by Tyler Cowen
on January 22, 2010 at 2:08 pm
in Web/Tech |
1. Excellent Kasparov essay on chess and AI.
2. Global inequality is decreasing, dramatically.
3. Does feeling like a victim make you selfish?
4. More proof that power corrupts.
5. How mobile phones are still working in Haiti.
6. Is Kindle going open-source?
Is #4 arguing that powers always corrupts, or that it tends to? The aggregated 10-point scores make it difficult to tell.
I think it’s only evidencing the latter, and there’s obviously a tremendous difference between the two.
Money quote from #1: “Jonathan Schaeffer, the inventor of the checkers-solving program, has moved on to poker and his digital players are performing better and better against strong humans—with obvious implications for online gambling sites.”
#3 could explain the behavior of a great number of political movements.
Perhaps the lesson, then, is that corruption and hypocrisy are the price that societies pay for being led by alpha males (and, in some cases, alpha females). The alternative, though cleaner, is leadership by wimps.
The alphas need to watch out for armed passive-aggressives.
Especially good collection of links, thanks.
Barkley Rosser, I’ve reviewed the short paper by Pinkovskiy and Sala-i-Martin and I’ve taken a quick a look at their NBER WP 15433 on which the short paper is based. First, the authors take into account both the national level GDPs and some measures of national income distribution. Second, apparently the authors have taken Branko M.’s research in their NBER WP (one of his papers is cited). Third, since we all know the shortcomings of both the methodologies to measure poverty and income distribution and the poor data bases for cross-country comparisons and world-level analysis, it takes more a few sentences to dismiss what these two economists have done.
I don’t know Pinkovskiy but I’m familiar with the research work on growth that Sala-i-Martin has been doing for a long time and I assume that he’s familiar with most methodologies and data bases. BTW: Soccer fans should know that Professor Sala-i-Martin, Columbia University, is the financial manager of Barcelona FC, the winner of the World Championship played last month against my hometown team Estudiantes La Plata (Argentina).
Indeed Tyler’s readers will have a great time with Xavier’s homepage. Don’t miss his entry on Keynesians.
I figure that inequality is increasing and decreasing for the same reason. There are Americans opening plants in Asia. Globalization. It’s a theory.
For the life of me I still can’t figure out why anyone would care about inequality. If everyone were equal, noone could copy the success of someone more successful.
It probably is the case that Sala-i-Martin has cited Branko’s work at some point. I know that there is an
ongoing debate between them over how to measure this. However, the alternative is not even given the light
of day or brief mention in the paper linked to here.
The issue can be crystalized by thinking about China in particular, which is very much the source of the
contradictory findings. Sala-i-Martin et al aggregate within countries and then measure across country
averages weighted by population. So, the large movement of China on average from very poor to middle income
is an enormous factor in the findings of Sala-i-Martin et al.
However, this approaches completely conceals the fact that within China there has been a massive increase in
inequality, with the Gini coefficient rising from around .16 to about .46 and still going over about a 30
year period. This massive increase in inequality within China very much drives the finding that global
inequality has increased if one measures it directly from households without the artificial aggregation into
national averages. This is the approach of Milankovic.
Obviously there is a debate here. I happen to think the Milankovic approach is superior, but at least when
bloggers announce that global inequality has unequivocally declined, based on the Sala-i-Martin et al, they
should at least recognize that another approach, possibly superior, finds a completely opposite result. This
is not a slam dunk (basketball analogy).
BTW, I see that you also claim to be a US football fan, particularly of the Minnesota Vikings. I am a personal
friend of one of their longtime former starts, Stu Voight, for whatever irrelevant worth that is, .
I lived three years in China working for the WB (1994-96 plus most of 1997 in Hong Kong). I know very well the claim that there has been an increase in inequality. Until 1978, everyone was equally poor (except of course for the top Party members). Since then, hundreds of millions were able to get out of poverty and inequality increased. On the other hand, in Cuba, by 1958 inequality was high, and fifteen years later everyone was equally poor (except for the top Party members). I remember that, in 1977, some ECLAC staff (UN’s Economic Commission for Latin American and the Caribean) criticized my work on LA poverty for failing to take into account the great Cuban experience. Anyway, my point is that both income level and income distribution should be taken into account and, if I have understood their work correctly, that’s what Xavier and his colleague have been trying to do.
I fully agree that global poverty rates have declined, which is heavily driven by the China. The matter of inequality is a different matter, and my bottom line is that it depends on how one measures, and the Sala-i-Martin result is not definitive. Thus bloggers should not be publicizing it as if it is, especially as this latest paper did not acknowledge the ongoing argument at all. It is not just this blog that has been publicizing this paper in this way either.
Comments on this entry are closed.
Previous post: What is not right in this picture?
Next post: How signals work on the dance floor
Email Tyler Cowen
Follow Tyler on Twitter
Email Alex Tabarrok
Follow Alex on Twitter
Subscribe in a reader
Follow Us on Twitter
Marginal Revolution on Twitter Counter.com
Get smart with the Thesis WordPress Theme from DIYthemes.