Thursday, December 13, 2007

Problem #1: Microeconomics Exam

In today's Jakarta Post op-ed, Professor Rokhmin Dahuri wrote that capitalism depletes natural resource and precedes global warming. Discuss the flaw, if any, in his argument.

Hint: Use your knowledge of Demsetz's Theory of Property Right,or Coase Theorem (in pdf), or Tragedy of the Commons. No math needed.

9 comments:

  1. Hi Prof,
    How many students are taking this course...? :-)

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  2. I can not see them... :-)

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  3. Oh, I am not the Professor, but I think the students are now off shopping for $295 organic jeans and $24 soy underwear somewhere. :-)

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  4. Rizal, I think that article cannot be a champion of green economics based on any ground. I might be wrong, but I don’t care. I frustrated with that (Sapu Jagat) article.

    Why the author attacked (voters)country A, when his solution is to get “subsidy” from country A. Mind that, it is country A (voters) preference that might help get him the subsidy.

    Bark louder doesn't make him good:)

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  5. Btw, on Coase, that article is a negative externality for me. But of course, I will not pay the author not to write or Jakarta Post not to publish it. The externality only lead to dizziness, nothing major.

    So, I hope this is more cost-effective. I choose to beg Rizal, not to "advertise" this type of article. If this does not work, at least i try:)

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  6. Mova, Sukasah Syahdan of Akal dan Kehendak (see the "of interest" section on the right sidebar) has the good answer in today's, Dec 17, The Jakarta Post op-ed (non permanent link).

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  7. yes, i've red the article. what if I say that not all negative externalities are immediately identifiable and that "sustainability principle" prevented us from creating such externalities?

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  8. I would suggest Grossman and Krueger "Econ Growth and the Environment" (QJE, 1995) to prof Rokhmin.

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