From the comments

by on August 1, 2015 at 4:09 am in Economics | Permalink

Tyler,

Isn’t it funny how so many people hold these two opinions in their heads at the same time:

1) Wall Street is just focused on the next quarter and they push corporations to have short term motives.

2) There was a stock market bubble 15 years ago built around bidding up prices to unprecedented levels for an entire basket of firms which had never been profitable and had no near-term plans for being profitable.

That is from Kevin Erdmann, Kevin’s blog is here.

Tsuyoshi Shimmura, Shosei Ohashi, and Takashi Yoshimura have a new paper:

The “cock-a-doodle-doo” crowing of roosters, which symbolizes the break of dawn in many cultures, is controlled by the circadian clock. When one rooster announces the break of dawn, others in the vicinity immediately follow. Chickens are highly social animals, and they develop a linear and fixed hierarchy in small groups. We found that when chickens were housed in small groups, the top-ranking rooster determined the timing of predawn crowing. Specifically, the top-ranking rooster always started to crow first, followed by its subordinates, in descending order of social rank. When the top-ranking rooster was physically removed from a group, the second-ranking rooster initiated crowing. The presence of a dominant rooster significantly reduced the number of predawn crows in subordinates. However, the number of crows induced by external stimuli was independent of social rank, confirming that subordinates have the ability to crow. Although the timing of subordinates’ predawn crowing was strongly dependent on that of the top-ranking rooster, free-running periods of body temperature rhythms differed among individuals, and crowing rhythm did not entrain to a crowing sound stimulus. These results indicate that in a group situation, the top-ranking rooster has priority to announce the break of dawn, and that subordinate roosters are patient enough to wait for the top-ranking rooster’s first crow every morning and thus compromise their circadian clock for social reasons.

In case you had any doubts.  The pointer is from Michelle Dawson.

 

The subtitle is Essential Writings by Our Greatest Thinkers, and the editor is Elizabeth D. Samet.  Here’s the shocking truth: these really are writings by our greatest thinkers!  Usually I am allergic to the topic of leadership and all the more allergic to edited volumes.  But this book has well chosen excerpts from Thucydides, Cervantes, Borges, Marcus Aurelius, Tolstoy, Milton, Plutarch, and Shakespeare, among many others, and a variety of moderns, including Mandela, Gandhi, Frederick Douglass, and Osip Mandelstam’s poem on Stalin.

This is actually a remarkable book.

Friday assorted links

by on July 31, 2015 at 11:33 am in Uncategorized | Permalink

1. Mark Turner part one, and part two.

2. Musical preferences are linked to cognitive styles (speculative).

3. Don’t take a selfie with a bison.

4. The leading horses are those with the most friends.

5. Noah Smith praises Berkeley.

6. Claims about ants.

7. The boom in mini-organs.

Arthur C. Brooks, The Conservative Heart: How to Build a Fairer, Happier, and More Prosperous America.

Greg Mankiw has reviewed the book.

Do pandas respond to incentives?

by on July 31, 2015 at 2:44 am in Economics | Permalink

Smarter than the average bear: Panda tricked zookeepers into giving her an air-conditioned room, round-the-clock care and extra bamboo by pretending she was pregnant

Here is the full story, with videos, consider this speculative.  For the pointer I thank the excellent Mark Thorson, a loyal MR reader.

Mirko

1. Novelist: Help!  I do own a copy of Sarah Nović’s Girl at War, but haven’t yet read it.

2. Basketball player: Toni Kukoc, the “Croatian sensation.”

3. Painting: There was an active school of Naive painting in Croatia, from Hlebine near the Hungarian border.  Perhaps my favorite from the group was Ivan Generalic, but Mirko Virius was very good too.

4. Inventor: Nikola Tesla.  Before you go crazy in the comments section, however, here is a long Wikipedia page on to what extent we can justly claim that Tesla was Croatian.  Here are further debates, Croat or Serb?  Or both?

5. Pianist: How about Ivo Pogorelić?  Here is his Petrushka.

6. Economist: Branko Horvat, the market-oriented market socialist, is the only one I can think of, here is an overview of his contributions (pdf).  Am I forgetting someone?

7. City: Split, not Dubrovnik.  I am here for two days right now, then on to Belgrade for a conference/salon.

I cannot name a Croatian movie or composer or pop star.  I have the feeling they have many more famous athletes.  Don’t they have a lot of beautiful models?  Aren’t they the world’s most beautiful people?  Has anyone set a movie here?

The bottom line: It would be worse without Tesla.

The University of New Hampshire’s Bias-Free Language Guide came in for widespread criticism earlier this week for possibly chilling speech by labeling words such as “American,” “illegal alien,” “foreigners,” “mothering,” and “fathering” as problematic and non-preferred.

Commendations are due, however, to university president Mark Huddleston. The UNH reports:

The associate vice president for community, equity and diversity removed the webpage this morning after a meeting with President Huddleston. The president fully supports efforts to encourage inclusivity and diversity on our campuses. He does not believe the guide was in any way helpful in achieving those goals. Speech guides or codes have no place at any American university.

From Free Exchange at The Economist:

In the first [paper] Isaac Sorkin of the University of Michigan argues that firms may well substitute machines for people in response to minimum wages, but slowly. Mr Sorkin offers the example of sock-makers in the 1930s, which took years to switch to less labour-intensive machines after the federal minimum wage was brought in. He also explains how this finding squares with other research. Most studies look at past minimum wage increases that were not inflation-proofed. Firms may decide not to go through the hassle of investing in labour-saving machines if the minimum wage will affect them less over time. But they could respond differently to a more permanent increase.

Mr Sorkin crunches the numbers, using a model of the American restaurant industry in which companies choose between employees and machines. He investigates the effect of a permanent (ie, inflation-linked) increase in the minimum wage and shows that the tiny short-run effects on employment normally seen are fully consistent with a long-run response over 100 times larger. The lack of evidence for a big impact on employment in the short term does not rule out a much larger long-term effect.

In a second paper, written with Daniel Aaronson of the Federal Reserve Bank of Chicago and Eric French of University College London, Mr Sorkin goes further, offering empirical evidence that higher minimum wages nudge firms away from people and towards machines. The authors look at the type of restaurants that close down and start up after a minimum-wage rise. An increase in the minimum wage seems to push some restaurants out of business. The eateries that replace them are more likely to be chains, which are more reliant on machines (and therefore offer fewer jobs) than the independent outlets they replace. This effect has not been picked up before because the restaurants which continue to operate do not change their employment levels, so the jobs total does not shift much in the short run.

The piece offers further points of interest.

Thursday assorted links

by on July 30, 2015 at 12:56 pm in Uncategorized | Permalink

1. No tip, but an economics card instead (don’t try this on your next date).

2. “As many as 20 percent of Haverford’s economics majors — many of them baseball players — choose baseball or sports as the subject of their thesis.”

3. Someone likes a William Vollmann novel.  There are other rave reviews, but so far I can’t get through the first five pages.  Still, I admire what he is trying to do.

4. You people made a mistake when you stopped buying CDs.  Here is Alex Ross on the same.

5. Wage insurance? (ha)

6. Arab Gulf states vastly outspend Iran on military.  And paper and packaging are still a $132 billion a year industry.  The key medium for the new ads for paper is…the internet.

7. An even greater stagnation.

Inputs are imported too

by on July 30, 2015 at 9:56 am in Economics, Law | Permalink

Ted Diamantis, an importer of Greek wines who is based in Chicago, has been helping his suppliers stock up on bottles, labels and printing ink. The barrels, though, have him worried.

In two or three weeks, some of Greece’s winemaking regions will begin their annual grape harvest. The wineries Mr. Diamantis buys from age their wine in barrels from Italy and France, but Greece’s capital controls make it difficult for them to send money out of the country to pay for the barrels they need for this season. No barrels means no wine for Mr. Diamantis.

“Without the ability to access your capital, you can’t buy anything,” said Mr. Diamantis, who is in Greece meeting with his business partners. “The marketplace is frozen.”

That is from Stacy Cowley at the NYT.  Similar examples illustrate why Greece leaving the euro, even if a better idea for the longer term, would not have been such a picnic in the short run.  Exports would have collapsed, not boomed.

Split, Croatia bleg

by on July 30, 2015 at 2:02 am in Food and Drink, Travel, Travels | Permalink

What to do?  What to see and where to eat?  Our stay there will be brief, but thanks in advance for your assistance…

A long look at short-termism

by on July 30, 2015 at 1:45 am in Data Source, Economics | Permalink

That is the title of a working study from Credit Suisse (pdf), here is one excerpt:

The problem is that short-termism is very difficult to prove. As we will see, many of the common perceived symptoms of short-termism don’t hold up to scrutiny, and there are some legitimate reasons for the shortening of time horizons. While there remains plenty of room for improvement, especially when it comes to incentives, the issue of short-termism deserves more care than it has received in the popular discourse. With little exception, the debate appears to be very one-sided.

Here is another good bit of many:

Were compensation the simple root of the problem, then correction through regulation or other market forces would be relatively straightforward. But a link between pay and termism is difficult to establish. Academic research shows that CEO pay has closely followed the size of the firms in the economy independent of the form of remuneration. Further, executive compensation has moved toward long term incentives, boards of directors are more independent than in the past, and governance committees are “nearly universal.” Reviewing the challenges of conclusively demonstrating short-termism, one scholar wrote, “[I am] aware of no empirical evidence establishing that executive pay term is inadequately focused on long-term performance from either a shareholder or societal perspective, systematically.”

And:

To summarize, a proper test of short-termism should address the micro-macro problem by relying on the outcome of the market pricing process rather than the views of individuals. While many constituents feel the market is short-term oriented—a feeling that has been expressed through the decades—asset prices don’t support this sense.

In fact there is a good deal of evidence that the sectors which require the most long-term attention attract investors and boards who understand that need.  Here is my previous post on this issue.

For the pointer I thank Michael Mauboussin.

*Money and Soccer*

by on July 29, 2015 at 2:22 pm in Books, Economics, Games | Permalink

The subtitle for this one suffices for a review:

A Soccernomics Guide: Why Chievo Verona, Unterhaching, and Scunthorpe United Will Never Win the Champions League, Why Manchester City, Roma, and Paris Saint-Germain can, and why Real Madrid, Bayern Munich, and Manchester United Cannot Be Stopped

I haven’t even read the full subtitle yet (I used Control C), much less the book.  But the author is the highly regarded Stefan Szymanski, and John Foot gave it a very positive review in the 24 July 2015 TLS.

A very good sentence

by on July 29, 2015 at 1:01 pm in Current Affairs, Law, Philosophy | Permalink

We care about African animals and British people, but ignore African people and British animals.

That is from Andrew Pearson, via Ben Southwood.  And here is an interesting WaPo Lindsey Bever article about the economics of hunting big game.