The Scoponomist

Cover photo by Kirsty Pang

Content Word from the President

Economics - More Than Theory

Bitcoin - The Whats and the Whys How free trade makes your life better (without you knowing it) Transatlantic Trade and Investment Agreement TTIP

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Experience - Sharing Success @ Work Alumni Interview with Ann-Kathrin Zotz Deutsche Bundesbank internship Abroad Exchange semester in Buenos Aires Semester abroad in Bangkok

Activities - SCOPE | Economics Updates City trip to Luxembourg EconRound - Technocracy vs. Democracy Foreign trip to Hong Kong Frontier Economics Workshop C&A lecture review

Made in Maastricht - Research @ UM How your tutorial group affects your grades 2

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Dear Reader, This last printed edition of the Scoponomist is the perfect opportunity to announce to you a fresh start for SCOPE | Economics. As of the academic 2014/15, we will be publishing the magazine mainly through our new website launching January 2015. This is one of many changes that signal we are moving forward! I would like to thank the Committee for their work and congratulate all the external authors for their contributions. SCOPE | Economics has taken a huge leap forward over the summer break. Growing from the small IES Network in 2005 into the SCOPE | Economics with over 700 members today was no easy task. However, we are now confident that with the base established by our many predecessors, SCOPE | Economics is ready – with your help – for the challenges to come. To make this achievement a memorable one, the board has decided to mark formally the new beginning for SCOPE | Economics on September 1st 2014, which is the start of our organization’s tenth year. I would also like to use this opportunity to thank the board, especially my predecessor Alina Gruschka, and all committees of the academic 2013/14 for their great work and effort within SCOPE | Economics over the past year. Enjoy reading the Scoponomist, and on behalf of the board, we look forward to a busy and successful year working with you. Yours sincerely, Konstantin Kaufmann President Scope | Economics 2014/2015 3

Economics

BITCOIN:

Monetary freedom we should use wisely

The Whats & The Whys

n the past few months you surely have heard about Bitcoin while checking the news. After all, it did get up to $900 in December, so there must have been something special about it. This article will give you some insight into the world of Bitcoin and what makes it important. Technically, Bitcoin (currency code BTC or XBT) is a digital currency. It exists as a code inside the internet. People own Bitcoin only in the sense that they keep a number of Bitcoins in their virtual wallets. These “wallets” are standardized internet accounts which allow transactions to take place as they would do with any physical currency:

By Ivan Toshev when a certain amount of Bitcoins leaves one wallet, that same amount enters another wallet. All wallets have their own public numbers, much like IBANs, and passwords that only their owners know. “All transfers are overseen by an all-encompassing log called “the blockchain”, which keeps records of the transactions and ensures that they add up.” These technicalities may seem trivial, but they have tremendous implications on the way Bitcoin works. Bitcoin allows anonymity and many users consider that to be its most im-

“the digital currency is a sure way for dissidents to find financial support for theri activities.”

More moderate websites that trade with BTC include Wikipedia and Wordpress, as well as the web services company Baidu, commonly known as the Chinese Google. In November 2013, the billionaire entrepreneur Richard Branson announced that his space tourism company Virgin Galactic would accept Bitcoin, making it hard for sceptics to deny the growing importance of this peculiar internet invention. Additionally, because using Bitcoins is like using a gold-backed currency, Bitcoin owners can enjoy particular advantages, as for example inflation protection. This makes Bitcoin especially suitable for use in countries with highinflation history and strong monetary restrictions, such as Argentina, where people with different occupations choose Bitcoin to break state constraints and run their businesses, completely legally. Bitcoin does outstand with qualities such as user’s freedom and anonymity, but these virtues also leave room for practicing morally questionable activities. There exist encrypted, anonymized internet pages that are dedicated to illegal materials and substances, such as child pornography and drugs,

Economics

portant feature. The blockchain may keep records of the flow of Bitcoins between wallets i.e. accounts, but wallets have no names attached to them. The system does not need the user’s ID with a physical address attached to the account like real banks do. Anyone can use tools for anonymous internet browsing to access his or her wallet and then make anonymous payments. This frees the users’ holdings from surveillance, bank and government control. For this reason, there is a pronounced presence of Iranian Bitcoiners who use the crypt o c u r re n c y to trade goods and services, and to avoid the international sanctions imposed on their country. WikiLeaks, the infamous open-source website that published classified, incriminating information regarding the US and other governments back in 2011, found itself unable to raise funds when its bank and PayPal accounts were frozen. Today, WikiLeaks accepts Bitcoins as one source of much needed donations, proving that

Economics

and those of them that charge money use Bitcoins. For example, Silk Road is an ebay-type website that has been handling $15 million worth of transactions a year. The greater part of the merchandise there includes cocaine and heroin. Silk Road and other encrypted webpages offer various other goods and services in return for Bitcoin, including weapons and assassinations, although no data exists on whether their buyers really get what they pay for. Bitcoin drew attention in November 2013 as a result of its price surge. There is no central authority of Bitcoin, no bank to regulate the supply and no gold to back it up.

it was just supply and demand market forces at work for something that was becoming more popular and useful. In all likelihood, time will provide an answer for the questions that financiers, computer geeks and the rest of us ask ourselves themselves. In a confused and pessimistic world after the 2008-09 economic meltdown, Bitcoin is an unregulated, anonymized digital currency that has brought new potential for financial liberty. Regulated only by the free market and backed up by solid code, it is an alternative to the established fiat currencies and to a foreign exchange ground that often sees government meddling. Whether people fear its potential or look optimistically at its future, one thing is sure â&#x20AC;&#x201C; BTC gives people monetary freedom.

However, similar to a gold standard system, there is an almost fixed amount of BTC in the world. This means that when a greater number of people wish Photo courtesy: www.bitcoin.org to use it, its value is driven up. In early 2013, 1 XBT cost less than $50, in the autumn of 2013 the value stayed above $100, and later in November, it rose above $500. Upon seeing this, some observers suspected irrational speculation that would lead to yet another bubble. The famous US pundit and economist Peter Schiff recently spoke out in favour of these concerns, as unlike gold, Bitcoins have no intrinsic value, but rather exist as mathematical algorithms inside our computers and are useless on their own. Others believed 6

Economics

How Free Trade Makes Your Life Better (without you knowing it) By Ivan Toshev

hen few years ago the world sunk into an economic turmoil, the mass media rushed to bemoan capitalism. At first, I thought that capitalism had gotten itself into deep trouble and was on its way to make life miserable for all of us, but in the following years, I acquainted myself with the different sides of the story and realized that a lot of good had come about thanks to free trade. That was unspoken good that has been either ignored or unmentioned. What are the unfamiliar benefits of free trade to society? I try to answer this question as I look through the history of trading.

The role of free markets for humanism Throughout the centuries, the relationship between free trade and social progress has been growing stronger and stronger. In the past, countries that had more people engaged in trade also exhibited greater social development. For example, Ancient Greece, where democracy was born, was a mountainous area where people could only grow few crops. Hellenes were forced to obtain their wheat from other peoples in the Mediterranean region so that trade grew to an integral part of their lives. Later, during the Middle Ages, the great city of Constanti7

Economics

nople became the most important trade hub in Europe. Sea trade was a driving force for prosperity also for the British and the Dutch nations, who witnessed remarkable social changes many decades before the rest of Europe. These cities and states all shared one common feature – progressiveness, which led their commercial activities modernize their societies. “The way trade brings societies forward is essentially through instilling in people a notion of equality and fairness.” Experiments with the ultimatum game support this hypothesis. The ultimatum game is part of game theory and is often used for different economic experiments, such as negotiating wages or funding, and it allows scientists to see how market players act in these situations. In the ultimatum game, there are two players. At the beginning of the game, player A receives certain amount of money to split with player B. If player B deems player A’s offer unfair, there is no deal and the money is taken away. If player B agrees to the offer, both parties get to keep the amounts as proposed by player A. British journalist and businessman Matt Ridley discusses this setting in his two books “The Origins of Vir-

tue” and “The Rational Optimist”. According to Ridley, in most cases, player A offers player B between 1 and 50 % of the sum. Interestingly, however, the proportion depends on player A’s background. Players from industrialized societies offer deals close to splitting the money into equal amounts. But when this game is played with hunter-gatherers from South America or Africa, player A is much less generous, offering not more than one quarter of the money. Player B, on the other hand, is unwilling to accept figures lower than 40 or 30 % of the amount, which contradicts economic logic. The experiment suggests that unlike individuals coming from developing societies, those coming from the industrialized world, where trade is far more intensive, have accrued a sense of fairness which transcends rationality. Engine for innovation Another way of free markets to drive social evolution is through fostering innovation. Free, unbridled trade enhances information and knowledge flow and allows theory to be put into praxis. This triggers a striving for new ideas and innovation. History suggests that a freer market is a prerequisite for a faster

Economics

rate of innovation. During the late 1700s, markets in many European countries, such as France, Spain and Italy, were subject to a number of regulations, tariffs, taxes and other means of control. British merchants, on the other hand, enjoyed much higher degree of freedom to move goods, capital and labour. It was a favourable environment for the entrepreneurs who started the industrial revolution and the steam engine, the power loom, the modern factory with its economies of scale, and many other inventions we cannot imagine modern life without. Britain, unlike countries on the other side of the Channel with persistent government interventions, gave its people the freedom to turn their ideas into reality. To support the role of free trade for human evolution, evidence dating back 10,000 years comes to light. Tasmania, an island located south of the Australian continent, was first inhabited by humans 35,000 years

ago. At that time, the Bass Strait did not exist, and the settlers maintained active trade links with the mainland. 10 000 years ago, however, the rising waters cut Tasmania off and the island lost every connection to the bigger population of Australia. As a result, trade shrunk and the Tasmanians gradually reverted to selfsufficiency. Fossil evidence from the island reveals that the locals once knew how to make various kinds of tools, such as awls, bone needles or fish traps, to name a few, and that they all originated from the time of commerce. The rise of the Bass Strait, however, did not only aggravate Tasmanians’ further progress, but doomed them to revert to very much of a primitive life style. Unlike their predecessors, these people were unable to perform basic tasks, including clothes making and fishing, that would provide them with normal living. The Tasmanians’ story illustrates well “the indisputable role of active trading and communication for improving humans’ existing skills as well as cultivating new ones.”

David Rocardo - the founder of the theory of comparative advantage

Economics

Free trade for world peace As I have argued above, within societies, free trade fosters humans’ sense for justice and entrepreneurial spirit. Not only that, but on an international level, it also reinforces peace. Thomas Friedman, the famous New York Times columnist, is the author of two noteworthy books on the subject – “The Lexus and the Olive Tree” (1999) and “The World is Flat” (2005). In them, Friedman argues that in our day and age, the mutual benefits stemming from international trade are so immense, that they have come to serve as a deterrent to armed conflict. The reasons for that are as follows. Free trade allows countries to specialize in the production of certain goods, which grants them a comparative advantage over other countries. According to the famous British economist David Ricardo, when two states produce different goods and engage in mutual trade, they both end up owning a greater quantity of each other’s production than they would have if they were self-sufficient. But if instead these countries start a war with one another, goods exchange between them will cease, and life standards for both of them will worsen. In “The Lexus and the Olive Tree,” Friedman refers to this phenomenon as

“The Golden Arches Theory of Conflict Prevention”, where “the golden arches” symbolize the fast food chain McDonalds (Friedman believed that McDonalds restaurants were proof for economic development). On this idea Friedman further elaborated in “The World is Flat”, where he described the importance of global supply chains of international trade with the “Dell Theory of Conflict Prevention”. This theory refers to the production process of one Dell computer, whose single parts are all produced in different countries, and serves to illustrate the importance of international trade networks and supply chains. “Free trade allows markets to develop economies of scale and make higher profits.”

often blame the capitalist system for it. The roles of free trade for humanism, innovation and world peace, I think, are some the most interesting unmentioned reasons why media can be wrong. Photo courtesy: www.iww.org; www.wikipedia; “Innovation” photograph from https://www. flickr.com/photos/thomashawk with license: https://creativecommons.org/licenses/by-nc/2.0/. No changes have been made to any of the used material.

Economics

A war, however, would demolish both networks and capital. China and Taiwan, for example, trade actively with one another despite having every political reason to be in conflict. Even when tensions escalated in the early 00s, the two countries retained their peace, as the disruption of their supply chain would have hurt Chinese stakeholders just as it would have hurt Taiwanese and Western such. The mass media today constantly report on stories about war, poverty, genocide and terror and they

Тransatlantic Trade and Investment Agreement - TTIP

“Game-changer” and “economic NATO” – those are the words used to describe the US-EU project of a Transatlantic Trade and Investment Partnership (TTIP), also known as TAFTA for Trans-

Atlantic Free Trade Area. Currently, a growing alliance of groups defending civil liberties is publishing petitions and declarations strongly against this agreement, even though core formal talks began only last summer. I would argue that this project deserves much more attention than that it has been receiving so far. Here are some reasons why. A bit of background first: fostered by decades of good rapports, 11

Economics

institutional strengthening of the US-EU relationship has been an ambition since at least the 1980s, with proponents often calling for deeper market integration. In addition to the creation of several private think tanks and organizations, this ambition led to the establishment of the Transatlantic Economic Council in 2007. The consistent pressures from both continents and their already very similar trade philosophies finally resulted in the attempt for developing an all-encompassing free trade agreement, named TAFTA, and subsequently renamed TTIP. US President Bush and German Chancellor Merkel had already mentioned this project at a meeting in 2007, but six months later, the financial storm cooled down the impetus. The preparatory procedure therefore began only in November 2011 at the US-EU summit, when the US-EU High Level Working Group on Jobs and Growth was given the task to draft the content of the treaty. The Working Group states that they consulted private and public stakeholders, as well as legislatures to better delimit the most important points that needed to be addressed. In February 2013, they published a six-page final report compiling

the main conclusions of their research and outlining the project. The broad objectives of TTIP can be found in this report. In short, they are the following: - More trade in goods and services between the US and the EU - More investment in each other’s economies through more protection of each other’s investors (dispute-settlement system) - Less “behind the border” nontariff barriers - Harmonization of regulations across countries - Development of common rules on certain matters, such as Intellectual Property Rights (IPR), environment, public companies, and competitiveness of Small and Medium Enterprises (SMEs). “Currently, EU and US have the world’s largest trade relations,” with bilateral trade in goods and services worth roughly 780€ billion and direct investment amounting to 2.4€ trillion in 2011. According to a study from the Centre for Economic Policy Research ordered by the European Commission, achieving TTIP’s goals would annually increase EU’s and US’s GDPs by 119 and 95€ billion, respectively. Additionally, it would create “hundreds of thousands”

“more cohesive trade policies between both sides would deepen their mutual relationship,” which has somehow deteriorated since the onset of the Iraq war. In an increasingly fragmented political world, this agreement might become an International Relations game changer in the longer term.

US Trade Representative Dan Mullaney, on the left, and Chief of the Directorate General for Trade of the European Commisssion, on the right, during the first round of the EU/US trade and investment negotiations in Washington DC, July 2013

However, much progress is still to be accomplished before witnessing these results, because several problems have already arisen. The most important of them are

the unresolved trade disputes between the two parties, described in a 2010 fact sheet from the Office of US Trade Representative. These disputes include the EU chemical components registration programme (“REACH”), which is judged by officials overseas as unjustified and too thoroughgoing; and European GMO foods labelling, which, according to the Office, is unjustified and negatively impacting not only the US-based GMO food producers, but also the overall European conformity assessment, thus hindering US exports to EU. Additionally, negotiators have already been confronted with some conflicts between American and European agro-industries, as well as between respective authorities over state procurement (notably, defence and security). Therefore, I believe that we are quite far from seeing an arrangement combining interests of governments and lobbying groups from each side of the Atlantic. But even notwithstanding negotiations-related problems, the project faces another obstacle. While according to Transatlantic Relations specialist Dan Hamilton there are only benefits in the suggested draft agreement, citi-

Economics

of new jobs and support millions of others. TTIP could also trigger widespread ambition to set “gold standards” for trade policy worldwide. Beyond the economic advantages, some mention another benefit to this agreement:

Economics

zen advocacy groups, movie directors, union leaders, culture- and arts-related associations, hacktivists and audio-visual groups are initiating petitions and vehement declarations against TTIP. Why would this be the case, if experts see no problem? Mostly for three reasons. First, citizens and groups have learned from past experience: the famous SOPA and ACTA, and the lesser-known CETA are considered as repeated official attempts to infringe Internet freedom and civil liberties in the name of Intellectual Property. After it became known to the general public that EU-Canada CETA had massive chunks of its text copied from the ACTA legal text, opponents of TTIP believe now that this will also be the case with TTIP. There

sial policy areas. Indeed, according to IPR expert Burcu Kilic, the chapter on copyrights and patent laws was initially thought by the Working Group to be a topic too sensitive for negotiations (rightfully, since at that time, ACTA had just been rejected by the European Parliament). According to Kilic, this chapter has been included in the agenda after lobbying from drugs corporations like PhRMA. This has also been confirmed by the pretty harsh reluctance of senior EU negotiator, Trade Commissioner Karel De Gucht, to accept the Parliament’s decision over ACTA, and by his involvement in all major European IP-related treaties to date. From there, the second reason why citizens are concerned is that this chapter would undermine their “rights to health, culture, and free expression” and limit their choice of educational tools and academic journals. This is because suggested IPR provisions have included longer patents and stronger patent infringement sanctions (notably against “generic drugs” companies); a are, however, signs that TTIP is change in the European cinematodifferent, although these signs are graphic industry regulations; and mixed with some less controver- more state-controlled Internet, al-

lowing for unpopular excesses exemplified by recent NSA scandal. Furthermore, some argue that the chapter would hinder competition so much that only multinational corporations would benefit from the agreement, whereby hurting SMEs. A third point sparkling worries: “the secrecy surrounding the negotiations is unjustified and suspect.” Indeed, except for a leak of the draft agreement, no document addressing thoroughly the treaty has been released to the public. This lack of transparency naturally leads to apprehensions. Recently, union leaders of both sides

Economics

Karel De Gucht, Member of the EC in charge of Trade, on the left, and Michael Froman, US Trade Representative, on the right, during a TTIP meting in Washington, February 2014

have expressed concerns over the lack of information on the topic and fear to be left aside for what could then be an undemocratic attempt to lower labour standards in both nations for the sake of international competitiveness. They also expressed worries about the possible crowding-out of US jobs to Eastern Europe. On the political stage, there have been echoes of the widespread concern over secrecy, change in consumer protection, and civil liberties, but with so far no response from negotiators. Overall, the combination of the aforementioned factors makes “many citizen advocacy groups believe that TTIP aims among others at changing non-trade related laws in an undemocratic fashion” to foster big businesses interests at the expense of citizens’ welfare. Since citizens’ opinion obviously diverges from businesses interests and seems to also diverge from negotiators’ ideas, TTIP still has to pass the democratic test. At the time of writing, there is indication that this is acknowledged by

Economics

democratic instances at least in the EU. Indeed, despite the few shadow rapporteurs representing parliamentary groups in the negotiations, the Parliament warned that it wanted to be systematically more informed than it had been until now, and Karel De Gucht during the Brussels Forum, March 2014 that diplomats should chapter as a whole has not yet take its opinions more into account. been addressed officially. This is But on the other side of the ocean, exactly why TTIP negotiations no one seems to hope for much deserve much more attention from from the legislature anymore, as citizens. Arguments made against it is evident from the latest GalACTA and SOPA are applicable in lup poll, which showed that only this case as well. The need of pub10% of Americans had confidence lic scrutiny is even more critical as in the Congress. The European Parliament just voted in favour of “the combination with economthe start of the official talks, but ically stimulating arrangements only by specifying with another seems to overshadow the controversial policies” vote pushed for by France that it should be allowed to safeguard that have already been democratiits “cultural exception”, especially cally rejected in the past. Formal in the face of Hollywood giants. negotiations of TTIP have begun Consequently, on 14 June 2013, on 17 June 2013 during the G-8 European trade ministers decided summit. to exclude the audio-visual secFrom a more general point of tor from the treaty (with possibilview, TTIP is an example that ity to include it back), frustrating free trade agreements can have negotiations coordinators. While negative non-economic externalicultural issues are now clearly recties significant enough to trigognized, the Intellectual Property ger social responses. Three of

a society to have free trade with negative externalities leading ultimately to less happiness for its citizens? “It is most likely to involve individual private sector agents’ considerations” – be they legitimate or not. So, more importantly, how to limit the negative aspects of current free trade ideology? In the fast-paced globalization context we are all living in, this is a question of utmost importance.

Economics

these externalities (health concerns, cultural identity concerns, and freedom concerns) can easily be identified in this case, but there are also other externalities, such as environmental concerns or long-term consequences, resulting from other treaties in the world. Each of these agreements must be thoroughly investigated and improved. The basic argument for TTIP is that it generally maximises consumers’ utility and society’s economic welfare, which are (admittedly inaccurate) concepts economists use for estimating well-being. That is, more well-being is the main justification for freer trade as it is indirectly also the justification for the World Trade Organization (WTO), for like-minded organizations, and for a big part of international law and against protectionism in general. Then, what would be the point for

Photo courtesy: ec.europa.eu; “Stop ACTA 21” photograph from https://www.flickr.com/photos/ martinkrolikowski with license: https://creativecommons.org/licenses/by/2.0/. No changes have been made to any of the used material.

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Bij DNB werk je in het zenuwcentrum van onze economie. Iedere beslissing die we nemen, wordt dan ook kritisch besproken door alle Europese kranten. Door de dynamiek van de financiële wereld is geen dag hetzelfde. Steeds weer krijg je te maken met een ander complex vraagstuk en moet je de actualiteit zien voor te blijven. Daarmee lever je een belangrijke bijdrage aan financiële stabiliteit en zorg je voor vertrouwen. Kun jij die druk aan en zie je het als een uitdaging om onze economie vooruit te helpen? Denk dan eens aan een carrière bij DNB. Kijk voor meer informatie en de mogelijkheden op werkenbijdnb.nl.

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08-11-12 17:17

On focus:

Ann-Kathrin Zotz, Economic Consultant at UN-eclac

Experience @ Work

nn-Kathrin Zotz studied International Business Economics at the School of Business and Economics of Maastricht University between 2007 and 2010. She holds a master’s degree in Applied Economics specialized in International Trade, Finance and Development and jointly awarded by the Barcelona Graduate School of Economics, Universitat Pompeu Fabra and Universitat Autònoma de Barcelona.

After moving to Santiago de Chile in July 2011, she worked as an Economic Consultant in the Economics Development Division of the Economic Commission for Latin America and the Caribbean of the United Nations (UN-ECLA), as well as for the Trade and Integration Department of the InterAmerican Development Bank in Santiago de Chile. Since April 2013, she is working as an Economic Consultant for the Transport Service Unit of the Natural Resources and Transport Division of the UNECLAC. Ann-Kathrin’s research focuses on climate change mitigation and adaptation policies, and their economic impact – in particular, on the trade pattern and infrastructure systems, and on the natural resource management of the Latin American and

Experience @ Work

Caribbean (LAC) region. She is especially interested in the adaptive capacity to climate change and energy consumption of infrastructure systems in the seaports of Latin America and the Caribbean. She recently finished a study on decoupling energy from mobility and the economic challenges of this process. Furthermore, she started a new project, taking Norway as an example for natural resource management in the LAC region. During academic year 2012/2013 she kindly accepted our invitation to hold a guest lecture with the topic International Trade and Climate Change: Friends and Foes. SCOPE | Economics: AnnKathrin, what made you choose Maastricht University for you bachelor? Ann-Kathrin: There were several different factors that determined me to choose UM. One of the most important ones was that the Dutch universities had more experience with the Bologna bachelor system, whereas in Germany this was still relatively new. Maas-

tricht University attracted me with its English programmes, the possibility of studying Economics and Business at the same time, the opportunity of going abroad for a semester, as well as with the broad variety of partner universities. Scope|Economics: During your bachelor at the SBE you chose to major in Finance, so how and when did you “discover” the field of development economics? Ann-Kathrin: Besides all the finance classes that I had to take for my major, in my third year, before going on exchange, I chose the Development Economics class as an elective. I enjoyed it quite a lot and even decided to choose the development economics Capstone organized by Prof. Thomas Ziesemer. While working on my Capstone I became more and more interested in this field. As an exchange student at the Université Panthéon Sorbonne in Paris, I had a wider range of courses on development economics to choose from, including master’s courses. I met a lot of great professors there; it

was a good experience to have the freedom to choose to study exactly what I was interested in. “I knew right then and there that development economics was what I wanted to devote myself to in the future.”

Scope|Economics: From all the skills you acquired during your time at the SBE, which are the ones that proved to be most valuable to you after graduation?

Scope|Economics: What can you tell our readers about the Barcelona Graduate School of Economics and the time you spent there? Ann-Kathrin: The Barcelona GSE is a renowned and well ranked university, offering new master’s programmes with a focus on applied economics and other areas where economists are needed at the moment. There are a lot of internationally renowned professors, many of them teaching at big American universities as well. Moreover, the student population there is also from diverse nationalities, quite different from Maastricht. There are students coming from literally all around the world. Sometimes it can feel like a true cultural shock. Plus, as a side point, the faculty is very close to the beach, which makes everything so much nicer…

Ann-Kathrin: The PBL system teaches you how to hold a presentation, it helps you gain self confidence when speaking openly, which is very important. Once you start working, you can really see the benefit of it. You learn how to present the results from your work, sometimes even things that you might not consider very interesting – that also hap- Scope|Economics:

Experience @ Work

In the end, I did choose the only master’s programme in Europe that offers a combination between international finance and development economics.

pens in real life. Moreover, you really improve your time management skills, organize yourself better.

the 21

Experience @ Work

teaching system at the Bar- would actually join the class. celona GSE different from the There are young professors one at UM? invited from all around the world presenting their work Ann-Kathrin: Yes, it is quite and looking for feedback from different. However, even if both experienced professors there is no PBL at the Bar- and students. The approach celona GSE, the classes are is extremely open, everyone still very interactive. In my year, we were forty-two students and we had lectures is more than welcome to ask together all the time. The questions and you can discuss professors get to know you with your professors for hours. more closely and you have to participate in class, it is re- Scope|Economics: What about quired. Especially in the first the masterâ&#x20AC;&#x2122;s thesis? What is block, they focus a lot on mak- the procedure there? ing the students interact with each other during classes. Of Ann-Kathrin: Writing your course, for all of us coming masterâ&#x20AC;&#x2122;s thesis can be a very from UM this was not a prob- exciting process. You have the lem, since we were already possibility to write in a group used to actively participating with other fellow students and in the tutorials. Something with additional help from the that I really enjoyed during professor assigned to supermy masterâ&#x20AC;&#x2122;s programme was vise you. For two months you that we were allowed to attend interact a lot with your susome PhD courses with other pervisor; supervisors are usuten to fifteen students: some- ally very supportive and really thing similar to the PBL sys- help you win the jury. It might tem, only that at the univer- also be the case that if they sity in Barcelona the professor are very interested in your

topic, you can end up writing a paper with them. Regarding the topic, you usually need to approach a real development problem and find solutions for it. This is why in the end topics are completely different from what they were in the beginning, and even more interesting. The professors are very open-minded regarding this.

Scope|Economics: After graduating from your masterâ&#x20AC;&#x2122;s programme you started working for the Economic Commission for Latin America. Tell us a bit about your experience with the Commission and how you can get there as a fresh graduate.

Experience @ Work

Scope|Economics: Any advice for prospective applicants at the Barcelona GSE? Are there special prerequisites in analytical skills required?

ally do not require a very advanced level of econometrics, but if you would like to do a more theoretical masterâ&#x20AC;&#x2122;s programme, you would probably need it there. So taking a little bit more econometric courses in your bachelor would definitely help. Moreover, knowing STATA will prove very useful as well, especially if you plan to work in research afterwards.

Ann-Kathrin: The Economic Commission for Latin Ann-Kathrin: For the appli- America is part of the United cation, make sure you get a Nations system and there are good score at the GRE test two ways in which you can (i.e. Graduate Record Exami- start working there. You can nations). This can really boost apply for the Young Profesup your profile. Regarding sionals Programme (YPP), analytical skills, they gener- which is a rather complex pro23

Scope|Econimics: I believe a lot of our readers would be interested in knowing if there are internship opportunities within the United Nations?

ECLAC headquarters in Santiago, Chile

Experience @ Work

cess since it includes a special YPP examination, an interview at the United Nations headquarters in New York, and several other stages. The programme is exclusively for graduates and preferably for those with work experience of two or more years. The second option is starting as a consultant, which I did myself. I went through the typical application process: I sent in my application, went to an interview, and was given an assignment to complete. They needed someone right away so I started directly as a consultant, working for four months on a project. Then the opportunity came up to work for the Inter-American Development Bank and a year later I returned to the United Nations. 24

Ann-Kathrin: Actually, there are great opportunities to do internships at the UN during your study time, especially as a master’s student. There are students who work for the UN as interns and stay there to write their master’s theses “together” with the UN. Even if you “lose” six months of your studies interning at the UN, the benefits of getting a job there after graduation are higher. This is something that I did not realize at the time of my master – you can interrupt your programme and do an internship that will most definitely help you later in

Service Unit of Natural Resources and Transport Division of the UN-ECLAC. I am part of a multidisciplinary team headed by Prof. Dr. Gordon Wilmsmeier, conducting research on transport policies. I am studying the adaptive caScope|Economics: What are pacity to climate change and you working on at the moenergy consumption of inframent? structure systems, focusing on seaports in Latin America Ann-Kathrin: I am currentand the Caribbean. I recently ly working as an Economic finished a study on decouConsultant for the Transport pling energy from mobility

Experience @ Work

your career. Officially, you cannot do a UN internship if you have already graduated; you need to still be enrolled in a study programme. This is important especially for students who would like to work for the UN afterwards. It is a lot easier to get a job there if you have already worked as an intern. After the internship you are officially not allowed to work for the UN in the following six months. However, this time mostly coincides with the last six months of your studies and if you are good, they will wait for you to come back.

Experience @ Work and the economic challenges of this process. Furthermore, I started a new project, taking Norway as an example for natural resource management 26

in the LAC region. Additionally, I have the opportunity to join events where senior economists in Latin America hold talks on climate change

and international trade. I have the freedom to conduct my own research and have my own project – that encourages me to be very proactive in my line of work.

Ann-Kathrin: It is very important for students to know that they will need a great deal of inner motivation also later on in their careers. Don’t do things that you are not interested in only for the CV, you will probably not even do a good job. If you want to take extra courses or do MARBLE, do it because it is interesting for you and not because you have to. I was never asked for my GPA for example. In the end, you need to find the balance – the CV is important,

but more important is that you do something you really want to.

Experience @ Work

Scope|Economics: Thank you very much for all the great insights you gave us. Any final words of advice for the students here at the SBE?

By Cristina Rujan Photo and infographics courtesy: www.eclac.cl; https://www.flickr.com/photos/ eclac/sets/72157629375924220/; http://www.barcelonagse.eu/Media_Kit.html. No changes have been made to any of the used material. 27

Join SCOPE | Economics! Dear Student, SCOPE | Economics is an official study association of the School of Business and Economics (SBE) of Maastricht University. We consist of about 700 General Members and roughly 40 Active Members who take on extra responsibilities by providing other students with great opportunities related to the broad field of economics. These include various academic, career and social events for both members and non-members.

You are not in one of these study tracks? No problem! As one of the five official study associations in the SCOPE framework, we are always looking for active members that are willing to put in additional effort into their university life and get an extra rewarding time from it. Not only will you see your own projects and ideas come to life, but you will also join a community of like-minded students in which you will have the most fun of your university time!

SCOPE | Economics particularly represents students of the Enough talking now. If you are following study programmes: interested in becoming an active • BSc Economics member of SCOPE | Economics, visit our website to find more in• BSc Business Economics formation and a committee that • BSc Information and Netbest fits your skills and interests. work Economics • MSc International Economic Studies (all specializations) • MSc Human Decision Science • MSc Infonomics

We are looking forward to your application! For more information visit www.scope-economics.nl

it’S ALL ABOUt

StRAtEGY Es sind die Ideen, die uns antreiben. OC&C ist eine der führenden internationalen spezialisierten Strategieberatungen. Das Unternehmen unterstützt das Top-Management nationaler und internationaler Großunternehmen sowie innovativer Mittelständler. In Deutschland liegt der Fokus auf den Branchen Handel, Konsumgüter, Bauwirtschaft, Medien, Telekommunikation sowie Transport, wobei OC&C als gefragter Partner für anspruchsvolle Problemlösungen gilt. OC&C berät in allen Strategiefeldern: Von Unternehmens- / Konzernstrategie und Mergers & Acquisitions bis hin zu Geschäftsbereichsstrategie und Effizienzverbesserung. Unser Erfolg — der sich immer über den Erfolg unserer Klienten definiert — zeigt sich in den langjährigen Kundenbeziehungen, die vielfach zehn und mehr Jahre zurückreichen.

Wir rekrutieren neue Mitarbeiter auf allen Karrierestufen. In welcher Position Sie bei OC&C einsteigen, hängt von Ihren Erfahrungen und Fähigkeiten ab. Wir legen von Beginn an großen Wert auf Ihre Neugierde, sich neuen Themen zu nähern, Ihre exzellenten analytischen Fähigkeiten, Ihre Kommunikations- und Führungsstärke und Ihre Begeisterung für unsere Unternehmenskultur. Egal, ob Sie als Manager oder als Praktikant bei uns beginnen: Bereichern Sie OC&C um Ihr Know-how und die Erfahrung, die Sie gesammelt haben.

Wir würden uns über Ihre Bewerbung freuen, die Sie bitte an Frau Mirjam Fuest richten. OC&C Strategy Consultants GmbH Mirjam Fuest Neuer Zollhof 1 40221 Düsseldorf Tel. +49 211 8607-240 Fax +49 211 8607-100 mirjam.fuest@occstrategy.de

Sie arbeiten in einem hochprofessionellen, internationalen Arbeitsumfeld mit einer außergewöhnlichen Firmenkultur, die durch Individualität, Freiraum und Unternehmertum gekennzeichnet ist.

www.facebook.com/occgermany

www.occstrategy.com 29

Experience @ Work

Deutsche Bundesbank

Internship experience by Carolin Thol

tanding in front of the Bundesbank, the German Central Bank is already impressive: not a glassy tower, spiralling into the sky over Frankfurt like all those other banks, oh no! Stability breathes from every pore of this massive building from 1972, which was meant to host the guardians of the former German currency, the “Deutsche Mark”. When the Euro was introduced in 1999, the Bundesbank became part of the Euro system, handing over the control over Germany’s monetary policy to the European Central Bank (ECB). So, what is the role of

those around 9,500 employees in the Bundesbank, 3,800 of whom working in the central office in Frankfurt am Main? That’s what I ventured to find out during my two-month internship at the Bank. Broadly speaking, the Bundesbank is responsible for keeping the German financial system going, which includes supplying the economy with cash, maintaining the cashless payment systems, as well as supervising the banks and the financial system as a whole. With more than 2000 financial institutions in Germany, no wonder that there’s lots to do! Next to the central

employees’ mean age, which I think also contributed to the relaxed atmosphere among my colleagues. It is by no means a coincidence that our department was founded only recently. During the financial crisis it became apparent that while single financial institutions may be stable, a severe imbalance in one small sector, such as the US subprime mortgage segment can cause a systemic crisis that may infect the whole system. Thus, the responsibility of our division is to look out for such systemic risks among German financial institutions. “The results of our work were directly forwarded to the president of the Bundesbank or to other members of the executive board”

Experience @ Work

office in Frankfurt, there are nine regional offices with 41 branches spread all over Germany that conduct the local banking supervision and organise the supply of money. As the tasks of the Bundesbank are essential for the German economy to function properly, work has to be accurately organized. Out of the fifteen departments, I was working in the department of financial stability – F, which is comprised of four divisions. Thereof, I worked in division F1 for macro prudential analysis. Furthermore, divisions are subdivided into teams, me being part of team F10. Sounds complicated? You’ll get used to it! At least, that’s what I experienced. Already on the first day, I got to know the whole team at the weekly group lunch. I was surprised by how easy going everybody was. I was quickly integrated in the group, which was especially easy as there were four other interns and trainees in our team. Additionally, the division of macro prudential analysis was only formed four years ago, so it is one of the youngest with respect to the

to use for briefings during board meetings or conferences on European level. An example for a pressing topic during my internship was the “Home Bias”, which describes the phenomenon of banks investing primarily in government bonds of their home country. I read lots of research papers on the topic and compiled data, trying to find 31

Experience @ Work

a reason for this case. I was glad when I received positive feedback after I presented my results to the rest of the team. At university, you write papers for which you want to get good grade, but when you make a mistake, nobody really cares. It rarely works like that in real life, let alone at the Bundesbank. When employees there make severe mistakes or work inaccurately, this may actually cause real problems, for instance, wrong policy implications. That’s why everybody is very strict at doing their job and double-checks everything to avoid the risk of providing the team with inaccurate information. It’s nice that your work really matters not just to you, but that it also has an impact on the work of other people. I had to get used to the responsibility that goes along with it. Next to her day-to-day business, my supervisor holds a part-time position in the research division at the Bundesbank. The Bundesbank regularly publishes working papers related to banking, finance and economics in general.

During my stay, my supervisor was working on two papers at the same time and thus, that was where I assisted her the most. I had to search for related literature and help her set up the outline of the paper, for example by providing ideas for research hypotheses. Well, the work was pretty much what you do at university! “I really liked the fact that I could use knowledge and skills I gained during my studies.” Good to know that you can actually make a living of what you learn in Maastricht! Speaking of job prospects, the Bundesbank offers many career opportunities, especially for economists. The internship programme is open

Experience @ Work

to students after their second year of study in economics or a related field. Although most of the staff is German, German skills are not required. In fact, there were some interns who didn’t speak German at all. If you’re interested in an internship, just check out their website. After graduation, the Bundesbank offers a trainee-programme that combines educational phases with practical phases in one of the Banks’ regional offices or at the headquarters in Frankfurt. Whichever type of placement you choose, it will undoubtedly be an enriching experience on a personal and a professional level! Photo courtesy: Carolin Thol & Bundesbank website

Experience Abroad

Steaks Drinking mate Spanish:

ne year ago I was sitting in a classroom in Frankfurt, taking a one-week intensive Spanish course as the first step of preparing myself for an exchange semester in Buenos Aires. Back then, my knowledge of the city was restricted to only a few things: I knew that Buenos Aires was supposed to be more European than other South American cities, that the language of instruction at the university would be Spanish, that they had tango and great steaks

My exchange senester in

Buenos Aires

there, that unfortunately, there was no beach close to the city, and lastly and most importantly, that I was going to have the time of my life there. At least according to all the stories I heard from other people who did a semester abroad. So what does â&#x20AC;&#x153;having the time of your lifeâ&#x20AC;? actually mean? First and foremost â&#x20AC;&#x201C; embarking on an adventure! In my case, this involved starting from scratch in the overwhelmingly big city that is Buenos Aires. The specifics of the Argen-

“I shared a flat in the city’s busiest neighbourhood with an Argentian guy who introduced me to some of Argentina’s typicalities.” Also, I found a very nice room in the heart of Palermo, a hip neighborhood where the majority of nice cafes, bars and clubs are. I lived there together with an Argentinean guy, who helped me to find my way in this huge city and introduced me into the world of asados and mate, two substantial parts of the Argentinean culture. Asado is the famous Argentinean barbecue, which usually does not start before 10 pm, where everyone the barbecue owner or his friends know is invited and you have tons of the best meat you will taste in your life. Mate, on the other hand, is a very bitter tasting green tea (at least it tastes bitter when you try it for the first time). And an all-time favorite drink in Argentina – you can always recognize an Argentinean by the mate cup he is carrying everywhere he goes in his one hand, and a thermos filled with hot water in the other.

Experience Abroad

tinian Spanish did not make my task any easier. For example, I was not even able to understand when they asked me if I needed a “bolsita” (bag) in the supermarket. I had to learn how to cross streets without getting run over by a car; that timeand moneywise it might not be the smartest thing to go to a big supermarket and wait for thirty minutes in line; and that it might not be possible to buy something in a bakery if you do not have any change but only a 50 peso bill (which is equivalent to about 5€). I had to learn how to take the bus, which was actually one of the hardest parts, as you have to look for the bus stop signs not only on the side of the street but also in trees and on everything else that you can put a sticker on. However, having found a sign with the line you need still does not mean the right bus will pass by any time soon. So, what did I do in order to overcome these little hurdles? Right in the beginning of my stay, I took a three-week intensive language course to pimp up my Spanish.

Experience Abroad

By the time university started in the middle of March, I had already lived through the first culture shock and got more used to the local Spanish language. I chose three relatively easy but yet interesting courses – Economic Geography, Argentinean Economic Structure and Game Theory – with only two contact hours each. Also, due to the difficulties I had in the beginning in following the Spanish classes, most of what I actually learned in the courses was in self-study right before the mid-term and final exams, which gave me a lot of spare time to fill in with other activities. During the week, that involved private Spanish classes for only about 6€ per hour, and staying active with sports courses, for instance, in climbing, while other exchange students took tango classes. On

the weekends, one of my favorite activities was to visit the colorful handicraft markets across the city. Until April, when the weather was still nice and sunny, you could hang out in one of the beautiful parks of Buenos Aires (and drink mate, of course) or travel a bit outside of the city to spend a day, say, at “Perú Beach”, for example, which is an artificial beach where you can try some watersports such as windsurfing; swimming there, however, is not allowed. And last, but not least, there is also the Argentinean nightlife, in which a dinner with friends tops the list of social activities, together with going to one of the many bars or clubs that are only a few minutes away from my house. Furthermore, I took two weeks off during the semester in order to go on two 10-day trips to smaller Argentinean cities and villages to finally see some nature again, which I missed a bit in Buenos Aires despite of the variety of alternatives it had to offer.

because of the many beautiful and distinct landscapes and lots of interesting people I got to meet on the way. Even though the first weeks in Buenos Aires were in some ways quite a challenge for me, I can only recommend to anyone who is about to decide on their study abroad location to make the most of this opportunity and go to a place with a different culture and, if possible, to also learn the language of the country, as this will help you embrace the experience to the fullest! By Julia Wiepking Photo courtesy: Julia Wiepking & Wikipedia

Experience Abroad

Now, at the end of my stay, I find myself speaking Spanish with an Argentinean accent, passionately calling bad tempered bus drivers passing me by names, wondering why people back home already have dinner at 7:30 pm when itâ&#x20AC;&#x2122;s only time to have coffee or a mate in Argentina, and packing the space that I have left in my suitcase full of mate and dulce de leche, a caramel cream Argentineans put on about everything. Although I enjoyed my rather laid back life in Buenos Aires, I have to admit that the six weeks I spent traveling in Brazil, Argentina and Bolivia at the end of my stay were at least as nice and full of unforgettable experiences, also

One night in

BANG

Experience Abroad

By Randi Wagener

ast January I got on the plane to escape the cold and grey Middle European Winter. Destination: Bangkok. No, this was not some decadent holiday trip; it was the start of my semester abroad. Although, I have to admit, for most parts it felt like an extended holiday – staying at a hotel, making trips, and always going out for dinner. My buddy Pop picked me up from the airport in Bangkok and gave me a ride

to the hotel I would be staying at for the next four months. While we drove through the insane traffic in Thailand’s capital, I explored the surroundings through the window – it was so different from everything I had ever seen before, that I was slightly overwhelmed. However, I got used to my new home quickly. Besides, there were still some things I needed to do before the start of the semester. One of them was to buy a uniform. Pop took my roommates and me to one of the many malls to pick out a skirt, a blouse, a belt and a pin, which we would have to wear every day when going to University.

GKOK

and the world’s your oyster

compared to Maastricht. There are no tutorials, only lectures lasting three hours each. If you’re one who doesn’t own a smart phone or a tablet, these can be the longest three hours in your life. Gladly, most professors aren’t bothered when you’re half an hour late or take a little break in between to get a snack. The University offered a great variety of meals, snacks and

Experience Abroad

Course registration started on the morning of the first day of class, which made things slightly confusing. But as it is always the case in Thailand, in the end, everything worked out alright. Chulalongkorn University (short Chula), named after a former Thai King, is the oldest and one of the most prestigious universities in Thailand. Hence, the majority of the students there belong to the upper class and drive cars and wear handbags people like me will never be able to buy in their whole life. Nevertheless, all students are very nice and generally interested in us foreigners. The teaching methods at Chula are a lot different

Experience Abroad

drinks. During lunch break you could order some fresh Pad Thai (one of the few dishes I knew how to pronounce, so that the lunch ladies understood me), a peanutbutter-oreo shake and some fresh fruit. Since university was not as time-consuming as I was used to from Maastricht, there was a lot of time left for all kinds of leisure activities. The hotel I stayed at had a nice pool, where I spent a large amount of my time, got foot massages, or went shopping. Bangkok has an insane amount of malls and you never have to walk too far to find a nice night market. I had to learn how to bargain, which is essential for getting a good deal, but in the end, I became one coldhearted bargainer. I probably still got overcharged, but for a “farang” (foreigner) I did quite well. Bangkok is known for its many food stalls, which are literally everywhere. You only have to step outside and you can buy whatever you crave for from the nice ladies at one of the many stands – fruit, iced coffee, bubble tea, fried chicken and all kinds of other snacks and dishes. Food really seems to be a major thing in Thailand; everyone is eating everywhere and all the time. Another activity of interest is Thai boxing called “Muay

Thai”. It’s the number one sport in Thailand and fights always draw huge crowds. To me this sport always seemed to represent the total opposite of the Thai temper. Thai people are typically kind and calm, and most importantly, always have a smile on their faces. As a grumpy German, it took me some getting used to smiling all the time, but I gave my best. Bangkok is the ideal city for partying and going out. Whether you go to a bar on Khaosan Road or to one of the many clubs in the night life districts, you’ll always have a good time. Other than in Maastricht, you don’t have to ride on your bike through the rainy night, you can just take a cab for less than two euros. Even though Bangkok is a great city there is not too much sightseeing to do. After you have visited the Great Palace and bought a new wardrobe, it’s time to explore other parts of Thailand. Travelling is – as you can guess – quite cheap, especially if you take the bus and stay at a hostel. We travelled to the southern part of Thailand and relaxed on the beautiful beaches, went snorkeling and visited the scene of “The Beach” movie. In the North, I went to one of the few real elephant sanctuaries. Many of these big,

already time for finals marking the end of an amazing semester. Gladly, I still had some time and money left to travel a little more around South East Asia. But as my tan got darker and my wallet emptier, it was time to go back home. As soon as I landed in Frankfurt, where it was 15Â°C and raining, all I wanted was to go back to Thailand.

Photo courtesy: Randi Wagener â&#x20AC;&#x153;Bangkok street foodâ&#x20AC;? photograph from https://www.flickr.com/photos/globalcitizen01/6165359903 with license: https://creativecommons.org/licenses/by-nc-nd/2.0/. No changes have been made to any of the used material.

Experience Abroad

but still gracious animals live rather unhappy lives, but at the sanctuary, abused and injured elephants find a loving home. Time really started to fly and after I had visited most of Thailand, had travelled to Cambodia and Hong Kong, it was

Economic Experience:

City Trip To Luxembourg

By Vera Schmickler

Activities

uxemburg: “Cheap gas, welfare state, banks!” – Standing in front of the SBE on an early Thursday morning, those were the first words coming into our minds when thinking about Luxembourg. 19 sleepy but motivated students were waiting to set course for an awesome three-day trip to the capital of the only Grand Duchy in the world. We were really excited about the trip and while waiting for the other participants to arrive, we noticed that for most of us, it was the first time to visit Luxembourg. Except for the typical clichés associated with the city, almost no one had an idea about what to

expect and what Luxembourg had to offer. When we were served a three-course menu with the CEO of a private bank two days later, then by the latest we knew: Luxembourg has to offer quite a lot! Only a few hours later and slightly delayed, we arrived at our first programme point: the Central Bank of Luxembourg. After a short introduction about the Central Bank of Luxembourg and its role within the European System of Central Banks, we were informed about the functioning of the European Central Bank and its monetary policy. A special focus was put on how the European Central Bank dealt with

though Luxembourg is quite small and compact, it is very diverse and international at the same time. Split up into an upper and a lower city everything from a modern banking district to an historical quarter can be found. In the evening we met in a cosy restaurant to have dinner together and to end the day with a lot of nice conversations. The next day was to bring an absolute highlight of the trip and exceeded all our expectations: a meeting with the CEO and the COO of KBL European Private Bankers. Our visit at their headquarter started with coffee and some conversations, followed by an interactive presentation dealing with the life of a private banker. Questions like “What does it take to be a private banker?”, “What do you have to bring?”, and “How to cope with clients?” were discussed. We were offered a lot of insights into client relationship management. One of the most important finding we took home is that private banking is not only about managing portfolios, but also

Activities

the financial crisis and which monetary policy tools it used. The presentation was especially interesting for the second year IBE students, as it was a nice addition to their current banking course and theory was coupled with practice. Afterwards we went to the city centre to have lunch. It was also the time we first got to know each other. We enjoyed the sun and the kind of French atmosphere before we continued our programme. The afternoon was devoted to a visit at the European Investment Bank. Impressed by the architecture of the building, we were guided to the presentation room and were offered coffee and tea. We received a short presentation on the functioning of the bank, its role in the European Union and their investments. We were really surprised to hear that the European Investment Bank is the world’s largest multilateral development bank and has a higher lending volume than the World Bank. During the rest of the day we discovered the beautiful city. Al-

Activities

and even more about managing individual relationships. Afterwards we were guided to a beautiful and posh lunchroom, where a delicious three-course menu, wine, coffee and pralines were waiting for us. Besides the CEO and the COO, several other private bankers joined our lunch to tell us more about the daily life of a private banker. This network lunch was one of the highlights of the trip, especially as it enabled us to get first-hand information from the private bankers, learn about their academic backgrounds, inform us about possible internships and get tips for application procedures. Still impressed by this great experience, we used the evening to test the nightlife of Luxembourg. After some pre-drinks in the hostel, we went to the bar mile of Lux-

embourg, where a crowd of young business people was enjoying their after-work drinks. We mixed and mingled and went to a few bars and clubs. On the next morning we all met to have breakfast together and to reflect on the last two days. Unfortunately, time had passed quickly and we already had to say goodbye. We all agreed that this trip offered a great insight into the field of banking and that for most of us Luxembourg would be an attractive place to live and work. With a lot of new impressions and experiences gained during this trip, we returned to Maastricht and our books and thereby back from the practice to theory. Photo courtesy: Vera Schmickler

Technocracy vs. Democracy

Activities

Period 5 Academic year 2012/2013 By Nicolas Moes

he topic of last yearâ&#x20AC;&#x2122;s Period 5 EconRound was inspired by the ongoing political turmoil across major part of Europe. Indeed, with the sovereign debt crisis striking hard among others Italy and Greece, Europeans observed the gradual transition of the Greek and Italian governments towards a rather technocratic decision-making. In Greece, this transition was triggered by the pressure imposed on the government by the Troika (IMF, European Central Bank and European Commission) to take some very serious action, and in Italy, it was embodied solely by the government of experts that came to power thanks to parliamentarian approval. During the EconRound, our aim was to lead the participants

in the discussion of the pros and cons of the democratic and the technocratic systems, and to show that the line between both notions is often blurred. With twenty four participants, the debate was enriching and active but unfortunately, too long for the time we were allowed. We reached some interesting dilemmas, since every one of us spoke from the point of view of citizens of a democratic society. For example, as the quality of the decisions made is not so much related to whether the decisions go through a democratic process or not, we asked ourselves whether apolitical ex-

EconRound Brick by brick, Scope | Economics builds up on its previous experience to make this event a valuable opportunity for students to discuss the interaction between economics, politics and society.

perts could come up with more rational and beneficial policies. “Intensive lobbying at all governmental levels twists democracy towards big businesses’ interests”

Activities

in a society that we believe is democratic, so we questioned the idea if a truly independent and optimal decision-making body was really possible. Those tricky questions have helped make this EconRound a very lively and interesting event for participants, as well as organizers. Therefore, the committee in charge of setting up the event is proud to consider this

EconRound a real success both in terms of attendance and content. Presumably, this was due to several factors that are developed below. Total transformation of the concept: Prior to this EconRound, in 2012-2013, the committee used to organize its events in a bar or a café, allowing for some free drinks during the debate and thus a much cozier atmosphere. However, this time, we decided to organize it in a big classroom at the faculty, in similar fashion to the first EconRounds from 2011-2012. An EconRound taking place at the SBE offers ad-

Activities

vantages in terms of budget and infrastructure, and allows for a more structured discussion. This associated with heavier advertising, full support from Scope | Economics and a particularly intense topic concerning students in every faculty is probably the main reason for the success of this event. Also, we did not give up at all the informal atmosphere, as we went for drinks in a bar which allowed us to get to know each other more and to have even more interesting discussions on the topic. However, we have room for improvement in several aspects, as explained below. Points to improve: There were some minor however obvious – flaws in the organization of the event that might lower the level of attendance or the prestige of the EconRound. First of all, as the event was up and running, no connection whatsoever could be established with Scope Economics. The absence of logos and other forms of promotional activity in the presentation is definitely an issue to address for the next EconRound, as this event is falling in the same category as Scope Economics’ other

academic events. Second, we had not think though the fact that some pictures of the event could have made it somehow easier to create a “group” of EconRound participants, and to give this group a more persistent identity. Pictures could also improve the attendance of future EconRounds. Even minor improvements as the ones just described are expected to result in an even more successful event. Conclusion: The committee is dedicated to improving the event. The success of the last EconRound demonstrates that it is possible for this kind of event to attract the same level of interest and have the same importance in Maastricht student life as lectures. We will therefore carefully monitor our own progress throughout this year to see the evolution.

HONG KONG handshakes, dim sum & exotic islands

mum government intervention. It is the world’s ninth largest trading economy with a particularly strong service sector. With a peculiar gut feeling due to a cocktail of sleep deprivation and the thrill of anticipation, our trip started on a very early Saturday morning in June in front of the School of Business and Economics. Mini busses took us to the Brussels airport from where our plane departed. Despite all the conveniences of Qatar Airways, the 14hour flight and the 8-hour layover

Activities

ong Kong – a vibrant metropolis, a trading hub at the heart of Asia, and a major gateway to China – was the destination of our SCOPE | Economics foreign trip in 2013. Around 7 billion inhabitants live in the Special Administrative Region of the People’s Republic of China. Following the British rule from 1842 to 1997, China assumed sovereignty under the ‘one country, two systems’ principle. Hong Kong’s economy is characterised by free trade, low taxation and mini-

By Mira Nagy

Activities

in Doha were exhausting. Thus, we were all very happy when we finally arrived in Hong Kong on Sunday afternoon. One of the public double-decker busses brought us from the airport to our hostel and on the way, we forgot all fatigue as we were all stunned by the panoramic views: modern highways, the sea to the left, green hills to the right, with a horizon full of sky scrapers in front of us; the futuristic feeling conveyed by the city’s armour of glass and steel facades was mixed with the freshness of exotic greenery; throughout the city, Philippine house maids were gathering on blankets on the pathways to spend their free day together. The remaining evening we spent exploring the neighbourhood of our hostel, where we gave one of the Chinese fast food chains a chance, but ended up in one of the indeed super cheap McDonalds. We started the next day with a super exciting visit to Vision 2047 – a think-tank, which was founded prior to the takeover by China in 1997 – to discuss Hong Kong’s future. We had the great opportu-

nity to sit together with some of the most renowned Vision 2047 members. Their personal stories drew detailed pictures of episodes of the history of Hong Kong. Moreover we discussed recent issues like the lack of housing, cage dwellers and waste management. This very first visit already gave us a taste about how the business life in Hong Kong looked like, but we had much more visits to look for and impressions to form. Every office was more im-

pressive than the previous one, all of them on the top floors of sky scrapers with huge windows and great view to Hong Kong’s highest point – the Peak, the sea, and the Kowloon tower. The most impressive offices were probably those of the Dutch ING bank, where we were welcomed with a rich buffet after a dynamic day of company visits and where we could catch our breath and take some pictures.

of Munich Re in the region. And at the offices of the German-familybusiness-moved-to-Hong-Kong “Lissi Dolls”, we learned about the challenges companies producing in China face at the moment. One of the main issues is wage gaps that make companies move their production from places with too high wages, such as the Great Pearls river delta (once, Hong Kong’s factory), to parts of China, where wages are lower, like in the northwest. This naturally brings about many

to see the great facilities including the library, swimming pools and gyms. At Munich Re – one of the world’s leading reinsurance companies based in Germany, we learned more about the insurance opportunities in Asia and the expansion

problems with the supply management as it is not as easy anymore to check the quality of production and to transport the products to the Hong Kong harbour. Other interesting places we visited were the Dutch and German embassies,

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A bit more modest and down to earth was the office of the Dutch chamber of commerce. However, Mirjam Achthoven, the young and driven communications manager, more than made up for it by giving us some interesting insights in her life as a Hong Kong expat. She was barely older than most of us and shared her experience as a young professional in Hong Kong. Our next stop was Hong Kong City University, where we chatted with students of our age and got

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Hong Kong Invest and the Hong Kong Stock Exchange. In the time in between or after the visits we enjoyed ourselves in Hong Kong. Often, we directly changed from our business outfits to a pair of shorts and flip-flops in a public toilet. We either headed off to Victoria Peak – the highest point of Hong Kong island – taking a ride with a tram from colonial times, or went shopping in on of the huge shiny, luxurious shopping malls. Others went on a more spiritual path and visited ancient Buddhist temples. Most nights we spent dancing in some of the mainstream student bars and clubs of Hong Kong, but we also went to check out some special events. Wednesdays is horse-racing night in Hong Kong – a huge event with live music, lots of beer and, of course, racing and betting. Some of us might have even started their gambling

careers on that night, while knowing almost nothing about horse-racing. Among the highlights of the city were also the many rooftop bars, which always provided for some great views and pictures. At these bars – among them the supposedly highest one in the world – we treated ourselves to some pretty expensive drinks. For the bargainers among us there were the night markets for clothes, souvenirs, bags, watches and more plastic from China. On the weekend, most of us visited the neighbouring Lantau Island with its enormous Buddha statue, the Buddhist monastery, and the traditional fisher village. Close to the island we even saw some of the famous pink dolphins, which rather look like swimming pigs. Another day we took a trip to the neighbouring Special Administrative Region Macau. This trip to the former Portuguese colony felt a bit like a trip back to Europe with all the old colonial buildings, Portuguese egg tarts, catholic churches, and the ancient fort. Nevertheless, it was not that entirely European: in Macau

centres. Pedestrians only move through the city via the underground or through bridges from one business building to another air-conditioned shopping centre. An artificial world just like out of some science fiction novel. Then there is the nature all around. â&#x20AC;&#x153;It doesnâ&#x20AC;&#x2122;t usually take you more than a few minutes to escape the artificial world and to find yourself in the midst of a jungle.â&#x20AC;? A huge part of Hong Kong consists of national parks and even within the business districts there are always some palms and other exotic plants. Not to forget the most beautiful beaches I have ever seen. Also there are monkeys, pink dol-

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we saw one of the oldest Chinese temples in the region. However, we all also dived with eagerness into the world of casinos with all its gold, lights and bling-bling. To give ourselves some rest from all the walking around, handshaking and new impressions, a part of our group decided to escape to one of the beautiful beaches in Hong Kong. The weather was great and it really did not feel too hard to earn 4 ECTS while splashing around in the waves and tanning in the sun. Looking back at our trip, I would say that the most impressive thing about Hong Kong is probably its diversity. There is the business world with skyscrapers, glass, steal, big roads and shiny business

phins, old and poor fisher villages. Furthermore, there is the Chinese influence. You have neighbourhoods full of Chinese neon-signs where everything is either in gold or in red, and the smell of garlic is omnipresent. You come across traditional pharmacies with all kinds of dried things and see tiny altars next to every door. Last but not least, thanks to the

former foreign trip committee, Laura Ketteler, Theresa Fischer, Celina Schelle and Lena Bödeker for organizing this exciting and unique experience! Photo courtesy: Mira Nagy & Mesut Kurşun You can follow Mesut on http://mexut.deviantart.com/

EVENT REPORT:

Workshop

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hat opportunities are there for alumni from Maastricht University? On 23 November 2013 Scope Economics met with two former students of the School of Business and Economics to find out what is it like to work as an analyst at one of Europe’s leading economic consultancy companies – Frontier Economics. The workshop included a presentation on the firm’s core activities and its recruitment process. Frontier Economists are specialists in economic consultancy and therefore work for firms, individu-

By Jeroen Douma als and governmental agencies to help them assess the economic effects of various decisions in the business cycle. They have worked for multiple firms, such as Vodafone, Gatwick Airport and large utilities companies in the United Kingdom. Frontier Economics is active not only in the UK, but it also has affiliates in Germany, Belgium, Ireland and Spain. Each of these affiliates is smaller in scale than the main office in London and specializes in a certain field. For instance, the office in Brussels works for European

gument its case against the alleged cartel. Both sides brought up some pretty convincing arguments! After the workshop, a small networking session with coffee and cake took place, which provided the participants with an opportunity to talk about the company with

their representatives, and wrapped up nicely our very informative and productive day. The Workshops Committee hopes the participants enjoyed their afternoon. We hope to bring to you more interesting workshops this academic year. Scope | Economics workshop commettee

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agencies, for example, the European Commission, and focuses on competition policy and antitrust. After the outline of the companyâ&#x20AC;&#x2122;s main business, the presenters described the general procedure for recruitment, interacting with the audience to help it experience the process more realistically. Frontier Economicsâ&#x20AC;&#x2122; vision on microeconomic theory is something prospective applicants must be able to implement in real life cases. Therefore, during the interview, each applicant is given a case and asked to solve it. Our audience was also challenged to solve some cases. The first case was used as a warm-up and involved the basic concept of supply and demand. The second case was one that was actually handled by Frontier. The audience was split up into two groups, where one had to defend itself against the claims of cartelisation, and the other to be act as a plaintiff in court and ar-

When the retail industry chooses for sustainability Lecture review by Darina Bacheva With thanks to Sueli Brodin, TalkinBusiness The cial cals and

retail industry is often described as a big environmental and sotroublemaker because of the extensive proportion of chemiin its products, the minimum wages it pays to its labour force, ultimately, the worldwide negative impact of the former two.

Do these accusations still hold or do we see a change in the global corporate retail mindset?

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lready prior to the financial turmoil that started in 2008, the global market observed an increase in environmental, social, and governance spending, commonly known as ESG. At that time, however, corporate social responsibility was still perceived as an alternative, exotic field, way out of the comfort zone of traditional investors. Today, it seems that companies on the global scale are making an effort to make up for previous mistakes and to minimize future ones not just by investing in short-term social projects to improve their public image, but by redesigning and adapting their entire production process into a sustainable manner of working. Surprisingly

perhaps, an example of a largescale sustainable investor is the clothing industry. C&A: making a clear choice for sustainability There is barely a country in Europe without at least one C&A store. The company, which employs more than 30,000 people in Europe, has expanded to China, Latin America, and recently Russia as its only franchise market. Its plans for future growth are even more impressive. C&A will spend a good part of the EUR 11 billion it made in sales in 2012, on building 50 new stores on an annual basis, and strengthening its brand recognition by retaining its lead role on the bio cotton market. Top managers of the clothing

retailer C&A shared some insights during a recent talk SCOPE Economics at the Maastricht University School of Business and Economics on how their company and the retail industry have been increasingly investing in sustainable development to make up for previous damage cost. “We did this in response to C&A’s customers’ loyalty and trust,”

“sustainable practices pay off through higher customer recognition and affiliation with the brand’s values.” He admitted, however, that the chemicals used for colouring and other purposes, which seem inevitable in the mass clothing industry, are a serious issue. To decrease its pesticides use and to produce according to legislations for permitted chemical cocktails, C&A has

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said Andreas Seitz, Chief of Staff of the retailer’s Global Leadership Council. Seitz differentiated between the three types of apparel markets – the premium, mid- and price markets, and explained that through its affordable but still qualitative production, and its increasingly sustainable working policies, C&A positioned itself in the “value” market, or “the higher end of the price market, but below the mid-market”. C&A distinguishes itself from other global retail-holdings in the ownership structure of the company, which is entirely privately held. Seitz explained that the “generation aspect” was extremely important for C&A’s shareholders, who want to hand over a healthy and sustainable business to the next generation. As a result, the compa-

ny focuses on a long-term outlook instead of maximum quarterly performance. This reminded of Geert Hofstede’s theory on the importance of the long-term perspective for sustainability. C&A is successfully implementing its sustainable policy with a large stake of its capital being spent on green and solar energy and on promoting education in developing nations, where many of its factories are based. Seitz stressed the value of proactive social responsibility strategies for the core business. “In recent years, customers have become increasingly cautious about the origins of the materials used for the goods they purchase, as well as for companies’ labour policies,” Seitz pointed out. “In that sense,” he argued,

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established a special chemistry department for testing and supervision of safety standards. It addresses risks for both the end customers of the company, as well as risks of soil and water pollution. CottonConnect Philip Chamberlain, Head of Sustainable Business Development at C&A elaborated on C&A’s longrun strategy to promote organic cotton production in emerging markets, with its main focus on India. Currently, 99% of the cotton used worldwide is not organic, but by 2020, Chamberlain said, C&A will aim at exclusively working with either certified organic cotton, or with more sustainable forms of the material, the production of which would require less water input. “The role of senior management is crucial to make promises become reality,” Chamberlain said. Next to support from the board, key success factors include having a clear target, and developing an integrated supply chain from farmers, field workers, suppliers and other stakeholders to improve efficiency levels. In the global initiative to support organic cotton producers, some of the biggest players in the

clothing market such as Puma, Nike, H&M, and C&A have put their rivalry for market-share aside and joined forces to found CottonConnect – an or g a n i s at i on investing in sustainable cotton production to improve the economic, environmental and social situation in producing countries. C&A is both a shareholder and a customer of CottonConnect. “We wanted to share our knowledge on organic cotton production with our peers, because one company cannot change the world by itself,” Chamberlain said. At the same time, CottonConnect, and indirectly C&A, plays a vital role for local farmers in developing countries, as it grants them access to the world’s cotton market and other networks. This results in better net profits for the producers and generally helps to improve their living standards. “C&A’s shareholders invest a great deal of money to ensure that the positive social impact of their efforts is sustained,” Chamberlain added. Both Seitz and Chamberlain stressed the importance of further

cooperation among companies in the industry to increase levels of sustainability. As the retailer sector is booming all over the world and expected to expand to Japan, Pakistan, India and South America, the impact of all actions undertaken on the environment and on societies will be even bigger than before. A more responsible and sustainable approach is therefore needed to ensure longterm economic and social benefits. Photo courtesy: C&A website

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Made in Maastricht

Bad Apples and Blinding Lights How your tutorial group affects your grades By Mira Nagy

t the beginning of every period and every new course, you are faced with a bunch of fellow students who will constitute your new tutorial group for the next seven weeks. In some groups you might feel lost and get the impression that everyone but you easily understands all those wretched equations. In others, you might be totally bored because your peers are discussing some trivial stuff over and over again. You probably know from your own experience that your tutorial group can affect you in terms of leaving you with a headache for

the rest of the day or giving you a fair self-esteem boost. However, your fellow students do not only influence your mood, but can actually have an impact on your grade in that course. A recent paper by the PhD students Jan Feld and Ulf Zรถlitz supports the existence of such peer effects. I met my former Understanding-Society tutor Ulf for a coffee to find out more. Having been both a student and a tutor, Ulf has collected some experience with how tutorial groups at Maastricht University function. In some of them, he told me, students fail to interact with each

Made in Maastricht

other as well as their colleagues in rial group will enlighten everyone other groups do. This observation else with his or her knowledge. brought Ulf and his friend and coFor their research, Jan and Ulf worker Jan to their research ques- looked at more than 42,000 grades tions: “Does the composition of a of almost 8,000 different students tutorial group affect grades? Does who took classes at the School of the ability of classroom peers af- Business and Economics between fect a single student’s own learn- 2009 and 2012. Thus, this study is ing behaviour?” In particular, not just some random research pathey were interested in the effects per; it is essentially about you and of average abilities of classroom me – about us SBE students. peers, the heterogeneity of these The empirical analysis conabilities, and the effect of having firms that there are small but one particularly high or low per- significant effects of peer ability forming peer. on your grade. Considering that Previous research suggests learning in tutorial groups is a key that there is no or only little effect feature of Maastricht’s way of of peers on an individual student’s education, the effect is consideracademic perfor- “This study is not just some ably small. Surmance. Concern- random research paper; it is prisingly, there ing the effect of essentially about you and me - is no major difparticular peers ference between about us SBE students.” on grades, theopeer effects at ry distinguishes between the cases the bachelor and at the master of the ‘bad apples’ and the ‘shining level. When looking at the actual lights’. One ‘bad apple that spoils findings of their study, ‘bad apthe bunch’ refers to a student who ples’ indeed have a negative effect performs much poorer than his on the rest of the tutorial memclassmates. The ‘bad apple’ might bers. On the other side, the data come too late to tutorial meetings, rejects the ‘shining light’ theory. hold up the tutorial’s progress Extremely well performing stuwith trivial questions and free-ride dents do not enlighten the whole on his or her peers’ work in joined tutorial group, but seem to have group projects. On the contrarily, a rather negative impact on their the “shining light” model predicts peers’ grades. Thus, a student’s that the super brain in your tuto- light can be rather blinding, cre-

ating confusion and irritation. Ulf summarised:

Made in Maastricht

“As the difference between abilities increases, students no longer benefit from interacting with each other.” He also presented these findings at the “Annual Conference of the European Association of Labour Economists” (EALE) at the University of Torino, where the paper was received very well. Ulf and Jan are among the first to show the negative effect of “blinding lights”. In that respect, their research is an important contribution to existing literature. “What are the practical implications of your research?”, I asked Ulf. “In general, with such small effects, it is hard to draw clear conclusions for education policies. Taken literally, our findings sug-

gest that the SBE might be able to raise overall student achievements by a little bit through applying different tutorial group assignment rules”, said Ulf. “However, in practice it is very difficult to predict whether that would be successful. Further research and experiments would be necessary to make clear policy recommendations.” He assured me that he or Jan would not promote any idea that might impede the progress of SBE students. They will further investigate how peer effects influence our performance. “We would like to understand better how students select their peers outside the tutorial and what other factors influence study success”. Photo courtesy: Maastricht University

Ulf Zölitz

Jan Feld

Post-doctoral researcher MSc Economics, University of Bonn Ph.D. Economics, Maastricht University Main interests: education economics, experimental economics & behavioral economics

PhD candidate BA International Management, University of Flensburg MSc IES, Behavioural Economics, Maastricht University Main interests: education economics, behavioral economics & labor economics

Your Magazine Committee Darina Bacheva Chair of Committee 2013/14 MSc Financial Economics

Thore Hildebrandt Vice President 2013/14 BSc International Economic Studies

Cennet Ak Content Commissioner/PO 2013/14 BSc International Business

Ivan Toshev Content Commissioner/PO 2013/14 BSc International Economic Studies 63

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