What would happen if money was falling from the sky like rain? Though this sounds like the tagline for a movie, Economist and Central Bankers around the world have recently been debating a similar idea called Helicopter Money. The idea of figuratively “dropping money from the sky, onto the economy” has been gaining ground as monetary stimulus has failed to kick-start economic growth. Helicopter Money is less Robin Hood, more monetary policy. Japan has been considering similar measures as deflation has kept looming. Mario Draghi sent the media into a small frenzy when he labelled Helicopter Money ‘an interesting concept’. On the other side of the canal, Labour’s Jeremy Corbyn made vague suggestions about ‘People’s QE’. And finally, here at Rostra, Professor Westerhout recently wrote an article dismissing Helicopter Money as impossible. But “free money” does not leave the impression of being a serious nor solid economic policy. So why are economists and policymakers around the world discussing this seemingly crazy concept? First, what exactly is Helicopter Money? The term Helicopter Money was coined by monetary economist Milton Friedman in 1969. Friedman used it to support his argument that a Central Bank could never fail to increase the amount of money in an economy. He argued that even if regular bank operations would fail, a Central Bank could always print money and literally just drop it onto the economy from the sky. Though Friedman used the term to illustrate his argument, years later, Governor of the Federal Reserve, Ben Bernanke, would go on to use the concept in several speeches. Bernanke hinted at the hypothetical possibility of using Helicopter Money as an extreme tool to counter deflation; a situation where prices in the economy keep decreasing. It turned out not everyone was equally familiar with the work of Friedman as the helicopter metaphor escaped people’s minds and earned Mr. Bernanke the nickname “Helictoper Ben”. Both Bernanke and Friedman used the term Helicopter Money to refer to any occasion where the Central Bank prints money and brings this money into the economy for “free”. As long as Central Banks are able to print money, they are able to bring it into the economy and increase the money supply. The helicopters are just theatrics; drones would be more suitable to our times. But why would Central Banks want to go as far as to bring money into the economy for free? In general, Central Banks control the money supply in an economy to achieve price stability. For most Central Banks, this objective translates into a price inflation target of just below 2% annually. This means all Central Banks’ efforts are directed at reaching and maintaining this target. To do so they have several tools at their disposal; primarily the deposit rate which can be adjusted directly and precisely. In recent years, however, the inflation target has become increasingly difficult to reach. As a consequence, Central Banks have increasingly turned to unconventional measures such as Quantitative Easing and below zero deposit rates. In a sense, Helicopter Money is a new unconventional candidate for this list. If inflation fails to pick up despite all the extreme measures already taken, pumping money directly into the economy might be the answer. Especially when you believe, as many economist do, that the failure of previous measures is caused by transmission channels that limit or stop their effect (an example of such transmission channels are banks). Helicopter Money avoids these channel as the printed money directly enters the economy. It can therefore be seen as a sort of last effort by Central Banks to spark inflation. Bringing Helicopter Money into the economy can be done in three ways. The money printed by the Central Bank can be handed directly to the people as a one-time donation. The money could also be handed to the government to fund infrastructure or other government spending. A final option could be used to use the money to fund a one-time tax-cut. Theoretically, this third type is identical to the first: having an extra euro to spend is the same as having to spend a euro less. In practice, of course, they could have very different effects. So where is the discussion about Helicopter Money coming from? In general there are two major issues with Helicopter Money policies: its implementation and its theory. How feasible is it to implement a policy that hands out free money? Giving people free money brings about a lot of questions on how much to distribute and to whom: is everyone, regardless of the size of their Bank account supposed to get the same X amount of money? Giving governments free money is also not easy. Governments are driven by politics and suffer from bureaucracy, both likely to hamper and complicate efficient spending. Furthermore governments are regulated by laws, for example within the European Union the ECB is forbidden to support national governments with money. When it comes to handing out free money there is a lot to consider, regardless of who you give it to, and practical issues tend to dominate theoretical benefits. Aside from these practical considerations there are also serious theoretical doubts. Professor Westerhout in his article outlined two main criticisms of the Helicopter Money theory. One of his arguments states that Helicopter Money can never be a temporary or one-time policy. Any positive effect on spending would lead people to consider Helicopter Money a success, since the costs of printing the money were basically zero. As a result the policy will be repeated over and over again until it becomes permanent. This argument is reasonable, but not entirely convincing. The goal of Helicopter Money is to push inflation towards the target level by increasing spending. From a political point of view, Helicopter Money is indeed a very tempting free stimulus of spending. But from the perspective of a Central Bank, Helicopter Money is a monetary instrument used to bring inflation back on track. Once this is achieved, the tool seizes to be of use. It even becomes damaging to the Central Bank’s objective as increases in the money supply will eventually always lead to inflation. As long as the Central Bank controls the printing press and sticks to its mandate, Helicopter Money will never be permanent. Here we clearly see the importance of Central Bank independence. Another argument made by professor Westerhout is that handing out free money will inevitably lead to people working less. Economic experiments have confirmed that a negative income tax, which is similar to handing out free money, causes people to work less. Sounds intuitive: why work for money when you can get it for free? But there is a slight twist to Helicopter Money that makes it different from a negative income tax. This has to do with timing. As reasoned above, a Helicopter Money policy will always be temporary. A tax scheme on the other hand is likely to stay around for long or even indefinitely. The future income consumers reasonably expect from the tax scheme causes them to start working less now. However, in the case of Helicopter Money these future benefits are absent as consumers realize the policy is only temporary and things will return to normal. As a consequence, consumers are unlikely to change the hours they work in response to a Helicopter Money policy. Crucial to this is, of course, the believe that the policy will be temporary. But as shown above the Central Bank can credibly commit to this and Helicopter Money might thus not depress labour supply. Helicopter money is an interesting concept and a logical extension to the unconventional measures already taken by Central Banks. However, when it comes to handing out free money there is a lot to consider, regardless of who you give it to, and practical issues tend to dominate theoretical benefits. Yet it would be ignorant to dismiss the possibility of Helicopter Money altogether. The discussion is relevant, see for example the blog of Helicopter Ben himself where he outlines several ways in which the FED could actually use Helicopter Money. In general, the concept remains theoretical with little to no understanding of whether it will work or how to implement it. The idea of free money being handed to people sounds extraordinary, especially to people with little understanding of monetary economics. We live, however, in extraordinary times which might just call for extraordinary measures like this. As monetary policy keeps moving deeper into unknown territory, Helicopter Money is unlikely to be the last economic oddity to be revived.

UvA Inside – by Olga Kowalska From the 9th to 13th of May, UvA (Faculty and Central) Student Council elections took place. Students could choose between four parties for the CSR (Central Student Council) and between two parties for the FSR (Faculty Student Council) FEB. The election turnout was sadly quite low: only 19,7% of UvA students cast their vote. This is the final outcome for Central Student Council: both UvASociaal and De Decentralen won 3 seats, De Vrije Student won 1 seat, while Ons kritisch alternatief was left without any place in the council. For the FSR of the Faculty of Economics and Business, List Sefa was the big winner. The party received a total of 508 votes and won 8 seats in the Council, while FEB Sociaal with a total of 166 votes has won 2 seats. Congratulations to all the winners and success in achieving all the goals in the next academic year! According to the outcome of National Student Survey (NSE), the satisfaction of students at the UvA has increased since last year. The overall satisfaction score was 4.01, so 0.05 more compared to year 2015. However, UvA is still bit behind the average satisfaction level of other universities, which this year was 4.07. Students rated atmosphere at the university and content of the courses quite high (4.01 and 3.93 respectively), but career (3.23) and study guidance (3.37) still need some improvement. We hope that in the next year we can see improvement in all of the areas! Economics Recap – by Daniel Koudijs This summer is set to be hot. At the end of June, two important events will take place that are likely to define the second half of 2016. Firstly, there is the Brexit Referendum on the 23rd of June, which will finally end the uncertainty about the UK’s place in the EU. Secondly, another significant decision will be made a few days earlier at the meeting of the Federal Reserve: will interest rates in the US be raised again? The minutes of the FED meeting this month reveal a strong preference towards raising again in June. Markets responded with worry and caution, as many believe the US economy is not strong enough and the costs of the FED acting too soon outweigh the costs of waiting a bit longer. Enough to worry about – closer to home, June seems very far away as European Banks, specifically in Italy, are struggling. Italian banks are caught in an ongoing fight with bad loans, pushing some of them to the edge of default and spreading contagion risk throughout the Italian financial system. A disaster was averted when emergency fund Atalanta rescued an otherwise failed IPO by Banco Popolare di Vicenza which was backed by UniCredit. The emergency fund was only recently put in place but has already used up much of its capital. Whether Atalanta can hold up the Italian sky until June remains a question. Business Recap  – by Yoeri Min The Netherlands remains one of the most creditworthy countries in the world, according to credit evaluator Standard & Poor’s last Friday’s report on the Dutch economy. On the same day, Goldman Sachs encountered much unexpected opposition against the proposed salaries of its top executives. Nearly one-third of the U.S. bank’s shareholders voted against the paying plans. The chemical industry in Netherlands has produced more than 1 percent more in the first quarter than in the same period last year The package transport in Netherlands has grown considerably last year. This is partly because many Dutch consumers increasingly make purchases online. Last year, Dutch motorists went more often to the garage to maintain their car. The total turnover of garages from maintenance work increased with 10,6% compared to last year. The recovery of the Dutch housing market propels the sale of household appliances. Last quarter, a lot more kitchen appliances were sold than a year earlier according to figures from research firm GfK. New Oath for Accountants – by Michel Mijlof When you are talking about an oath for a certain profession, you mostly think of lawyers and judges. They have to promise in front of the court that they are going to do their job in a professional and ethical way. Since the recent financial crisis, some bankers are also swearing an oath to make the financial world a bit more ethical. But, in the Netherlands, all the accountants are going to swear an oath. In some countries, such as Ireland or Scotland, the accountants already have to do so. The oath will be closely related to the values of the accountancy profession. Specifically, it should be related to the behavior and profession rules according to the VGBA, which is a special department of the NBA (Dutch Association of Accountants) that is dealing with the ethical rules and values of the profession. The new oath means that accountants should be aware of the public interest. They also should apprehend the integrity, objectivity, professional skills, carefulness and confidentiality. All the current accountants have to swear the oath before the 1st of May 2017. New accountants will swear their oath when receiving their certificate of qualification. Politics Recap – by Ioana Nicolau Discussions around Turkey joining the EU, which formally began in 1997, have highlighted the concerns regarding the pace of economic reform in Turkey, security issues, as well as the tensed relationship that the country has with Cyprus. The UK seems to be the state which is strongly opposing Turkey joining the EU, with populist politicians claiming millions of new migrants would enter the UK in the following years and increased risk of murders and terrorists attacks. In Austria, for the first time since WW II, the two parties that have dominated Austrian politics for decades, the Social Democrats and the conservative People’s Party, were both defeated by the right-wing populist Freedom Party. This led to the Social Democrat leader, Chancellor Werner Faymann, resigning after a revolt in his party over the failure to stop the Freedom Party from rising up. As of 1.00 PM (23rd of May), the final results of the second round of the presidential elections are not yet known with both Freedom Party’s Norbert Hofer and Green-backed independent Alexander Van der Bellen having about 50% of the vote in exit polls. After U.S. President George W. Bush’s administration refused to offer Indian Prime Minister Narendra Modi a visa for entering the U.S. (for “severe violations of religious freedom”) in 2005, current president Barack Obama will meet him in Washington next month to discuss security, economic growth, climate change and defense cooperation. The visit is perceived as meant to aid the two states in counterbalancing China’s increasing power. No Freedom Without Equality – by Artur Rymer On May the 17th, the world celebrated the annual International Day Against Homophobia, Transphobia and Biphobia. The goal? To raise awareness of the problem of discrimination that LGBTQ people around the world face every day. And it is a very serious problem. According to the report “State-Sponsored Homophobia” created by the International Lesbian, Gay, Bisexual, Trans and Intersex Association (ILGA), same-sex sexual acts are illegal in 74 countries and in 13 of those the punishment is death. At the same time, only 22 countries have introduced full marriage equality. On top of that, LGBTQ people face abuse and discrimination at home, in school, in the workplace and in everyday life in general in virtually every country, including those that are considered most-LGBT friendly. The situation of transsexual people is often even more dire, as we could have seen recently with the new, extremely discriminatory “bathroom law” in North Carolina. Despite considerable advancements in LGBTQ rights in recent years, the changes seem to have slowed down. And, considering discrimination LGBTQ have to endure, the process should speed up. I should speed up much more and immediately! Don’t stay indifferent to homophobia – no one can be truly free in a society without full equality! Max to the Max – by Michael van Rhee Dutch Formula 1 driver, Max Verstappen, recently wrote history by winning the Spanish Grand Prix in his debut for Red Bull Racing at the tender age of just 18 years and 227 days, thereby becoming the youngest ever winner of a Grand Prix in the Formula 1. Max’s life has been all about racing from the day he was born, seeing as both of his parents competed in racing. His father, Jos, was a Formula 1 driver himself (although perhaps not as good as his son), and his mother, Sophie, competed in karting. It was only Max’s first race for Red Bull Racing, having raced for Toro Rosso (another team owned by the American beverage company) throughout last year, and what a debut it was! After both Mercedes drivers had been eliminated — or rather, had eliminated themselves — Max truly excelled to withstand the pressure from chasing drivers to stay in first position. Hats off! Leicester City Win the Premier League – by Antoine Steen In perhaps one of the most remarkable sporting feats of all time, Leicester City have won the Premier League with two games to spare. At the beginning of the season, the bookmaker Ladbrokes was offering odds of 5000/1 for Leicester City to win the league. For some perspective on how unlikely an event this is, bookmakers have also offered odds of 1000/1 on Playboy magazine founder Hugh Hefner admitting he is a virgin and odds of 2,000/1 on Elvis Presley being found alive. In Ladbrokes’ 130-year existence, the bookmakers have never paid out bets on odds of 5000/1. This was a genuine black swan event. That it should have occurred in what is perhaps the most popular sports league in the world makes it all the more remarkable. Eurovision Song Contest  – by Yana Chernysh On  the 14th of May, the final of Eurovision 2016 was held in Stockholm, Sweden. Eurovison is a song contest started in 1956 in Europe. Each participating country can send one contestant with a new song, never published before the competition. The winner is determined by the points gained in the final. The points are given out by both professional jury and the televotes of the viewers. This year, with traditional 26 finalists, the 1st place went to Ukrainian singer Jamala with her song 1944. 2nd place went to Australia with Dami Im singing Sound of Silence. 3rd place went to Russia with Sergei Lazarev performing You’re the Only One. Ukrainian win caused a lot of controversial opinions. Jamala was accused of political contest in the song and a petition was signed to redefine the results. However, the results stayed the same. In several countries the contest was called political and became a big topic in the news. In 2017 Eurovision will be held in Ukraine, as it was the winning country this year. Let Them Rest – by Raffaele Di Carlo Memory is a tricky thing: sometimes we remember clearly things that happened years ago and forget what we had for dinner just the day before. However, if I asked you what you were doing on the 11th of September 2001, when all the major news services of the world broadcast the attack on the World Trade Center live from New York City, I am quite sure you would recall it perfectly. So do the victims and their relatives, who might soon have a chance to have their voice heard, as the US Congress recently passed a bill, the Justice Against Sponsors of Terrorism Act (JASTA), which would allow them to sue any member of the Saudi government allegedly involved in financing the terrorist attack. As you might expect, Saudi Arabia wasn’t very pleased with the turn of events: the Saudi government firmly denied any involvement in the attack – after all there was no evidence to begin with – and threatened to sell 750$ billions  worth of US Treasury securities, which could have nefarious effects on the US economic policy. It would appear the relationship between the two countries, once allies, has turned sour. The decision wasn’t unanimous in the United States themselves: the President, Barack Obama, opposed the bill since it was first proposed, claiming it would have disastrous consequences for the US foreign affairs, and vetoed its final draft. However, the Congress, with a suprising Democrat majority led by New York Senator Chuck Schumer, might overrule him. In the meantime, no legal action has actually taken place yet, sign that maybe the victims and their families have finally moved on, and that there is no use in dwelling on the past. Venezuelan Crisis – by Brunno Fontanetti Venezuela’s unstable economy started to reflect on the political scenario. The wave of protests increased in Venezuela as the opposition and government supporters get into confrontation daily. The riots have already caused several deaths and dozens of injuries. Just over a week ago, students, and the opposition in general, initiated protests against Maduro’s economic policy and the growing political insecurity. In response, the president has tightened security and promised that he won’t facilitate any coup. A year after the death of Hugo Chavez, Nicolas Maduro has increasingly been trying to contain the turbulence zone that crosses the country. According to the president, the country that is at (economic) war against the private sector, namely the opposition. Large companies and employers are accused of inflating prices for lack of economic patriotism. This month, the government approved a law prohibiting profit margins above 30%. The army will work as fiscal in this policy, checking each store’s prices and profits. Moreover, inflation rose to 55%, mainly because of exchange rates. The official fixed rate of the dollar exchange rate is 6.3 bolivars, but on the black market the dollar can reach 70 bolivares. To crown Venezuela’s unstable situation, the country is considered to be one of the most corrupt in the world. A corruption that the government attaches to the “parasitic bourgeoisie and speculative capitalism” but that has a lot of influence from the Chavez period of ruling: all regions were given to rulers of the Chavez family and friends, according to the opposition. While opposition and Maduro’s supporters fight, the economic situation creates a shortage of daily consumer goods. Venezuela imports virtually everything, including food products. There is a lack of basic products on supermarket shelves and to get them, people have to stand in lines for hours. Moreover, lots of non-protesters have been injured and killed in the middle of this fight for power, which creates a big interrogation mark in our heads: Who is really fighting for the interests of the country?

Global marketing spending exceeds $1 trillion, which makes up for 1 to about 2 percent of global GDP. As markets undergo dynamic changes, it is intuitive that for any company Finance and R&D are not the functions to lead this. Even with the best operations and organisation, without strong marketing plans, products or services will not meet the market and will fail to attract customer loyalty. Therefore, there is no question that companies nowadays place significant importance on their marketing approaches. The development of better analytical tools from recent years has made business leaders even more powerful and gave them a firepower for decisions with regards to strategy. If wisely chosen, marketing-mix analytics could lead to really pleasing marketing return to investment ratios. A CMO survey from February last year revealed that enterprises currently allocate 6.7% of their marketing budgets on analytics and expect to increase their spending to 11.1% over the next three years. The results of the survey also drew attention to the fact that more than one billion dollars was directed to this field. Estimates show that the number of marketing-tech companies doubled since 2014, currently reaching 2,000. Beginning with 2012, systems around the world have generated approximately 2.5 exabytes (10^18 bites) of data each day. There is certainly a reason for all of these. Analytics are currently considered a driver for product innovation. Companies can certainly make use of big data and digital platforms to develop and test new products, therefore, tracking the impact of product launches in real time. In addition, enterprises can benefit from information from digital channels by gaining insights from and about customers. Data-visualisation tools and dashboards help in building a clear view with regards to consumer preferences which can lead to new product ideas or improvement of existing products. Companies can also use analytics to keep themselves connected to market trends and competitors’ moves in order to make optimal pricing choices. Further on, big data can facilitate an efficient coordination with suppliers and other stakeholders. Sophisticated software systems are developed by companies in order to share inventory information and product prices with suppliers in real time. However, it is sometimes the case that marketing analytics does not act as a guardian angel for firms. It goes that all the diverse turbulences in the business environment have been labelled as “disruptions”. Although any disruption could be tackled down with the use of an adequate strategy backed up by regressions, the sad part is that most marketers actually fail to identify the factors that led to disruptions and establish action points. Firstly, this is certainly tied to the idea that when creating business plans and accounting for challenges, marketing executives do not separate between “controllables” and “uncontrollables”. The key solution is focus on empowering actions that have an impact on controllables while striving to defend from uncontrollables. And this is where marketing analytics should come to rescue. It is believed that quite a few companies do not have the capability to actually catalyse benefits brought by analytics, go wrong in their understanding of why sales initiatives have or have not worked out and therefore, end up with weak planning. To wrap it up, despite of all the fuss around analytics, according to Unica’s State of Marketing in 2011 report , 57% of marketers cited “measurement, analysis, and learning” as the biggest bottleneck they face within their organisations. In theory, big data and advanced analytics can offer useful insights, but in reality, it is maybe that all the consumer packaged goods companies just seem to be starting to leverage them.

April 27th saw the third edition of King’s Day, a national holiday in honour of the reigning monarch — King Willem-Alexander — celebrated on his birthday. It’s the successor of Queen’s Day, which saw the light of day as early as 1891 (back when Wilhelmina was still queen) and ran until 2013, when Beatrix abdicated and her oldest son — the first male monarch in over a century — took over. A privileged family This year saw the royal family pay a visit to Zwolle (a city in the province Overijssel, in the east of the Netherlands), where they were welcomed with the usual festivities. Admittedly, I could’ve done something more fun than watch these live on television, but what do you do, eh? Here I was, sat in front of my television, watching people dying to shake the hand of this one man guarded by an army of police officers. Okay, I suppose he’s a celebrity, but what for? The answer is as simple as it is unfathomable: he was born into the right womb, nothing more. That’s why he got to shake all those hands (not that I envy him), that’s why he earns a million euros per year (okay, there I might), and that’s why he doesn’t have to fight himself into society like everyone else has to. I’m not saying that our king (or any other monarch, for that matter) does nothing all day long; in fact, I quite like Willem-Alexander as a person. However, that takes absolutely nothing away from the fact that he gets to live a luxurious life solely for being the son of a supposedly ‘royal’ mother. I mean, just think about it: what does it even mean to be ‘royal’ anymore? It seems to me that traditional media (as well as social media more recently) have completely demythologised whatever was left of the royal family. (To illustrate: they have their own Facebook page.) This can ultimately only be a good thing, since it makes people realise that they’re just people who go to the toilet every day — much like you, if I’m not mistaken. On a more serious note, though, I think it’s highly unfair that there’s still such a thing as a privileged family — one that has more privileges than yours! — in a democratic country like ours. The monarchy is a severely outdated regime that clearly doesn’t rhyme with ‘democracy’, so it’s high time that we went back to our 17th century republican roots — hard-fought roots that we eventually lost. Republican roots This 17th century, often noted as the Golden Age of the Dutch Republic, was a very successful time in history for the early Dutch state. During this time, the Dutch Republic — consisting roughly of present-day the Netherlands, Belgium, and Luxembourg — overcame its Spanish rulers and became a major economic force in the world. The two westernmost coastal states — Holland and Zeeland — were among the most influential states, largely because of their location. Sitting right by the seaside, they explored and exploited the possibilities of overseas trade to the fullest, using its two most important fleets: the Dutch West India Company and the Dutch East India Company. The latter was the most successful of the two (in fact, it was one of the world’s most successful fleets altogether), bringing home exotic spices from the East that sold for very high prices due to their scarcity. As trade boomed, Amsterdam became an important economic hub in Western Europe, but it wasn’t just economic opportunities that brought people to the Republic; it was also known and renowned for its religious freedom — a unique and extremely hard-fought right, let me tell you. This brought religiously suppressed minorities (often from very different cultures) to the Republic, adding their sometimes very different skill sets to the knowledge that was already present there. This diversification of society proved to be a very important impulse — not just economically. Another thing that was unique about the Republic was its political structure. In the 16th century, when we still belonged to the Spanish empire, the Netherlands consisted of eight strictly independent provinces. However, as the 16th century saw a rebellion unfold against our Spanish rulers (who were very unpopular due to high taxes and suppression of religious freedom), it was argued that cooperation was required in order to defeat them. This saw the birth of the Dutch Republic. Despite the union, all states were very autonomous regions that cared a lot about their independence — a rare situation in a part of the world that was otherwise dominated by monarchies. Logically, this early democratic system also had its drawbacks, as the slow decision-making that resulted from this development meant that the Republic couldn’t react to changes as quickly as it could before. This would cost them in situations that required quick decision-making, such as wars. The Republic eventually lost its hegemony, primarily due to continued attacks from neighbouring countries, which recognised that the Republic had become a serious threat to their own livelihood. This forced the Republic to spend more money on its own defences, but it didn’t have enough to continue to invest in all of its departments. For instance, the North Sea department of its marine was neglected, causing the Republic to lose ground to the British in wars fought out on the North Sea. As trade stagnated and expenses increased, the Republic fell into a deep recession, and it was forced to raise taxes in order to pay off its increasing debt. A once mighty nation had fallen, and the call for a strong leader got louder again. As more and more power got concentrated around one person, the Republic already started to look more like a constitutional monarchy, and this process was ‘finally’ completed in 1806, when the French — led by Napoléon Bonaparte — imposed a monarchy on us by crowning his very brother (Louis Napoléon Bonaparte) the first king of Holland. This title then passed on to the wealthy Orange-Nassau family in 1813, where it has been to this very day. Four good reasons And so we fast-forward to the present day, where just about everything has changed dramatically, but not the monarchy and its royal family. I suppose it’s just a matter of time, but it’s still frustrating. My main reason for favouring a republic over a monarchy is very simple: it’s a much fairer system. In fact, you could even say that the Dutch monarchy — with its royal family — violates Article 1 of the Dutch Constitution, which states that all citizens of the Netherlands ought to be treated equally in equal situations. I don’t mean to be petty here, but this is not at all the case right now. One good example of this is the fact that the king, who already earns a million euros per year, is exempt from paying certain taxes that nobody else is exempt from paying. How in the world can that be the case? As said, I find it unfathomable (and completely unacceptable) that members of the royal family have more privileges than me, solely because of their last name. It’s depressing to see how many Dutch people seem to simply accept this fact; my guess is that most of these people have never really thought about it. This presumption is supported by the figures, which show that a large group of people within the Netherlands — an estimated 80% — don’t really question the monarchy at all; these are the people that simply take it for granted, “since it has always been there” — cough. As we’ve just seen, nothing could be further from the truth, so don’t let anyone tell you otherwise! Next up: exorbitant expenses. This is the one thing that, as far as I can tell, does seem to be getting some media attention every once in a while, probably because it sparks outrage among the public, and for good reason at that. The royal family is a notoriously big spender, and can you blame them? The money is there for them to use, and we’re doing nothing to stop them, so why wouldn’t they? Personally, I’ve never understood why the Golden Coach, for instance, needed to go into a four-year restoration spell. What are you going to do with it, send it to Pimp My Ride? It’s a goddamn coach! Maintenance of palaces is another one that’s hard to swallow, not lastly because I don’t understand why those palaces aren’t made public property to begin with. Third, there’s no use for a royal family anymore. Some people seem to think that the king still has an important representative function as the ambassador of a country, but let me ask you this: when you think of François Hollande, do you think of him as the Co-Prince of Andorra — which he is — or as the President of France? And finally, it’s not fair towards their children, or that’s how I feel. Even if they grow up in great wealth and the choice seems simple, they were never given a choice to begin with. Wealth is fun, but what about privacy? What if Amalia wanted a boyfriend right now? I’m not too sure how this would pan out, but for some reason, I just can’t imagine her bringing back some random dude to her house — err, palace — very easily. In a time when social media have taken over the world, the myth around the royal family has completely ceased to be, while Amalia is still expected to act ‘royally’ — whatever that means. I feel sorry for the little girl, and I’m not even being cynical there. Diminished support Luckily, the public opinion on the matter is gradually changing. Just before King’s Day, new figures concerning support for the monarchy were released into the world, and these showed that support had dropped from 78% in 2013 to just 65% in 2016 — an annual decrease of a good 4%. Assuming a (perhaps too optimistic) linear function, this would mean that support would drop under the 50% mark by 2020, still well into Willem-Alexander’s reign. A constitutional amendment would require a bit more than that (a two-thirds majority in both Chambers), but it’s still a very important mark, at least symbolically speaking. I’m afraid I won’t live to see the downfall of the Dutch monarchy, but when that day finally comes — and I think that this will be after Amalia’s reign — the world will be a fairer place yet again.

In Ethiopia, El Niño-influenced drought continues to affect millions of people, deepening food insecurity, malnutrition and water shortages in affected areas. [..] It is projected that in 2016, 2.2 million children under age 5 and pregnant/breastfeeding mothers will be moderately malnourished and 450,000 children will be severely malnourished (UN-OCHA, 13 April 2016). A major problem of climate change policies is their public good feature: (parts of the) benefits of the policies accrue to other countries. This may reduce the drive to take policy measures; it is cheaper to benefit from the measures taken by other countries. In addition, it may take years for the benefits of policies that are currently undertaken to become visible. Actually, it is a small wonder that about 200 countries succeeded to come to an agreement on climate change in Paris last year. In Somalia, a severe drought exacerbated by El Niño conditions has hit parts of Puntland and Somaliland, affecting hundreds of thousands of people. [..] the total number of people who need humanitarian assistance and livelihood support to 1.7 million, or 37 per cent of the 4.6 million people living in Puntland and Somaliland. Another problem is that climate change policies are costly. International agreements have to be translated into national policy measures. Next, there are winners and losers (as is the case for many types of government policies). On top of that, the financing of climate change policies may hinder economic growth. On the other hand, one can argue that investments in climate change may benefit the economy. The debate of which of the two effects is dominant, has not yet come to an end. In Madagascar, almost 2 million people are food insecure, and households in the worst-affected areas are expected to be unable to meet basic food consumption requirements until the maize harvest starts in April. Poor households are engaging in negative coping strategies, such as selling small animals and migrating. Increased consumption of cactus leaves and unripe fruits has been reported among poor households. As an example, take a look at the reduction of the emission of CO2, perhaps the most important element of climate change policies. This can be achieved by taxing the emission of CO2 or, in case a market in tradeable credits is in place as in Europe, by restricting the volume of emissions allowed. The economic effect of this is an increase in the price of fossil fuels and, consequently, downward adjustment of consumption and investment demand. This reduces economic growth when output is driven by domestic demand. However, the price increase may also contribute to economic growth; for example, it may induce firms to start investing in cost-reducing technologies, increasing growth through higher investment and through the saving on production costs. In Papua New Guinea, the Government estimates that more than 2.7 million people are affected by drought and over 700,000 people live in areas classified as Category 4 and 5, where food production has been severely affected. Approximately 480,000 of these people are in Category 5 areas and facing critical food shortages. One issue of climate change policies that is even bigger concerns their political-economic effects. Price increases are disliked by both consumers and producers. Policymakers that want to be reappointed cannot neglect that. This may give rise to delays in the implementation of policy change. The IMF lately noted that peer pressure may make such delay less likely. The simple fact that a large number of countries has come to an agreement in Paris may keep the train going. I do believe in such a peer pressure effect. However, I also think that things may go in the opposite direction. Should the implementation of policies stagnate in some (larger) countries, this could spread out to other countries. Vanuatu continues to grapple with El Niño-influenced drought, with many of the most affected areas the same as those which were hit by Category 5 Cyclone Pam last March. [..] The country’s Climate Change Department continues to forecast below-average rainfall over the next few months, after which Vanuatu will move into its traditional dry season. There are concerns that food gardens may not be able to supply sufficient produce to keep all areas and populations appropriately fed in the coming months. Political-economic effects may also occur in oil-producing countries. The recent sharp decline of oil prices already enforces Gulf states to reform their economies. Climate change policies would then trigger a further decline in oil revenues, requiring even more stringent reforms. In practice this means cuts in public spending and the introduction or increases of taxes in countries in which taxes are relatively unknown. Does that mean that we may expect that climate change policies run a risk of delay? It is difficult to think otherwise. Haiti has suffered crop losses of over 50 per cent due to El Niño-influenced drought. A total of 3.6 million people are food insecure (one third of the population), and 40 districts are currently in crisis (IPC Phase 3). Of these people, 1.5 million are severely food insecure and need immediate food assistance, while over 130,000 children are suffering from acute malnutrition. Climate change policies encounter many difficulties: it is costly, for consumers, firms, and governments in industrialized and emerging countries; it is to be enacted in a time in which the world economy is trying to recover from a serious crisis; some of the benefits of climate change policies take some time to become visible, others are enjoyed by other countries; and climate change policies induce political-economic effects that may hinder their implementation. South-western Honduras will remain in crisis (IPC Phase 3) from March to August 2016. According to a recent assessment by the Humanitarian Network, chaired by the Government, more than 2 million people have been severely affected and close to half a million people require emergency assistance. Nobody wants an El Niño. But an El Niño may have a message for the world; it may tell us we should do everything we can to challenge all the factors that may hinder climate change policy reform. #CO2 #taxes #investment #elnino #economicgrowth #climatechange

The 5th of May has always been a significant date for Britain. Aside from marking the 195th anniversary of the passing of the United Kingdom’s most formidable foe (read: Napoleon), the 5th of May 2016 carried a new historical achievement for the British capital: the election of Sadiq Khan, candidate for the Labour party, as new Mayor of London, replacing former mayor Boris Johnson in office. Now, the news of a new mayor in London might not seem that revolutionary, however in this specific case there are quite a few things worthy of note. For example, that a Muslim became mayor of one of the main capitals of Europe in an age in which Islam is strongly stigmatized by the masses because of the rise of the Islamic State and of its associate terrorist organizations. While this is certainly a great victory for diversity, it sure wasn’t easy to accomplish. The final outcome of the voting polls. The election of Sadiq Khan to office came in the middle of a period of crisis for the Labour party and Britain in general. The former is plagued by an inquiry led by the party’s leader, Jeremy Corbyn, for anti-Semitism, while the latter lives under the impending referendum that might lead the United Kingdom out of the European Union. Khan predictably took a firm stance against any form of racial and religious propaganda, as well as against the Brexit campaign, led by the incumbent mayor Boris Johnson. The electoral campaign saw Mr. Khan oppose Zac Goldsmith, candidate of the Conservative party in what was described by many as an “ugly” campaign. Highlight was an article, appeared on the conservative newspaper The Mail on Sunday, in which Goldsmith allegedly accused Khan of sympathizing for terrorists. The low blow didn’t seem to have much effect, though, or it even seemed to be counter productive for Goldsmith, causing many undecided voters to choose Khan. If anything, the political arena proved once more that populist rhetorics are often useless, without a valid political agenda. An agenda that, on the other hand, Mr. Khan has planned very thoroughly. Born in London from a family of Pakistani immigrants escaped from the horrors of the Indian partition and raised in a common house with his brothers and sisters, Sadiq Khan has always had housing and human rights at heart. And indeed there is much to be done in the British capital in that regard: the City, which is also the world’s leading financial center, is home to approximately 8.6 million people; and yet, charity organization Trust for London estimates that as many as 27% of them live near poverty level. Khan finds statistics like these unacceptable, and is committed to make London ‘a fairer and more equal’ place, to use his own words. He plans to achieve this in three steps. The first one involves stopping real estate developers from selling their housing projects off-plan (i. e. before they’re built). Real estate is a permanent store of value, which means rich investors usually decide to buy some properties at some point in time in order to secure part of their capital. In London, this translated in rocketing housing prices: the average house price is 534785 pounds, while rents are around 62% of the average income (according to Khan). Preventing real estates developers from bringing their projects to the market too soon will give Londoners an advantage over foreign buyers when competing for housing. The second step on Khan’s agenda concerns wages: around 20% of jobs in the British capital allegedly don’t pay enough for workers to cover the costs of living. Taking purchasing power into consideration, a fair “living wage” in London would be around 10 pounds an hour, Khan believes. Although that might seem a utopian goal to set, the new mayor is conviced it can be achieved by providing tax relief as an incentive for firms to pay a living wage. Sadiq Khan’s campaign slogan: Yes We Khan! The third and last phase is about one of London’s proudest monuments to progress: the Tube. Carrying around 3 million commuters a day from the outskirts to the workplace, the metropolitan system of transport is one of the most efficient in Europe. However, it also happens to be one of the most expensive. Khan, government transport official between 2009 and 2010, intends to freeze all transport fares for the next four years, while continuing investment on the network. Might that be a little too ambitious? Mr. Khan begs to differ as he believes that cutting investment on bureaucracy and reducing fees for consultants might just do the trick. Most of the Western world rejoiced at the news of Khan’s election: it is easy to translate his story into the American cliché of the self-made man, born poor and then making his way across society towards ultimate success despite the ideological barriers he faced. This is an ideal we are very familiar with because of our Hollywood-based cinematic culture. However, more than as a story of personal emancipation, I like to think of this event as the product of a society that is on an ever-rising path towards greater civilization and universal acceptance, that in a not too distant future will be able to achieve extraordinary things, despite the efforts of the hard-skinned reactionaries lurking in the dark.

When talking to people who had already graduated, I hear quite often that the time of studying on the university can actually be considered one of the best periods in one’s life. Maybe the appreciation of “the good student life” comes with age, because students themselves usually complain a lot about various things. Ok, I agree that with the vision of the upcoming final exams/multiple assignments to submit/thesis to finish in sight, the statement of “studies being the time of my life” may sound like a cruel abstraction. However, when thinking about university life in a more global and objective way, it seems like indeed, it cannot be that bad in the end. We have the opportunity to learn about relevant stuff and develop our understanding about this fascinating world; we meet new interesting people almost every day and have the chance to interact with them by engaging in ambitious discussions ; we have lots of freedom in planning our time and leave some space in the schedule for travelling or partying; believe me, the list of positives goes on. Of course, there are some aspects of the university life that can be objectively seen as really annoying: always busy computers in the library, expensive meals in the canteen, the extreme time pressure before the exams, boring classes at nine in the morning or the almost unrealistic expectations of some of the course. But you know what? Instead of complaining all the time about them, let’s take active steps in changing them! If studying should be that nice as they say, let’s make it even more awesome. Sounds good, you may think, but how an individual can change anything about the annoying aspects of the university life? Doing it all alone would be an insane idea, so don’t worry, I don’t aim at convincing you to become the second Don Quixote tilting at the windmills of school reality! However, if we combine our efforts, we can definitely make the change. So, have you ever hear about the Student Council of the FEB (in Dutch: De Facultaire Studentenraad, FSR)? Student Council consist of ten students from our faculty, who represent students’ interests and actively strive towards making our school experience better. Faculty Student Council is “both a consultative body and a lobby group, and has considerable powers to influence the policy followed by the Dean of the Faculty.” If you want to know more about the exact tasks of FSR, have a look at the article “Who Are Your Representatives at the FEB? An Insight Into Our Faculty Student Council” prepared for you by Ioana, a current FSR member. While FSR takes care of the issues of our Faculty, we have also representatives at the higher level. The Central Student Council (in Dutch: De Centrale Studentenraad, CSR), is the body representing all the students of the UvA and can be seen as a link between the students and the top management of our university. As you can imagine, people who represent us both at the FSR and CSR can have the great impact on changing our study experience for better. Who else can help us more and understand our needs better than other students? The good news is that THIS WEEK, you have the opportunity to decide on who will represent you next year!!! Your choice today can have a direct influence on how nice your study experience will be! I provide you with a short manual on what you have to do. 1. Choose the party you whose program appeals to you the most. This year, you can choose between two parties: FEBSociaal and List Sefa. Exclusively for Rosra, both of the parties prepared the list things they want to change at the FEB. Please read them both carefully! Check FEBSociaal here Check List Sefa here 2. Go to stem.uva.nl and leave your vote there. You have time only this week, so from 9 to 13 May 2016! 3. Enjoy the fact that you made an active contribution to making your study experience better! One short note on voting itself: your vote does count! You can see from the experience of many nations, that political parties winning government elections can either ruin the country or contribute to its success. Instead of complaining afterwards, be a responsible democrat and do not let others take the decision for you! #electionsstudentcouncilFSRCSR

Founded in 2005, UvAsociaal is a student party with ramifications in all of the faculties of our university. Its values are based on pillars such as freedom, quality, equality and engagement: student should feel encouraged in the pursuit of their studies by meeting a challenging and pro-active learning environment, regardless of their background and with the freedom to choose their preferred form of education. For UvAsociaal, university is more than just taking classes and getting a degree, but rather a place where students can develop themselves to reach their full potential by means of critical thinking. It plans to achieve this with a very specific agenda for FEBsociaal, the FEB branch of the party. The current state of our faculty is not perfect: there is still much to do in order to make the Faculty of Economics and Business more inclusive and successful. For example, UvAsociaal  campaigns to make higher education more accessible for high school students by reducing the initial requirements to join a Bachelor’s programme and removing the binding study advice (BSA), barriers that force students to focus on grades rather than understanding. Another point of interest for the party concerns tutorial classes: UvAsociaal seeks to reduce the size of tutorial classes to the benefit of better communication between tutor and students and improved concentration. It also opposes the current 8-week courses system, claiming real learning needs longer, less stressful schedules. UvAsociaal believes in the University of Amsterdam as a united entity, which is why it plans to foster this synergy between faculties by assigning part of any eventual surplus in the FEB budget to faculties in financial distress. This year’s candidates for the Faculty Student Council are: Tijmen De Vos (already member of the Faculty Student Council and also candidate for the Central Student Council), Mourad Farahat (already member of the Faculty Council), Raffaele Di Carlo and Tufan Kiziltekin.

Waiting is a ubiquitous activity in many services, forming an unresolved issue in most organizations, while being an inevitable result of the business model in others. Customers wait for busses, people wait in line at the supermarket, people wait at airports, and so forth. To make matters worse, customers dislike waiting. Because of psychological factors such as delay gratification and consciousness of time, people become impatient, bored, anxious and even angry while waiting. In fact, some customers dislike waiting so much, they hire people to wait in line for them. Managing perceived time investment is therefore an important service marketing challenge. A vast amount of scholars have studied the mathematical theory of time, waiting and queuing. However, as services are experienced rather than consumed, a stronger emphasis is put on perceived time. Perceived time refers to the experienced time, which is measured by an individual’s perception of the duration of an event. The Walt Disney Company is doing an excellent job in managing these time perceptions. The Walt Disney Company Founded in 1923, The Walt Disney Company owns multiple theme parks located all over the world, often referred to with the comprehensive brand name, Disneyland. These theme parks include Disneyland Paris, Walt Disney World, Disneyland Resorts, but also the luxurious Disney Cruise Line, involving four Disney themed cruise ships. Visitors of all ages and walks of life in the United States, Europe and the world have embraced the Walt Disney theme parks, by “creating compelling stories, endearing characters and memorable experiences for all guests”. The Walt Disney theme parks are gigantic. Disneyland Paris alone employs nearly 15,000 cast members, drew over 275 million visits since 1992, and ranks as Europe’s number one tourist destination. Consequently, waiting lines at Walt Disney theme parks are no exception. By carefully managing the perceptions of time, The Walt Disney Company minimizes the negative impact on customer satisfaction, while in some cases even being able to turn waiting into a satisfactory experience. Waiting line structure The structure of waiting lines refers to its spatial layout. Spatial layout is defined as the way in which objects are situated in an environment. Spatial layout of waiting lines is influenced by carefully placing furniture, equipment and doors. Waiting lines in a service environment designed to provide feedback on progress are associated with more positive affect and lower customer perception of waiting time than waiting lines designed to not provide feedback in terms of waiting line progress. By providing feedback on queue progress, customer frustration and time distortion are decreased, positive influencing customer satisfaction. The Walt Disney Company is well aware of the impacts of waiting line structure on customer satisfaction. Features designed to alleviate stress in Walt Disney theme park waiting lines were incorporated as early in the 1970s. At Walt Disney theme parks, waiting lines are designed to continuously provide feedback of customer progress. Furthermore, the shape of the waiting line, its visibility and rapidity of movement also influence the consumer’s perception of waiting time. Consequently, waiting lines in Walt Disney theme parks curve to let them appear shorter. Moreover, these curves often hide parts of the line ahead. For most attractions, estimated waiting times are displayed in the beginning of a waiting line. Often, these displayed waiting times are slightly higher than the actual waiting time. Consequently, customers are pleasantly surprised by a waiting time slightly lower than what they initially expected. Waiting line experience At Walt Disney theme parks, the wait is often part of the experience. For many attractions, while waiting, visitors are provided with an intriguing background story concerning the attraction, often surrounded by a carefully designed environment, fully suitable to the atmosphere, style and ambiance of the attraction. By doing so, visitors are being kept occupied, while setting expectations for the actual ride. Whenever waiting can’t be integrated into the attraction experience, for example when waiting for a retail cash register to open up, Walt Disney stores use retail environment distracters to entertain customers while they are waiting in line. Music at Walt Disney theme parks are everywhere. For example, unsuspecting visitors to Disney’s imitation town near Orlando, Celebration, “encounter piped music scattered among the fake foliage of the immaculately pruned town square”. Ambient sounds increases customers’ time spent in a store because of the distortion in their sense of time. Furthermore, perceived time is lower for listeners exposed to less pleasant music. Apparently, more distasteful music will make the queue appear to move more quickly. Walt Disney theme parks chose to fit the music to the ambience of the attraction. For example, it would be weird to let the Peter Pan attraction be accompanied by dark, tasteless, heavy metal music. Although perceived time might be reduced, questions arise concerning its impact on the customer total attraction experience and satisfaction. Fastpass Nowadays, customers are time sensitive. As the value of time rises, customers are eager to pay additional fees to avoid wasting time in line. The entertainment industry needed to develop products and service that meet these needs. Consequently, The Walt Disney Company has developed Fastpass, “an in-park reservation system for popular rides to reduce the inconvenience of long lines”. Fastpass allows visitors to shorten the wait for an attraction free of charge. To receive a Fastpass, visitors insert their entrance ticket into one of the Fastpass machines. Each entrance ticket can extract one Fastpass. The Fastpass is valid for one visitor. The Fastpass displays a time window in which the visitor has access to a special shortened waiting line for an attraction. Until that time, visitors can enjoy other attractions, have lunch, and relax. When the time window displayed on the Fastpass has passed, visitors do not have access to the shortened waiting line anymore, and will have to validate a new Fastpass in order to gain access. By introducing the Fastpass, The Walt Disney Company adds an extra dimension to the waiting line experience. People enjoy new concepts such as Fastpass, as it provides clear communication concerning waiting time, accurate expectations are set, while stimulating favourable emotions of customers who are able to legitimately ‘skip’ the regular waiting line. However, the fairness of Fastpass is questionable. Even though every customer can shorten their wait by extracting a Fastpass for free, customers perceive waiting time as unfair when others can join a shorter queue, irrespective of the context. ‘My Disney Experience’ App Recently, The Walt Disney Company launched the ‘My Disney Experience’ app offering wait times for attractions, show times for fireworks and parades, and diner reservations. The app allows customers to explore Walt Disney theme parks on the interactive, GPS-enabled map, theme park tickets can be bought on the go, character greeting locations and times can be searched for, and plans can be shared with friends and family. Furthermore, the second wave of next generation Fastpass experiences are linked to the app, allowing customers to check and modify their return times on their mobile devices while using Disney’s in-park free Wi-Fi. The My Disney Experience app decreases customer perceived time investment and increases customer satisfaction in a number of ways. Because of its excellent communication regarding waiting times and park layout, customers can plan their trip to the amusement park beforehand, setting out a route throughout the park, fully able to spend as much time in attractions as possible. Furthermore, customers are being kept occupied. Nowadays, apps on mobile devices are often used as distraction or entertainment. Lastly, the introduction of the My Disney Experience app increases the fairness of the wait. Customers can look up the estimated waiting time beforehand, consciously deciding whether the attraction is worth the wait. Conclusion The Walt Disney Company is doing an excellent job in managing customer perceived time investment, despite the enormous amounts of visitors it has to handle. As they focus on delivering experiences of a life time for all ages, The Walt Disney Company strongly focuses on managing the emotions of customers, reducing the customer perceived time investment. Furthermore, unambiguous communications regarding waiting times are provided through various channels, while keeping customers occupied during the wait. Concluding, The Walt Disney Company superbly manages the expectations of both the wait and attraction. #customerexperience #TheWaltDisneyCompany #waitinglines

Who is to blame for the recent financial crisis, the worst since the Great Depression? Majority would say that it’s the banks that are at fault. And although the reasons behind the recession are still being researched and it will be long before we know the exact answer to this question (if at all), it is difficult to ignore the role that banks, especially investment ones, have played in crippling our economy. As a result, everyone, no matter the opinion on the topic (perhaps with the exception of bankers themselves) has called for governments to take action and heavily regulate financial institutions. However, for the first time (at least on such a big scale), many have called not to just regulate the banks once again, but to change the way we think about global finance altogether. There are, of course, many ideas on how to achieve that. Still, not many have been actually tested and, therefore, it might be difficult to introduce them instead of keeping the status quo. However, one has been used for quite a while already and has been discussed as a possible solution. Is Islamic finance a solution to our economic problems? So what is Islamic finance? The underlying idea behind it is to satisfy the tenets of Sharia, a framework with guidelines and laws for many aspects of Muslims’ everyday lives. In the context of finance, the most important rule is the absence of interest rates or riba, as profiting from lending money is forbidden. Furthermore, profiting from areas of the economy that stand against Islam, such as alcohol or tobacco, is not allowed either. This sounds rather simple, but for us, the FEB students, lack of interest rates stands in a total opposition to what we’ve been learning in each of our classes. In fact, at first you would probably ask yourself: how do banking and finance even work without interest rates? First of all, the ban on interest rates is not a new idea or one that is specific to Islam alone. For most of the medieval ages, the Catholic Church banned charging interest on loans. As a result, most of the banking in Europe was done by the Jewish communities. However, with the Church’s change of policy on financing and the creation of the first big banks, such as those of Medici and Fugger families, interest rates have become a natural part of banking across the European continent and later the world. To the extent that, again, we cannot imagine finance without them. And yet, it works. With no interest, Islamic banks deal only in real (tangible) assets and not in highly speculative financial instruments. Therefore,  you could compare an Islamic bank to a trade intermediary. Ok, but without interest how do Islamic financial institutions stay afloat? They do so through several types of transactions, based on trade and lease agreements and risk-sharing between the “lender” and the “borrower”. So rather than lend you the money to buy a new car, an Islamic bank will buy the car and transfer its ownership to you with each installment you pay. It is through those installments (with a margin above costs), rather than interest rates, that Islamic financial institutions earn money. In case of investments, two parties agree on the amounts they will commit and the proportion of returns each of them will receive. Again, with no interest rates. So where can you find Islamic financial institutions? Other than in predominantly Muslim countries, Islamic banking is, among others, present in European countries and in the United States. An example would be Al Rayan Bank in the United Kingdom, which has operated there since 2004. Also, in March this year, Russia witnessed the opening of its first Islamic bank. Still, the biggest Islamic banks are, not surprisingly, located in predominantly Muslim countries, especially the Persian Gulf states. In 2015, the largest one  was Al-Rajhi Bank from Saudi Arabia, followed by financial institutions from Kuwait and United Arab Emirates. So is Islamic finance the answer to the problems of our financial system? Not necessarily. There are certainly some aspects from which we could learn. For example, one could argue that one of the causes of our problems is the obsession with profits that drives bankers and financiers to find new and new ways of squeezing out more money. Lack of interest rates and not dealing in speculative assets could (at least in theory) limit the negative effects that greed has on our economy. However, Islamic financial instruments are not that much different from conventional banks. Yes, there are no interest rates, but Islamic banks still make profit by charging installment payments with margins above the costs or increasing their shares of returns. In fact, according to research, payments that Islamic banks charge are strongly correlated with prevailing interest rates. Therefore, in the end, Islamic finance offers the same or very similar instruments, albeit in a slightly different form. However, it shows that financial systems other than the one on which our economy is built are possible and that they can and do work. Maybe we should finally sit down and talk about how to incorporate new ideas into old institutions and make everyone (perhaps with the exception of those who benefit the most from the status quo) better off?

The real estate market was one of the major causes of the recent financial crisis. Specifically, the mortgages were repacked in complex derivatives to gain huge profits for the investment banks. Unfortunately, this did not work, because the complexity was too great and even the banks that traded the mortgage derivatives, called collateralized debt obligations (CDOs), did not know what CDOs were doing and how exactly did they work. This led to some bankruptcies in the banking sector, Lehman Brothers being the most famous example. But, nowadays in 2016, eight years after the financial crisis, the real estate market prices are rising again. Will this lead to another bubble that creates a financial crisis? I will look at this phenomenon with the focus on the Amsterdam real estate market. The real estate prices are rising very quickly in Amsterdam and they are approaching the danger zone. The market is overvalued, as has been proven by a research of the UBS. According to the analysts of the UBS, it is due to the fact that the European Central Bank (ECB) uses a money-expanding policy called quantitative easing. In almost all European capital cities, including Amsterdam, the real estate prices are above the level of 2007, which is the same price level when the crisis started. The central banks have three folded the money supply since that time and, as a result, the real interest rate has strongly declined. This, in turn, meant that the deflation was not as high as usual. Moreover, the mix of favorable economic circumstances, expectations and capital inflow from countries outside Europe caused the rising inflation in the recent years. Analysts state that all of this could lead to a next crash in the financial markets. The real estate market in Amsterdam is ranked sixth in the world at this moment. Housing prices in Amsterdam declined by 25% between 2008 and 2013. But, since 2013, the housing prices have risen again by 11%, despite the fact that incomes were stagnating. Housing prices in other parts of the Netherlands are not following the trend of Amsterdam. Additionally, the historical low interest rate led to a block in the debt reduction. But what exactly is a real estate bubble and how does it arise? A real estate bubble is an economic bubble that appears periodically in real estate markets. This phenomenon is characterized by the rapid increase of the taxation value of real estate. Examples for these real estate are houses, office buildings etc. It is fueled by demand, speculation and the belief that the recent history is a good forecast for the future. It usually starts with an increase in demand (a shift to the right in the demand curve), taken into account that supply of real estate takes a relatively long time to increase. Speculators enter the market, believing that profits can be made through short-term buying and selling. This further drives the increase of demand. At some point, demand decreases (a shift to the left in the demand curve) or stagnates,  while at the same time supply increases, resulting in a sharp drop in prices. The supply is slower because it is affected by the speed of construction. Constructions can be very time consuming, especially for the huge office buildings. This drop is a bubble that bursts. To explain the theory a little more, I will give an example. The effect of this bubble is already being seen in the real estate market. Hopefully, it will not lead to another financial crisis, but this effect is more adaptive, because the people who live in Amsterdam are affected directly. As mentioned before, the housing prices in Amsterdam are rising much faster than the ones in the other parts of the Netherlands. The reason for this can be derived from the fact that the population growth in Amsterdam is higher compared with, for instance, the cities in the neighborhood of Arnhem or Rotterdam. Amsterdam also has a lot of students and these are likely to stay here after graduation. Moreover, other people that are willing to have a good job are also coming to Amsterdam. Therefore, they decide to leave the rural areas and settle in the capital city instead. The business center of Amsterdam, the ‘Zuidas’, is definitely an important factor. It is still growing and many notable international companies, such as Royal Bank of Schotland, Baker and McKenzie, Akzo Nobel and other huge firms are located at the ‘Zuidas’. The attractiveness of Amsterdam as a city to live in will lead to higher prices because of increased demand, especially prices in the center of Amsterdam or near the ‘Zuidas. To illustrate this in numbers, the average price per squared meter in the center of Amsterdam is more than €5000. The price per squared meter in the ‘Zuidas’ is more than €3000. These numbers are quite high, especially compared with rural areas. To find an answer to the increasing demand, more houses are being built in Amsterdam. However, a house is not built in one day or one week and, as a result, when the houses are finished, the demand could already have declined, thus causing prices of real estate to decline Concluding, you can say that we have a housing bubble in Amsterdam right now. The prices are rising rapidly and it also includes the rental prices. This could mean that ‘normal’ working people cannot afford the houses anymore. This is already happening in London, where the traffic is horrible due to the fact that so many people are travelling from areas outside the city to its center. In Amsterdam, it seems that this is also going to happen. Unfortunately, there is not a single solution to the real estate bubble in Amsterdam. That is why it is very important to pay attention to it and be careful when buying a house, especially when buying it for an investment purpose. If we do not do that, we might have to fear a second financial crisis.

I planned on writing an article briefing the F8 Conference, Facebook gathering for developers. I wanted the article about the way that Facebook is going to influence the world, about the Internet access facilitation for poor countries and about the fake altruistic motivation. But after spending last evening, night and this morning actually watching the presentation I realized, that what draws my attention is not the content, but the way the content is presented. Because Facebook did just amazing job to keep your attention focused and to keep you entertained during both almost two hour long performances. So allow me please to give you, instead of a brief summary of the newest Facebook achievements, a not-so-brief act of appreciation of how Facebook makes an incredibly good job in drawing your attention to something, that is not in the end that enormously interesting, keeping it, making you laugh and feel the personal bond with the presenter, and in the end, making you excited and impressed with their ideas. Give examples Everything, literally every thesis, has to be supported with an example. And now, the main challenge is to make sure those examples will not get boring. If you can show how your product works, for example the Virtual Reality equipment – do it! You will create a feeling of personal engagement. If you can’t, try to find the examples that would be remembered. Use contrast, for example aligning caption of a romantic sunset with caption of President. You can even go for so sponsors placement – in the end, it is quite funny when your technology allows for an order of flowers from a company called ‘1-800 Flowers’ … without making the actual call. Provide personal touch When you tell how personal lives can be affected, it seems legit to exemplify with your own. Telling about recording important moments in life? A video of you kid doing his first steps will be perfect. Everybody knows your kid from Facebook posts anyway, Mark! Talking about translation option to fight the language barriers? It would help if you have international family or friends. And basing on examples of messages would be much more powerful if those were your own, actual messages, not some made-up exchange of information between made-up individuals. Tangible visuals are powerful visuals What a better way to show how light your designer plane is if not by carrying a huge pipe taken out of it into the stage with your one hand? How to better make people try you VR devices if not by giving them ones as a present? And how to boast more efficiently with your new 360 camera if not by showing everybody how shiny and hip it looks on stage? Oh, you are trying to show how you make online shopping with the new messenger artificial intelligence bots? Wear the shoes you are virtually buying on yourself on stage. It will make the experience more down to Earth. Try to keep emotions real All those three points about examples have one and the same aim – to keep the public engaged, to make them feel like you know what you are doing and that you really believe in what you are saying. And an intimidated engineer who constructed the prototype and, probably, has been on a stage maybe once in his life, is the essence of authentic emotions. Be Casual Hey Mark! I mean, Mr Zuckerberg, but nobody would dare to be that official. Be casual. Wear sneakers, t-shirts and jeans. Call each other by the given name when you switch from one speaker to the other. We are young, hip and inventive. Show it! The whole thing, despite the complicated structure, was extremely tidy, logical, and consistent. Switches between orators were fluent, graphic layout was neat and uniform. The public was obviously chosen to know, what is going on, and to be into the ideas presented, those were not random passers-by. Even though, it takes some effort to make the public so reactive to every single detail you incorporate in your speech, the smallest joke, the slightest intonation of your voice. My private favourite of the whole presentation was the way the outsourcing of Facebook’s designs was highlighted, by repeating the phrase: ‘This gonna be available NOW, when I get off this stage.’ And I believe we can use not only their amazing, innovative designs. Their stunning performance is available to watch NOW, when I write this text too. And I believe both of those things can be extremely useful to learn from. #artofspeech #F8Conference #facebook #MarkZuckerberg