Monologue 2002

/2002/September/October/November/December

Tuesday, December 31, 2002:New Year Eve Party

Andrei and Natalia invited us to celebrate the new year. See the monologue for January 1, 2003.

Saturday, December 28, 2002:Studying during Holidays

I have started looking for a research topic. I read several papers on, in particular, industrialization and HIV vaccination. Yet, as Mario wrote me, specifying a topic is not an easy task. Even worse, it's hard to keep studying during holidays as Cisco exactly pointed out...

Thanks a lot for your warm messages, Lura, Sunny, Fernanda, and Kyoko. Best wishes in the New Year!

Wednesday, December 25, 2002:Merry Christmas!

It snowed all day long yesterday. It was really beautiful. I got a phone call from my father in the mornig yesterday, and he told me that my mother's operation succeeded. This was the greatest Christmas present.

I received lots of Christmas cards and messages from friends of mine. Thank you very much, Dendy, Atonu, Natalia, Mario, Omar, Cisco, Seiko, Obata-senpai, Minako, Mai, Miyuki, Yi, Asuka, Miyoshi-senpai, and Ayumi. Merry Christmas to you too!

Friday, December 6, 2002:Mexican TGIF

I forgot to go to Mexican TGIF. Too bad.

Thursday, December 5, 2002:Last lectures

All the courses ended today. This quarter passed extremely fast.

University e-mail system was out of service all day long.

Wednesday, December 4, 2002:Mario's presentation

In Professor Townsend's class, Mario gave a great presentation.

Tuesday, December 3, 2002:Presentation

I finished with the presentation. It was a good experience. I learned a lot from presentations by Gustaf and Emil. They did pretty well.

Monday, December 2, 2002:Practice

Martin helped me to practice giving presentation. He also read through my two refree reports and gave me valuable comments.

Sunday, December 1, 2002:Surprise!!

We held a surpsise party to celebrate Atonu's 27th birthday. It was really exiting, when we secretely waited for Atonu and Shaolly at their apartment.

Saturday, November 30, 2002:First Draft

I finished writing the first draft of critical paper on Alesina and Rodrik(1994).

Friday, November 29, 2002:Briscola

I put a link to Atonu's webpage.

Gino, Sonia, Chihiro, Sonia, I and many others enjoyed Briscola, a very famous Itarian card game, for a while after dinner.

Thursday, November 28, 2002:Thanks Giving Day

Emil, Martin, Cisco, and I enjoyed some beer at Emil's place from 3:30pm. His apartment was cool. We saw some pictures of Snejana, Emil's girl friend. She was beautiful.

Dendy and Lura held a nice casual party at their place. We joined them at around 7:30 pm. They cooked a variety of delicious southern American dishes and we brought some wines. We had great time. Thank you, Dendy and Lura.

Wednesday, November 27, 2002:Birthday

Birthday did not seem to be what I could control or change. Many friends, cousins, and parents gave me birthday messages. I truly appreciate them. Thank you very much, Miyuki-chan, Kelly, Mina-chan, Junko-san, Chihiro, Martin, Sakura-chan, Shu-chan, Ryo-chan, Father and Mother.

Tuesday, November, 26, 2002:Last lecture

We had the last lecture of Professor Yorukogulu. Gustaf, Emil and I were going to give presentation on articles that each of us chose next Tuesday.

Monday, November, 25, 2002: Take care

I saw Gustaf walking on crutches. Oh, poor Gus.

Sunday, November, 24, 2002:Football

Selected players in our department played football against GSB at Stagg Field. I went to cheer them, although it was freezing today. Ricard and Gustaf got injured in the game and went to the hospital. I hope that they will recover soon.

Saturday, November, 23, 2002:Referee Report

I went to Harper library, and wrote a summary and crticism on Mankiw, Romer and Weil(1992).

Friday, November, 22, 2002:Treasure Box Again

Mother sent me a package containing some food, clothes, a magazine, and some pictures taken at Ryo-chan's wedding. Thank you.

Thursday, November 21, 2002:Professor Becker's Problem set

I started working on Mankiw, Romer and Weil (1992). It had a lot of weak points. Still it was worth studying.

Martin and I helped some first year students to do their assignment for a class. If an industry exhibits constant returns to scale, does each firm in the industry also has constant returns to scale technology?...The answer should be "Not necessariry".

Thanks Giving Holidays would start from next Thursday. The day before Thanks Giving would be supposed to be my birthday. Yet I decided to postpone it to next year.

Wendnesday, November 20, 2002:Robert Solow

I read Solow (1999), a paper that summarised Neoclassical Growth Theory which originated in Solow (1956). This paper was useful to understand Mankiw, Romer and Weil (1992) that I would present in Growth Theory. The Solow model was quite old, and quite problematic actually. Yet it was still around. Growth Theory had not grown, probably.

Tuesday, November 19, 2002:Assignment

The order of presentation was determined in Growth Theory. Gustaf, Emil and I would present on December 3. Each of us would have only twenty minutes for presenting a summary of a paper and criticism on it.

Monday, November 18, 2002:Make-up class

After two-hour class given by Professor Townsend, we had a make-up class taught by Professor Yorkoglu. It was planed be a three-hour session, but it ended in a two-hour session because Professor got tired.

Sunday, November 17, 2002:Snow

We had some snow this morning. The roofs of the dormitory and the ground were covered with snow. There seemed to be to much snow to play football.

Gino, Sonia, Sandorino, Luis, Milano, and I had lunch at Nile, a Middle East restaurant, on the 55-th street.

Saturday, November 16, 2002:The day before

I read Prescott and Townsend (2002), a paper titled "Mechanism Design and Assignment Models". It was interesting.

There will be a football game between the PhD students at Department Economics and the students at Graduate School of Business tomorrow. Omar, Tee, Gustaf and many others will play for us. I should go to the field and cheer them up.

Friday, Novmenber 15, 2002:Special TGIF

I read Chiappori and Ekeland (2002), a paper titled "The Micro Economics of Group Behavior: Identification".

Smile, Emil, and I went to Q Club. We had a special TGIF, a casual party held on every other Fridays for Econnomics Ph.D students and faculties, organized by Professor Sonnenschein, the new Department chair. We had better food and more wine than usual TGIF. That was cool.

Rola, Samantha, John, Emil, Martin, Ben, Raghu, and I had dinner at Medici, an Italian pizza restaurant on the 57-th street. I enjoyed spinaci lazania there.

Thursday, November 14, 2002:Classes and reading

I had a couple of classes from 9:00am: Nonlinear Econometrics in which we learned estimation of treatment effects, matching method, and so on, Growth Theory in which we covered two papers, and Development Economics in which we learned sufficient conditions for collective model and identification problem. After the classes, I attended TA session for Development Economics in which the solutions for the problem set were briefly explained.

I read Chiappori and Ekeland (2002), a paper titled "The Micro Economics of Group Behavior: General Characterization" in the evening.

Wendnesday, November 13, 2002:Problem set

After Professor Townsend's class, I started working on Professor Chiappori's problem set. It was long and full of algebra.

Tuesday, November 12, 2002:A Long Day

I attended three classes and one working group (seminar) over lunch, and read Prescott and Townsend (2001), a paper titled "Firms as Clubs in Walrasian Markets with Private Information". Exhausted...

Monday, November 11, 2002:Practice Writing Summary

As you noticed, I have been practicing writing summaries of papers here. I would appreciate your comments.

I read Alesina and Rodrik (1994) and McElroy and Horney (1981) in the morning.

In Professor Townsend's class, Martin cleverly poited out whether we could fairly compare the two models appeared in Paulson and Townsend (2002), since the setups in the two models were different. I am going to start reading Prescott and Townsend (2001) tonight.

Sunday, November 10, 2002:Growth and Inequality

I reviewed Jeong and Townsend (2002), a paper titled "Models of Growth and Inequality: An Evaluation" in the morning. As Kuznetz (1955) and many others pointed out, many countries experienced changes in the degree of income inequality among people in the process of economic development. Using the Thai Socio-Economic Surveu data, Jeong and Townsend (2002) compared two theories explaining the phenominon. The first model was proposed by Lloyd-Ellis and Bernhardt (2000), so-called (wealth constrained) occupational choice model, or LEB model. Agents chose a occupation from two types, a wage earner and an entrepreneur. Agents could make more money by choosing to be an entrepreneur. Yet they needed to pay a fixed cost determined by their ability, using only their bequests from their parents. This LEB economy grew from two sources: capital accumulation of entrepreneurs in modern sector and occupational shifted from lower-income occupation to higher income occupation. The second model was proposed by Greenwood and Jovanovic (1990), so-called (wealth-constrained) financial participation model or GJ model. There were technologies available that could convert the capital investment today into a yeild tomorrow. Agents could choose either constructing a financial portfolio by themselves or asking financial intermediaries to construct the better portfolio, in the sense that portfolio constructed by the financial sectors would make higher yield. Again, agents had to pay a fixed cost to join the intermediation coalition. Jeong and Townsend concluded that the LEB model performed better than the GJ model in explaining the dynamic, aggregate and decomposed features in Thailand for the levels and growth of income. Both models were close in predicting the decomposed inequality changes, though the LEB model has a slight edge. However, the GJ model did better than the LEB model in explaining the levels of inequality as well as the shape of income distributions. They wrote that they could not conclude that one model strictly dominated the other.

I read Paulson and Townsend (2002), a paper titled "The Nature of Finacial Constraints: Distinguishing the Underpinnings of Models of Growth with Inequality" in the afternoon. Financial market imperfections were at the heart of a variety of models, including models of economic development where economic growth came at the expense of increasing inequality. Paulson and Townsend (2002) compared limited commitment model, worked out by Evance and Jovanoviv (1989) and Banerjee and Newman (1993) among others, with moral hazard model, examined by Aghion and Bolton (1996). In limited commitment model, the financial constraint was due to limited commitment. Agents could supplement their personal stake in entrepreneurial activities by borrowing. Wealth played the role of collateral and limited default (this was an quite important feature of this model). Thus low wealth entrepreneurs might be constrained in investment and some potential entrepreneurs might be unable to borrow to finance entrepreneurial projects. Agents' utility, which was not explicitly defined though, seemed to depend only on consumption (this implicit assumption caused the following result of this model). Thus, they borrowed more as their wealth increased so that they could maximized their profit, and consumption (this was the result of this model). In contrast, moral hazard model focus on financial constraint that arose from moral hazard problems. Since effort was unobserved and repayment was only feasible if the project was successful, poor borrowers would face little incentive to be diligent, increasing the likelihood of project failure and default. In order to break-even, lenders charge higher interest rates to low-wealth borrowers. Thus some low-wealth potential entrepreneurs would be unable, or unwilling at such high interest rates, to start businesses at any scale. Low-wealth entrepreneurs who did succeed in getting loans would be subject to a binding incentive compatibility constraint that ensured that they exerted the appropriate level of effort, and this limited credit for investment, increasingly so as wealth diminished. Agents obtained utility from both consumption and laisure in moral hazard model (this assumption derived the following result). Thus, credit was generally decreasing in wealth, since agents wanted to enjoy laisure or reduce effort as their wealth rises (this was the result of moral hazard model).

Saturday, November 9, 2002:Criticism

I read Browning and Chiappori (1998), a paper titled "Efficient Intra-household Allocation: A General Characterization and Empirical Tests" in the morning. The neoclassical theory of demand applies to individuals, yet in empirical work it is usually taken as valid for households with many members. This is called unitary approach, that is, mother or father decides what and how much each member of household consumes. Browning and Chiappori (1998) explored what the theory of individuals implies for households that have more than one member. All they assumed was that however decisions were made within household, outcomes were efficient. They refered to this as the collective setting. Then, they showed that in the collective setting household demand must satisfy a symmetry and rank condition on the Slutsky matrix, which was called SR1 condition. A symmetry on Slutsky matrix implies that the rise in rice consumption in response to the rise in the price of bread is equal to the rise in bread consumption in response to the rise in the price of rice for given level of utility (this is not easy to convincingly explain).

I began writing critical review on Mankiw, Romer and Weil (1992), a paper titled "A Contribution to The Empirics of Economic Growth" in the afternoon. My points were following. First, they assumed that the techonological growth rate was common across all the countries. It was not convincing to us, as we observed different technological progress across countries. Developing countries had experienced a lot of difficulty when they introduced techonologies of developed countries. Second, they assumed that the same production function could be applied to all the sectors; agriculture, manufacturing, and service. Again, this was quite problematic, as we knew that, in general, manufacturing sector was more capital intensive than the others. Third, they assumed that all the countries were in the transitional paths from 1960 to 1985, and they suddenly reached the steady state, in which the growth rates of GDP per capita were constant, at the same time. They did not give any justification for the assumption.

Friday, November 8, 2002:Milton Friedman

We had a conference to celebrate Professor Emeritus Friedman for his ninty-th birthday at Ida Noyes Hall.

Professor Friedman was well-known to be one of the most influential economists in the 20-th century, and the leader of Chicago school. He made a lot of academic contributions including plenty of policy implications, in particular, permanent income hypothesis and monetary policies among many others.

Some faculty members as well as scholars and policy leaders from around the country spoke on Professor Friedman's contribuions. Professor Sargent impressed me most. Using just one equation, Euler equation, he neatly explained about a main contribution of Professor Friedman and his academic deschedants from Professor Lucas, through Professor Hansen, Professor Townsend,to Professor Alvarez, and Professor Lustig.

Emil, Martin, and I enjoyed hamburgers at Lucky Strike, a new bowling alley on the 55-th street after the conference. They told me that they were also impressed by Professor Sargent.

Thursday, November 7, 2002:Estimation of Treatment Effects

We had a class of Nonlinear Econometrics with Professor Abadie. He talked about estimation of treatment effects.

The idea of treatment effects can be explained in the following way. Suppose that there was a government. They spend large amounts of money funding social programs and other public policy initiatives. The purpose of program evaluation is to assess the effectiveness of such public policy interventions. Some examples of the effects of public interventions are:

In each example, we want to evaluate the effects of a treatment (e.g., participation in a training program for the disadvantaged) on some outcomeof interest(e.g., earnings or employment). If you want to evaluate the effect of a training program on an indivisual, then you need to compare her after-training earnings with the earnings that she would have received if she had not taken the training (counterfactual). The difference in the earnings is called individual treatment effect. This is a tricky idea. Actually, it took us time to understand this idea, when we first learned this concept from Professor Heckman last winter.

Wednesday, November 6, 2002:Simulation

I read two papers, Jeong and Townsend (2001) titled "Models of Growth and Inequality: an Evaluation", and Townsend and Ueda (2002) titled "Quantitative Evaluation of Financial Deepening on Growth and Inequality”, preparing for Professor Townsend's class. His papers are interesting, and still in progress. In the seriese of research, he first carefully examined data set including consumption, education, income, access to finacial institutions, and so on, of households in Thailand, and he obtained estimators for important parameters in the models he constructed. Then, he ran his models on computers and simulated Thai economy. That was cool.

In the class, Omar asked him how Greenwood and Jovanovic (1991), titled "Financial Development, Growth, and the Distribution of Income", explained on the declining part of Kuznets curve.

On the basis of somewhat slendar evidence, Kuznets(1955) cautiously offered the proposition that during the course of an economy's lifetime, income inequality rises during the childhood stage of development, tapers off during the juvenile stage, and finally declines as adulthood is reached. That is, if you take a measure of economic development on the x-axis and a measure of income inequality on the y-axis, and draw the graph, then, the curve will be inverse u-shaped.

The upward part of Kuznets curve was simulated in Greenwood and Jovanovic (1991) based on the reasoning that the rich could enter financial sector, paying some entry cost, and they could increase their wealth, wheras the poor did not have enough wealth so that they could not enter the financial sector, and remained to be poor. Thus, Omar's question was whether they could simulate the alleviation of income inequality among people. Professor's answer was "No". It turned out that the simulation of reduction in income inequality was not a piece of cake.

Tuesday, November 5, 2002:A Rainy Day

It was a rainy day. I had classes from 9:00am to 3:00pm. Professor Abadie's Nonlinear Econometrics and Professor Chiappori's courses were prety good as usual.

I got a book titled Agricultural Development witten by Professor Hayamai and Professor Ruttan from former Professor Johnson's collection. I was glad, as it was one of the most important book in Agricultural Economics. Professor Hayami was one of the giants in Agricultural Economics.

I am studying in the small library in International House. I can hear somebody playing the piano, and another playing the violine in the assembly hall next to this library. They were playing very softly and beautifully.

Monday, November 4, 2002:Professor Townsend

Professor Townsend began his course on Development Economics today. It seemed to be very interesting and quite useful to me. I was really happy.

Sunday, November 3, 2002:Rotten Kid Theorem

I read "A Theory of Social Interactions" written by Professor Becker, and "Fertilitity Choice in a Model of Economic Growth" written by Professor Barro and Professor Becker. The former one was known as the original paper of "Rotten Kid Theorem", which asserted that if all family members receive gifts of money income from a benevolent household member, then even if the household head does not precommit to an incentive plan for family members, it will be in the interest of selfish family members to maximize total family income.

Saturday, November 2, 2002:Endogenous Growth Theory

I was reading a survey of Growth Theory. Professor Solow's Growth model, in which economic growth rate was determined by the exogenous technological growth rate and the population growth rate, and the saving rate only affected the level of steady state production level, was the milestone. In the recent literature a lot of economists had tried to endogenize the sources of economic growth in their models. For instence, AK model (Romer 1986), where capital was assumed to have technological externalies so that there was increasing returns in capital in whole economy, Human Capital model (Lucas 1988), Learning by Doing model (Arrow 1962), Product Variety model (Grossman and Helpman 1991), Technological Innovation model (Aghion and Howitt 1992) are most famous among many others. Yet Romer imposed an exogenous upper limit on the efficiency of capital accumulation so that an optimum exists, the growth rate in the steady state was exogenoursly given in Aghion and Howitt's model, and the other models were crucially dependent on strong assumptions on the parameters which hold with measure zero, i.e. they never happen, and therefore not robust: The elasticity of growth rate of human capital with respect to the current level must be equal to unity in Lucas's model, the elasticity of labor saving with respect to the past production is unity in Arrow's model, the elasticity of saving in innovation cost with respect to product variety is unity in Grossman and Helpman's model. Mankiw, Romer and Weil (1992) , and Barro (1997) insisted that Solow model with human capital could explain the labor productivity in the steady state and the conditional convergence, findings from real economy, better. Yet Mankiw et al.(1992) was not free from criticism. In particular, they assumed that the same rate of technological growth could be applied to all the countries based on the argument that the advancement of knowledge rapidly spreads across countries. In reality, however, technologies in industrialized regions could not be easily adoped in undeveloped regions.

Friday, November 1, 2002:A Beautiful Morning

It was chilly, but a beautiful morning. We do not have many sunny days in this season.

I did not feel so good today that I left Reg early for home. I bought a book titled Wealth and Poverty written by Professor Bhagwati, one of the giants in International Economics, for just ten dollars at Powell's Book Store on my way. It was a good deal. Professor Bhagwati is also recognized as a teacher of Professor Krugman and Professor Grossman among many others.

Thursday, October 31, 2002:D.Gale Johnson

It was Halloween today. I saw many people wearing funny cloths on campus. Professor Chiappori also showed up in the class wearing a Halloween tie.

Professor Johnson, one of the giants in Agricultural Economics and Chinese economy, retiered last Friday. He had been working for The University of Chicago for fifty-eight years(!). Actually he was also an adviser of Professor Otsuka, one of my advisers in Japan.

Professor Johnson thought that the faculty and students might have an interest in some of his books and journals he acquired over the years. Then, his secretary placed a couple of boxes of books in the Department building so that we could freely look through them and take them which interested us. I got a book titled The Socialist System: The Political Economy of Communism written by Professor Janos Kornai. I truly appreciate it. I hope that Professor Johnson will enjoy his new life.

Wednesday, October 30, 2002: Bargaining Solution

I studied Nash bargaining with a book on game theory written by Myerson. Even if you do not know economics, you might have watched a movie titled "Beautiful Mind" which was about John Nash, a Nobel laureate in economic science.

Tuesday, October 29, 2002: Dynamic Programming

I studied dynamic programming with Recursive Macroeconomics written by Ljunqvist and Sargent, since I needed to know it to read articles in growth theory. The book has quite good introduction of the technique. I should read Sargent and Lucas' book next.

Monday, October 28, 2002: International Trade

I started reading Theory of International Trade written by Dixit and Norman, since I need to know international economics to proceed with my research idea of economic development with industrialization. Although it is not a new book (published in 1980), it contains a variety of important topics in classical international trade theories. Moreover, it is easy to follow.

Sunday, October 27, 2002: Winter Time

Daylight saving time, summer time, ended yesterday, and winter time started today. Tokyo time is fifteen hours ahead of Chicago time. For example, it is seven o'clock in the morning here when it is ten o'clock at night in Tokyo.

Saturday, October 26, 2002: Duration Models

I read a chapter on Duration Model, which I am currently leaning in Professor Abadie's Nonlinear Econometrics, of Wooldridge's textbook. The model is used in particular in analyses of the length of unemployed period in the labor market, and the survival of firms in the output market.

Friday, October 25, 2002: Spirited Away

I read Douglas North's Nobel Lecture today. He began his lecture with "Economic history is about the performance of economics through time. The objective of research in the field is not only to shed new light on the economic past, but also to contribute to economic theory by providing an analytical framework that will enable us to understand economic change." Actually, he understands economic theory very well. It is even surprising to me, since economic historians in Japan only cares about " the economic past". I enjoyed his lecture, especially his concept of "institution", which is a kind of primal rule in economy.

I went to see Spirited Away, a successful Japanese animation movie titled "Sen to Chihiro" in Japan, with Chihiro. It was simply interesting, and in particular the image was beautiful. Emil and Martin went to see the remake of a Japanese horror movie, Ring. I wonder Martin could sleep well last night.

Thursday, October 24, 2002: Robert Fogel

I was reading Robert Fogel's Nobel Lecture published in American Economic Review, although I am not taking his course. He was writing about economic growth and population theory in the lecture. It was an important topic in development economics. In the paper, "(Fogel) stressed that the need for economists to take account of long-run dynamic processes through a study of history".

Wednesday, October 23, 2002: Problem Set

It rained from time to time.

I read some sections of Myerson's Game Theory for Chiappori's class. I had better to read it again. Then, I read Greenwood and Jovanovic (1990). The idea was interesting, but it was a very difficult paper. It seemed to me that I need to understand dynamic programming in order to understand the paper. Although I did not finish reading it, I started working on Chiappori's second problem set with Martin.

Tuesday, October 22, 2002: Keep Concentration

From 9:00am, I had Nonlinear Econometrics. He finished hypothesis testing, and started durations models, which I had never learned. It was interesting. From 10:30, I had Growth Theory. I got his permission to discuss and criticize Mankiw, Romer and Weil (1992) in the last class of this course. From noon, I attented pizza working group, that is, a seminar over lunch. The topic was about financial access within business group. From 1:30pm, we had Development Economics. Professor Chiappor gave us a good lecture on non-cooperative and cooperative approachs to household resource allocation. From 3:30pm, I attended Money and Banking Workshop, where Professor Townsend presented. They aim seemed to compare their result with others' result. Yet I could not understand how their model worked very well. I wanted to understand it more deeply. After that, I went to TA session, where Teaching Assistants present solutions to problem sets, for Chiappori's course. Now I am studying at Reg.

Monday, October 21, 2002: Applications Workshop

Since the topic was interesting to me, I attented Applications Workshop, that is, a seminar. It was about an adoption process of new agralican technology in African. He focused on the technological externalities among farmers. I thought that there could be basically two types of equilibria; one in which nobody adopts the technology in part due to the lack of information, and the other in which everybody adopts it because of sufficient information, given that the techonology is worth adopting. Then, I wanted to ask what was the most important element that determines which type of equilibrium was attained. Yet there were so many faculties who were concerned with the data problem I failed to ask my question. Although I had known that there were endogeneity problems, hard to avoid it in this type of research, in his statistical analysis, I had not imagined that the faculties would stuck to it in that way.

Sunday, October 20, 2002: Read, Read, Read

I went to Reg, and read three papers: Daflo and Udry (2001), Murphy, Shleifer and Vishny (1989), and Mankiw, Romer and Weil (1992).

Daflo and Udry (2001) was on intrahousehold resource allocation. I had been reading some related papers recently. All the empirical researches rejected unitary approach: There is only one utility function in a household so that the intrahousehold allocation, which is independent of the sources of income, is Pareto optimal. Murphy et al. (2001) explained the situation in which some countries succeeded in industrialization and the others did not by using the concepts of pecniary externality and Nash equilibrium. Mankiw et al. (1992) showed that an augmented Solow model could explain country-level growth better than endogenous growth model. Yet Solow model could explain only steady-state dynamics, while endogenous growth model could treat out of steady-state dynamics. Moreover, their result was based on the extremely strong assumption that the technological growth rate was common accross all the countries. It was quite unlikely.

Saturday, October 19, 2002: Morning Call

When the phone rang this morning, I was still on the bed. It was from Minako in Tokyo. We were on the swimming team at Nishi highschool (around ten years ago). I was glad to talk to her. Thank you for calling me, Mina-chan.

Ryo-chan, my cousin, and Yukiko-san celebrated a marriage in Tokyo today. I wish you great happiness!

Friday, October 18, 2002: Insomnia

Before going to TGIF, casual party for Econonomics Ph.D students held on every other Friday, I was studying at SS401. So was Bapu, a third year student. But, hey, look! He was reading Biochemistry. He told me that he was taking a two-year medical school program as well as Ph.D program in Economics. Wow!

We had Italian TGIF organized by Ale, Mario, Ronni, and other Italian friends. It was nice.

I went to Doc Films with Chihiro. We watched Insomnia. Unfortunately, it was not very interesting to us.

Thursday, October 17, 2002: Time flies

Three weeks have passed since the Autumn quarter started. We have only seven weeks left.

I have been trying to read books and papers that are (or at least seemed to be) related with my research topic. The more I read, the more I realize I need to learn. I enjoy this feeling. I just try. This is my style.

Wednesday, October 16, 2002: Chiappori's Problem Set

Andriy, Atonu, Martin, and I worked on the problem set after dinner. Although we could manage to finish it, I found that I had a lot to learn.

Tuesday, October 15, 2002: Martin's Research Paper

Martin wrote the first draft of his research paper. It took him just one night. What a productive person he is! I carefully read his interesting paper, and made best effort to give him some comments. I hope that they were helpful to him.

Monday, October 14, 2002: At Reg

I studyed the materials from Nonlinear Econometrics and Growth Theory. I also started working on the first problem set for Development Economics. It is not easy...

Sunday, October 13, 2002: French Table

It was freezing outside. I went shopping at Coop Market on the 55-th street. I bought Japanese rice, napa cabbage, pork, and so on. There held a used book market, but there was not a very interesting book to me.

I had dinner with Gino, Sonia, Editt, and Sandorino. They are from French speeking areas except Sonia, who is from Italy. Gino is from Mauritius, Editt is from Quebec in Canada, and Sandrino is from France. We talked about educational system in each area.

Saturday, October 12, 2002: Very Primitive Hypothesis

It was cloudy and very dark today. I was reading Deaton and Muellbauer's Economics and Consumer Behavior. It is a great book, which connects theories of consumer and the empirical analyses.

I have a lot to read for my research paper. Still I suppose that there exist some general conditions that any developed countries satisfy. I am thinking of industrialization, comparative advantage, and human capital. In my understanding, most developed countries experienced industrialization. My very primitive hypothesis, which might oppose current literature in this area, is that: People in a country where agriculture is not very successful are more likely to invest in human capital, even though they have less resources to invest, so that they are more likely to succeed in "smooth" industrialization. In anyway, I need to carefully observe what has occurred in developed countries, and what is going on in developing countries. Emil, Martin, Andy, Atonu, and all my dear readers, please let me know if you find any nice books or papers related with this topic.

Friday, October 11, 2002: Nori-maki

Emil, Martin, and I went to Hatsuhana, one of the best sushi bar in Chicago. We enjoyed Sushi Dinner and Yebisu Beer. Then, we went to see the movie, Transporter. It was a quite cool and funny action movie. I like Luc Besson's movies such as Leon and The Big Blue.

Thursday, October 10, 2002: Research Paper

We have to write a research paper by the end of the Autumn quarter in the next year. Martin has already got nice idea on the participation of votors. It is really interesting, and it will be a nice paper.

I would like to work on the process of economic development, and, in particular, I am interested in industrialization. I am reading some papers and books on agricultural economics, economic history, growth theory, and development economics. This is not easy, but quite exiting.

Wednesday, October 9, 2002: Natural Science in Japan

Mr.Koichi Tanaka receives the Nobel prize in Chemistry this year. Congratulations! Natural science in Japan seemed to meet with world's acceptance.

Tuesday, October 8, 2002: Edward Glaeser

Dr. Masatoshi Koshiba receives the Nobel prize in physics this year. Congratulations! According to the news, he has been at our university for a couple of years.

Professor Glaeser, who was a student of Professor Becker, gave presentation on his "The Political Economy of Hatred" at Rational Choice Seminar. He seemed to be inspired by Becker's seminal Economics of Discrimination. Becker and Glaeser looked enjoying discussion.

Monday, October 7, 2002: Andrei Shleifer

I attended workshop in applications of economics. Professor Shleifer, who was professor at the University of Chicago, talked about his new research on voting and migration induced by distortional policies. It contained interesting anti-Tiebout result, which is to say that "bad policy" prevails as its effect rises.

Sunday, October 6, 2002: Reading

I changed some parts of this webpage today. It became slightly convenient.

Sunny opened a cute webpage. I am glad that she got idea of diary from my website.

I read some literature in my room, listening to The Best of Ken Burns JAZZ, which is a collection of greatest hits in jazz. I currently enjoy studying and searching for a nice topic of research, though I have a lot to do.

Saturday, October 5, 2002: "Aren't you supposed to kill me?"

Emil, Martin, and I had lunch at Bartlett. Previously at Bartlett, we were charged twelve dollars for dinner on weekdays and for lunch on weekends. Yet they changed the system in which we are charged for each dish. In fact, they reduced the prices. This was good news for us. We would not have a meal at Hutchinson Commons, which ridiculously raised the prices, anymore. I am sure that the manager of Hutchinson Commons does not know business.

I went to see "Minority Report" at Doc Films with Chihiro and Gino. Cisco and Martin were also there. I was never bored, as the story often evolved beyond my expectation. I felt an anology between the message of this movie and famous Lucas's critique, as Chihiro realized an anology between nine eleven and "Signs". That is to say, people decide their behavior, (and their future), based on their information about the past, present, and future so that they maximize their utility. Once people expect a government policy, they adjust their behavior before the policy comes into effect, and nothing occurs after the policy is introduced. By the same token, Department of Precrime in the movie, which is supposed to detect and prevent murders before they are committed, might not work.

When we went home, it was chilly outside. Winter seemed not to be so far.

Friday, October 4, 2002: TGIF

We have a casual party held for Economics Ph.D students and the faculties in the department building every other week. It is called TGIF ("Thank God it's Friday").

Emil, Martin, and I dropped in there at around a quarter to five. I did not see many first year students, whereas there were supposed be more. It reminded us of last year. At that time, we always felt guilty about not studying, and were afraid of the Core exam (see the monologue for September 16 and 17). We could really enjoy talking with many people, drinking some bottles of beer today.

Then, we went to the pub in Ida Noyes Hall, and continued enjoying talking and waited for the movie showed in the theater in the building. We watched "The Bourne Identity" presented by Doc Films. It was pretty cool. Actually, it was the second time for Emil to watch it.

Thursday, October 3, 2002: An Ambitious Day

I attended four classes today: Nonlinear Econometrics(9:00-10:20), Growth Theory(10:30-12:00), Development Economics(13:30-15:00), and Public Finance(17:00-20:00). I do not think I can handle this so that I am going to drop Public Finance, and I will just audit Nonlinear Econometrics. Professor Abadie clearly explained extremum estimators in Nonlinear Econometrics.

I realized that I had been writing only school events these days... I hope to find something else to write.

Wednesday, October 2, 2002: Preparation

I had no class on Wednesday until Professor Townsend will start his course from November. This is nice to review the materials I learned on Tuesday, and I can also prepare for Thursday. I read Professor Yorukoglu's paper for Growth Theory in Reg in the morning. I was not comfortable with some parts of it. I will ask him tomorrow.

I printed out tons of papers for Nonlinear Econometrics, which I will try to attend early tomorrow morning, at Crerar. Mario and Fernanda laughed at me, seeing me printing them out.

Tuesday, October 1, 2002: Classes

I attended Professor Yorukoglu's Growth Theory at SS401 this morning. He would cover some topics such as techonological change and information industy. His course seemed to be more interesting than I expected.

I took Professor Chiappori's class at Cobb Hall in the afternoon. His couses was going to focus on empirical testing and identification of general equilibrium model. His lecture briefly touched theory of general relativity, not only economics. I got interested in his course.

I attended Workshop in Maney and Banking. I again appreciated that Professor Hansen and Professor Alvarez were really clever.

I have been studying in Reg. I have read two papers for Growth Theory. Now it is at midnight. "My usual life" has come back in the end.

Monday, September 30, 2002: Summer Again?

It was really hot, like in mid-August, today. It was great to have such a nice weather.

The school started, and I attended two workshops this afternoon. Professor Axelson presented his paper on auction at the workshop in economic theory at Rosenwald, and Dr.Bleakley spoke on his paper about disease and development at the workshops in applications of economics at SS401. Professor Axelson's result seemed to be interesting, but he consders so many cases that I was exhasuted when he started explaining the most important part. Dr. Bleakley's paper was quite interesting, even though it was a preliminary version. Yet I was slightly worried about his specification. I was not sure that his regression analysis could give him the best evidence that he wants to show. Still his paper was surely promising.

Sunday, September 29, 2002: D'Angelo Law Library

I was reading Professor Schultz's sminal book, Transforming Tranditional Agriculture, in D'Angelo Law Library. It was such a beautiful place that I wanted to come to again.

I met Natalia and Maria enjoying afternoon tee at an open caffe on my way to Co-op Market. I was glad to hear that they would also take Development Economics field.

I tried boiled potatoes with the basil paste for dinner. It was tasty.

Saturday, September 28, 2002: Cupid

I was pleased to hear from Snejana, though I have never seen her. Emil knows her very well for some reasons...

I enjoyed a movie, "One Hour Photo" with Gregg, Thomas, Gunn and Jose at Equire. Robin Williams played a psycho role in a skillful way.

Friday, September 27, 2002: Picnic and Oscar Peterson

I was skimming some Professor Lucas's papers and Professor Schultz's books at Reg. Development Economics is quite interesting to me.

I met Emil, Martin, and Smile there, and we joined the picnic held for Econ Ph.D students in front of the department building despite the cold and cloudy weather. I met Constantino, Edward, Maria, Dendy, and many others after a long separation. The incoming students devoured hamburgers and fried chickens as we did last year. We heard about Professor Townsend's innovative way of research from Alex. That is to say, he collected data on land use in Thailand by using pictures from satellites. We left there for the downtown at around 7pm.

On the bus for the downtown, Martin and I met Andriy. Then, we went to Symphony Center to listen to Oscar Peterson's jazz concert. He is one of the greatest jazz artist, who has played with many of the genre's greatest contributors including Louis Armstrong, Duke Ellington, Charlie Parker, among many others. It was a great concert.

When I arrived at I-House at around midnight, the picnic was still continuing there!

Thursday, September 26, 2002: "Welcome Back!"

Summer is ending, and friends are returning to Hyde Park. I enjoyed lunch with Gustaf, Martin, Emil, Omar, Sebastian, and Min at Bartlett. I also met Run, Tee, his wife, (they just got married. congratulations!), Natalia, and Maria at the department building

I helped Martinand Smile construct their web pages.

I met Atonu and Shaoly in the end! We celebrated their marrige with Emil, Martin, Smile and Min at Leona's. According to them, more than eight hundred people attended their wedding reception in Bangladesh. Congratulations, Atonu and Shaoly!

I received a "treasure box" containing Japanese cookbook, homemade fig jam, homemade basil pasete, and others from my parents tonight. Thank you!

Wednesday, September 25, 2002: "Atonu has been back with his new wife!"

I registered for the two courses from Development Economics field, the first course of Growth Theory, the first course of Public Economics, Workshop of Economic Theory. Probably, this looks a slightly ambitious plan, yet I can make a modification until the fifth week. According to Sergio's wife, he registered for eight courses.

It was around noon when I received an e-mail titled as above from Smile. I was astonished at the news, since Atonu has never mentioned his girlfriend yet. We were pretty delighted, and swiftly planned to have a dinner to celebrate their marriage. Then, Bin, Minhua, Emil, Martin and I enjoyed dinner and celebrate their marriage at a Mexican restaurant in the downtown. It was a bit pity that Atonu and his wife, Shaoli, did not attend it. We hoped that we invite them to a nice celebration dinner next time.

I was pleased to hear from Peter tonight.

Tuesday, September 24, 2002: Preparation

Emil, Martin, and I talked about the specialized fields over lunch. Emil is interested in Growth Theory and Money and Banking, and Martin seems to take Money and Banking and Development Economics.

While Smile kindly suggested that we go to China town, I could not join them to prepare for the meeting with Professor Goolsbee tomorrow.

Monday, September 23, 2002: Specialized Fields

I have been thinking which fields I should take this year. I have development economics in my mind as primary major, although Professor Heckman's course seems to be very difficult. Still I have to chose my second major. I want to learn Growth theory, but Public Economics looks also interesting to me. I am going to take Professor Lucas's International Trade in Winter and Professor Becker's Human Capital in Spring anyway.

Cisco kindly helped me register in Econ Lab at 1155 Building, which we usually call NORC, this afternoon. I saw Bin, Sergio and his wife working there.

Emil, Martin and I enjoyed pizza at Pizza Capri on the 53rd street at night.

Sunday, September 22, 2002: Welcome Reception

We had a welcome reception at I-House, which is a nice dormitory for graduate students and where I also live. We made a number of friends with each other, enjoying delicious Caribbean foods and music. We were surprised and dissapointed that the president of the University of Chicago made a speech on national defense of the U.S., neglecting the fact that there were a plenty of people from all over the world. Still it was great to meet a lot of incoming students.

I enjoyed an animated discussion with Gu and Jose on European history until around 1 am.

Saturday, September 21, 2002: "No Foundation!"

Emil and Martin suggested, by e-mail last night, that we go to see a comedy show this evening, and I replied that we could have a diner before the show.

Yet there was no response from Cisco and Smile even until this afternoon. I tried to call Martin at around 4pm, but he was not at home. Thus, I almost thought that it would be postponed until tomorrow. It was 5pm when Martin gave me a call, and I could finally join Martin, Emil, Cisco and Andriy to go to The Second City.

Unfortunately, they had already sold their tickets out. Then, we went to Steppenwolf Mainstage Theatreto see a play, "The Time of Your Life", which was a story about lives of various people in waterfront saloon in Sanfrancisco. It was quite funny that a drunk old character with beard and mustache had the habit of saying "No foundation!"

We were also impressed by their "Pareto efficient", (i.e. anybody cannot be happier without lowering others' satisfaction), way of distributing tickets. That is to say, while they basically sell tickets in advance, they also offer stand-by tickets that give you a seat only when people with tickets do not show up. This system allows the theater to earn twice for some seats, and gives late customers a chance to enjoy the show. Poor The Second City did not have such sophisticated system.

After the show, we enjoyed dinner at an Intalian restaurant,Topogigio in Old Town. I had tasty clam spaghetti there.

Friday, September 20, 2002: Gabriel and Sunny

I woke up a bit late this morning, for I came home late last night. There was a call from Sunny, and she kindly invited me to lunch with Gabriel.

I arrived at Reg, the main library on campus, earlier than the appointment, and met Cisco, Nataria, Ben, Nori, and Tiang. They seemed to have nice summer.

Sunny, Gabriel, and I enjoyed lunch at Medich on the 57th street. Medich is an Italian restaulant. (Mario might say, quote, "Italian", unquote, though.)I ate Pizza Margerita, and it was all right.

Thursday, September 19, 2002: Jazz Showcase

Nakamura-san, a senior in our program, took me to a French restaurant and, then, to Jazz Showcasein the downtown. He has eight hudred Jazz CD's, and has played the trumpet in jazz bars in Japan. He told me that he paid attention to bass guitar, since it is the main instrument that decides the rhythm in a jazz band.

Wednesday, September 18, 2002: Andy's Jazz Club

I met Martin, Onsel, and Andy, when I was working in Crerar, and we congratulated each other on our success. Then, Martin and I went to Julie's office to obtain the brochure of the courses.

Inviting Emil and Andriy, we went to see a movie, Sings, in downtown. There were only ten spectators in the theater. The movie was about so-called mystery circles. An alian attacks a family of Mel Gibson. Yet it dissolves in water...

Martin took us to Andy's Jazz Club. I sat on a seat very close to the band, and I was impressed by their vigorous performance.

Tuesday, September 17, 2002: The Result

I made it!!! I am pleased to report here that I passed the Core exam. I shared this happiness with my friends. I cannot still believe it. I suppose that I will realize it, when I wake up tomorrow morning.

Monday, September 16, 2002: The Core

I did my RA job at the computar lab in Crerar library, which is the newest and the second biggest library on campus, all day long. I saw a lot of classmates and seniors in my department. My classmates seemed to be very nervous about the result of the Core exam, since if we fail the exam, we will have to retake the courses for the first year students and the Core exam next July. We have been waiting for the result for about two months. To be honest, I am also tense.

Sunday, September 15, 2002: Nimono

The weather was mild today. Listening to the nice CD's, I studied for the RA job in my room almost all day long.

I tried cooking nimono, which literally means food boiled and seasoned, tonight. It is somewhat like stew, but with more vegetables and much less meat than Western stews. We may use fish in stead of meat.

I cooked ground beef and half an eggplant, which was still much larger than Japanese one. I choped the eggplant into bite-sized pieces, soaked them in salt water. I put a pot on, and placed the eggplant. The meat was inserted, and a cup of water was poured in the pot. I put dashi, Japanese soup stock, in the pot. Just before the end of cooking, I put a spoon of soy sauce. Nimono turned out best when the ingrediendts had plenty of soup stock to cook in.

The taste was all right as a novice cook. But it was slightly different from what I expected. I will learn it from the web sites such as this page.

Saturday, September 14, 2002: Beats

It was a sunny day, and I even felt summer still stay in Chicago today. I went downtown by Metra, which takes me fifteen minutes and costs me about two bucks. I got off at Randolf station, and walked along the Michigan Avenue to the north. I purchased some pants and shirts at an apparel shop on the Ontario Street. Then, I walked toward the north again for Borders Books on the Pearson Street. I bought two Jazz CDs there. One of them was a Louis Armstrong's and the other was an anthology of big bands which contained "Take The 'A' Train" by D.Ellington and other greatest hits.

There is famous Water Tower just in front of the bookstore. A crowd surrounded six boys at the foot of the tower. The boys tapped out various beats on the bottom of buckets, and entertained the audience. They seemed to have practiced it very hard and amuse themselves by playing.

Friday, September 13, 2002: A past U.S.-Japan summit

It was more than a year ago when the former premier Mori met the former president Clinton. Since Mr.Mori could not speak English well, he practiced it with his interpreter before the summit. Mr.Mori said "Hello! How are you?" "I'm pretty good. Thank you! And you?" replied the interpreter. Then, Mr Mori said "Me too!"

At the summit, Mr. Mori said "Hello! WHO ARE YOU?" Then, Mr.Clinton answered "I am Hirary's husband. What about yourself? " "Me too!" replied Mr. Mori.

Thursday, September 12, 2002: New Glasses

Not only me, but also many classmates failed eyesight, since classrooms and libraries, where we have always studied, are very dark.

An optometrist carefully examined my eyes and my old glasses. "Your right eye has got worse by three steps and your left eye has got worse by four steps," said she. Although I did not understand the measure of eyesight even with her explanation, I knew that I really needed new glasses.

Wearing the new glasses, I feel living in a new vivid world. I am supposed to study harder...

Wednesday, September 11, 2002: Nine Eleven

One year has passed since the tragedy sruck us. We have grieved on one hand, and we have been furious with the terrorists on the other hand.

The United States has led the campaign, "The War on Terrorism", and others have followed it since then. However, I cannot believe that the seriese of wars can prevent further tragedy from occuring. Since potential terrorists are moving around the world, the wars involves thousands of innocent people. In this sense, they are World Wars. Moreover, anyone can never gurantee that a terrorism will not occur again. Thus, the wars are going to continue for ever. I hope that we will be able to find a better way to settle the issues and to achieve a lasting peace.

May the victims rest in peace.

Tuesday, September 10, 2002: Economics of Model Changes

My cousin, Shuta, recently returned to Japan after two-year-graduate-study in Washington, DC. He is surprised that people buy new models of cellular phones evey three months. He even feels that the firms are forced to supply the new models and the customers are intruded to buy them at such short intervals. Moreover, he wonders what if consumers are satisfied with the current models and stop buying new ones. It seems to me an interesting economic problem.

Needless to say, the firms are not forced to supply new models, or the customers are not intruded to buy them, as long as the market transactions are voluntarily conducted, as we usually observe. It seems natural to suppose that firms are maximizing their profits by introducing the new models continually, and that consumes are maximizing their utility (satisfaction) subject to their budget constraints by purchasing the new models contiually as well. The next question is what would happen if consumers decreased or even stopped buying new models. First, the price of new cellular phones would be reduced so that some customers would buy the new products. Second, the profits of the firms and their subcontractors would decline, and the salaries of their employees would be reduced and the unemployment rate in the economy would increase. Finally, people would reduce their consumption of other goods and services due to the decline in their income, and, even worse, it might end in the recession of the economy.

Of course, Shuta's point is not limited to the economic situation. I suppose that it worries him that resources are wasted in the view point of the environment. While I do not have a clear-cut answer to this problem right now, the relation between environment and development is an important issue. It seems to me better to remind the fact that people in developed countries tend to tackle the environmental problems more eagerly than people in developing countries. What do you think?

Monday, September 9, 2002: RA

I have been working for Professor Goolsbee at GSB (Graduate School of Business) as a RA (research assistant). He is interested in public finance. I am currently contacting several agencies in U.S. and Canada to obtain suitable data sets for his current research, and learning nonparametric econometrics, which is an analytical method to be used in this project. Pagan and Ullah (1999) is a nice textbook on the topic.

Sunday, September 8, 2002: Chicago 1/2 Marathon and Ryuichi Sakamoto.

The Chicago 1/2 Marathon was held in my neighborhood this morining. A great number of runners participated in the big event under the beautiful sunny sky. I cheered them with the families and the friends of them along the street. The runner looked satisfied, when they finished.

Mr. and Mrs. Ohyama and I enjoyed listening to Ryuichi Sakamoto's concert at House of Blues Chicago tonight. The hall seems to have a seating capacity of around 200, and it has a bar on each floor. We were impressed by their gentle yet passionate performance.

Saturday, September 7, 2002: Freshmen.

I had a meeting with my Japanese juniors this morning. I gave some useful hints for the new students. Gino told me tonight that there are fourty nine students in the entering class of 2002. The class size is the largest for the last ten years. It seems to me that this is because the economy is in the recession so that more people choose graduate education rather than employment. I hope that they have great academic experience.

Friday, September 6, 2002: Cooking.

Since I lived with my family in Japan, I had never cooked. But I started cooking here last December, because I wanted to eat Asian dishes and it was cheaper than eating out. I appreciate that my mother cooked for me every meal when I was in Japan.

I learned cooking from some Chinese friends and Tee, who is from Thai. Thus, I cook "Japanese-Chinese" and "Japanese-Thai", e.g., fried vegetables, beef garlic, fried rice, Mabo Tofu, and so on. My friends recognize the taste of my dishes, and I am basically satisfied with my skills at cooking. Sometimes, however, I really love to eat Japanese dishes, and I wish that I could cook them.

When I stayed at Obata-sempai's and Matsumoto-san's apartments this Summer, Yuko-san and Shouko-san, their wives, cooked excellent Japanese dishes for me. I deeply appreciate them, and I envy my seniors. In Chicago, Kaoru-san, Ohyama-san's wife, sometimes cooks me delicious Japanese dishes a lot.

...It is time to cook.

Thursday, September 5, 2002: My Homepage!

After some strugles, I finally succeeded in setting up my homepage! I hope that keeping this diary will help me improve my writing skills in English. If you have any comments on this page, please e-mail me.

I went to Chicago Jazz festival in grant park with Andy and Chihiro last Friday. It was awesome. The festival waked my interest in jazz last year. I have been enjoying jazz especially on the radio since then.

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