Thursday assorted links

by on February 25, 2016 at 12:14 pm in Uncategorized | Permalink

1. The economic cost of gender gaps; “We find that gender gaps cause an average income loss of 15 percent in the OECD, 40 percent of which is due to entrepreneurship gaps.”

2. Our first “practice questions” video for MRU, on economic growth and the Rule of 70.

3. Wearable robot transforms musicians into three-armed drummers.

4. The global black market in cacti.

5. Does chocolate make you smarter? (speculative)

6. George Selgin on allowing the Fed to buy bonds.

1 Anon. February 25, 2016 at 12:20 pm

Is that “gender gap” as in productivity, or “gender gap” as in differential pay for equal productivity?

2 Miguel Madeira February 25, 2016 at 2:44 pm

Neither – is in labour force participation and entrepreneurship

3 required February 25, 2016 at 11:18 pm

Obviously, poor women need to work as childcare provider for rich women to become entrepreneurs. But poor women do not make good childcare providers. Middle class women make good childcare providers. So poor women will knly be able to take care of their own children and that does not affect the economy. Hence the gender gap in labor force.

4 jim jones February 25, 2016 at 12:32 pm
5 anon February 25, 2016 at 7:07 pm

That was interesting. I might have to reassess eCigs.

6 Shane M February 26, 2016 at 4:45 pm

Similarly, I’ve always felt that caffeine helps sharpen my thinking. It seems like the research conflicts on whether this observation has merits..

7 Brian Donohue February 25, 2016 at 12:42 pm

#6 is pretty good.

8 Donald Pretari February 25, 2016 at 1:20 pm

#6…I thought it was very good.

9 Heorogar February 25, 2016 at 12:49 pm

Where did you find 1,500 words to say about Trump?

10 Cliff February 25, 2016 at 1:16 pm

Is more entrepreneurs inherently better?

11 Nathan W February 25, 2016 at 11:47 pm

In the developing world, a lot of “entrepreneurs” are essentially street hawkers. It might be good for their own income, but I doubt the ability to be a major engine of growth, except perhaps in the long run if it makes it easier for them to invest in the health and education of their children.

12 The Anti-Gnostic February 25, 2016 at 1:35 pm

#6 – if I’m reading him correctly, Selgin is calling for the Fed to return to being a “banker’s bank” instead of its current ballyhooed dual mandate.

13 tepper February 25, 2016 at 5:48 pm

Selgin correctly observes that the Fed and central banks are now bewildered by the economy– the Keynesian magic somehow doesn’t work like it’s supposed to… so central bankers are flailing about for new avenues of Keynesian applications
(“…These are challenging times for monetary economists like myself, what with central banks making one dramatic departure after another from conventional ways of conducting monetary policy.}

It never occurs to him that he might be fundamentally wrong about central banking… and about his base understanding of the U.S. and world economic problems now festering.

14 Robert February 25, 2016 at 1:52 pm

I didn’t know anything about cacti, and I wanted a “Road Runner” style saguaro in my California lawn. That’s when I first learned about the seedy underworld of the cactus smuggler.

I ended up getting an artificial one! It’s even better: I have a hidden camera in it.

15 Ammon Bundy February 25, 2016 at 3:44 pm

The BLM are stealing our cacti. There is nothing in the Constitution to support such brazen Federal overreach.

16 Richard February 25, 2016 at 1:54 pm

Anyone ever study the economic impact of women working and foregoing childbearing, thereby depopulating the country?

17 John February 25, 2016 at 2:04 pm

There’s plenty of people to do the work. We have our pick, and we don’t even have to pay tens of thousands of a year for the first 22 or so years to get them work ready. What a bargain!

18 Cliff February 25, 2016 at 3:37 pm

Unfortunately we have not shown a willingness to make our pick

19 Horhe February 26, 2016 at 10:32 pm

Only at the cost, in the long-term, of diluting ownership in your society and other forms of property, like informal institutions (safe neighborhoods, actual civil society)

The actual financial costs of receiving low wage immigration in a welfare society which subsidizes them are also an issue. Also, If I were an American, I wouldn’t be too keen on training my H1-B replacement to do the jobs Americans won’t do, like programming. I dislike Trump’s prolespeak, but you have a country, not a labor market. There’s more to it than the holy GDP. This is also true for giving up on goods and services produced in the household which are not represented in GDP, and transferring that labor into the wage economy while offering imperfect substitutes which also appear in GDP. Are child caring services provided by nannies equal in value and quality to those provided by the mother?

20 Miguel Madeira February 25, 2016 at 2:43 pm

Countries with few women working (like Japan) has even less births (after all, if a family has half of the income, could afford less children)

21 Richard February 25, 2016 at 3:27 pm

“Countries with few women working (like Japan) has even less births (after all, if a family has half of the income, could afford less children)”

What about Saudi Arabia? Even fewer women working, and more children!

In all seriousness, the only places with below replacement fertility are the richest nations in the history of the world. So I don’t think it’s about affordability.

22 (Not That) Bill O'Reilly February 25, 2016 at 3:45 pm

Well, those wealthy countries have also developed a culture of greater investment into children, so the cost of childrearing is a bit different (before also considering opportunity cost).

A lot easier to justify 10 kids if all you have to do if feed and shelter them rather than invest in their education, particularly if the alternative is to be a bored housewife rather than a professional.

23 Nathan W February 26, 2016 at 4:43 am

Also, in a lot of places a large family is viewed in part as a retirement plan.

24 NN March 2, 2016 at 5:15 am

Iran has fewer women working than Saudi Arabia, and it has a slightly sub-replacement fertility rate (1.9 births per women). Also, the fertility rate in Saudi Arabia has been steeply declining since 1980 (back then it was 7.2 births per women, nowadays it is 2.7 births per women). Clearly keeping women in the kitchen is not a solution to hypofertility problems.

25 Horhe February 26, 2016 at 10:44 pm

I think Japan’s birthrates will rebound after the current generation of seniors passes, when real estate values will fall because of a lack of foreign migrants subsidized by the state to prop up prices. This will improve affordable family formation. It should at least get to replacement level.

People forget that Japan passed laws in the late 1940s to address their high fertility after the loss of their empire (and colonies) and the prospect that a future blockade could lead to mass starvation. The country is very mountainous and suitable areas are densely populated. Just as an example – my country, Romania, has 20 million people left. It feels roomy. Japan is 1.5 times larger in area size, but is 73% mountainous, as opposed to 31% in the case of Romania. Its population is 6 times larger. And it’s in an area with frequent natural disasters.

26 Nathan W February 25, 2016 at 11:53 pm

Lots of people have. Women who proceed to advanced education and/or the labour market invest more in each child, leading to higher average human capital and higher future GDP per capita. Families with large numbers of children invest little in each child, implying lower future per capita GDP.

27 Stephan February 25, 2016 at 2:08 pm

#6. The rule of 70 is quite accurate around a 2 % growth rate . The error in number of years is only 0.08% . Using Mathematica I see that the error( x in % ) grows linearly as 0.47x – 0.86. For 10% growth rate error in # of years is 3.8% . Interestingly for small growth values it’s still more accurate that the third order series expansion of (1+x)^n = 1+nx+1/2(-1+n)nx^2+1/6(-2+n)(-1+n)nx^3+〖O[x]〗^4.

Anyway quite a good rule of thumb

28 dearieme February 25, 2016 at 3:10 pm

It’s better than a rule of thumb. Consider ln2.

29 Stephan February 25, 2016 at 4:13 pm

It’s equivalent to approximating ln(2) by 0.7 * ln(1+x) /x . very good approximation at x= 0.02. I call it a rule of thumb because it’s a hack, obviously a useful one

30 required February 25, 2016 at 11:20 pm

Its also called rule of 72, with one more significant figure.

31 gab February 25, 2016 at 3:31 pm

And for years now, I’ve thought it was the rule of 72. Man, you learn something new every day.

32 Heorogar February 25, 2016 at 4:11 pm

I’ve been around so long I remember the “rule of 78’s.”

33 Stephan February 25, 2016 at 4:16 pm

rule of 72 is quite accurate around 8%, Error in % follows 0.46 x- 3.7 . So rule of rules 🙂 . Use rule of 70 between 0 and 6%, use rule of 72 for higher than 6%

34 Too Late February 25, 2016 at 4:13 pm

Y = Y_0 (1 + r)^n

If r is small (it is):
(1 + r) = e^r
Y = Y_0 e^(r.n)

For Y to double:
2.Y_0 = Y_0.e^(r.n)
2 = e^(r.n)
ln(2) = r.n
0.7 = r.n
n = 70 / r%

35 Too Late February 25, 2016 at 4:16 pm

I hate this comment software. Let’s try again

For Y to double:

2.Y_0 = Y_0.e^(r.n)

2 = e^(r.n)

ln(2) = r.n

0.7 = r.n

n = 70 / r%

36 kaleb February 25, 2016 at 2:17 pm

What’s the long-run cost of fertility reduction due to female entry into the workforce, reduced genetic quality due to delayed birth, and the cost of human capital loss in men due to artificially increased job displacement via gender diversity policies?

We’re already seeing a substantial cost inflicted on young men raised by single mothers and raised in an educational environment that seems to cater to and push women at every level. Single motherhood will never be cured by shaming fathers into marrying women in situations where natural attraction doesn’t exist. Rather stable relationships will form when men have the economic bargaining power to maintain their side of the contract implicit in a marriage.

The work environment increasingly seems to cater to women as well.

37 Cliff February 25, 2016 at 3:34 pm

Nothing like the sober and reasoned assessment of societal problems

38 (Not That) Bill O'Reilly February 25, 2016 at 3:37 pm

The work environment increasingly seems to cater to women as well.

Despite the enormous public policy push to mandate “women-friendly” policies, I’m not seeing this being the case in practice.

39 Mark Thorson February 25, 2016 at 4:41 pm

Prospective analyses revealed no association between cognitive function and chocolate intake measured up to 18 years later.

So the answer appears to be no.

40 msgkings February 25, 2016 at 4:46 pm

Betteridge wins again

41 msgkings February 25, 2016 at 4:47 pm

Above directed at EH of course, but now that the nesting is all screwy I hope these two posts get deleted.

42 ed February 25, 2016 at 5:32 pm

I don’t know about great, but America would certainly be better if we sent you back to Russia.

43 Nathan W February 25, 2016 at 11:58 pm

1) Helping women to access education and the labour market is not a free lunch, because they have to work for it. But doubling the size of the labour force without doubling the size of the population has got to be one of the closest things to a free lunch if you’re focused on the macroeconomy. However, I do not think we should be indifferent to how this may negatively affect the quality of child rearing.

3) I think the people with deeper appreciation of musical talent will as a general rule have most appreciation for unaided raw talent. And for those who are indifferent to this and only care about the end result beats, purely software solutions are presumably better than what the robot-aided musician can deliver. I highly doubt this will catch on. Also, the idea of using an EEG to do what the musician “simply thinks about” doing is a really bad idea for two reasons. 1) in improv-like stuff, you really go with the feeling and there is not much conscious direction of what you do next, and 2) when you’re really thinking about it, you might think about doing lots of things, whereas “feeling” will often take over and lead you somewhere else. As an analogue, consider a computer-guided walker which started to walk you in any direction that you thought was interesting, without requiring the cognitive decision making process to go from “hey, maybe I’ll go over there” to “yes, I’m going over there”. The first would lead to quite a lot of undesirable or even dangerous false starts. The medicine and technician applications seem potentially useful though.

44 Shane M February 26, 2016 at 5:10 pm

With the new VR tech soon to become reality, it will be “interesting” to see how well we can inhabit different shaped bodies. I can see some musicians trying to become an 8-armed drummer in a virtual world. Whether our brains are wired for it, who knows? I recall mention of some studies saying they have much more success enabling VR user to inhabit a hominid body than other shapes (for example a crab).

I agree with your basic point that the music is really more about the feeling than anything intentional, although in practice I think it’s algorithmic in nature (based on some hobbyist work I’ve done). I could see algos working together with a human to generate music, similar to the way a band works together to create different grooves. It’s really pretty easy in a live band setting for each player to adjust to the other and create different vibes, or even follow along musically in the formative creative/song-writing process.

45 Horhe February 26, 2016 at 10:45 pm

It wasn’t free. It’s just that the losses didn’t show up in the GDP, but in culture and quality of life.

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