With the Champions League heading to it’s quarterfinals, I thought it would be a good idea to talk about the hobby that most people get into during this period of the year: betting. Now, I’m not a betting guru, and my student bank account can prove that, but, some microeconomic studies do theorize on how to bet efficiently. And, since I don’t have a nephew, such as our great columnist Sander Onderstal has, I will have to make use of an economic narrative to better explain what this theory is about. I have a friend called Christoph, which, I must say, quite enjoys betting in football. Don’t get me wrong, he doesn’t watch all Champions League games and check all the teams’ stats to make precise bets, he actually just asks for another friends’ guess. And not a specific one as well, just any friend that is randomly close to him. And even though I’m not a betting guru, I thought this was the most irrational way of betting I had ever seen. But as it turns out, Christoph actually had an efficient decision making process. According to microeconomic theory, Christoph has one thing on his mind, while choosing a bet: his wealth. The risks he will be willing to take in any bet decision he makes ,will depend mainly on his wealth. So, if he just received his wages after 1 week of pure hard work, he will be leaning towards betting; if he is one day away of getting his wages, which for most students means you have cents in your account, he would be leaning towards not betting. This would be a graphical representation of what Christoph has in mind when making his choices: as his wealth increases, his utility increases as well. So in the graph on the left, Y would be his utility, and X would be his wealth. Imagine it’s Champions League day. Christoph goes to university, meets up with us and decides who he is going to bet on. He presents his options: he can bet on Arsenal’s win against Bayern Munich, and the payoff is 4.5* (amount of initial Most of you should be familiar with the concept of utility, but it basically represents how well off he would feel by making that bet. Theoretically, he would make that bet if the expected utility of the bet is higher than the utility of not betting at all. His expected utility will be an average of the utility he gets in either scenario, with the probability of it happening. So, let’s say he is willing to bet for 10 euros. The probability of Arsenal winning the game is low, and if you follow the Champions League, you might know why. Let’s say this chance is 20%. That would result in the following expected utility equation: EU= 0.2*U(wealth+payoff) + (1-0.2)*U(wealth-loss) So, we assigned a utility for each of the scenarios possible for Christoph, if he decides to make the bet. It is important to remember that he will only take the bet if the value of his expected utility is higher than the utility level he obtains without making the bet. Christoph loves the rush of betting, the adrenaline, and everything that comes with it. He is, what we call in microeconomics, a risk lover. This means that his utility while betting works in a different way than, for example, my utility while betting. He will have an increasing utility, read benefit, towards betting, whereas I will have a decreasing one. This means I would prefer taking a safe bet with a lower payoff rather than a risky bet with a higher payoff. On the other hand, Christoph’s utility gain when winning the bet is higher than his utility loss when he loses that bet. Even though I believe betting on Arsenal to win any game at all is simply ludicrous, Christoph made his decision of betting on them, and after understanding why he made that decision, I couldn’t really disagree with it. And the most beautiful part of economics is that even though all decision making processes are rational and efficient, it could all go south. And it did. Because in the end, who the hell bets on Arsenal against Bayern Munich?

Algorithmic trading firm Flow Traders has racked up 31 months without a single day of losses, making the Dutch company one of the big winners from the spread of exchange-traded funds (ETFs). Flow Traders is listed the leading global technology-enabled liquidity provider, specializing in exchange traded products (ETPs). Flow Traders provides liquidity in ETP markets 24 hours a day while seeking to stay market neutral at all times and without having directional opinions. While Flow Traders does not have any clients, they enable investors to buy and sell ETPs efficiently by quoting bid and ask prices. Thereby Flow Traders, seeks to earn small amounts of money on large numbers of individual transactions based on the differences between our ETP prices and the prices of the underlying or related instruments. They provide liquidity in over 4,000 ETP listings across the globe, tracking all underlying asset classes, including equities, fixed income, commodities and currencies with access to over 90 trading venues in 36 countries. The company has been named Europe’s number one Trading House for ETFs in the EFT Risk European Rankings over three consecutive years – 2013, 2014 and 2015. Flow Traders has an algorithm specialized in so called hard-to-price ETFs. They are so successful in this kind of arbitrage trading that they have made a profit every trading day for the past 31 months! “Throughout 2016 our trading infrastructure operated as expected and the trading team showed great discipline during events like Brexit and the U.S. elections,” said Flow’s co-Chief Executive Officer Sjoerd Rietberg. An ETF, or exchange traded fund, is a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund. Unlike mutual funds, an ETF trades like a common stock on a stock exchange. ETFs experience price change throughout the day as they are bought and sold. ETFs typically have higher daily liquidity and lower fees than mutual fund shares, making them an attractive alternative for individual investors. It even pays you dividends! But how can you make money with buying and selling ETFs within seconds? For example, let’s take the AEX index. If you have bought an ETF tracking the AEX index for a total of $1,000, you theoretically own all stocks which are listed at the AEX index. If the AEX drops, let’s say, fifty basis points (bps), the value of the ETF should also decrease by fifty bps. If this is not the case, an arbitrage opportunity appears. Namely, if the ETF is worth $1,002, but the AEX is increased by fifty bps, your ‘normal’ portfolio which represents the AEX is worth $1,005. So, if you buy the ETF at $1,002 and you sell the underlying stocks (the exact same stocks as you would have if you had bought the ‘normal’ portfolio), you will have a profit of $3. This is exactly what Flow Traders is doing so effectively by using special developed algorithms. These algorithms pick up signals from the markets for potential arbitrage opportunities. When the spread between the ETF and the underlying stocks is effectively, the algorithm places a buy order and sells the underlying stocks in less than a second. This technique is also called High Frequency Trading (HTF). The more volatile a market is, the more profit a HFT boutique makes. However, due to subdued volatility in the first three quarters of the year, net trading income from the European ETF market, where Flow is the biggest trader, dropped 14 percent in 2016 to 167 million dollars. Income from the U.S. market jumped 32 percent to 68 million euros as Flow started building a presence in the off-exchange ETF market where the biggest deals take place. Want to know more about Flow Traders’ CEO or HFT-trading itself? Visit this page to read an interview with Co-CEO Dennis Dijkstra. Bewaren Bewaren

Just two more days to go until the big day of the general election on March 15! I introduce to you this year’s party leaders, in the least politically correct way possible. But hey, who ever said that there’s no fun in politics? This list features the six parties that sealed at least ten seats in the 2012 general election — starting with the largest party, then going all the way down to the layabouts… Mark Rutte (People’s Party for Freedom and Democracy, 41 seats) Our good-humoured Prime Minister! Often criticised for his broken promises, but still charming in his own right. In fact, he might well be the most wanted single in the whole country right now. Foolish enough to agree to work with Geert Wilders six years ago, wise enough not to repeat said experiment ever again. All in all, I think he’s a likeable person. He studied Dutch history at Leiden University, where he obtained a Master’s degree in 1992, after which he gradually worked his way up towards the top, working for several companies before he finally ended up in The Hague. He actually already had some political experience then, having been the chairman of the Youth Organisation Freedom and Democracy (a group full of young preps) during his studies. What’s not to like? D’oh! Lodewijk Asscher (Labour Party, 38 seats) A genuinely great Minister of Social Affairs and Employment in the outgoing cabinet, who did everything he could to cherish the social cohesion in this country (or whatever was still left of it). However, it seems as if he’s someone who’s just not tough enough to run a political party, and the latest polls appear to be confirming this, as they have the Labour Party at a shocking all-time low of nine seats. I know it’s pointless, but I sometimes can’t help but wonder how well he would’ve done a few decades ago, when the whole political climate seemed far less vicious than it is today. Oh well… Asscher did a Ph.D. in law at our very own University of Amsterdam, and he was a researcher (as well as a teacher later on) at a related institute in the years that followed — that is, until 2006, when he went into politics. Unlike many colleagues, Asscher still lives in Amsterdam. Geert Wilders (Party for Freedom, 15 seats) Does this man really need an introduction? A populist in heart and soul, but far more intelligent than that blond on the other side of the ocean with an equally strange coupe. Geert Wilders is one of those weird ones. He’s the toughest of them all, a great fighter — and I say that very sincerely — but let’s be honest here: he probably won’t achieve all that much. After finishing high school, Wilders first travelled around the world. He wanted to see Australia, but due to a lack of money, he first went to Israel instead. According to himself, he instantly became a friend of the country’s, and he was shocked to see the lack of democracy in surrounding countries. It’s thus possible that the foundation of Wilders’ train of thought was laid during that very trip. Wilders took a course in health insurance in Amsterdam and earned several law certificates at the Dutch Open University. Emile Roemer (Socialist Party, 15 seats) The clown of the lot. The kind of man who could’ve been your uncle telling awkward jokes at a family gathering, and he even has the accent to go with it. Cringe! Still, you gotta give him credit for the way in which he’s led the party in the past seven years, for at least he’s a resilient person. In fact, his party got very close to becoming the largest party in the 2012 general election, until Diederik Samsom — Labour Party’s previous party leader, who was replaced by Lodewijk Asscher just a few months ago — made a very strong entrance into Dutch politics and managed to win over its voters just in time, after which they were surpassed by Mark Rutte’s VVD as well. In terms of education, Roemer studied to be a primary school teacher, and he actually was one for almost 16 years before he finally moved to The Hague. He became the party’s leader in 2010. Sybrand van Haersma Buma (Christian Democratic Appeal, 13 seats) An otherwise decent Christian who has suddenly turned into a self-declared leader during the recent debates. In Wilders’ absence, Van Haersma Buma has tried to fill the gap on the right-hand side of the political spectrum by acting tough against Islam. It didn’t seem all that genuine to me, but it does seem to have worked, for his party has been on the rise in the latest polls, currently sitting at almost 20 seats. Some people seriously think that he might be the next Prime Minister, a scenario I really don’t wish upon… well, myself. Van Haersma Buma studied Dutch law at the University of Groningen. A follow-up course on international law at the University of Cambridge completed his studies. He then worked as a criminal defence lawyer for the Council of State before going down the politics route. Alexander Pechtold (Democrats 66, 12 seats) A respected politician who has been a Member of Parliament for over ten years now. He studied art history and archaeology at Leiden University with a specialisation in 17th-century paintings, but it wasn’t until the age of 30 that he finished his Master’s degree. The reason? He had already landed a job as an auctioneer by then. Given his field of study, you’d be surprised to see how much Pechtold knows about economics, although he does make the occasional mistake as well. For some reason, I’ve always thought of him as the Dutch David Cameron, but it seems unlikely that Pechtold will ever be Prime Minister himself. Bad luck, Alexander! Much like Cameron, Pechtold’s party sits somewhere in the middle of the political spectrum, so at least there’s a serious chance that he’ll end up in the next cabinet. We’ll see what happens; I think he deserves it. Honourable mentions GreenLeft leader Jesse Klaver (a promising political talent of just thirty years old), Henk Krol (leader of the 50PLUS party, see the hilarious video below), and Sylvana Simons (who paid a visit to our faculty a few weeks ago) are all people to look out for during the upcoming election. Best of luck to all the candidates, and to the Dutch readers I’d just like to say: please go and vote!

Although the notorious strenuous overworking culture in Eastern Asia has been a widespread phenomenon that was recognised by the authorities for decades, there is still a considerable amount of workers suffering from overworking in various ways. In comparison to most European countries, the working environments in Eastern Asia are less laid-back, and these societies perceive working long days as hard-working, which is often praised. For instance, Japan is one of those countries that still possesses the toxic working culture and where the issue comes under the spotlight from time to time. By 2015, claims of ‘death by overwork’ had risen to a record high of 2,310, and the statistics are plausibly just the tip of the iceberg as the examination criteria are rather strict. Moreover, more than one-fifth of employees are exposed to high risk of death by overwork as they are clocking at least 80 hours overtime a month, according to one Japanese government investigation in 2016. The suicide of Ms Takahashi is a devastating case that took place in Japan on the Christmas Day back in 2015. Ms Takahashi was a graduate of the prestigious University of Tokyo, and a former employee of the digital advertising division of Dentsu Inc., which is the biggest advertising agency in Japan in terms of scale and sales revenues. Dentsu Inc. had previously been accused of being directly responsible for the sudden death or suicide of their employees, and it is famous for its harsh discipline on achieving the success and goals of the firm. The death of Ms Takahashi brings back the long-standing discussion on the high stress working culture in Japan, which exposes workers to a high risk of karoshi (過労死), which literally means death from overworking. The investigation revealed that she had suffered from severe workplace bullying, as well as extremely unhealthy long working hours, resulting in the development of her depression and suicidal thoughts. She was forced to work overtime for 105 hours per month in total, and the effort she put into work was taken for granted by her superiors. They even condemned her for being lazy, and that is why she had to work those extra hours. Some might wonder why she did choose to end her life instead of just switching to another company; the answer is tied together with the Japanese working culture as well. In Japan, if a full-time job worker is to quit, it is commonly perceived that he or she must have done something very wrong, and is thus forced to switch to a new firm. No other sensible reasons, such as currently experiencing poor treatment or pursuing personal growth, are reasonable. That is to say, demonstrating loyalty to one’s company and persistence plays an important role in Japanese work ethics, especially when it comes to switching employers; and the consequences of leaving a job can be a tremendous burden when seeking the next employment. The above-mentioned case is not unusual in Eastern Asia, especially in places where work ethics are Confucian-inspired. Besides Japan, places like South Korea, Hong Kong and Taiwan are also among the list of countries where overworking is fairly common. For example, South Korea has the second longest working hours in the OECD: employees clocked an average of 2,113 hours in 2015, 43 days more per year than the OECD average. On top of the fact that these governments’ interventions are not making any transformational impact on the long-standing issue, the mentality and the distorted hierarchical organisational structure are actually at the heart of the problematic situation. Furthermore, it is not a coincidence that the countries where overworking are prevalent all possess cultures heavily influenced by Confucianism. The cultures in Eastern Asia are generally more pro-collectivism (group orientated), and people still respect hierarchy and differences in relative socio-economic statuses more than Westerners do. Therefore, by taking into account the incorporation of group thinking concepts into the context of work, it is not difficult to comprehend why these cultures put emphasis on prioritising the achievement and reputation of a group, or the company, instead of the individual. In practice, it somewhat indicates that overworking is deemed as a virtue and that people should feel guilty getting off work early/on time, while others are still staying at the office and dedicating their personal time to the company. This is especially significant in Japan where people even have to apologise for leaving earlier than their colleagues—and if those who stayed are the superiors, most employees would not dare to leave. Thus, on the same note, you may realise that in most of the mass media coverages regarding overworking, the attention is given to the cases and phenomenon in Japan more than other countries. The Japanese society is perceived as much less ‘westernised’ in terms of its culture and social values, which are fundamentally distinctive from the Western society compared to other Eastern Asian countries. We can analyse the unique and complicated working culture in Japan from diverse aspects such as historical influences and social norms that shape the modern Japanese society’s mentality. After Japan experienced the defeat in World War II, in the hope of reconstructing the nation and regaining economy power, Japanese citizens possessed a strong sense of mission to devote their time to their occupations in post-war Japan. At the same time, employers were content to see this social phenomenon and in response, they provided benefits such as housing subsidies, good insurance, pension and most importantly, some degree of job security. Gradually, most people’s lives revolved around work, some even at a state of workaholism, and Japan became the nation with the longest working hours in the post-WWII era. The famous “life-long employment” (終身雇用) model used by large corporations originated in 1920 turned into the dominant employment model in the post-war era; moreover, it has been employed under such a condition and became the goal of children of the new middle class in the 1960s. The economy continued to prosper and Japan was the world’s third largest economy in terms of GNP in the 1970s. However, in the late 1980s, at the height of the Japanese bubble economy, more and more workers were forced to work more than 60 hours per week. The pressure was especially burdensome for people in the senior level, where an investigation in 1989 revealed that over half of the people in top management levels considered themselves at high risks of death by overwork. More and more white-collar workers fell under the victim of overworking themselves to death, and the government started to published relevant statistics, in which the deceased had to overwork for more than 100 hours per month to be categorised as ‘karoshi’. Things got worse after the entire economy fell apart when the Japanese asset price bubble burst in 1990. The time after the bubble’s collapse, which occurred gradually rather than catastrophically, is known as the “lost decade or end of the 20th century” (失われた10年). With the crash of the economy, the culture of overworking became very common and death from overwork even reached an epidemic level. In present-day Japan, although the rate of karoshi is still high, both the government and the employers are trying to exert effort to encourage work-life balance, such as policies making it mandatory for workers to take at least five days of paid holiday a year, or measures such as “Premium Friday” to enable the employee to leave earlier on Friday. And because of the decrease in working population resulting from the extremely low birth rate, it is said that the employers are transforming the working condition to the better in order to attract talented employees. One thing to bear in mind is that, if the society’s fundamental mentality towards work ethics does not change, the effects of regulations imposed by the authorities might be very limited. As the saying goes, there is always a countermeasure to the policy. What really matters to the success of a company is the ability to foster highly productive employees and lower the turnover rate of the staff. That is to say, a comfortable working environment and flexible working culture is the key to extract the best out of the employees and make them willing to stick to the organisation longer, and most importantly: preventing them from suffering any occupational hazards.

In the last few years, the world has been witnessing a shift in a long trend that is known as globalization. Globalization can be defined as the trend of international integration on economic, political and cultural levels. Throughout history the trend of globalization has gone through ups and downs. There are two factors that influence globalization: 1) Technological development, which advances means of communication and transport, and 2) Politics, which determines the degree of openness to and acceptance of outsiders, who may be different in appearance, language and culture. In the period of 1500s to the early 20th century, globalization was a syndrome of modern European conquest, with a great share of world land and people under the rule of some European colonial states. Spain and Portugal ruled over Central and South America from the 16th century till early 19th century; the Ottoman Empire ruled over North Africa and Arabian Peninsula from early 16th century to late 19th century; England, France, the Netherlands, Belgium, Germany, Denmark and Norway ruled South Asia from the 16th century to mid-20th century , North America from early 17th century to late 18th century, and almost all of Africa from mid-19th century to mid-20th century.  In this colonial period, the world was globalizing, cultures met one another, goods, services and financial markets were integrating and political systems were converging to a standard model. When World War I erupted in 1914, the world closed its borders due to war conditions. European colonial powers’ resources were drained in the war, so they lost their grip on the colonies, and what is known as decolonization began. The newly liberated states expressed a level of assertiveness and that affected their openness to foreign interaction. These two factors of war conditions and decolonization reversed the trend of globalization, and that reversion lasted until the end of World War II, after which a new wave of globalization started with international economic cooperation and openness, and a progressive immigration policy in rich western states. This new wave of globalization , especially its economic aspect, reached a climax in late 1990s fueled by China’s economic growth and trade openness, until 2010, when the decline led to what is known as “deglobalization”. Globalization can be assessed using three measures: Trade Globalization, Financial Globalization and International Immigration. Trade (de)globalization Trade globalization is measured by this simple formula: (Total World Export + Imports of goods and services) / World Gross Domestic Product. According to World Trade Organization Statistics, this ratio grew at approximately 2.7% in the 60’s and 70’s, 3.5% from 80’s until 2010, and then down to 1.3% 2010-2016. This recent slowdown has been due to world economic growth slowdown, a direct consequence of the global credit crisis of 2007-08. International trade intensity has been partially affected by the structural switch that took place in the Chinese economy from export driven growth model to domestic consumption driven growth model, a trend that is likely to continue in the coming decades as the purchasing power of the Chinese citizen is rising rapidly. The global production chain, which has been a prominent characteristic of globalization, has been going through fragmentation due to rising income in producing countries, so the “Production in East and Consumption in West” model is breaking. The current rise of nationalism and protectionism in the US, may affect its trade volume with China, knowing that trade between these two nations represent roughly 15% of world trade (in goods). These are indicators that the world may be entering a phase of trade deglobalization. The following figure illustrate the deviation of international trade growth and world GDP from the trend (actual growth is represented by the solid line, the trend extension is represented by the dotted line) Source: DataStream, IMF WEO and Bank calculations. Note: dotted lines show pre-crisis trend. Country data are weighted by market exchange rates to calculate the aggregate. Financial (De)globalization Financial globalization is measured by (Total International Capital Flow) / World GDP. According to IMF Global, capital flows have been contracting in the last years, even after the recovery of the world economy from the 2007-08 crisis. Currently, it is around 2%, a significant fall from almost 27% in 2006. This is due to capital controls imposed by many states which has led to the rise of risk aversion of international investors as a consequence of rising uncertainty and political instability. The following figure illustrates the contract of international capital flows. Sources: IMF International Finance Statistics and World Economic Outlook Database. Note: For each quarter, flows are summed over all available country data, divided by an estimate of quarterly GDP, and then smoothed by averaging over the current and previous quarter. International Migration Currently, there is a consensus that the world today is the most unequal in at least 100 years in terms of wealth and income. The trend of rising income and wealth inequality has sped up in the last few decades since the takeover of right wing economic ideology known as “neoliberalism“. Migration mostly takes place from members of low income and middle income countries to high income countries. With rapidly rising wealth and income inequality between different countries/regions of the world, it is common sense to predict that the rich would build larger walls to guard themselves from potential threats of the poor. For example the United States have been and are still receiving the largest share of total world migrants (around 20%). However, due to immigration restrictions that were imposed after 9/11, the net number of  immigrants to the USA dropped from almost 9 million in the period 1995-2000 to around 5 million in the period 2010-2015. Similar patterns can be observed in other high income countries; namely France, the UK, Saudi Arabia, United Arab Emirates, and Japan. Germany migration statistics have been on the opposite of this trend since it has been receiving a large number of Syrian refugees in the past few years, a matter that can be excluded from this analysis. Another major restriction was imposed on 3 March, 2017. The European Parliament has taken the first step in potentially revoking visa-free travel of US Citizens/Residents to the European Union. That’s because the U.S. doesn’t allow citizens of Cyprus, Poland, Croatia, Bulgaria, and Romania, to visit the US under the visa waiver program. Due to this unequal treatment of some of EU citizens, the European Parliament is urging similar restrictions against US citizens Another recent and major indicator of the trend of deglobalization. Although the world is still relatively open, the trend of globalization has been going in reverse in the last few years, and this reverse is most likely to continue because its drivers are present and growing. International trade growth is plummeting despite world economic recovery from the last financial crisis, and is most likely to keep falling with the current rise of nationalism and protectionism. There has been a trend of financial deglobalization due to imposed capital controls that rendered the investment climate uncertain for foreign agents. Due to rising international income and wealth inequality, with security threats, immigration restrictions have been tightened and the international voluntary flow of people has declined in the last few years and is likely to keep declining. Bewaren Bewaren

There are nine days left for the Dutch to decide which party they want to vote for in the upcoming general elections. These will take place the 15th of March, and the decision appears to be harder than ever. The Dutch elections are being closely watched by other European countries, as the Netherlands is the first major country to vote upon a new parliament, whereafter elections in France, Germany and Italy are to follow later this year. All party leaders are doing their best to convince the undecided voters, and this time they really have to, since the political landscape in The Netherlands is rather fragmented. This year, 28 parties (!) are campaigning to get as many of the 150 seats in the House of Representatives as possible, and therefore competition is fierce. Almost all politicians are doing their best to appear on many different talk shows and in many different newspapers, where they discuss what is arguably the most important topic during of this year’s campaign: the Dutch identity. Besides that, immigration, social security, the European Union, racism, and health insurance are major subjects during the elections. Prominent political players are incumbent Prime Minister Mark Rutte (VVD), the experienced Alexander Pechtold (D66), the ambitious Jesse Klaver (GroenLinks), newcomer Sylvana Simons (Artikel 1), and the big absentee during public debates: Geert Wilders (PVV). What are the plans that politicians have for the Netherlands and what is most likely to occur after the 15th of March? First of all, it is important to understand that the fragmentation of the political landscape plays an important role in the elections as a whole. Since there are only 150 seats in the House of Representatives, and there are 28 parties to vote upon, it seems very unlikely that one party will get a majority of votes. The biggest party thus has to form a coalition with other parties to create a majority of at least 76 seats in the House of Representatives, although there is also the possibility of a minority coalition, but this is not preferred over a majority coalition. This is often referred to as the Dutch ‘polder model’, since the largest party is not able to pass all of its plans through and compromises have to be made. The current coalition for instance exists of the liberal right-wing People’s Party for Freedom and Democracy (VVD) and the left-wing Labour Party (PvdA). This purple coalition – blue represents the liberals, red represents the socialists – is often criticised for the fact that the parties’ leaders did not keep all promises made during the previous campaigning period. Last summer, PM Mark Rutte apologised for the broken promises, such as the €1,000 he had promised to every Dutch household after recovering from the economic crisis. However, these compromises are inevitable in every coalition, although it obviously becomes harder when more parties are involved. According to the latest opinion polls, Rutte’s VVD will be the largest again, but with only 28 seats (instead of the current 41). Forming a majority coalition could thus get very difficult, since the second largest party would be Wilders’ Party of Freedom (PVV) with 24 seats. Rutte has already stated that cooperation with the PVV is not going to happen again, so the coalition can only be formed with more ‘little’ parties – probably at least four – and it could be very difficult to come to an agreement then. The Dutch identity Apart from the fragmentation of the political landscape, most party leaders argue that the country is very divided as well. Due to globalisation and immigration the Dutch identity appears to be at risk. All debates address the Dutch identity, enabling politicians to state that the Netherlands is known for its tolerance and multicultural society, but also that the norms and values are slowly changing. A good example of these changing norms and values is the discussion about Zwarte Piet (Black Pete). This Dutch tradition, which sees Sinterklaas come to the Netherlands to celebrate his birthday by giving all the children presents, used to be a completely innocent holiday, until it was emphasized that Zwarte Piet might have originated from slavery. This discussion became a very intense one, due to emotional reactions on social media, and the ‘lack of respect’ from both ‘camps’. The people that were in favour of the tradition felt as if their tradition was being taken from them, while opponents felt as if the tradition actually went in against the fact that we are all equal, and that Black Petes could be replaced by less offensive Petes. This discussion is just an example that shows that there are mixed feelings among the Dutch. Part of the society feels as if we are all equal and we deserve to be treated as such, while the other part feels as if the Dutch identity is being taken away from them by the ‘newcomers’ we let into our country. Discussions tend to get very intense on social media, and that is why there is a feeling that our Dutch identity is in danger. The concerns about the norms and values we share in our country fit the populistic wave that spreads over the whole Western World. After the Brexit and the U.S. elections, it seems that more and more Western countries search for their own identity in reaction to globalisation. In combination with the threat of terrorism, this leads to the expected growth of nationalism, which in Dutch politics is represented by Geert Wilders’ right-wing party. Wilders is known for his anti-Islamic statements, his Quran ban, and his proposals for the Nexit and to close the borders immediately. Together with the French Marine Le Pen, he wants to start a movement in Europe were the EU becomes less important, and he promises the Dutch voter that the Netherlands will be ours again. Remarkable is that Wilders does not show up on television, public debates or in the papers at all, but instead only spreads his vision through Twitter. His strategy apparently works, since he led the opinion polls from the beginning of the year until now, although more people are starting to wonder how exactly Wilders wants to make the country ‘ours’ again. Other issues Apart from the topics that concern our Dutch identity, such as immigration, integration, racism, and EU membership, there are other important topics to decide on next week. For example the social security system is discussed a lot. Ever since the retirement age was increased from 65 to 67 in 2012, a lot of elderly have been trying to revert this decision. The Socialist Party, Wilder’s PVV, and the 50+ party are all trying to get the retirement age  back at 65, while most of the other parties argue that reversion of the policy would lead to an unsustainable situation due to the ageing of the population. Another unsustainable situation would occur if the government were to ignore the effects of global warming. According to Jesse Klaver, frontman of GroenLinks, the government has to use taxation to prevent the people from using harmful products. For example a carbon tax is often discussed, but he has also suggested taxation on meat consumption. Luckily, almost all party leaders agree on the fact that sustainable energy is on the agenda in the coming years, so it will definitely be taken into account. Furthermore, a lot of Dutch citizens have lost their faith in politics, and therefore prefer the use of referendums. So while voting for the House of Representatives next week, a decision concerning direct democracy is being made as well. Almost every left-wing party seems to be in favour of consultative referendums, but only a few want to change the indirect democracy into a direct one with binding referendums. The Forum for Democracy, a new party that was founded by Thierry Baudet, for instance is one such party. The topic came up after the referendum about the Association Agreement with Ukraine in April, as well as the Brexit. However, it remains to be seen whether direct democracy is really the best way to run a country. As with every election: there is more to it than just the issues that I discussed in this article. All policy plans concern education, health, defence, infrastructure, employment, wages, taxes, etc. etc. It seems to me that there is not one party that covers all the issues the way I find them important, so even voting appears to be making compromises. Next week is going to be an exciting week, but also a very unpredictable one, since I cannot say whether the ties will turn. I can only hope that all the Dutch know what they are voting for, and vote for the party that is closest to their norms and values. Personally I think that our Dutch identity is not really in danger, and we just have to get the feeling that we are a cool country that just recovered from the economic crisis, and is ready to be a country for everyone again, which I think it has always been. The 15th of March, you’ve got the possibility to vote at CREA.

In our annual family weekend last spring, my nephew, Paul, organized a beer tasting test. He let us taste seven Dutch beers: Heineken, Grolsch, Bavaria, and some lesser-known brands including one from a supermarket. The question was simple: which beer is from which of the seven brands? The outcome: Each family member had about one brand correct on average. One! My seven-year-old kid would not have done worse if he had listed the beers randomly (without drinking them!). What to make of this? Was my family too drunk after the beer tasting to list the beers in any sensible way? That seems unlikely. Most of my family would not even notice seven glasses of beer, let alone seven sips. A more probable explanation is that all those beers are truly indistinguishable taste-wise. This made me wonder: Why do all beers taste the same? Why do beer companies not differentiate their beer? “That is a great question,” nephew Paul said. “It cannot be hard for a great economist like you to come up with a convincing answer.” The pressure was on! “Let me think about it,” I said, nonchalantly, and I withdrew to my room. The first thing I did was to find out what Paul might have meant by “a great economist.” I found the answer in the work of John Maynard Keynes: “Economics is the science of thinking in terms of models joined to the art of choosing models which are relevant to the contemporary world.” So, a great economist is someone who has mastered the art of choosing the model that has the greatest bite in a real-world setting. The first model that came to mind was the Hotelling model, published by statistician and economic theorist Harold Hotelling in 1929. Here is a simple version of the model. Imagine a beach full of sunlovers, uniformly spread out over the beach. Two ice cream vendors, Ben and Jerry, sell identical ice cream at the very same price. At the start of the day, they decide where to locate their ice cream stands on the beach. Where did I see a link with beer? I’d argue that a location on the beach is analogous to the taste of beer, let’s say on a scale from not bitter at all to very bitter. Consumers vary in terms of preferred bitterness, which corresponds to their locations on the beach. When picking a beer, they make ‘travel costs’ depending on how far the beer’s bitterness deviates from their preferred bitterness. Back to Ben and Jerry. It is clear that both will locate in the middle. Their prices are fixed so their profits depend only on the number of customers. If Ben locates in the middle, the best thing Jerry can do is to stand next to him. He will get half the consumers. In any other spot, fewer consumers will come because they want to minimize their travel costs. I knew many applications of this model: In two-party elections, parties tend to avoid extreme programs (‘the median voter theorem’). The Economics & Business bachelor programs offered by the UvA and the VU are like two peas in a pot. In London, Brick Lane is famous for a cluster of Indian curry restaurants. However, I soon decided that the Hotelling model failed to offer a convincing explanation of why all Dutch beers taste the same. For one thing, the number of companies is greater than two. If Ben and Jerry settle in the middle, Ola, a third ice cream vender, will be better off locating somewhere else. In fact, in the case of three or more firms, some degree of product differentiation will be observed according to Hotelling’s theory. Another critical assumption is that the prices are fixed. Of course, beer companies can change their price once they have settled on the taste of their beer. In that case, they have a strong incentive to avoid price competition and differentiate themselves as I tried to articulate in my previous column. It was almost morning when I realized that with a small twist, the Hotelling model can be a reasonable description of the Dutch beer market. Imagine that Ben is ill one day so that Jerry is the only ice cream vender on the beach. Of course, Jerry will locate in the middle of the beach and sell his ice cream at a pleasing monopoly price. The next day Ben returns to the beach. Before he has the chance to open his ice cream stand, Jerry comes over and says: “Listen, Ben. We can make much higher profits when only one of us locates in the middle of the beach charging the monopoly price. Why don’t we make the following agreement: We alternate the days that we offer ice cream on the beach. You today, me tomorrow, you the day after, and so forth.” Ben immediately realized that this was a great plan. He only had to work once every two days and he would still earn more money than before. Indeed, I thought, the Dutch beer market looks divided, too: Heineken serves the west of the Netherlands, Grolsch the east and the north, and Bavaria the south. The result is regional monopolies that, in line with the model, brew barely distinguishable beer. I also knew that a couple of years ago, Dutch beer brewers Heineken, Grolsch, and Bavaria were fined by the European Commission for cartel formation. The next day, nephew Paul congratulated me on my reasoning. He added: “In line with your model, we would expect much greater product variety in the UK which has many more beer brewers than the Netherlands.” “Why?” I asked. “Well, it is much harder to sustain a cartel agreement in such a fragmented market. Indeed, there is little evidence of cartel pricing in the UK, as Margaret Slade shows. Moreover, there is a much greater variety of beer on offer: stout, brown ale, golden ale, pale ale, Indian pale ale, session bitter, best bitter, premium bitter, to name a few.” It was a fun family weekend. Cheers!

Well, you might have already heard about this economic terminology numerous times. You also might have encountered the concept from the United States more recently. In televised US presidential debates last year, Donald Trump and other conservative Republicans, repeatedly spoke in support for trickle-down economics. Although its principles have been largely applied in real-life scenarios, as so far no persuasive empirical evidence has been found to prove the validity of success for this theory. Nevertheless, it is definitely useful to acknowledge why the premise of trickle-down effect has failed to be captured in real life, as anticipated from the advocates, and why it should not be encouraged. THE HISTORY OF TRICKLE-DOWN ECONOMICS The term “trickle-down” to be implemented in the application of economics was first conceptualized by the American comedian and political commentator Will Rogers in the 20th century. The term was used to criticize the revolutionary stimulus reform that was executed by President Herbert Hoover during the Great Depression. He believed that monetary assistance being given to the working class, the unemployed and the poor communities would be inefficient to the mutual development of the economy. In stark contrast, those funds should be granted to large financial corporations within the country, in the hope that a healthy elite class would eventually help the rest of the economy through the creation of jobs and public investment projects. Of course, even back then, there were indeed massive flows of public skepticism about the effective use of these distributed funds in the hands of the elites. Under the presidency of Ronald Reagan, the term again gained popularity, albeit differently applied, as the Democratic Party showed their disapproval of his economic policy. The administration believed that this would be the revolutionary progress of supply-side economics, the ideology that dominated economic thinking at the time. Expansionary policies, such as tax cuts and other benefits to the wealthy, were highlighted as the primary concerns for the Democrats, however, as this allowed widened income discrepancies which indirectly led to the development of other societal problems. Surprisingly, the scientific community seems to denounce the implementation of trickle-down economics into academia, as they believe that it should stay in the realm of other political debates (or even more so, should not be mentioned). As such, you might understand that despite its frequent appearances in the news, there is yet to be a formal definition of trickle-down economics in mainstream textbooks. THE EXPLANATION So, from these above-mentioned historical events, it can be understood that trickle-down economics should be portrayed as economic benefits that are offered to the wealthy, in anticipation that deductively this should enhance common welfare. In particular, these privileges are usually presented under either a direct injection of money supply (which is of course much less of a likelihood now) or alternatively, tax reductions to businesses and its owners, to high-income earners, to other capital gains and dividends. With the help of neoclassical economic theory, these “so-called” leading entrepreneurs would promote economic growth through the use of these funds by allocating more investment into capital and labor – in the most simplistic sense – and the creation of more job opportunities. In reality, there is much more to this argument. The mere existence of banking and financing makes lending and borrowing much more convenient than ever. Trickle-down proponents argue that a positive feedback loop of lending and borrowing will be facilitated much easier, and consequently prompt even more economic expansion. Ideally, the theory of trickle-down economics incorporated one fundamental assumption, that the distribution ratio of these funds to the society should remain unchanged compared to what was recorded before the implementation of the trickle-down program. This assumption is shown to be the underlying reason to why the concept has failed to materialize, although it had made sense on paper. Besides the flawed logic of the assumption itself, several questions on how the trickle-down effect in economics has not been effective are also discussed. While the public opinion usually targets the misuse of the funds itself for individual benefits, there is more to that argument. Academic publications of the last century have identified some underlying causes for the downfall of trickle-down economics. In 1997, in their extensive discussion on income inequalities and capital, Aghion and Bolton discovered that the unpredictability and the instability of business investment returns made it extremely difficult for funds to “trickle-down” into the budget of the poor. Additionally, the owners of the projects are also in a vulnerable situation as they usually do not intend to cover themselves and their employees with income risk insurance. Secondly, policies that favored the accumulation of wealth for the rich also contributed to the weakening middle class all over the world, which has been long believed (and scientifically claimed) to be the solid foundation of the strength of one domestic economy. The economic/financial recession that exploded in 2008 dissolved the demographic and even until now, the US economy has yet to return to its prosperity recorded pre-crisis. The Obama administration’s response to that crisis is partly to be blamed as well. The rescue packages that went straight into the hands of corporate owners and bankrupt firms, instead of the middle class, did not aid the process of effectively revamping the economy. ECONOMISTS’ RESPONSES? There is a huge obstacle to the advancement of this topic during the early days of economics: the lack of available technological infrastructure to induce a comprehensive statistical report that would serve in defense, or attack, of one theory. Trickle-down economics also suffered the same destiny in the early 20th century. Although there was a nationwide effort of data collection for individual income for the sake of tax reporting, there was yet to be any sufficient academic work on the issue. The dispute could not be debated properly without the collection of large-scale empirical data. It was not until the 1950s that economist Simon Kuznets, famous for his work in his investigation of economic inequality, presented its first valid empirical data to make an argument for such case. The development of computational technology has allowed more devotion into these kinds of researches of this issue, usually represented as the academic research into income inequality. More recently, in 2015, a collective effort of five IMF economists has declared that the benefits of the trickle-down effect were not observed during periods of less stringent regulations by the government. For example, tax rates for the rich fell drastically, from 70 percentage points to merely 28 percent, under Reaganomics. Under this regime, the US economy suffered from an extended period of stagflation, with absurdly high inflation figures and excessive unemployment across the country. The available funds were definitely not put into productive causes, as there was the increased concentration of public money to defense companies for their own military involvement in the Middle East. The IMF study showed the rising concentration of wealth for the top percentiles would lead to a decrease in GDP growth in the short run, and little improvement in the economic performance in the medium term. Therefore, the “trickle-down”, as inferred from their analyses, would do no good to the general welfare. If you have ever looked through the detailed discussion of Thomas Piketty in his renowned work “Capital in the Twenty-first Century”, you might have realized the concept of r>g, or alternatively phrased, the rate of return of capital exceeded the growth of the economy. This development, per Piketty, was actually observed even as far back as the 19th century when colonization of European countries started to form all over the world. Major economic powers at that time (Britain, France, the Netherlands, etc.) started to collect “capital income” from their own colonies, but these private benefits were largely grasped by the wealthy society that had the means to establish their influence in its respective colonies. During the globalization era, using the collected statistical data that Piketty assembled, he also believed that this tendency of wealth accumulation had returned, with the “help” of favorable tax policies, and reinforced itself to be inherently dangerous to the social welfare of each citizen. IS THERE STILL AN OPEN DISCUSSION…? According to the academic researchers Aghion and Bolton (1997), there might be a hindering prospect for success of the trickle-down effect. Only when the government is equipped enough to establish an institutional framework that would appropriately adjust the system of capital redistribution, as they claimed, the negative impacts from the current trickle-down effect would only be mitigated. Each individual will benefit as a whole, as a result. In their lines of reasoning, this policy proposal would enable more capital to be distributed and accumulated by the working class. There are definitely some rare occurrences on our planet, however, that show trickle-down economics was somewhat observed throughout the history. As almost all properties were destroyed during the aftermath of the Second World War and everything has to be reinvigorated, capital injection was again utilized to revive the macroeconomic outlook. The published work of Simon Kuznets about inequality in 1953 showed that the trickle-down effect was observed, as inequality shrank and growth blossomed in the 35-year period from 1918. However, the event should not be considered as an empirical validity to the theory. Firstly, the difference, in terms of personal wealth, between social classes was narrowed down as the direct consequence of the destruction of the wars. Private properties were severely damaged, and barely any economic activity could be in operation during the time. The capital distribution, as such, was much more balanced, compared to the economic reform in the Great Depression. It also could be mentioned that since there was much less risk involved in the process of reconstruction rather than involving in new developmental projects, so the distributed funds for the former purpose were indeed inherently much more efficient. The answer to the question whether there is still an open discussion about trickle-down economics will then be: probably no. Or at least, not compatible with our socio-economic outlook, not just yet.

Economics – Evrim Öztamur For the first time in history, Germany’s biggest trading partner is China. With the increase in Chinese exports and an imports to 180 billion USD last year, China took the place of the US, which fell back behind France in the third place. The German government is likely to appreciate this change, as it made clear that global free trade must be safeguarded. After the President of the US threatened to impose import tariffs, and his top trade advisor accused Germany of exploiting a weak euro to boost exports, it is unlikely that the US will take back the No. 1 position in Germany’s trade top-list. German Vice Chancellor Sigmar Gabriel has also noted that the European Union should focus its economic back to Asia, in the case that the US takes protectionist approach in its international policy. Also this month, UK has been shown to have a higher GDP growth than previously expected; by 0.7%, up from 0.6%. According to the latest official estimate, the growth in the final three months of 2016 was higher than previously recorded. However, the Office for National Statistics cut down their expectations of 2016 as a whole from 2% to 1.8%. This revision puts UK right below Germany, who were predicting their growth at 1.9%. Although there has been a slowdown in business investment, the dominant services sector kept growing steadily. It is expected that the momentum gained at the end of 2016 will slow down, and be lost as we head towards the second quarter. Also worryingly, real household expenditure has increased by 0.7%, in comparison to a 0.1% increase in wages, which is clearly not sustainable. Mongolia’s IMF bailout – Hải Đăng Vũ The national government has recently agreed to initiate a US$5.5 billion rescue program from IMF institutions to alleviate its enduring debt problems over the last couple of years. Aside from the assistance from the IMF, the promised expansion of credits for Mongolia also include other offers from public financial organizations from within Asia, including support from major economies such as China, Japan and South Korea. Mongolia, having been once considered one of the fastest-growing economies of the world, has been faced with immense pressure of debt obligations of overseas investors. The contraction of domestic economy, most notably during the last three years, is a direct consequence of depressing performance of the mining industry, which is directly affected by abysmal commodity prices. Other industries of Mongolia are largely undeveloped. Although there is no information available on the allocation of these rescue packages, IMF had already initiated its campaign by the immediate provision of US$440 million last week. Further supply of money will be carried out, on the condition that Mongolia is required to adhere to stringent demands from the IMF. The economy is expected to receive more foreign investments whilst quickly escape from recession. As of the end of 2016, domestic GDP growth modestly reached 0.1%, with excessive inflation (6%) and high unemployment (8.6%). Kraft Heinz drops Unilever takeover bid  – Tsz-Tian Lu Kraft Heinz withdrew its offer to take over Unilever on the 19th of February, less than three days after it publicly confirmed its interest. It would have been the largest food conglomerate merger in the history, with combined sales revenue just behind Nestlé. The offer, in which Kraft Heinz wanted to acquire Unilever for $143bn, had been publicised in an extremely early stage and therefore left relatively little room for deals negotiation between the two firms. Unilever rebuffed the offer with hostility, stating that “Unilever rejected the proposal as it sees no merit, either financial or strategic, for Unilever’s shareholders. Unilever does not see the basis for any further discussions.”. There are several key factors that blocked the deal. Besides the fact that Unilever considered the offer fundamentally undervalued its business, political influences play an important role here as well. One of Kraft Heinz’s main shareholders, 3G capitals, is known to be strategically aggressive and has conducted hostile takeovers several times, including the takeover of Cadbury back in 2010 where Kraft reneged the commitment to retain factories and jobs in Britain. And because Unilever is an Anglo-Dutch company, the U.K. government was sceptical about the deal, since it worried that the deal would eliminate job opportunity in the U.K., which is a huge concern for the British government – especially after the Brexit –  and that it was contradicting to the British industrial policy. Business Recap – Nando Slijkerman The potential $143 billion takeover of Unilever by Kraft Heinz was the talk of the town last week. Well-placed sources said Kraft Heinz’s key investors – investment guru Warren Buffett and private equity tycoon Jorge Lemann – were forced into a chastening retreat after Unilever made clear the company stood no chance of sealing the second-largest corporate deal in history. Unilever’s stock price was booming, but later returned to its old price when Unilever foiled Kraft Heinz’s takeover bid. AEX exceeded finally the 500 index points, but after a few hours, it dropped below the 500 again. Due to upcoming elections in France and the Netherlands, the market will be a little more volatile these months. Not very profitable for the long-term investor, but the more for our High-Frequency Trading (HFT) friends. Monitor your market and let’s get it in! Let’s have a look at the numbers. AEX rose with 2,23% this month. S&P rose 3,41% and the Dow Jones increased by an impressive 4,26%. Our German neighbors (DAX) finished last by increasing 1,61%. Let’s monitor the developments with respect to the elections closely, and see you on the markets next month! UvA Inside – Leonie Ernst Although the second month of the year has been very successful for the university as a whole, the most important happening according to the students must have been the IT disturbance that hit both Blackboard and the website of the UvA itself. The disturbance was caused by a malfunction of the hardware, and had already occurred before. Due to maintenance, the websites were still inaccessible for another full day (February 23th), but by now the IT-problems should have been solved. As to the success of the university: the UvA was ranked the most international university of the Netherlands and Amsterdam was ranked the best student city in the country as well. The UvA has internationalisation as one of their strategic priorities since 2011, and the ranking shows that this strategy is definitely paying off. In the ranking of best student cities, Amsterdam is placed 36th out of 100. The top 3 consist of Montréal, Paris and London. Furthermore, four researchers from the UvA were awarded the prestigious Vici grant worth 1.5 million euros for their extraordinarily researches. On February 17th the rectors of the Dutch universities published a joint letter in the Dutch paper NRC Handelsblad. In their letter they stress their concerns regarding the recent developments in the United States and other parts of the world where the freedom of academia seems to be in danger. They call on EU governments to oppose attacks on academic freedom, because academic freedom is of great importance to us all. High potential programs – Daphne Sweers As students, we can count ourselves to the top layer that are fortunate enough to receive an education at university level. A high degree is likely to be paired with a dose of ambition and aspiration. Didn’t we all once wonder how it would be to be the CEO of the Apple of 2040? Not only students are eager to strive for the stars, companies are also keen to discover the most suitable employees among them, initiating several measures for that purpose. But how effective are those measures? An article by Zenger and Folkman provides an interesting read on the matter, stating that ‘companies are bad at identifying high-potential employees’. According to their research, approximately 40% of people in high potential programs (HIPO programs), should not have been placed in such a program. Specifically, there were four traits that have determined their spot in the HIPO programs: technical and professional expertise, taking initiative and delivering results, consistent commitment and a fit with the organizational culture. Moreover, the underperforming individuals fall short in two essential skills: strategic vision and the ability to motivate others. Such misplacement is disadvantageous for both parties involved, not only because organizations might end up with individuals in leadership positions where they will not thrive. The article serves as a good reminder that the goal and the path to it should serve the same purpose. Something to keep in the back of your mind when you enter your career path full of aspiration. The full article can be read here. Politics – Ioana Nicolau Last week, a number of EU states, including Germany, Italy, and France, have expressed their support for the European Commission’s plan to make the UK pay a substantial compensation bill before the Brexit talks will even start. Meanwhile, attempts to force the government to give all EU citizens in the UK permanent residency after Britain leaves the bloc have been defeated. Suicide attacks on two security bases in Syria from last Saturday killed over 32 people, including a senior intelligence officer, and threatened to overshadow peace talks in Geneva. Jonathan Paris, a Middle East analyst, explained that the Geneva talks encountered huge challenges even prior to the attacks, since they aim to decide on Syria’s political future following the war. Iran launched naval drills at the mouth of the Gulf and the Indian Ocean, as tensions with the US escalated after US President Donald Trump put Teheran “on notice” for firing a ballistic missile test. He stated that Iran was playing with fire and that all US options were on the table. China announced that it will suspend all imports of coal from North Korea in an effort to enact UN Security Council sanctions aimed at blocking the country’s nuclear weapons and ballistic-missile program. Dutch Politics Recap – Michael van Rhee Tension is rising as we get ever closer to the big day of the general election on March 15, with a few minor debates already taking place here and there, but without any serious fireworks so far. At the same time, other debates were almost called off, and generally speaking it seems that taking part in broadcast debates isn’t self-evident anymore. Geert Wilders shows that you can do just as well by being active on social media, bypassing journalists altogether — a trend that continues to be seen virtually everywhere. In spite of his absence, Wilders continues to dominate the news headlines, this time because of one of his bodyguards allegedly leaking sensitive information to third parties, thus possibly compromising Wilders’ safety. Wilders had only just started campaigning when the news came in, and he hasn’t been seen ever since. The only question is whether it’ll affect him at all. Meanwhile, most political parties have hit the road in order to start winning over floating voters. For those of you who speak Dutch: you can follow all the latest news surrounding the election in daily campaign blogs hosted by the NOS. As for us, we’ll get back to you soon with more articles! The Death of Kim Jong Un’s Brother – Raffaele Di Carlo On February 13th 2017, Kim Jong-nam, half-brother of North Korean dictator Kim Jong-un, was assassinated at Kuala Lumpur International Airport, Malaysia. The airport’s security footage shows Mr. Jong-nam being approached by two women at the baggage collection belt. After this brief encounter, the man approaches security officers indicating his face, and later he is carried to the hospital, where he eventually died. The most logical conclusion would be that in that short time frame of contact, the two women somehow managed to contaminate him with some toxic substance that finally led to his death. Following that logic, the two women, one Indonesian and one Vietnamese, were arrested by the Malaysian police. The general opinion is that the North Korean dictator might have decided to get rid of a potential pretender to his own title, although Kim Jong-nam seemed to have renounced that claim and preferred to be on the run. North Korean authorities, on the other hand, claim this was an assassination orchestrated by Malaysian nationals to appease the United States and South Korea. Reality might be in favor of the first hypothesis. There had been already one assassination attempt against Kim Jong-nam, in 2012, when he traveled from Singapore to China. In that circumstance, only a delay in his flight saved his life, and later the man sent his half-brother a letter in which he asked to be left in peace. It seems like he didn’t accept. Developments on the Fight against Islamic State – Omar Osman On February 23rd, Iraqi military forces took over Mosul airport. This is considered a milestone in the fight against the Islamic state. Mosul is the second largest city of Iraq with approximately 2 million inhabitants, and it is the main strong hold of IS. The operation took four hours. IS continued to fire mortars at the airport from further inside the city after losing the ground to the army. This advance brings the Iraqi army within less than a mile of western Mosul, which is under the control of IS, after the Eastern part was taken over by Iraqi army in last January. Also IS is expected to face an attack on Raqqa, its capital. Turkey has presented two proposals on how to carry out a joint military operation to drive IS from its stronghold in the Syrian city of Raqqa. If IS is expelled from Raqqa and Mosul, it will seize to be a “state” as how it is now, and its status will be demoted to a militant group of scattered forces. Maybe then it should come up with a different name. Trump’s Press Conference – Brunno Fontanetti ‘Look at what is happening is Sweden right now’, said President Donald Trump, institutionalizing what we knew was true, but feared the most: the president has absolute no clue about what he is talking about. In fact, after such a tremendous mistake during one of his ‘greatest rallies in the world’, research was made, and it was found that the day before Trump’s speech, Fox News aired a story correlating the intake of the refugees program ran by Sweden, with the increase in the rape rate of a specific city. If you think this news was complete bogus, you are as right as Trump’s supporters. Indeed, that wasn’t the only opportunity Trump disseminated fake news to the public: on his first press conference, or as I like to call it, the season premiere of Breaking a Country, Trump said he was the Republican president with the most votes ever in history. Of course, that wasn’t the case, and when questioned about the problem, he answered, as the good spoiled kid he is: `But I won, didn’t I? The problem with Trump appears to be greater than imaginable: we can’t really understand if what he is saying is actually a fact or not. He goes around the country making advertisement and saying one different thing at a time, one controversy after another. Some argue that this is his purpose: copying his great comrade, Vladimir Putin, Trump is making fake news to mask his real intentions, which are still unknown. As a person, I believe this is  the most intense moments in international politics I have ever seen. However, as a person who loves comedy, I must say, politics is getting kind of funny. Munich Security Conference – Yana Chernysh This month a 53rd Munich security conference took place. Around 500 leaders debated about the crises and challenges that international security is facing. The most crucial issues that had been discussed were the war conflicts in Syria, Afghanistan, and Eastern Ukraine. Angela Merkel pointed out the role of Germany in the solvency of such conflicts and the US as an important ally of the EU. A lot of speakers touched the topic of the Russian-Ukrainian conflict. Most of them exhorted Russia to stop the violent actions on the territory of Ukraine. Some of them also noticed that Russia is not following the arrangements that were made during the Minsk conference. The foreign minister of Russia Sergey Lavrov stated that he does not see any alternative to dialogue between Kiev, Donetsk, and Lugansk, as a method of solving the conflict. He also said that Russia is still in cooperation with NATO and is not willing to terminate it. However, Sergey Lavrov also claimed that NATO is an institution of the past that leads to certain tensions, supporting Trump’s position in this sense. Another important topic discussed during the conference were the Europe’s concerns regarding Trump’s politics and the new US government. One of the concerns was the willingness of Washington to make a deal with Moscow. Representatives of Trump also said that there will be no changes on key issues of the political path the US chose, at least for now.

A bit more than a year ago, on the 4th of January, I took the plane to Norway. The capital city Oslo was my destination, where I would spend my adventure of studying abroad for one semester. I planned everything perfectly and prepared myself for the rough Norwegian winter with a lammy coat, woolen long-sleeves, warm gloves and a small bottle of Jägermeister. Apart from some minor complications, like arriving at the wrong airport, the trip went very smoothly. After picking up the keys of my new house, I dropped my luggage, searched for the free Ikea bus and bought one plate, one fork, one spoon, one knife, one bowl, two pans, some bed linen, and of course ate the famous Swedish kjottboller as dinner. Although somewhat confused by the Norwegian prices (650 NOK in total??), I had the feeling I handled it quite economically. Apparently, I applied for a private university called BI The next day, it was time to go to the university. Even though it was a walk of only ten minutes, I safely took the bus. I was too scared to get lost in -15 degrees and 30 cm of snow. When the bus arrived in front of an enormous newly designed building I was not sure whether I was at the right spot. I walked in and got even more amazed: high escalators, glass elevators, a fancy coffee shop, and a gym inside the building. Apparently, I applied for a private university called BI Norwegian Business School, while still paying the low Dutch tuition fee. Not bad at all. In a lecture room with 200 other exchange students, the rector gave us a welcoming speech in which he spoke out his amazement, “You guys chose for the coldest, darkest, and most expensive country in Europe”. To soften this tough reality, he gave us some typical Norwegian goodies like a mixture for waffles and liver paté. Introduction Weeks the Dutch “hutspot” was appreciated, the gravy not so much The first two (!!) weeks were full of introduction activities. We learned a bit of Norwegian, went on a bus tour through Oslo, had to participate an intercultural workshop, made dinner in groups of our own nationality and shared all this food with each other (the Dutch “hutspot” was appreciated, the gravy not so much), and went to a hilarious lecture/comedy show called “How to be a Norwegian student?”. Although it was quite exhausting to participate all these social activities, it really helped to meet new people. In no time I became friends with Fins, Canadians, an Aussie, a Brit, Germans and even some Dutchies. Educational Experience After two weeks of fun, the serious part of the exchange started. I was excited and curious about the teachers, the level of education, the ratio of international versus national students, and the size of the classes. Compared to the lectures at the University of Amsterdam, the groups were pretty small, and therefore the classes were highly interactive. But also because of the low-existence of hierarchy between teachers and students at Norwegian universities, classes were always open for debate and even encouraged you to think critically. The level of English of the teachers was excellent (apart from some apparently Swedish funny pronunciations like “sheep money” instead of “cheap money”). for the first time during my finance studies, I heard about the genius man Minksy Among other things, we went on a Shell field trip where we had to give a marketing pitch for the Shell stores in Norway. Besides, I learned how to make use of rhetorical devices with the end goal to give a speech of fifteen minutes about a topic I was interested in. Furthermore, for the first time during my finance studies, I heard about the genius man Minksy and his famous financial stability theory. And last but not least I learned all about Norwegian culture and history; how and when Norway got independent, the difference between Nynorsk and Bokmal, and how the in 1933 initiated “Law of Jante” (the unwritten law that states “you are not to think you are anyone special or that you are better than us”) is still influencing the current Norwegian society. Trips But an Erasmus exchange is not an Erasmus exchange without making adventurous trips. My girls’ squad and I decided to go to the north of Norway, Tromsø. Hearing exciting stories of fellow students about the Northern Lights, made us thrilled to see them too. We searched for the best spot to see them, bought a huge jar of candy to stay awake, listened to and sang along with an awesome 90’s R&B playlist, and had our fully charged cameras at the ready. So we waited, and waited, and waited… No Northern Lights for us. With fresh courage we repeated this ritual the next day but unfortunately we were not the lucky ones. To ease the pain, we planned a dogsledding trip, which was terrifying and incredibly beautiful at the same time. Nightlife & Dating hook-ups with the more shy Norwegians ended up in fb-message conversations After some detox days in the north, we were ready to party again. Because of the ridiculous high alcohol prices, pre-drinks at student houses with Schiphol-imported beverages were common practice. Games and music were played until a complaint of the neighbours stopped the party. No problem at all. Around 22.00 it was time to head to the club anyways. With a whole group of exchange students we conquered the dance floor and the first romances appeared. Most of the time, hook-ups with the more shy Norwegians ended up in fb-message conversations, whereas kisses with other exchange students resulted in exciting and interesting dates. Dating was fun and unconditional, the knowledge the romance would probably stop after the semester ended, made everything easy and less serious. Political Debates “Fransje is just a hippie” Although we had the best parties and funniest conversations within our group, along with the Brexit, European Refugee Crisis and pre-elections in America, we could not avoid some heated discussions. A Brit who considered voting in favour of Brexit, Canadians who felt closely related to the US elections, were split up in a democratic- and a republican team, a Dutchy (me) who was the only one who fully supported Merkel’s “Wilkommenskultur” (welcoming culture), and an Aussie who felt a bit disengaged from these items but was constantly interested how we felt about these happenings. These conversations were tense, however, we could often end the discussion with a smile and conclude, “Fransje is just a hippie”. Summertime and the livin’ is easy As the months were passing by, the days were getting longer and longer (it barely turned into darkness), and in May already, it was beach weather in Oslo. To chill and relax in between the exams, we went for a swim (according to my Finnish friends a symbolic moment of getting rid of your “winter jacket”), biked through the city with the city bikes, or made a barbeque in one of the many nice parks in Oslo. One by one, exchange students were heading back home as they completed their exams. For a reason, I just could not leave this country already. The beautiful nature, delicious coffee, best kanelboller, and stylish people felt like a fairy tale. Also, there was one goal I still needed to accomplish: the Trolltunga hike. A 22 km long hike with a height of about 900 metres, located near the little town Odda. The landscape was gorgeous, almost as if you were walking through the scenery of the movie Frozen. But at the same time it was rough, climbing uphill, walking through snow, small waterfalls, and mud. But yesss thanks to my hiking boots and the helping hand of my Canadian friends I managed to survive it! Although it was hard to say goodbye, it was a great relief to realize I could travel around the world and visit all these people in their own countries. If you still have any doubts going on an Erasmus Exchange, I can only give you one advice: please just do it! The deadline to apply is the 1st of March, so there is still one week left! For more practical information and handy action plans, please read my previous article or visit the study abroad site. If you still have any questions, you could make an appointment with the Exchange Office via the consultation hours, or ask your questions via the digital question form.

Recently I noticed that I do get most of my news from social media. Moreover, I get to know about what is popular now, what the new trend is and what the world, in general, is facing and is concerned about through the social media platforms. How and why have social media become such an influential part of our everyday life? And what are the outcomes of this? That is what I want to discuss today. Social media have become a big part of people’s everyday lives. Judging from my friends and my experience with these platforms – yes, we do use them on a non-stop basis. But is there a problem with social media being so addictive and controlling if everything is so much easier with it? I think yes. First of all, we can name the reasons that do not seem that terrifying, mainly the prejudgment and making an opinion about a person based on what is said on social media about him and on his own profile. It is not a secret that the internet is full of jokes about famous and not so famous people that seem light and innocent at first. However, when you see them constantly, it is highly likely that you create a certain opinion about that person without even realizing that. Therefore, the next time you see, for example, a politician giving an important speech, you won’t be able to take it in all seriousness you need, because of all related jokes and cheesy articles you found out about this person. It is important to note that this is not only the case with celebrities. Most people also get to judge other ‘ordinary’ people based on their social media image, which, in most cases, is misleading. This does not seem like a big deal, though, does it? Well, there are some more serious issues concerning the way social media is controlling us. For this example, I will take Instagram. You know, usually, when you go on the exploration page, they show you a lot of different pictures and videos that may interest you, as Instagram thinks. What do you usually see? As far as I know, most of the time they would show the ‘new trends’ and how society should function and live. Maybe it will be a million pictures concerning the Women’s march or the elections, or how you need to get fit and healthy. On the other side, the platform will tell you how you need to stop body shaming and how important equality is. When I see all these posts, the only thought that gets into my head is – why do I even see it? If I want to get the news about the political world, I will go to a news website. If I want to know about the women’s march – I will just google it. And why someone (or better to say so many people) are trying to force their own opinion into the mass? 
Recently it got clear that social media is a perfect platform for promoting some specific ideas and now the social media is just overflown with the ‘propaganda’ type of posts and no one seems to see the problem here. The main issue that concerns me is that not all people actually apply critical thinking and analyze the posts they see, they just see them, believe them, and take them into account. If one does not really think about the things that are promoted, one can easily be driven to an extreme end of an initially right idea. Another interesting example of social media being an influential part of people’s life is modern politics. They use their own social media (like Twitter) to express their opinions and announce important decisions. After that, the news is usually spread around the Internet. This way, people do not need to switch on the TV every time they want to know the latest news, they can just go to any of their social media profiles. Although this can be a really good thing because the news is freely spread around the world, anyone can read them and make their own opinion, such freedom can lead to certain consequences. First of all, not all the news posted on the Internet, and especially on social media can be trusted. You can read more about this issue in Raffaele Di Carlo’s article. And second of all, not all people will analyze news that is posted on social media and will just believe them straight away. I think the main reason why social media is now used as a new home for news, shops, and sharing opinions is the easiness of it. It is very easy to spread anything on social media. It will either become popular because it is an interesting post, or one can just pay for it to be promoted. Any post can be seen by people from all over the world and it is so tempting that your opinion will be heard, isn’t it? Another easy thing about social media is that one can just hide behind their profile, say and promote whatever they seem to believe in and go back to their real life, while people on the Internet will be judging the post. It is easy to be brave when no-one knows who you are. All of these examples are still based on a good thing that social media gives us – the opportunity to share one’s interests, beliefs or just anything with the world. It is indeed a great opportunity, just use this opportunity wisely.

“You won’t believe how this Amazonian tribe cures cancer using only piranha scales and parrot feathers! DOCTORS HATE THEM.” “Discover 10 natural (and gluten-free) ways to resurrect the dead: number 6 will surprise you!” “The government lets refugees stay in five-star hotels while poor citizens are homeless. SHARE IF YOU ARE OUTRAGED.” “Were the Rothschilds actually in contact with extraterrestrial life forms? And how many freemasons does it take to unscrew a light bulb?” I’m sure posts like these nowadays infest pretty much anybody’s Facebook feed. I guess it is both the curse and blessing of unlimited access to all sorts of information combined with freedom of expression. I usually tend to just scroll down and ignore them and leave them to their glory at the expenses of the gullible. However, when I see people I previously deemed intelligent actually share them for other people to read, I tend to get slightly more alarmed. Not just because of the content of the article itself, which alone speaks volumes, but because the sources of such articles are usually very fishy and their names should at the very least ring a bell, making them unfit to support any sort of claim. And this phenomenon is not only limited to hippie remedies and conspiracy theories but caters well to the agenda of political parties and organizations of all sorts, in a real ‘fake news industry’ that capitalized millions of dollars in the last US elections alone. However, you look at it, misinformation (or “alternative facts”, as a wise man once said) is all around us, and its exponential growth has only recently become visible enough to hit the news. All over the world, people have started waging their own crusade against this subtle but not less deadly enemy. A first mover in the field was none other than Wikipedia, the free encyclopedia. An incredibly small part of its immense team of independent editors decided to put a very peculiar motion to the vote: to replace every single citation of the Daily Mail in Wikipedia articles with more reliable sources. The decision was caused, in the editors’ words, by the media outlet’s “reputation for poor fact-checking and sensationalism”. By a majority of 58 on 90 editors, the motion passed, and volunteers all over the world are already at work on modifying the already existing 12000ish links to the Daily Mail. Needless to say, the decision triggered an immediate reaction from most of the British press, including the Mail itself, which called the move “a politically motivated attempt to stifle the free press” and raised the stake by claiming Wikipedia itself should not be considered a reliable source of information. Another episode occurred in Italy, where after a series of legal défaillances concerning some of the members of his party, Beppe Grillo, leader of the Five Star Movement, deemed it appropriate to blame it onto the “partisan press”, which in his opinion fabricated such accusations in order to protect the status quo from his “revolution”. As a solution against the alleged misinformation of the national newspapers, Grillo suggested creating a People’s Jury on the Internet, where random citizens can vote to determine whether a certain piece of news is true or false. Regardless of the preposterous suggestion, it is ironic enough of him to blame the public newspapers and television of misinformation, when the media affiliated with his party (all sorts of Facebook pages and websites and even a newspaper) are some of the major retailers of clickbaits on the Internet. Not to mention his infamous personal blog, but that’s another story. So why is misinformation on the Internet dangerous in the first place? Well, imagine if somebody started spreading the news that vaccines are actually harmful and people believed it. Suddenly you would see a decrease in the number of vaccinations, and while common diseases such as the flu would not be affected, you would see other illnesses that we had not witnessed for a very long time flourish again and reach pandemic levels. Guess what? In 1998, an academic named Andrew Wakefield published an article in which he correlated vaccination in children with the incidence of autism and other complications. The article was later refuted, but in the meantime people believed it (and some still believe it today), and the rate of vaccinations in the UK dropped dramatically. Unsurprisingly, an epidemic of measles festered the country for the following years. Now, imagine if somebody came to you claiming that immigration and outsourcing are the main cause of unemployment in your country and that the only solution is to kick everyone out and restore autarchy… Unfortunately, there is little governments can do to control the spread of fake news: freedom of speech and press decrees that anyone may publish anything they like, as long as it does not incite to violence or illegal actions. Attempts from outside the news world, as the Wikipedia case and Grillo’s People’s Jury exemplified, are largely unsuccessful. It is then up to news outlets such as newspapers and tabloids to monitor their agents more strictly to prevent inaccurate depictions of reality. But then it is also up to us to use our critical thinking to understand what is a credible source and what is not. I usually enjoy comparing national newspapers to find the points where they coincide, and as far as economic theory is concerned, nothing clears your mind like reading a nice abstract on an academic journal on the subject, especially since someone sacrificed herself to let us read them for free. In addition, there are several blogs and websites spreading all over the Internet with the sole purpose of conducting fact-checking campaigns and debunk fake news. The most popular are Politifact for Politics and Econofact for Economics. Quickly reading through any of their articles will undoubtedly help you discern whether those suspect claims you read on your feed have any foundation. In general, however, I really like this rule of thumb: what makes a source credible? Evidence and authority. Why would you trust some random guy on the Internet when you wouldn’t believe professors and scholars?