(Lucas) sought a 1957 book by Richard Bellman, Dynamic Programming. Bellman was a mathematician working at RAND Corporation, quite literally a rocket scientist. He had invented a set of techniques designed to optimize decisions in which long chains of choices had to be made amid changing circumstances -if for example, you wanted to fire a missile into the upper atmosphere and hit a target halfway around the globe, or even travel to the moon".and
"Lucas hoped the same methods could also be applied equally to calculate a point at which to spend or save, to decide when to draw down inventory, or to switch from stocks to bonds. Anything that required a formal statement of the links between present and future was a candidate be improved by rocket science".Now I know why I had so much trouble preparing for Macro mid exam. (grin)
OK, let's just play jazz.
Rizal, pls try to think an aggregate for the size of a province, then find an applicable macroeconomics concept for our country to be divided into smaller independent contexts. :)
ReplyDeleteGood thought. Maybe we can then come up with the optimal number of local entities for economic growth --I don't know about separatism, though.
ReplyDeleteIf you like Bellman, read his autobiography, "Eye of the Hurricane" He may be smart, but I wouldn't wanna be him.
ReplyDeleteThere's nothing about separatism.
ReplyDeleteThink Indonesia as an unconditional free trade region.
Take a standard approach:
Y = C + I + G + (X-M)
AD = SRAS, P = Y
Sumatera:
Ysum = Csum + Isum + Gsum + (X-M) between Sum & the rest of Ind
ADsum = SRASsum, Psum = Ysum
Jawa:
Yjaw = Cjaw + Ijaw + Gjaw + (X-M) between Jaw & the rest of Ind
ADjaw = SRASjaw, Pjaw = Yjaw
Indonesia:
Yind = Cind + Iind + Gind + (X-M) between Ind & the rest of ind
ADind = SRASind, Pind = Yind
Yind = f (Ysum, Yjaw, Ykal, Ysul, Ytim)
Pind = f (Psum, Pjaw, Pkal, Psul, Ptim)
With Ind monetary authority who controls dP = f (dRate)
Balance of Payment can be set something like this as well, right?
Eg., you're a Jawa income tax resident:
- working in Sumatera,
- sending money to your family in Jawa for their spending in Jawa,
- lending money/invest to Sumatera business,
- buying land in Kalimantan,
- spending money to your parents in Sulawesi, and
- giving charity to the people of Papua.
You can still work out the BoP, right?
I haven't looked at that possibility, but, alas, it has to wait since I still have piles of papers to digest.
ReplyDeleteI thought you wanted, using Bellman's dynamic programming, the point at which a region decide to separate from or stay within the country --which is a very interesting exercise, too