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Sunday assorted links

by on August 28, 2016 at 12:25 pm in Uncategorized | Permalink

1. The culture that is Bethesda, Maryland.

2. Chile’s pension scheme under fire.

3. Child abuse in China: a neglected issue.  The statute of limitations should be longer than two years.  That’s two from The Economist, the current issue is their best of the year to my mind.  Of course you should subscribe.

4. The Mayan-language Ixcanul is perhaps the best movie of the year so far, trailer here, the full movie is here but without subtitles, so brush up on your Mayan or see it on the big screen.

5. This piece illustrates Cowen’s Second Law, yes I know that is a refereed journal and the paper is based on real data but still it is best forgotten or better yet never viewed in the first place.  They needed eleven (!) authors for that one, three of them women it would seem, and four on the team chanted that correlation is not causation.  I wonder how the IRB discussion went.  Less sexually charged is the game of “Diving chess.

6. “Most of the world’s mathematicians fall into just 24 scientific ‘families’, one of which dates back to the fifteenth century. The insight comes from an analysis of the Mathematics Genealogy Project (MGP), which aims to connect all mathematicians, living and dead, into family trees on the basis of teacher–pupil lineages, in particular who an individual’s doctoral adviser was.”  Link here.

Saturday assorted links

by on August 27, 2016 at 12:21 pm in Uncategorized | Permalink

Friday assorted links

by on August 26, 2016 at 11:14 am in Uncategorized | Permalink

A recent piece from the excellent Conor Sen has attracted some disputation.  The main claim is that building restrictions aren’t as bad as they might at first seem.  If you keep people out of Manhattan they move to Atlanta, and that produces synergies too:

Here in Atlanta, as in the rest of the Sun Belt, job migration is the driving force of the economy. Corporate relocations and expansions are celebrated here the way billion-dollar tech startups are celebrated in Silicon Valley. The “New South” would not have developed were it not for people looking to flee the crowded and expensive cities of the Northeast.

…Housing constraints in some cities accelerate economic development in emerging parts of the country. They decrease economic inequality between metro areas and lead to economic interdependence that drives civil rights. And they offer some promise to ease the pain of waning communities in the Rust Belt, Appalachia and beyond. A country where the vast majority of talented people move to one or two cities might be an economist’s idea of utopia, but a nightmare to those of us concerned about equality of economic opportunity.

Analytically, the first question is whether the biggest cities would attract too many people in the absence of building restrictions.  To answer that, you have to balance crowding costs vs. synergy benefits.  It can be said that average social returns to living in cities will equalize, even if marginal social returns do not.  Cross-city migration equates the average returns, even in the presence of externalities, just as in the classic “two roads” problem.  If one road is going faster than the other, people will switch, although the “final driver” still is not taking his entire social impact into account.

Note that if urban synergies are constant across scale, equality of the average across two cities will in turn imply equality of the marginal, and an efficient allocation of population across the larger and smaller cities will result.  Building restrictions won’t change that, although they do shift where the equalization margin will be at.

(Building restrictions also may mean NYC space is used inefficiently, even if the distribution of population across cities is more or less optimal.  Building restrictions are not identical to urban entry fees, but rather they shift space allocations at various margins of construction, though to potential movers their “entry fee” aspect may seem most important.  These marginal distortions may interact with the “entry fee” aspects of building restrictions in various ways, muddying the analysis.  Complicated!)

Now maybe synergies aren’t constant across urban scale, but suddenly the costs of building restrictions in Manhattan look lower.  They are defined by the differences in synergies across scale, which may not be such a huge number.  Furthermore synergies might be more important for the Atlantas than for the Manhattan, in which case the building restrictions in Manhattan could be welfare-improving.

(Note that if a city or region has really big firms, the chances that interpersonal synergies will be internalized into initial wage offers will be higher.  And there is a time horizon issue.  Circa the 1920s, Los Angeles synergies may have appeared much lower than those for NYC, but it probably ended up better for the nation as a whole that the racist “entry fee” for movie-making in NYC led to the creation of Hollywood on the West Coast.  Similarly, was it not also a good thing that NYC blew its chances of being the center of the American venture capital market?  If Peter Thiel were here, and communing with Kenneth Arrow, he might see too many risk-averse, conformist entrants into New York and look for a remedy, just as New York was itself once a respite from an overcrowded, restrictionist, religiously conforming Europe.)

OK, that’s scale but what about congestion costs?  They do seem to go up in a non-linear manner with scale, and that lowers the costs of building restrictions in Manhattan.  Manhattan is more likely to be too crowded than is Atlanta, as a first-order approximation.  Of course differential endowments across regions can complicate this, for instance NYC has better mass transit.

Now, to push this all one step further, is Peoria just a smaller Atlanta?  Does it too have synergy benefits?  (Or can we say that too many people stay in Peoria and too few go to NYC + Atlanta?)  Don’t we observe the very largest synergy benefits at small scales, namely going from households of one to two, two to three, etc.?  Might Peoria have the highest synergy gains of them all?  At least in utility terms if not in dollar terms?  Or do we need an ongoing risk of “Peoria brain drain” to induce Peoria residents to acquire the skills that they may or may not end up taking out of Peoria?

In any case, worth a ponder.

Thanks to a government initiative, all teen residents who reach that milestone this year will be given a “Cultural Bonus”—a cool €500 to spend on movies, books, theater and concert tickets, museums, and national parks, reports The Local.

From an economic point of view, such vouchers can make good sense, as Alan Peacock used to stress.  Nonetheless they take away two of the big reasons why arts funding is politically popular.  The vouchers do not offer well-defined benefits to specific suppliers (read: interest groups), and the government cannot affiliate very directly with specific popular or prestigious projects.

In terms of stimulus, this is less likely to boost employment than many public works projects.  A lot of cultural goods are local public or club goods, supplied beyond the point of congestion.  In other words, just let one more person sit in the movie theater.  That does, however, mean lots of pure profit for suppliers of reproducible popular culture.

Here is the Cara Giamo article at Atlas Obscura.

Thursday assorted links

by on August 25, 2016 at 12:31 pm in Uncategorized | Permalink

1. Will I someday be a fan of Fan Bingbing?  And are index funds communist?

2. There is no great stagnation.  Whenever I give no further description with this header, it is usually something pretty good (bad), right?

3. Bombardment and dust when you fly at 20% of the speed of light.

4. The link between politics and personality maybe isn’t that strong.

5. “After all, labor market slack has now already declined to very low levels.

6. Given Hillary’s speech, I will re-up my earlier post on neo-reaction, which is related to “Alt Right.”

That is my latest Bloomberg column, here is one excerpt:

The virtues of business startups have led to many a success story. These enterprises start with clean slates. They embody the focused and often idiosyncratic visions of their founders. The successful ones grow faster than their competitors. Even after they become larger and more bureaucratic, these companies often retain some of the creative spirit of their startup origins.

It is less commonly recognized that some nations, including many of the post-World War II economic miracles, had features of startups. For instance, Singapore started as an independent country in 1965, after it was essentially kicked out of Malaysia and suddenly had to fend for itself. Lee Kuan Yew was the country’s first leader, and he embodied many features of the founder-chief executive: setting the vision and ethos, assuming responsibility for other personnel, influencing the early product lines in manufacturing and serving as a chairman-of-the-board figure in his later years.

Other start-ups nations have been UAE, Israel, Taiwan, Hong Kong, Cayman Islands, Estonia, South Korea, and of course way back when the United States.  You will note that many of these examples are imperfectly democratic in their early years, and they do not in every case grow out of it.  And this:

The world today seems to have lower potential for startup nations. This is in part because international relations are more peaceful and also because most colonial relationships have receded into the more distant past. Those are both positive developments, but the corresponding downside is not always recognized, namely fewer chances for reshuffling the pieces.

This is the close:

To paraphrase John Cleese from Monty Python, the startup nation concept isn’t dead, it’s just resting. Whether in business or in politics, the compelling logic of the startup just isn’t going away.

The best chances for future start-ups may be in Africa, around the borders of Russia, and perhaps someday (not now) Kurdistan.  Do read the whole thing.

Wednesday assorted links

by on August 24, 2016 at 2:11 pm in Uncategorized | Permalink

Here is the summary:

The stereotypical obituary is a formulaic recitation of facts — dry, boring, and without craft. But Margalit Fox has shown the genre can produce some of the most memorable and moving stories in journalism. Exploiting its “pure narrative arc,” Fox has penned over 1,200 obituaries, covering well-known and obscure subjects with equal aplomb.

In her conversation with Tyler Cowen, Fox reveals not only the process for writing an obituary, but her thoughts on life, death, storytelling, puzzle-solving, her favorite cellist, and how it came to be that an economist sang opera 86 times at the Met.

Here are the transcript, video, and podcast versions of the dialogue.  Here is one excerpt:

FOX: …Things happen. But in general, we try to have a certain level of preparedness with the major figures. We do indeed have the advance obits — all but the top, as it were — written, edited, on file. We have about 1,700.

That said, the vast majority of what my colleagues and I down in the trenches do, probably 90 percent of our working life, are daily obits that are found out about, reported, written, edited, copyedited, put in the paper all in the space of a single day, just like any other article in the paper.

And this:

COWEN: Are there obituaries of economists that stand out in your mind? Or maybe some you’ve written?

FOX: Well, interestingly, there is one. As I said, my original training was in classical music, so my editors almost jumped out of their skins with excitement when they discovered they could assign me the obituary of a Harvard economist named Richard T. Gill.

Now, why did they give that to me? Because as we say in the lede of the obit, “Richard T. Gill, in all statistical probability the only Harvard economist to sing 86 performances with the Metropolitan Opera, died,” etc., etc.

COWEN: Yes, I remember reading that one. That was before I knew that you were you.

FOX: I was me then. You just didn’t know it.

COWEN: Correct.

Do read the whole thing.  I asked her about privacy concerns, how well a famous person is really known by his or her family and friends, whether there should be affirmative action in the obituaries section, who is chosen for this exclusive club and why, what one learns reading obituaries (“death sucks”), what is underrated in life (“silence”), why British obituaries are different, and about her very good books on linguistic code cracking from antiquity and Bedouin sign language.  And more.

Here is the Conversations with Tyler series.  Here is basic information on Margalit Fox.  Here is Margalit Fox on Twitter.

This is perhaps the best and most instructive one I have heard:

…Mr Xi’s authority remains hemmed in. True, his position at the highest level looks secure. But among the next layer of the elite, he has surprisingly few backers. Victor Shih of the University of California, San Diego, has tracked the various job-related and personal connections between the 205 full members of the party’s Central Committee, which embodies the broader elite. The body rubber-stamps Mr Xi’s decisions (there have been no recent rumours of open dissent within it). But the president needs enthusiastic support, as well as just a show of hands, to get his policies—such as badly needed economic reforms—implemented. According to Mr Shih, the president’s faction accounts for just 6% of the group.

That is from The Economist.  Along related but not identical lines, here is a good story of the weak control of the Chinese central government:

Through July, claimed capacity reductions were less than half the target for the year (and less than 40% of the target for coal capacity reduction).  Some provinces were reported by the NDRC to have achieved only 10% of their annual targeted cuts.

…This resistance has led to more and more shrill directions from Beijing to act on instructions.  Now Beijing is sending out 10 inspection teams across the country to check on claimed capacity removal and to require follow through on additional closures.  I have one suggestion for them: The only way to ensure a closed plant remains closed is to physically destroy or remove key pieces of equipment.  Otherwise don’t be surprised when it starts back up again.

Don’t forget this:

Many steel mills are the key employer and tax payer in their city. In boom times, they might have provided as much as 30% of the tax revenue for local government.  Workers from the steel mill were at the forefront of buying property in the town, creating a positive cycle of additional demand for housing and steel.  If these workers are now laid off, even with one-time transfers from the center, local government faces an enormous challenge in trying to find new jobs for people who have been in a steel mill all their life.  They can’t all become part-time Uber/Didi drivers. Many government officials see delay as the most logical course of action.

That is from Gordon Orr.

Tuesday assorted links

by on August 23, 2016 at 12:10 pm in Uncategorized | Permalink

I’ve been hearing plenty of calls for a higher inflation target, perhaps four percent.  I do understand the case for this, and furthermore it is not obvious that the higher rate of inflation would bring significant social costs.

The thing is this: whether rationally or not, the American public hates higher rates of price inflation.  Perhaps they mis-sample or mis-estimate prices, or perhaps the higher prices really do erode their real wages in a way they can’t get back through a new labor market bargain.

So a higher price inflation target would mean that everybody would hate the central bank.  It would not shock me if the first thing they did was to dismantle…the higher price inflation target.

Under nominal gdp targeting, the rate of price inflation would not have to significantly rise until worse times were upon us.  That is precisely when such upward price pressures would be most useful.

Monday assorted links

by on August 22, 2016 at 1:26 pm in Uncategorized | Permalink

Demand curves do slope downwards:

Euthanasia tourists are flocking to Brussels to get a lethal dose. Doctors at hospitals and clinics at Belgium’s capital are seeing an increase in number of euthanasia tourists who are travelling from across the world to their accident and emergency rooms.

As elective medical killings are illegal in France, French patients are often arriving with suitcases. They believe that their request to die will be carried out within a week.

In 2015, a whopping 2,023 people were medically killed in Belgium. The number has more than doubled in five years. According to Olivier Vermylen, an emergency doctor at Brugmann University hospital, seven out of 15 euthanasia cases involved French people.

“It’s a phenomenon that did not exist five or six years ago. Nowadays I get phone calls about French people who arrive in the emergency room announcing that they want euthanasia,” Vermylen told Belgium’s Sudpresse newspaper, reports The Times.

Even at the Jules Bordet institute in Brussels, almost a third of euthanasia consultations, that is 40 out of 130 cases, are by French people. One of the primary reasons why people choose to get euthanized in Belgium is the cost.

Euthanasia in Switzerland costs €4,000 (AU$5,935), writes The Australian. However, euthanasia in Belgium is usually free as the treatment is covered by the European Union’s health insurance card. The bills are sent to French healthcare providers.

And here is a person who needs that extra dose of media training:

“Of course, Belgium is not here to euthanize half the planet. I can understand those who say that France should look after its own patients. But this is easy to say in the office. When you have a patient who is suffering in front of you, you don’t think of that. You help – whether they are French or not,” said Brugmann University hospital’s Michele Morret-Rauis.

I am sorry people, but in light of that state-dependent utility function known as “life or death,” if it ever came to such a point I would opt for Switzerland.

Here is the article, via the excellent T. Hynes.

A few of you have asked, I considered that question in 2012, here is a significantly revised update:

1. Now I know how to text, sort of, though I hardly ever do it.  It strikes me as the worst and most inefficient technology of communication ever invented (seriously).  It’s not that fast, and it’s broken up into tiny bits of back and forth.  I don’t see how it makes sense beyond the “What should I get at the supermarket? — Blueberries” level.  There is intertemporal substitution, so just, at some other point in time, spend more time talking, writing longer letters, making love, whatever.  Not texting.  It is never the best thing to be doing, except to answer some very well-defined question.

2. I now carry only one iPad around, as I donated my spare iPad to a poor Mexican family.  I use it very often for directions, book and restaurant reviews, and general life advice.  Plus email and keeping current on my Twitter feed.  I simply don’t want a screen any smaller than that.  My iPad now also has a rather pronounced crack on the front glass, but that adds to its artistic value.  I dare not drop it again.

3. I have an iPhone, which I hardly ever use for anything.  Occasionally someone calls me on it, or I use it to check email in situations when it might be rude to pull out the iPad.  Other times I am rude, but it’s actually a form of flattery if I am willing to check my iPad in front of you.  You may not feel flattered, however.

3b. Except for the occasional Uber ride, I don”t use apps and hate reading news sites through the apps, I won’t do it.  I’m used to the web, not your app, and I hope I can get away with being a stubborn grouch on this forever.

4. I now have a Bloomberg terminal, which is very cool.  It is amazing that a product designed in the “before the internet as we know it” era still is the clear market leader and the best option.  Bloomberg is a great company with a great product(s).  Right now I can do about 5 of the 25,000 separate commands, but the fault is mine not theirs.  In the meantime, send me email at my gmu address, not what is listed on the Bloomberg column.

5. I use my Kindle less over time.  It remains in that nebulous “fine” category, but I prefer “real books.”  Kindle is best for works of fiction when I know in advance I wish to read every page in the proper order.  I am continuing with my long-range plan to read Calvin’s Institutes on my Kindle, bit by bit, in between other works.  This will take me ten years, but a) he is a brilliant mind, and b) in the meantime I won’t lose sight of the plot line.

6. I have a new Lenovo laptop, sleek and fast, plus some computers at work.  I don’t even know what they are, but probably they are quite subpar.

Way more iPad and way less texting are I suppose the main ways in which I deviate from the dominant status quo.  Come join me in this and we shall conquer the world.