Saturday, October 18, 2014

Countercyclical Student Demand

I teach a summer course in the CREI Macro Summer School on financial crises. It is going to be a mix of theory and empirics, of looking at the sub-prime crisis and the South Sea bubble, plus everything we know about credit booms gone wrong (the chart on the left shows US GDP relative to trend1890-1940). Last time I taught something similar was two years ago, in the summer of 2006. I had about 15 students or so. It was fun and very interactive, the way I like to teach, but I couldn't help thinking that perhaps, it would have been nice if a few more people had signed up.
Today, the secretary in charge of registration rang me and asked if I wanted to limit registration. Limit registration? I thought I had trouble hearing. She proceeded to tell me that I had 41 students, and that applications were still coming in. Of course, recent minor hickups in world markets may have a thing or two to do with this. I look forward to having a good crowd of central bankers, private sector analysts, and PhD students taking my course. It seems that the most countercylical business you can run is a summer university dedicated to financial and other crises...There is still milk on the shelves of my supermarket, but for how much longer? Spanish lorry drivers have decided to strike, in protest against higher fuel prices. Apparently, transport fees are renegotiated only intermittently (taxi drivers are out of luck completely), and oil at $135 is not making them happy. Apart from the spectacle of cars lining up for fuel (like during the oil crises of the 1970s), it's an interesting exercise in how rigid some prices apparently are - without rigidities in setting prices for truck transport, presumably truckers would care but little (unless demand for their services collapses if they introduce a fuel surcharge). I assume the whole thing will be resolved with a few symbolic compromises, but it could be quite nasty if the strike lasts for more than a week or so. Now, if only I didn't have to worry about getting to a weekend wedding...

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