Tyler Cowen

Assorted links

by on December 20, 2014 at 3:21 pm in Uncategorized | Permalink

1. One million mummies.

2. Schemes to clean up Beijing’s air.

3. National security Christmas gifts.

4. How do people encounter bourbon?

5. Krugman’s model of monetary impotence. and more here.  I say if there is no representative agent, there is a game-theoretic scramble for goods in period one, following an increase in the (purely current) money supply.  That said, you still shouldn’t expect the quantity equation to apply to the monetary base.  Scott Sumner responds here.  Empirically, the problem is to explain both Switzerland and the UK (some price inflation over five percent), not to cite one or the other.  I say that depends on what the central bank/government wants, not time consistency issues by the way.

6. Does the plasticity of human nature favor conservatism?

Here are the last few paragraphs from Global Times:

The US society stands on the upper stream of global competition of culture. It needs to show some good manners instead of being too aggressive. The American elites should not just speak like gentlemen, but behave like them.

The biggest motive for Sony Pictures may be the box office, by putting out a sensational story. However, if the movie really was shown on a large scale, it would further upset the already troubled US-North Korea ties.

Some people in the US have complained that China has been suppressing Hollywood’s freedom of creativity through economic power. Actually China should further stick to principles when dealing with Hollywood.

Apparently, it is easier to show them the economic consequences than trying to reason with them.

There is this bit too:

Americans always believe they can jab at other countries’ leaders just because they are free to criticize or make fun of their own state leaders. Actually the countries targeted in Hollywood movies are very selective, such as the Cold War era’s Soviet Union, North Korea and Iran.

China used to be also portrayed in a negative light occasionally. Now that the Chinese market has become a gold mine for US movies, Hollywood has begun to show an increasingly friendly face, just in order to attract more Chinese viewers.

The full analysis is here, interesting throughout, via the excellent Adam Minter.

Lucy Kellaway of the FT reports that “food, activities and even spa treatments are chocolate-themed,” here is one description from another source:

A dessert island fantasy, Boucan by Hotel Chocolat in St Lucia seems made for chocolate lovers. The jungle-surrounded hilltop lodges – with views of the Caribbean Sea and Petit Piton peak – perch beside a cacao plantation that hosts classes and tours, with plenty of samples. The ultra-local restaurant serves some of the island’s best food, including chocolate in both sweet and savoury preparations. Though the hotel natural setting is relaxing enough to help you forget it all, cocoa is rarely far from mind: the superlative spa even uses homegrown pods in its massage treatments.

That link is here, a full set of links is here.  For breakfast they serve chocolate tea and chocolate muesli, and for dinner the tuna steak is cooked over bitter chocolate.

What I’ve been reading

by on December 20, 2014 at 12:15 am in Books, Uncategorized | Permalink

1. Jim Al-Khalili and Johnjoe McFadden, Life on the Edge: The Coming of Age of Quantum Biology.  How quantum effects can matter for biological phenomena.  No, it doesn’t mean Roger Penrose was right (and this book usefully tells you why not), but still this is a stimulating book for tying together two apparently disparate areas of inquiry and two apparently disparate areas for popular science books.

2. Michael Oakeshott, Notebooks, 1922-86.  Lots about Aristotle, lots about love, good for browsing.  He wrote “‘The cowboy costume remains mysteriously sexy’.  Yes, but how much better it was when it was felt but not recognized to be so.”  That was from 1964.

3. James Hamilton, A Strange Business: Making Art and Money in Nineteenth-Century Britain.  Another era — this time Turner and his contemporaries — falls under the commerce and culture treatment.  A nice background to the forthcoming Mike Leigh biopic of Turner.  This book made a number of best of the year lists in the UK, it comes out in the U.S. in 2015.

4. James Booth, Philip Larkin: Life, Art and Love.  A very good multi-dimensional biography for people already interested in Larkin and knowledgeable about his life, not necessarily a great introduction.

5. Clive James, Poetry Notebook 2006-2014.  A superb book, one of the very best appreciations of poetry and introductions to poetry of the 20th century.  This book has received raves in the UK, it is not yet out in the U.S.

Arrived in my pile are:

6. Alex Nowrasteh and Mark Krikorian, Open Immigration Yea, and Nay.  This book is structured as a debate with two separate parts.

7.  Joachim Weimann, Andreas Knabe, and Ronnie Schöb, Measuring Happiness: The Economics of Well-Being, from MIT Press.

8. F. Bailey Norwood, et.al., Agricultural & Food Controversies: What Everyone Needs to Know.

9. Andrew Zimbalist, Circus Maximus: The Economic Gamble Behind Hosting the Olympics and the World Cup.

Assorted links

by on December 19, 2014 at 11:46 am in Uncategorized | Permalink

1. The troubles of Russia.  And Krugman’s notes on Russian debt.

2. Searching for (Canadian) Elizabeth Gallagher.

3. Qatar soccer markets in everything.

4. Prosecutors and defense lawyers on Serial.

5. “It’s the people that are carrying stuff like chainsaws that make me wonder.”

6. The 109-year-old tuatara virgin.

7. George Clooney on Sony and North Korea.

8. “Everything in her working life is organized around the illness…”

In particular, about 57% of the papers accepted by the first committee were rejected by the second one and vice versa. In other words, most papers at NIPS would be rejected if one reran the conference review process (with a 95% confidence interval of 40-75%)

Here is another framing:

If the committees were purely random, at a 22.5% acceptance rate they would disagree on 77.5% of their acceptance lists on average.

That is from Eric Price on the NIPS experiment, there is more here.

For the pointer I thank a loyal MR reader.

I now regularly find that when I buy something from a cashier — especially small ticket items — that I have the option of tipping the salesperson.  There will be a cup for tips, or the space to write a tip into the credit card transaction.  If I buy a gelato, or a newspaper in the airport, these tipping chances present themselves.

I take it there are a few classes of customer:

1. Those who are looking for chances to tip more, to feel good about themselves.

2. Those who are uncertain about when they should be tipping, and who will now enter a tip to avoid feeling bad, out of fear that the social default has shifted toward tipping in some additional arena.  They don’t prefer to tip, but they figure they are supposed to, and do not therefore hold a grudge.

3. Those who are indifferent to this new possibility, or perhaps who actively resent it, and who will leave no tip at all and do not feel guilty about that.

4. Those who aren’t sure what they should be doing, ultimately decide against the tip, feel bad about this, identify the establishment which made them feel bad, and avoid that establishment in the future.

If the share of individuals described by #4 is sufficiently large, suppliers will be reluctant to create new tipping opportunities, but it seems that is not the case.  And so the practice of tipping is spreading.  Note that as new tipping opportunities spread, uncertainty about the true social defaults increases (“hmm…maybe coffee servers do deserve a tip…”) and that increases the share of individuals who fall into #2.  Which in turn raises the profitability of creating new tipping opportunities, which in turn muddies the understanding of social defaults, and so on.  That is indeed the Dantean inferno we live in these days.

As a good Coasian, I feel tipping makes most sense when the quality of service potentially varies, and is elastic to the effort of the server.  Those are not the boosts in tipping opportunities which I am observing.  I’ve never had anyone scoop me a bad gelato, but service quality at the supermarket checkout varies a good deal, mostly depending on whether the cashier knows not to engage the (other) customers in too much chatter.

The words of Gillian Tett are worth a ponder:

…corporate leverage in regions such as Asia is considerably higher today, relative to gross domestic product, than it was before the 1998 Asian financial crisis, as Frank Neumann of HSBC notes. What is even more alarming is that these numbers might understate the risk since many emerging market companies have been using offshore vehicles to raise funds — and those flows are not well tracked.

The BIS reckons that about half of the debt securities sold between 2009 and 2013 by emerging market entities, along with a large chunk of loans, were channelled via offshore entities, not onshore parent companies. These offshore entities typically swap this money from dollars into domestic currency and repatriate it to the head office.

Brazilian, Russian and Chinese firms, for example, are thought to have created some $35bn of these internal intra-company flows in the first quarter of 2013 alone. But these flows are often recorded in the data as a “foreign direct investment flow”, not debt. The risk, then, is that companies are exposed to currency mismatches that will only become clear at a later date.

The full FT article is here.  Here is a related article, focusing on Claudio Borio.  Here are Borio and Hyum Shin from the BIS.

Pallets

by on December 18, 2014 at 2:16 pm in Economics, History | Permalink

On the topic of pallets, Jacob Hodes writes:

There are approximately two billion wooden shipping pallets in the United States. They are in the holds of tractor-trailers, transporting Honey Nut Cheerios and oysters and penicillin and just about any other product you can think of: sweaters, copper wire, lab mice, and so on. They are piled up behind supermarkets, out back, near the loading dock. They are at construction sites, on sidewalks, in the trash, in your neighbor’s basement. They are stacked in warehouses and coursing their way through the bowels of factories.

The magic of these pallets is the magic of abstraction. Take any object you like, pile it onto a pallet, and it becomes, simply, a “unit load”—standardized, cubical, and ideally suited to being scooped up by the tines of a forklift. This allows your Cheerios and your oysters to be whisked through the supply chain with great efficiency; the gains are so impressive, in fact, that many experts consider the pallet to be the most important materials-handling innovation of the twentieth century.

And there is this:

Not all pallets belong to the world of whitewood. The most important other category—and whitewood’s chief antagonist—is the blue pallet. These blues are not just a different color; they are also built differently, and play by different rules, and for the past twenty-five years, the conflict between blue and white has been the central theme in the political economy of American pallets.

The full story is here, and it is one of the best long reads of the year.  For the pointer I thank Michael Tamada.

Assorted links

by on December 18, 2014 at 12:25 pm in Uncategorized | Permalink

1. Don’t let your Texas plumber truck end up in the Syrian war.

2. An outsider looks at the upcoming AEA job market.  And Yakut ponies are cold.

3. The best book covers of 2014?

4. Vera Te Velde says visit Cuba now.  And Daniel Drezner on Cuba.

5. Mobile phone data and African food consumption.

6. “There is such negativity about clouds written into our language…”  And don’t be too shocked: “Half of Cloud Appreciation Society members – the group celebrates its 10th anniversary next year – are British.”

7. Jonathan R. Macey on the Bebchuk/SEC kerfluffle (I agree with him).

Taxing the safe haven demand

by on December 18, 2014 at 6:19 am in Current Affairs, Economics | Permalink

Switzerland is introducing a negative interest rate on the deposits it holds for lenders, its central bank said on Thursday, moving to hold down the value of the Swiss franc amid the turmoil in global currency markets.

The Swiss National Bank said in a statement from Zurich that it would begin charging banks 0.25 percent on bank deposits exceeding a certain threshold.

There is more here.  Here is the market reaction.

This cracks me up:

The illustrations on the banknotes show generic examples of architectural styles such as renaissance and baroque rather than real bridges from a particular member state, which could have aroused envy among other countries. “The European Bank didn’t want to use real bridges so I thought it would be funny to claim the bridges and make them real,” Stam told Dezeen.

The article headline is “Fictional bridges on Euro banknotes constructed in the Netherlands.”  Perhaps this will prove a broader and subtle metaphor for making the eurozone actually work…

For the pointer I thank Joel Cazares.

Felix Salmon writes:

Facebook’s algorithm is already working overtime on trying to slim down a virtually infinite range of possible News Feed posts to a much smaller number. A significant chunk of the NewsFeed is already ads, so in order to make it into the News Feed if you’re not an ad, you need to be really, really good. Like, one close friend announcing her engagement, or a video of another friend pouring a bucket of ice water over her head, or a long and hilarious comment thread on a third friend’s status update. What’s not really, really good? A link to some random website which has a user experience which Facebook can’t control, and which is probably suboptimal on mobile.

In 2015, then, the winners of the Facebook attention lottery are going to be more videos, as well as genuinely native, in-app content from advertisers. The losers are going to be external websites who have become reliant on the Facebook traffic firehose. That traffic is going to start falling, in 2015, for the first time. And the repercussions are likely to be huge.

And here is a very good Nicholas Carson piece on the future of Google, I found this point (among others) interesting:

The only reason search makes money for Google is that people use it to search for products they would like to buy on the internet, and Google shows ads for those products. Increasingly, however, people are going straight to Amazon to search for products. Desktop search queries on Amazon increased 47% between September 2013 and September 2014, according to ComScore.

I often find that people take the current landscape of the web for granted when they try to imagine the future of media.

From the archives, on Cuba

by on December 17, 2014 at 12:35 pm in Current Affairs | Permalink

Here is a Cuban joke which we hope will become obsolete:

One Cuban young woman complains to another. “He lied to me! He told me that he was a luggage handler! It turns out, he’s nothing but a neurosurgeon!”

Here are many other Cuba posts from MR, interesting throughout!

Assorted links

by on December 17, 2014 at 12:08 pm in Uncategorized | Permalink

1. Jeff Bezos is smart.

2. Hyper-realistic cartoon eyeballs.

3. A variety of reflections on Jean Tirole (pdf).

4. The poor do indeed face higher rates of inflation.

5. There is no hidden bottle of scotch in your shoe stagnation.

6. Why isn’t Germany a bigger fashion player?