Tyler Cowen

1. When it comes to South Carolina, he is a cornball, but a likable one.

2. He played Strato-O-Matic baseball as a kid.  No mention of Jim Bunning in that context.

3. After two years at Harvard, he had taken only Econ 101.  Later Dale Jorgensen became his mentor.

4. He is a fan of Borges, with the influence coming from his wife, who has taught Spanish literature.

5. He regrets his earlier tough rhetoric on the Japanese central bank.

6. Greenspan’s marriage proposal to Andrea Mitchell was riddled with his trademark ambiguity.  Bernanke, in contrast, proposed after two months of courtship.

7. Bernanke underestimated the extent of the housing bubble.  Various negative consequences were to ensue from the collapse of housing prices.

8. “I had never gone overboard on libertarianism…”

9. Ben got really, really mad at the AIG chief executives, in fact he “seethed.”

10. The Fed did not have a good, legal way to bail out Lehman.  It needed a buyer, and no buyer was to be found.  A short-term infusion of cash would not have sufficed.  And Ben was afraid at the time that if he confessed the Fed’s impotence in this regard, the market reaction would have been negative.

11. The idea of a mortgage cram down made good sense but was never politically feasible.

12. “So, by setting the interest rate we paid on reserves high enough, we could prevent the federal funds rate from falling too low.”

13. I found the discussions of Wachovia and WaMu came the closest to offering new perspective and information.  Perhaps he was able to say more because these actions did not skirt the possibility of the Fed exceeding its mandate.

14. He had a favorable impression of the frankness of John McCain.

15. He thought QE should been done through the purchase of corporate bonds, but the Fed didn’t have the right kind of authority at that time.

16. He argues that the idea of ngdp targeting is too complicated and could not easily be made credible, given that the Fed has built up its reputation as an inflation fighter.  It also raises the risk that a non-credible ngdp target wouldn’t boost output, but would deliver price inflation, thereby resurrecting stagflation as a potential problem.  (By the way, here is Scott’s response.)

17. He is still upset at the coverage he received from Paul Krugman.

18. In Nunavut he passed on raw seal meat and a dogsled ride.

The bottom lines: This book has way, way more economics than I expected and probably more than the publisher wanted.  It really is Ben’s attempt to defend his place in history, and yes the book does deliver a huge dose of Bernanke.  This is not ghostwritten fluff.  It does not however dish much “dirt” or shed much new light on the key episodes of the financial crisis.  Both in public and in the book Ben has been extremely gentlemanly.  Still, as I kept on reading I could not escape the feeling that he is deeply, deeply annoyed by many of his critics, and very much determined to tell the story from his point of view.  That is what you get from this book.

Chapter Summary
Information is convex to noise. The paradox is that increase in sample size magnifies the role of noise (or luck); it makes tail values even more extreme. There are some problems associated with big data and the increase of variables available for epidemiological and other “empirical” research.

Here is a bit more information:

Greater performance for (temporary) “star” traders We are getting more information, but with constant “consciousness”, “desk space”, or “visibility”. Google News, Bloomberg News, etc. have space for, say, <100 items at any point in time. But there are millions of events every day. As the world is more connected, with the global dominating over the local, the number of sources of news is multiplying. But your consciousness remains limited. So we are experiencing a winner-take-all effect in information: like a large movie theatre with a small door. Likewise we are getting more data. The size of the door is remaining constant, the theater is getting larger. The winner-take-all effects in information space corresponds to more noise, less signal. In other words the spurious dominates.

That is from a Marc Andreessen link (but what is the source?).  He also links to the March Playboy piece on why the world is getting weirder all the time, previously linked by MR but worth a reread nonetheless.

Monday assorted links

by on October 5, 2015 at 12:09 pm in Uncategorized | Permalink

1. And job openings at MRUniversity.com.

2. Toward a simple theory of left and right.

3. Fish face recognition.

4. Bargaining with a bear (video).

5. Steve Levitt talk on Big Data (video).

6. Is there a $20 libertarian bill lying on the sidewalk?

Nathan Robinson of Harvard has an opinion:

In this paper, I take the position that a large portion of contemporary academic work is an appalling waste of human intelligence that cannot be justified under any mainstream normative ethics. Part I builds a four-step argument for why this is the case, while Part II responds to arguments for the contrary position offered in Cass Sunstein’s “In Defense of Law Reviews.” First, in Part I(A), I make the case that there is a large crisis of suffering in the world today. (Part I does not take me very long.). In Part I(B), I assess various theories of “the role of the intellectual,” concluding that the only role for the intellectual is for the intellectual to cease to exist. In Part I(C), I assess the contemporary state of the academy, showing that, contrary to the theory advanced in Part I(B), many intellectuals insist on continuing to exist. In Part I(D), I propose a new path forward, whereby present-day intellectuals take on a useful social function by spreading truths that help to alleviate the crisis of suffering outlined in Part I(A).

At least it’s his only paper.

The pointer is from the excellent Kevin Lewis.

Are we normalizing Hitler too much?

by on October 5, 2015 at 12:59 am in Books, Education, History | Permalink

There are now websites dedicated to “kitlers” (cats that look like Hitler),YouTube videos that remix documentary footage to turn Hitler into a dexterous disco dancer, and innumerable parodic appropriations of Bruno Ganz’s psychotic rants in Oliver Hirschbiegel’s film Downfall that are refashioned to criticize a plethora of contemporary cultural discontents ranging from Kim Kardashian, traffic jams and Indian call centres to Rebecca Black’s song “Friday.”  Disparate as they may sound, thse phenomena are, according to the American historian Gavriel D. Rosenfeld, all signs of a widespread “normalization” of Nazism in contemporary culture.

That is from Anna Katharina Schaffner’s review of Rosenfeld’s Hi Hitler! How the Nazi Past is Being Normalized in Contemporary Culture, September 11th issue of the TLS.

In that same TLS is this extraordinary Lidija Haas review of Ferrante, one of the best book reviews I’ve read in years.

And here is an interesting article on Nazi porcelain.

What I’ve been reading

by on October 5, 2015 at 12:39 am in Books | Permalink

1. Larissa MacFarquhar, Strangers Drowning: Grappling with Impossible Idealism, Drastic Choices, and the Overpowering Urge to Help.  Profiles of people who are obsessed with helping others.  That is a wonderful premise for a book, somehow for my taste it didn’t run quite deep enough.  Still, many people will like this one a great deal.

2. Nicholas Stargardt, The German War: A Nation Under Arms, 1939-1945.  I read only about a fifth of this one.  I thought it was a very high quality treatment of how German citizens perceived WWII, and also quite readable.  It didn’t match my interests at the moment, but I am happy to recommend it.

3. J.M. Coetzee and Arabella Kurtz, The Good Story: Exchanges on Truth, Fiction and Psychotherapy.  A running dialogue between Coetzee and a psychotherapist, some of it is interesting.  Some of it.  But after the early sections on the dangers of storytelling, I got bored.  Surely at some point empiricial psychology deserved a mention.

4. Harry G. Frankfurt, On Inequality.  A very short book, but longer than the blurb I wrote for it: “Economic equality is one of today’s most overrated ideas, and Harry G. Frankfurt’s highly compelling book explains exactly why.”

5. Philip E. Tetlock and Dan Gardner, Superforecasting: The Art and Science of Prediction.  What makes some people very good at forecasting?  Self-recommending, here is a good Q&A with Tetlock.  The real question of course is why isn’t everyone working on this?

*The Martian*

by on October 4, 2015 at 10:38 pm in Film, Science, Uncategorized | Permalink

The way the movie is good is almost the opposite of the way the book is good, so re-gear your expectations.  It is the most convincing portrayal of a planet I have seen in cinema.  (Planets, by the way, create erotic bonds stronger than those of actual marriages.)  I enjoyed the homage shots to Bruce Dern and Silent Running, Brian De Palma’s underrated Mars film too.  The horizon images of earth toward the end come as an ecstatic jarring relief.  They are, by the way, aiming for the China market with a plot twist that almost seems satirical except in Beijing it is dead serious.  That this film is sometimes dramatically inert is beside the point, recommended.

France fact of the day

by on October 4, 2015 at 3:10 pm in Economics, History, Uncategorized | Permalink

…mergers aside, the youngest firm in the CAC 40, the main stock index, was founded in 1967.

That is from The Economist., via James Pethokoukis.

Sunday assorted links

by on October 4, 2015 at 12:56 pm in Uncategorized | Permalink

1.Using remote sensing to police auto emissions (pdf).

2. How do blue whales stay so fat on such tiny food?

3. Thwarted MIE: grandparents try shelling out 10k for naming rights to grandson.  As for parents: “They are paying consultants such as Ms. Korwitts to choose a name, testing ideas as if they were marketing slogans with college admissions officers, and creating new monikers just because they like the sound.”

4. Shakespeare’s father was rich.

5. The Romer Model turns 25.

6. John Tierney update on recycling.

I have been predicting this, Emma Jacobs covers it in the FT:

This new breed of tutors catering to undergraduates is growing (admittedly from a low base). Once the guilty secret of schoolchildren seeking to get into selective schools or gain top marks in exams, private tutors are now helping British undergraduates and even postgraduates at universities. As many teenagers and twenty-somethings start their new university terms, some will be seeking the help of tutors, like Ms Kasson. Some even assist graduates applying for jobs in banks and professional services firms.

Edd Stockwell, co-founder of Tutorfair, a non-profit organisation that also provides tutoring to children whose parents cannot afford the fees, has seen the number of requests for degree-level tutorials double in the past year. Luke Shelley, director of Tavistock Tutors, says its services for undergraduates have grown “rapidly” in the past six years.

There will be very large classes, such as MOOCs and based on the kind of resources you find on MRUniversity.com.  And there will be very small classes, perhaps of one or two.  It’s the in-between class size, of say two hundred students, that doesn’t always make sense.

Do however note this:

In Ms Mali’s experience it is the parents that are driving the undergraduate tuition business. “Sometimes you do wonder if [the child would be more successful] if they allowed them to fail.”

This is an under-discussed point in today’s ideological environment.

The incompetence of thieves

by on October 4, 2015 at 2:07 am in Economics, Education, Law | Permalink

I investigate self-reported theft data in the NLSY 1997 Cohort for the years 1997–2011. Several striking patterns emerge. First, individuals appear to be active thieves for extremely short periods – in most cases in only one year, and fewer than 5% of thieves for more than three years out of the 15 years of data. Second, self-reported earnings from theft are generally very low and there is little evidence of “successful” criminals or consistent earnings from theft. Third, measures that proxy impatience (smoking, for example) are highly correlated with theft. Fourthly, thieves and non-thieves have similar earnings during the years of peak theft activity, but thieves have lower earnings in their late 20s (after most have long since stopped committing theft). Attrition of survey respondents, underreporting and incapacitation effects do not appear to explain this. There may be “professional thieves” too rare to show up in even large samples such as the NLSY. Theft in the United States thus appears to be substantially a phenomenon of individuals entering a temporary period of intensified risk-taking in adolescence.

That is from a new Geoffrey Fain Williams paper in JEBO, via the excellent Kevin Lewis.  Kevin also links to new evidence that concealed carry laws are orthogonal to crime rates.

Saturday assorted links

by on October 3, 2015 at 1:21 pm in Uncategorized | Permalink

1. Japan will have some driverless taxis fairly soon it seems.

2. Lengthy Steve Pearlstein profile of Olivier Blanchard.

3. A divided Catalonia.

4. Interview with Colm Toibin.

5. What kind of error is a sticky price?

6. Alice Chen, Emily Oster, and Heidi Williams on why infant mortality is higher in the United States (pdf).

7. Dani Rodrik slides on what we know about structural reform (pdf).

Despite the cloud cast by the Volkswagen scandal, automakers are proposing that they be allowed a 70 percent increase in the nitrogen oxides their cars emit, unreleased documents show, as part of new European pollution tests.

Under the new plan, cars in Europe would for the first time be tested on the road, using portable monitoring equipment, in addition to laboratory testing.

The automakers, which include Volkswagen, General Motors, Daimler, BMW, Toyota, Renault, PSA Peugeot Citroën, Ford and Hyundai, are essentially conceding what outside groups have said for some time — that the industry cannot meet pollution regulations when cars are taken out of testing laboratories.

Here is the Danny Hakim NYT story.

Japanese females quietly overtake American females in terms of #labor force participation.


Noah writes: Note the big jump and trend break when Abe took office.

This paper presents novel evidence on the role of credit scores in the dynamics of committed relationships. We document substantial positive assortative matching with respect to credit scores, even when controlling for other socioeconomic and demographic characteristics. As a result, individual-level differences in access to credit are largely preserved at the household level. Moreover, we find that the couples’ average level of and the match quality in credit scores, measured at the time of relationship formation, are highly predictive of subsequent separations. This result arises, in part, because initial credit scores and match quality predict subsequent credit usage and financial distress, which in turn are correlated with relationship dissolution. Credit scores and match quality appear predictive of subsequent separations even beyond these credit channels, suggesting that credit scores reveal an individual’s relationship skill and level of commitment. We present ancillary evidence supporting the interpretation of this skill as trustworthiness.

That is a new Fed working paper (pdf) by Jane Dokko, Geng Li, and Jessica Hayes.