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LM
Wednesday, August 5, 2009
Monday, June 29, 2009
Ahead or Behind The Curve?
I identify the word ‘policy’ as an intense word; I define it as to rein a scope of complex problem. The first thing that a policy maker must do is to characterize the complexity of the problem, whether it is to find the ‘causal factors’, the ‘common factors’, or the ‘scenarios’ between factors. In addition , the attempt to know is also including each factor’s magnitude to intensively affect the complex problem and the timing of each factor’s impact; thus, there are two very important words of policy making ‘timing’ and ‘significance’…
Yes, even the act of knowing is a very hard thing to do….
I tried to metaphor policy making as cooking. I have to know the food’s ingredients, the composition, and the process to make the dish. However with a non-analogous condition, in cooking I can try as many times as possible to make the same dish until it tastes good, but in policy making, policies should be implemented as effectively as possible with the best result possible.
Ok now let’s cook….
Do research on the dish: which ingredients are the best, where I can found it, and the composition of the factors. One thing that I believe is best practice not always bring the best result. So, different cook put diverse ingredient depends on, for instance, the climate condition and consumer’s cultural background. After deciding the best composition, then let’s start….timing is very important! If I put the ingredient earlier the dish will be raw, the taste of each ingredient won’t be so delicious (not optimal). Moreover, as an inexperienced cooker, most of the time I put the items too late thus making the dish too cooked. Again, like the early trial the ingredients won’t be tasteful….the effectiveness of the factors is reduced…
Policy making is also an art of knowing and timing…whether we are behind or ahead the curve, we cannot be sure yet…
Associating it with Bank Indonesia’s job, it has to guide public expectation inflation; therefore, Bank Indonesia must implement policy ahead the business cycle, identify the turning point, and choosing the most effective tool to affect the market…Currently, inflation is predicted to be in a downward trend until the third quarter and slightly increased in the last quarter until next year. So, when is the right timing for BI rate drop to stop? Will it be ahead or behind the curve? We will see…
Yes, even the act of knowing is a very hard thing to do….
I tried to metaphor policy making as cooking. I have to know the food’s ingredients, the composition, and the process to make the dish. However with a non-analogous condition, in cooking I can try as many times as possible to make the same dish until it tastes good, but in policy making, policies should be implemented as effectively as possible with the best result possible.
Ok now let’s cook….
Do research on the dish: which ingredients are the best, where I can found it, and the composition of the factors. One thing that I believe is best practice not always bring the best result. So, different cook put diverse ingredient depends on, for instance, the climate condition and consumer’s cultural background. After deciding the best composition, then let’s start….timing is very important! If I put the ingredient earlier the dish will be raw, the taste of each ingredient won’t be so delicious (not optimal). Moreover, as an inexperienced cooker, most of the time I put the items too late thus making the dish too cooked. Again, like the early trial the ingredients won’t be tasteful….the effectiveness of the factors is reduced…
Policy making is also an art of knowing and timing…whether we are behind or ahead the curve, we cannot be sure yet…
Associating it with Bank Indonesia’s job, it has to guide public expectation inflation; therefore, Bank Indonesia must implement policy ahead the business cycle, identify the turning point, and choosing the most effective tool to affect the market…Currently, inflation is predicted to be in a downward trend until the third quarter and slightly increased in the last quarter until next year. So, when is the right timing for BI rate drop to stop? Will it be ahead or behind the curve? We will see…
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