Thursday, December 18, 2014

First period -overview

After 48 days, I have maybe recovered enough to reflect about the first period, which finished on the 2nd of November. I think it can be useful to know how first courses looked like.

The first period was composed by two courses, Public Economics and Empirical Economics. As my predecessor blogger Martijn said, these courses are meant as the basis on which the following courses are going to construct. They were indeed very important courses, and very different.

Public Economics was deepening in detail the most important cases of market failures (public goods, externalities, asymmetric information, etc.), considering the effects of possible policies. We had two meetings per week: a lecture and a tutorial. They were both held only for the around 20 students of our master. During the lecture, professor Groot was explaining the main arguments of the course, connecting them with contemporaneous debates. Every week we were furnished several articles meant to problematize and expand the subjects from the book, while the professor was always pointing out the concrete aspects of the theory, putting the theoretical arguments in touch with actual problems of the international scene. Especially interesting was the lecture on inequality, where through the web site of the “Global rich list” we where shown in which highest percentage of the world income distribution we were most likely going to be. With a net income of 25.000 euros per year, you would result in the top 1.5 % of world incomes.

A part from the connection with the real world, I find interesting the theory of Public economics in itself. I was always impressed by how economic science allows to deal with sociological and psychological aspects of people’s behaviours in a mathematical and analytical manner. You deal with graphs and formulas, which apparently look arid, but what actually shape them are potential desires, fears, opinions, fatigues and pleasures of people. All the “life lymph” which makes people work, choose whether to affront risk, save or spend, privilege the rich or the poor, keeps dancing in front of you in a ballet of lines and axes, while even the most chaotic aspects of life can show in these limpid formulas where by listening carefully you can still hear pulsing passions and fears. This is the most fun I personally find in Public Economics.

In the tutorial we were instead preparing the exercises for the exam. Tutorials were prepared by students, and every week three or four of us were explaining the exercises related to the book chapters. This made the course quite participated.

On the other hand, Empirical Economics was essentially a course of Econometrics, which was teaching us a medium level knowledge of the econometric theory and of regressions techniques. The course was really important, since it furnishes the main empirical instruments to actually work with economics; and it is the main “technique”, the most important “know how” furnished by the master. This is personally the course on which I was pointing the most in order to find a place in the labour market afterwards.

Nevertheless, it was indeed a very difficult course. Again it was structured in two meeting per week (lecture and tutorial) but for this course students of all masters in economics were together. So in lectures we were around 100 students, in a big hall (the auditorium), while for tutorials we were splitting in smaller groups of around 25 students.

 After the first two lectures which were resuming the basic knowledge of statistics and econometrics (the content of the summer-course), we started with time series, panel data and instrumental variables. At the same time, for each tutorial we had to prepare several exercises, mainly through the use of the software STATA (to learn its use was one of the most important acquirements from the course).

Relating to the course of Empirical Economics, I would like two add two things. On one hand, as I said, it was extremely important. On the other, it was difficult: and it was difficult because the subject itself is complicated, but also because the course was not leading us by hand. The pre-required level of knowledge of the subject was important, and while Dutch students were in general taking the basis course at the bachelors, most part of international students had troubles. So I would say: don’t take this as an argument against choosing the master: the course will in the end make you know econometrics, which is really important. But it won’t be easy. So prepare to acquire most part of the knowledge by self-study: the chapters of the book will help you to understand (the book is indeed very clear and provides several examples), the slides will tell you what’s the essential material you need to know, and once you have read book and slides you can follow the lectures which will make you practice with the subject. So through this triad (book slides lectures) you can expect to pass the exam (and I had indeed a final good grade). But don’t try to change the order of the three, i.e. don’t expect to understand the lectures without reading book and slides, or to understand the slides without reading the book.

In the end, to be true, I found very interesting and fascinating also the course of Empirical Economics. I personally like this abstract thinking, and enjoy how in your imagination all these theoretical forces and cross effects combine giving shape to an intellectual space. If I can give you one hint which cost me several weeks of study and reflection, just remember this: the problem you will face in empirical economics, is basically almost always the same: you have to avoid that the error term is connected at the same time with the dependent variable and with some explanatory variables, because it will give a biased estimator. This can take several names: omitted variables, unit root, autocorrelation… but the phenomenon which causes problem is at the end always this. You maybe now don’t understand my words, but trust me, young Skywalker, they may turn to be useful.

Up to now, I would say that I am really satisfied with the master. It is interesting,  rich in insights, and in general we are followed quite well and almost with a one-to-one attention. Only for one course over four it wasn’t so (Empirical Economics -about the two courses of present period I will write later).  Professors know us very well and it’s perfectly normal to call us by name, in a familiar atmosphere work built on daily basis in a group of less than 20 students. This is totally different from what I was experiencing in Italy. At the same time, the work required is affordable but important, which in the end will make the master useful. And I would like to remind that I am not writing in the interest of USE, I simply express my true impressions as a master student.

With this, I wish you all a nice holiday and Christmas and friends! No matter if you may read in June or August -you always have a Christmas in front of you…