling companies to send out industrial documents like order or invoices digitally. The development and acceptance of credit cards, automated teller equipments (ATM) and telephone banking in the 1980s were likewise kinds of electronic commerce. Another kind of e-commerce was the airline reservation system symbolized by Sabre in the UNITED STATE and Travicom in the UK.

Online shopping, a crucial element of electronic commerce was created by Michael Aldrich in the UK in 1979. The world’s very first taped B2B was Thomson Holidays in 1981. The first documented B2C was Gateshead SIS/Tesco in 1984 The world’s very first tape-recorded online consumer was Mrs Jane Snowball of Gateshead, England During the 1980s, online shopping was likewise used thoroughly in the UK by auto manufacturers such as Ford, Peugeot-Talbot, General Motors and Nissan. All these companies and others used the Aldrich systems. The systems utilized the changed public telephone network in dial-up and rented line modes. There was no broadband capability.

From the 1990s onwards, electronic commerce would in addition consist of enterprise resource preparing systems (ERP), information mining and data warehousing.

A very early example of many-to-many electronic commerce in physical goods was the Boston Computer system Exchange, a marketplace for utilized computer systems launched in 1982. An early online details marketplace, consisting of online consulting, was the American Details Exchange, another pre Internet online system introduced in 1991.

In 1990 Tim Berners-Lee invented the Web and changed a scholastic telecommunication network into an around the world everyman everyday communication system called internet/www. Company on the Internet was strictly prohibited up until 1991. Although the Internet ended up being popular worldwide around 1994 when the first web online shopping began, it took about 5 years to present security protocols and DSL enabling regular connection to the Internet. By the end of 2000, lots of European and American company companies offered their services with the World Wide Web. Ever since people started to connect a word “ecommerce” with the ability of purchasing numerous goods with the Web utilizing protected protocols and electronic payment services.

In the United States, some electronic commerce activities are managed by the Federal Trade Commission (FTC). These activities consist of the use of industrial e-mails, online marketing and customer personal privacy. The CAN-SPAM Act of 2003 develops nationwide standards for direct marketing over e-mail. The Federal Trade Commission Act regulates all kinds of advertising, consisting of online advertising, and states that advertising should be sincere and non-deceptive. Utilizing its authority under Area 5 of the FTC Act, which prohibits unfair or misleading practices, the FTC has brought a number of cases to implement the pledges in corporate privacy statements, consisting of pledges about the security of customers’ personal info. As outcome, any business privacy policy related to e-commerce activity may be subject to enforcement by the FTC.
The Ryan Haight Online Drug store Consumer Protection Act of 2008, which entered law in 2008, modifies the Controlled Substances Act to deal with online drug stores.

Contemporary electronic commerce involves everything from ordering “digital” material for instant online consumption, to buying traditional goods and services, to “meta” services to assist in other kinds of electronic commerce.

On the consumer level, electronic commerce is mostly carried out on the Web. An individual can go online to acquire anything from books or groceries, to costly products like property. Another example would be electronic banking, i.e. online expense payments, buying stocks, moving funds from one account to another, and initiating wire payment to another nation. All of these activities can be done with a few strokes of the keyboard.

On the institutional level, big corporations and monetary institutions utilize the web to exchange monetary data to assist in domestic and worldwide company. Data integrity and security are extremely hot and pressing issues for electronic commerce today.

~~ These are notes from my UoM Computer Economics Class ~~