China’s “augmented fiscal deficit” (i.e. off-budget items included) has climbed to nearly 15% of GDP
That is from Goldman Sachs, via Simon Rabinowitz.
China’s “augmented fiscal deficit” (i.e. off-budget items included) has climbed to nearly 15% of GDP
That is from Goldman Sachs, via Simon Rabinowitz.
That is a new paper by René Böheim, Christoph Freudenthaler, and Mario Lackner, the abstract is to the point:
We analyze gender differences in risk-taking in high-pressure situations. Using novel data from professional athletes (NBA and WNBA), we find that male teams increase their risk-taking towards the end of matches when a successful risky strategy could secure winning the match. Female teams, in contrast, reduce their risk-taking in these situations. The less time left in a match, the larger is the gap. When the costs of an unsuccessful risky strategy are very large (losing the tournament), we find no increase in risk-taking for male teams.
This is consistent with the broader portfolio evidence on risk-taking. For the pointer I thank the excellent Kevin Lewis.
“Average Management Scores by Country,” manufacturing only, here are the rankings from Nicholas Bloom, Raffaella Sadun, and John Van Reenen:
1. United States
6. Great Britain
That puts Mexico ahead of Singapore, New Zealand, Republic of Ireland, Chile, Spain, China, and many other nations. I do in fact believe this result, but of course that means Mexico’s other problems must be correspondingly more severe than one might have thought.
Here are various copies of their paper “Management as a Technology.”
Justin Winkler has a new thesis from Haverford (pdf):
This paper analyzes the impact that the influx of foreign players has had on the salaries and labor market outcomes of domestic players in the National Basketball Association (NBA). The study builds on previous literature in the field of labor economics by examining this research question in a highly specialized labor market with a rigid salary structure. First, an unbalanced panel data set at the player-year level from 1990-2008 is used in combination with a log-linear regression model to estimate the impact that the number of foreign players in the NBA has on the wages of domestic players. Results are insignificant. A handcrafted dataset tracking the careers of Chad Ford’s top 50 American prospects from 2001 through 2015 is used with a series of ordered logistic regressions to examine foreign players’ impact on the career length and outcomes of American players. Additional ordinary least squares regressions are used to estimate the career quality of American prospects by the quality of the leagues in which they played. Results of all regressions investigating the career outcomes of American prospects are also insignificant.
Households making $25,000-$35,000 a year spend ninety-two more minutes a week online than households making $100,000 or more a year in income, and differences vary monotonically over intermediate income levels.
That is from a new NBER paper by Boik, Greenstein, and Prince. Do note that the authors adjust for age and other demographic variables.
The upshot is that the real “undervalued” services from the internet come from its risk-sharing properties, not from the supposed lack of pricing of internet services. If something bad happens to you, well…there is always the internet to fall back upon, at least provided you still can afford the connection. This also means that business cycles are not quite as painful as before, but also that labor markets will be slower to adjust.
Some also may find in this fact an optimistic statement that “real life” (ha ha) has more to offer than the internet, with the caveat that real life is expensive.
The data in this very interesting paper also indicate that Chat has largely collapsed since 2008 as a way of spending time on the internet, internet time devoted to news sites has fallen from 10% to 5%, and social media and video are on the rise.
Matthew Gentzkow, Jesse Shapiro, and Matt Taddy have a new NBER paper Measuring Polarization in High-Dimensional Data: Method and Application to Congressional Speech.
We study trends in the partisanship of Congressional speech from 1873 to 2009. We define partisanship to be the ease with which an observer could infer a congressperson’s party from a fixed amount of speech, and we estimate it using a structural choice model and methods from machine learning. The estimates reveal that partisanship is far greater today than at any point in the past. Partisanship was low and roughly constant from 1873 to the early 1990s, then increased dramatically in subsequent years. Evidence suggests innovation in political persuasion beginning with the Contract with America, possibly reinforced by changes in the media environment, as a likely cause. Naive estimates of partisanship are subject to a severe finite-sample bias and imply substantially different conclusions.
It seems this move toward polarization starts around the time of Newt Gingrich and the Contract with America, and it starts with the Republican Party. It remains an open question, however, how much this corresponds to greater polarization in more concrete terms. To some extent symbolic polarization may substitute for the ever-diminishing ability of politicians to disagree about how to allocate discretionary spending. Let them eat ideology!
It seems Millennarian cults really mean it, at least in the experimental context:
We model religious faith as a “demand for beliefs,” following the logic of the Pascalian wager. We show how standard experimental interventions linking financial consequences to falsifiable religious statements can elicit and characterize beliefs. We implemented this approach with members of a group that expected the “End of the World” to occur on May 21, 2011 by varying monetary prizes payable before and after May 21st. To our knowledge, this is the first incentivized elicitation of religious beliefs ever conducted. The results suggest that the members held extreme, sincere beliefs that were unresponsive to experimental manipulations in price.
The original pointer was from Robin Hanson.
In autocracies, successful coups often improve economic performance, perhaps by replacing an incompetent or malevolent leader. In democratic countries, however, a successful coup is associated with lower per capita growth rates by an average of 1 to 1.3 percentage points per year over the following decade. On average, these coups reverse beneficial economic reforms, especially for the financial sector.
When a coup does overthrow a democratically elected government, it tends to bring a military leader and significant changes in policy, and not usually for the better. There are long-run correlations of such successful coups against democracies with lower investment, lower schooling and higher infant mortality.
…for failed coups in democracies the more general historical results are quite different. In fact, they are difficult to distinguish from no economic growth effects at all. Given the various imprecisions of statistics, this does not prove that failed coups will have no growth effects, but it can be said that the numbers give us no clear reason to be worried, at least not over the 10-year time horizon chosen by Meyersson. This may be one reason why asset markets do not seem to be panicking over the failed Turkish coup attempt.
To be sure, there are some possible or even likely short run effects of the recent turmoil, such as declines in tourism or foreign investment. Still, the data as a whole are showing that the long-run fundamentals of democracies with failed coups tend to reassert themselves within the 10-year time horizon, and those short-run disruptions end up mattering less than we might think.
Do read the whole thing. You will note that shares of the Turkish closed end mutual fund are still up about thirteen percent for the year (FT link), though down 2.5 percent at Friday’s close.
Now if Turkey had left the European Union, that would be a different matter altogether…
In other words, last night was an outlier. Here is Jonathan M. Powell and Clayton L. Thyne in the Journal of Peace Research:
We also see some interesting trends in the frequency of coup attempts over time. As shown in Figure 2, there is a fairly clear decline in the total frequency of coup attempts over time. The high point for coup attempts came in the mid-1960s, followed by two more bubbles in the mid-1970s and the early 1990s. The number of successful coups has likewise decreased over time. We saw 12 successful coups in both 1963 and 1966. The mid- to late-1970s also saw a brief burst of successful coups (ranging from 3 to 9 for each year). An interesting trend emerges when we look at the percentage of coup attempts that resulted in successful regime changes, which we plot on the right side of the Y-axis. The mean success rate is 48% during the entire time span. This rate saw early peaks around 1970 and 1980, and then a decline until the turn of the century. However, we see another spike in the success rate starting in 2003. Twelve of the 18 (67%) coup attempts since then have been successful, and only one of the most recent four coup attempts has failed. While coups have certainly waned over time, the recent success of coup plotters suggests that coups remain a key element of governmental instability.
I cannot readily pull out Figure 2 from the pdf, but it is on p.7 of the document. Note that their data run up through 2010, and thus do not cover the Arab Spring.
A Timbro study by Alexander Fritz Englund showed that E.U. membership for the 28 countries resulted in a statistically significant increase in economic freedom in all of the sub-categories in The Economic Freedom of the World index. The biggest improvement comes in the year of membership, but it increases afterwards as well.
I have found that discussions of Brexit would be improved by considering the British productivity gap. Often I hear talk that a Britain set free from EU strictures can pull ahead and overtake those countries, at least in terms of economics. Yet a look at the historical record is sobering.
If you compare British productivity per labor hour, it is about thirty percent below the levels of France, Germany, and Ireland. It is subpar before North Sea oil, during North Sea oil, and after North Sea oil. It is well below par even when Germany is at or near full employment, so this is not mainly a composition effect resulting from Britain putting to work more lower-quality laborers and thus lowering their average. It also tends to hold on a sector-by-sector basis, though of course not for finance.
In terms of productivity, Britain ranks below even Italy by these metrics, pre-crash too. Don’t bother to ask about the Nordics. The UK, however, does beat Japan.
You will note that this phenomenon is quite distinct from the recent, post-crash UK productivity stagnation, as it is a story about initial levels. Before 1973, when Britain joined the then-EEC, the productivity gap was slightly larger than it is today. In other words during its EU membership the country closed the productivity gap somewhat, though of course this may not be due to EU membership in any direct way.
There are various explanations for the British productivity gap, some of them involving education, or management, but I wonder whether these are explanations or mere restatements of the basic facts.
I’ll never forget the first time I visited the Netherlands in 1985. I was in Dordrecht and reading through the comments of a guest book for a modest hotel. The writer was British, and apparently was visiting the Continent for the first time. He/she expressed shock at seeing that virtually everywhere in the Netherlands was a nice place, compared to the home country, much of which was not so clean and not so nice. He/she lamented and apologized for this feature of Great Britain, and that is yet another way of expressing the productivity gap.
At least in some sectors, there are reasons to believe that the productivity gap dates at least as far back as the late nineteenth century, when Britain lost a good deal of ground to Germany. The debate is murky, but it is wrong to think of this as a recent problem, try here and here.
As of late, the United Kingdom has punched far above its weight by (re)creating London as a service center and financial capital of most of Europe. Post-Brexit, London indeed might keep this role, albeit in a probably diminished capacity, and there is some risk of London losing it altogether. While there is a “Dutch disease” problem (sterling appreciation hurts other British exports), on net the success of London really does help pay the bills elsewhere.
In the meantime, it is not obvious that productivity miracles will be blossoming elsewhere in the British economy.
It is indeed a sobering thought — most of all for the Leave case — to contemplate the British productivity gap.
Looking at the impact of housing costs on living standards among different groups, the report shows from the start of the income slowdown in 2002 to 2015:
- Over half of households across the working age population have seen falling or flat living standards – equivalent to almost 11 million households;
- Two-thirds of the growth in average working age income has been wiped out by rising housing costs;
- More than all of the growth in private renter income has been wiped out by rising housing costs; and,
- The same is true for households headed by someone aged 25-44 who will also have seen all of the growth in average income wiped out by rising housing costs.
The report shows that while London is a standout case in terms of how housing costs have dragged down living standards – the share of income spent on housing has risen by almost a third in the capital since the early 2000s – it is wrong to see this as a southern problem. It finds that the North is catching up with the South – Scotland, the North West and the East Midlands have all experienced sharper increases in housing costs as a proportion of income than the South East and South West.
That is from the Resolution Foundation.
There is a new AER paper by Justin R. Pierce and Peter K. Schott, here is the abstract:
This paper links the sharp drop in US manufacturing employment after 2000 to a change in US trade policy that eliminated potential tariff increases on Chinese imports. Industries more exposed to the change experience greater employment loss, increased imports from China, and higher entry by US importers and foreign-owned Chinese exporters. At the plant level, shifts toward less labor-intensive production and exposure to the policy via input-output linkages also contribute to the decline in employment. Results are robust to other potential explanations of employment loss, and there is no similar reaction in the European Union, where policy did not change.
Here are various ungated versions.
The activities of victims at the time of attack in the Florida cases were distributed as follows: 17.4 percent were related to trying to capture/pick up/exhibit the animal; 16.7 percent involved swimming; 9.9 percent involved fishing; 9.5 percent related to retrieving golf balls; and 5.3 percent involved wading/walking in water.
Here is more information. Staying away from alligators — and golf — would seem to eliminate most but not all of these attacks.
The combination of mass joblessness, wage cuts, and higher taxes means disposable household incomes have fallen even further. To make up the difference, Greeks have been eating into their savings. In 2006-2009, the personal savings rate averaged about 6 per cent. In 2015, the rate was -6 per cent.
The total amount of dis-saving since mid-2011 implies Greek households have eaten into €19bn worth of savings even as their living standards have cratered. For comparison, the financial accounts published by the Bank of Greece indicate €36bn in household bank deposits and cash, including deposits in non-Greek banks and foreign currency, disappeared over the same period…
Greek households have cut their investment spending even further, from about a fifth of disposable income in 2007 to just 2 per cent in 2015.
…Greece’s capital stock has been shrinking by about 6 to 7 per cent of output since 2012…
In other words, the collapse of Greece is worse than we had thought. That is from Matthew C. Klein.