Is this the FM a leading Emerging Economy can afford?

In my unusual inebriated state of mind, I was casually going through a news item on my favourite news paper "Google News - Business" section on 31-Oct-2011 at about 22:45 hrs. The first news items caught my mind - obviously, being a Relationship Manager in an Indian Bank, I would be focusing my news on issues relating to "interest rate scenario", "inflation", "exchange rate", "industrial index of production", "euro crisis", and such similar or related news articles.

So, my eyes caught the first news item on the Business section of Google News at this time viz., "Inflation to ease soon, says Pranab Mukherjee" on TOI published at Oct 31, 2011, 10.17PM IST

It spoke of one of the statements made by Finance Minister of my country (India) on the RBI's decision last week to raise key policy rates for the thirteenth time since March, 2010, to tame the rate of price rise. Mr. Mukherjee said, "There was some liquidity excess which was required to be mopped up and through the adjustment of interest rates, efforts have been made to mop it up."

My basics tell me that there are two simple and straight forwards tools that RBI (any Central Bank for that matter) uses as part of Monetary Policy. They are 1) Interest Rate - via Repo and Reverse Repo Rates [Increase in rates would make credit available at higher costs] and b) Liquidity - via Cash Reserve Ratio (CRR) [Increase in CRR would mop up liquidity from the economy and any decrease would release liquidity into the economy]. I am still not able to understand how Mr. Mukherjee could say that an increase in interest rates would mop up excess liquidity in the system.

With such people becoming FMs to one of the leading Emerging Economies, what would be the fate of Fiscal Policy Interventions, Much needed Reforms, and the aspiration of the people of the nation to become one of the economic super powers.

Human Like Machines (HLM)

Good thing about puzzles is that all the required information to understand it completely is available. If we treat life as a puzzle, this point becomes invalid. There is information asymmetry. We don't have all the information. Not even the critical information that is required. If we evaluate life in these terms, it become a more interesting situation.

Dearth of information makes life more interesting. How? Let me explain. If we were to have have access to all the information required, then life is solved for us. This means that a finite set of rules would be enough to tackle any thing related to life. This makes the emulation of human brain in the neural networks successful and complete. This in easier terms will mean that creation of a machine that can think like humans is possible.

Because we can take decisions in the world of information scarcity, and this can't be done by a machine, it is impossible to create a human-replica machine.

Another line of thought could be that even when we don't have access to complete information, we are able to decide based on some heuristics and some rules of thumb, which are rules again. So, it is possible to create a rule-based human-like machine (HLM).

This can be countered with the fact that the depths of these rules of thumbs are unfathomable. Even if they are finite, their application is not fixed. Even if it is fixed, it is mutable, very unlike the characteristics of machines, where the rules to large extent are immutable.

Considering these limitations, machines that emulate humans could be created, but the information that needs to be made explicit is largely tacit, the representation of this information increases the complexity.

There is a trend in terms of identifying the meta rules, the rules that are the basis for the actual rules, this will make the rules more abstract and hence decrease the size of the rules. There is an increasing effort in these directions of exploration for creating HLMs.

Though there are some breakthroughs in creating HLMs, they are largely restrictive and in no measure equal to humans. But with in a given field of expertise, are very handy.

Some day, it would be possible to have a world where the Stephen Spielberg's AI would become a reality. But that is only for future generations to witness.

Puzzling my way through

Today was an eye opener for me. I almost ensconced into a comfortable position, had I not come across this peculiar problem. I was complacent with the way things were going and the way I was able to comfortable live my way through.

Suddenly I come across a problem that looked simple. I tried to solve it. I tried for 15 minutes, then for 30 minutes. Fight continued... I spent about 1 hour, did not succeed.

I suppose I will start working on it as soon as finish my posting here. I believe, life get boring without challenges. If there is a challenge at hand, it feels great thinking about it, working towards cracking the secret.

Once I solve it, I would be satisfied. After that what? I am free again. Searching for more. This will continue ...