Musings on African Politics

So much seems to be happening in the continent that a single post should not do justice to this topic but I shall start somewhere.
In the case of Egypt, the recent uprising, which for most part was inevitable in helping stamp out the sheer top-level corruption that had become commonplace in the country over the years, has left the country struggling to bring itself to ground once more. As levels of debt continue to rise by the increased borrowing necessitated by the economic shock, the question of sovereign riskiness has been one that is also under review. The hope would that, normal activity shall soon pick up and that administration transitioning shall not cause any further drag on the country as a whole economically. A debt-to-GDP ratio of 70% is not too comforting at all for Egypt given it's potential otherwise.

The political question of whether the ousting of Hosni Mubarak I would not dwell too much upon as this eventuality, which to me has been long overdue, was sure to come round at some time in his time as the dictator he had built himself to become. Mubarak-type sometimes seems to be one that some if not most African leaders seem to gravitate towards after winning a couple or more elections. Power simply becomes too sweet and the word "enough" seems to slowly dissolve away and in this case, it might have gone down the Nile in a silting process. Libya, Cote d'Ivoire, ZImbabwe, Kenya with the times of Daniel arap Moi and Uganda with Museveni share a history of long-lasting presidents or colonel's, not particularly placing all these countries in one big particular basket in any particular reason other than the aforementioned. It seems as though leaders in these countries just couldn't get enough and feel as if things would not go right if they do not stay on for endless terms in office. Even assuming things go right, a statement which might sometimes be mistaken for successfully "managing" any meaningful opposition, what would motivate a leader to want to hold office for more than two decades, 25 for the good old Museveni?

Libya I feel should not be discussed in the same light as Egypt and so a later post seems in order. And in that same vein is ZImbabwe, Kenya and Cote d'Ivoire. Stay tuned!

Trade is made of...

Prof. Art Carden examines how trade creates wealth, by allowing people working together to produce more than they could individually. Using a simple two-person example, he shows another example of how cooperation during production benefits everyone.

Credit to Marginal Revolution.

A Coase Theorem in Action

Credits to Greg Mankiw.

The theorem brings forth the idea that what really matters is that everything is owned by someone and that, initially, who owns what doesn't matter.

There sure is nothing like a free lunch.

It might've been the only sensible conclusion that I would make out from a recent class I sat through in Optimisation Techniques so I take a minute to rewrite it here.
The discussion rotated around functions and the different possible manipulations that make them fancier to suit the economist's intentions as it is for most mathematics for economists.

Concentrating on the cost function for the purpose of making my point, I came to piece it together that one is justified in saying there is nothing like a free lunch because the cost function is an increasing function in all possible domains that it can be extended to cover. The baker definitely incurs expenses and probably due to inflation these rise with time t eventually bring about actual price rises. Not that there'd be free lunch if costs stayed stagnant because I'd still assume that there'd still be fixed costs to be covered. If there was depreciation, then I'd also assume that lunch would get more affordable but not completely free. When a charity gives lunch for free, assuming bread constitutes lunch, there still needs to be someone somewhere who sponsors that meal or the participants themselves donate at their own discretion.

There is no free lunch in deed.

Pareto Efficiency?

Whoever said that a distribution set can be Pareto efficient and disgusting was right on the money. In fact I tend to think that the latter is sufficient for the former, practically. Enough said.