Start an economics discussion in eng tips 10

[2dye4]

I begin to find economics very interesting these days. Not the highly extrapolated academic stuff but the more broad issues that may be attacked with common sense analysis.

I have read frequently more thoughtful analysis on this site than can be attained anywhere else. No we are not economists and don't pretend to be. We certainly don't want economists designing bridges and engines. But there are three reasons we could do moderately well at informing each other about economic idea.

1 We don't have a reputation or ax to grind. (its not our profession)

2 We do have a much above average ability to see dynamics and establish cause and effect of things.

3 We are located at the source of business although used as a service to this but we have a distance that allows us to see a little more than the stakeholders.

As a benefit to ourselves the more we understand the free market and its direction the better we can guide our careers .

 

[dcasto]

In school I had to take the old economics 1 and 2, supply demand, butter and guns... I also took engineering economics. Unlike all those econ sissies, we derived the discount factors from scratch using calculus and yes the realtime discount factor ends up with an eponential function.

Engineers can see the actual costs and call BS when there is market force driven difference and then predict when the artificial difference will disappear or at least discuss it with our peers at work (the marketting guys just assume that 1 point makes a straight line line and that 2 points makes a trend and 3 points just confuse them).

 

[csd72]

I dont have much faith in the simplifications that 'economics' professionals use.

csd

 

[bacon4life]

After taking both general economics and also enginering economics in school, I was pretty excited to apply the principals to my first job. The more I tried to find the basic information to do some of the simpler types of calculations, more I realized much of the theory was based on the assumption of

http://en.wikipedia.org/wiki/Perfect_information.

I am finding out the world of money actually operates "just barely enough information."

 

[dcasto]

Bacon4life, aw and on top of that Monte Carlo economics too.

http://en.wikipedia.org/wiki/Monte_carlo_simulation

And don't forget Linear Programming, I've never seen an Business major get into this....

http://en.wikipedia.org/wiki/Linear_programming

 

[Dinosaur]

I find that Walter Williams, PhD, provides some of the best economic analysis to everyday problems you will find. He is very pro-market, anti-monopoly, anti-government intervention and all that. I hope you can find what you want from his site at George Mason University.

 

[csd72]

Dinosaur,

How can you ensure that you dont have monopolies if you dont have government intervention?

csd

 

[jorton]

2dye4,

I think we are economists, but of a much more practical manner. I would go so far as saying we are ultimate economists. We don't sit around theorizing, we actually design and build within the constraints of our resources (time, money, labor, materials, energy, etc.) The goal of almost every design is efficiency. The goal of most research is to increase efficiency while maintaining an adequate level of safety. Anybody could design and build bridges (maybe not engines) if they had unlimited time, material and labor. For example, the Romans were building bridges 2000 years ago, and we are still building bridges today. What has changed since then? The overall economy of the bridges being built.

However, I think you are discussing the more theoretical concepts of economics. I have difficulty even deciding where I stand on many of the economic issues. For example, I believe in capitalism, but inherently dislike WalMart and other companies that send vast sums of money overseas. Also, many of the theories seem to contradict each other, and they are idealized. What scares me the most about "economics" is that we have folks in DC that constantly tinker with our economy. They are not the first people I would put in charge.

 

[jeebusmn]

Economics is second to covering your own butt. When in doubt, oversize.

 

[SomptingGuy]

I just dug out my "Macro Economic POlicy" lecture notes from 89/90 and had a nose through them. Loads of mathematical models relating inflation, tax, money supply, investment, capital, etc. Then they get Fiscal and/or Monetary policy run through them to see the dynamics and eventual equilibrium. All interesting stuff, mostly rubbish though. Apart from the (obvious) relationship between interest rates and inflation, all the rest of it was hypothetical and constructed after the fact to explain history. It didn't even do that very well.

One thing missing from all the models was the feedback loop provided by economists continually fiddling with the controls based on model predictions.

Did anybody else get forced to sit a course like this?

 

[monkeydog]

Yes Enconomics was one of the required courses, but it counted as a humanities course (creative writing etc)

 

[SomptingGuy]

What really blew it for me was that we (in the UK) had some kind of financial catastrophe during the course (might have been "Black Friday" or something??) where interest rates were raised 3 or 4 times in a week. Our lecturer was like a Cheshire cat during the next lecture, explaining why it happened and how obvious it was to those who knew.

As a hungover student with grades to achieve I ignored the obvious "How come you didn't know this last week and cash in on it?" types of question.

 

[2dye4]

No not interested in anything you learned in school.
We know that was crock.

I would like to know opinions about the globalization trend and its sustainability. What do you think about currency impacts on international trade??
Is it possible that an ever increasing specialization in manufacturing and design is similar to growing instability in markets. As economic efficiency increases is it possible that it also becomes less stable. Meaning as resources are stretched to the maximum does it take less stimulus to create a positive feedback event, ie a setback or crash.

See as engineers we have have a dynamic system model of thinking that may just be very useful for analyzing a situation like this. Can the specialization of manufacturing and design continue indefinitely or is there a natural saturation point where returns are diminished.
Where the noise of business processes render the ideal unrealistic.

 

[GregLocock]

I can't really see a good argument AGAINST globalization, if by that you mean the tendency for industries/organisations to migrate to where the conditions are best suited to that activity.

On the other hand that doesn't mean that all industries or activities will be performed everywhere, leastways I won't be buying shares in the Eskimo Banana plantation, or the Kuwait Umbrella factory.





Cheers

Greg Locock

Please see FAQ731-376 for tips on how to make the best use of Eng-Tips.

 

[livingston]

It seems to me that companies take globalization to mean make or buy your products where labor is the cheapest. I don't see how that helps anyone.

 

[Gymmeh]

Globalization helps the poor third world counties stabilized because they have a flow of money which inherently increases the quality of life, makes people lazier and, less hostile.

Although along with this, there is the Newton’s Third law... someone has to loose their quality of life and become more destabilized… See most of the “Rust Belt” area’s in the US, example. Chicago has such a nice crime rate, poverty, etc… when it once was a great industrial city.

Greg- I would say arguing this is very relative… a Steel worker from the US that is unemployed because the market move over seas may have a good argument. I saw a nice picture of a welder somewhere in Asia using a news paper to protect his face from the weld! How can a US/EU company compete with that? If they have to comply with OSHA, unions, insurance, etc…. I am sure when the Asian dies from skin cancer or some other work related issue from welding, no one but his mother knows/hears about it…
I found the Img.

http://www.weldreality.com/welding without helmet.JPG

I would say there is no way you can argue against globalization, if life was considered a right around the world. This would keep things inexpensive and provide a higher standard of life for the lower classes around the world.

 

[csd72]

I have seen guys in nepal, crushing rocks with a hammer for concrete aggregate. I really dont think it is these small businesses that are competing with the west.

Anyway, you cant call yourself a capitalist and then argue against free trade.

csd

 

[Ashereng]

Allocation of resources, on a global scale, is what most people think of when they think globalisation.

If you can get the same product, from a cheaper source, wouldn't you? That is capitalism.

If two people sell the same product, I should be able to buy from either, without imposed penalty. That is free trade.

All of these things sound good, and in principle, are. The problems are in the details, in this case, the execution of these ideas. Usually, there is short term pain for the entrenched, and the long term gain usually goes to someone else.



"Do not worry about your problems with mathematics, I assure you mine are far greater."
Albert Einstein
Have you read FAQ731-376 to make the best use of Eng-Tips Forums?

 

[Gymmeh]

Ashereng,

You forgot one thing,

Gov'ts are supposed to be for protecting their people. which also applies to "All of these things sound good, and in principle, are. The problems are in the details, in this case, the execution of these ideas. Usually, there is short term pain for the entrenched, and the long term gain usually goes to someone else."

 

[csd72]

The world changes, some jobs change or even fade away. You cant start unnaturally propping every industry that doesnt work. People retrain and move on.

Just as you may have to do when the world runs out of petroleum (move over to biofuels perhaps?).

csd