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Assorted links

by on September 1, 2014 at 12:00 pm in Uncategorized | Permalink

1. What people cured of blindness see.

2. Shoes that show you the way.

3. Which states are in the Midwest?  I say no to all the marginal cases, including Kentucky.  And how can it be that not everyone thinks Iowa is in the Midwest?

4. China insurance markets in everything.

5. Who is the gun salesman of the year?

6. Maids are no longer servants.

7. Interest rates.

8. Update on charter city plans in Honduras.

1. Bolivia became a semi-stable democracy in the early 1980s and it has stayed that way.

2. For all the rhetoric to the contrary, the current regime is a mix of 1990s-era market-oriented reforms and Evo Morales.  Probably you like one of these, though perhaps not both.

3. Many more Bolivian children go to school than before, and the incidence of malnutrition has been plummeting, with longer-run benefits for IQ.  You will read many fabricated or non-causally-backed claims about the connection between inequality and growth, but for Bolivia I believe these arguments.

4. Bolivia has done so many things wrong in the past, there is a lot of low-hanging fruit through purely internal improvements.  For instance the country is a fantastic tourist destination, but would not at this moment be experienced that way by mainstream American tourists, due to language, hotel, and infrastructure shortcomings.  Eventually those problems can be and will be solved.  Eventually.

5. Bolivia does not have much export exposure to China, and does not face much geopolitical risk.

6. Of all commodities, hydrocarbons may be relatively protected in price through the forthcoming global turmoil, because the Middle East implosion will make Bolivia’s current main resource more valuable.

7. Bolivia’s fiscal situation is surprisingly sound.

The three main reasons to be pessimistic about Bolivia are:

1. Most of their economic policy is quite bad, especially when it concerns the nationalization of foreign direct investment.  The FDI future of Bolivia will be extremely unfavorable.  The rhetoric and indeed the behavior of the government sometimes is like a villain from an Ayn Rand novel.

2. Their main trading partner is Brazil, a country which will have gone from eight percent growth to near-zero growth in but a few years time.  Argentina is either the number two or number three trade partner, along with the U.S., depending on the year in question.

3. Bolivia hasn’t done that well in the past.

Of those three reasons, #1 probably matters a bit less than you might think, and #3 a bit more.

It is much debated in Bolivia whether corruption is going up or down.  I believe it is going up, but partially for good reasons.  For instance the construction sector is doing well, and construction tends to be corrupt in many countries, for reasons intrinsic to the activity itself (e.g., lots of big contracts, easy to claim invisible expenses, etc.).  That means higher corruption but also a better corruption than the penny ante bribes of a shrinking economy.

Right now Bolivia is growing at a rate of above six percent.

It is potent:

If people married each other more randomly, poverty levels would be considerably lower than they are now.  If we abandoned all current family arrangements and randomly grouped all Bolivians into new families of 5 persons, poverty levels would fall by about 15 percentage points (from the current level of 55% of all households to about 40% of all households).  The Gini coefficient measuring inequality would also fall from about 0.70 to 0.55.

But Bolivians do not mix much in marriage.  The correlation between partners’ education levels is extremely high at about 0.77, with no signs of falling.  For comparison, the corresponding number for Germany is 0.52 and for Britain it is 0.41.

But not all Bolivians are equally restricted in their marriage choices.  In the department of Santa Cruz the correlation is only 0.69 while in Potosi it is 0.82, with a corresponding difference in poverty rates.

That is from Lykke E. Andersen, Development from Within, an interesting and well-written collection of essays on Bolivian development, and sometimes on development policy more generally.  The cited piece was written in 2008.

Here is a good sentence from that book:

Just one little road block can disrupt an entire vacation.

Here is the author on Twitter.  Here is her blog.

Sunday assorted links

by on August 31, 2014 at 12:18 pm in Uncategorized | Permalink

1. David Rosand has passed away.

2. Which state has the worst drivers?

3. Interview with Robert Aumann.

4. Summer books from Politico, many are the sorts of titles you don’t usually run across at MR.

5. Does the language of deceit betray scientific fraud?

By Lilia Shevtsova, this is the best essay I have read on Russia, Ukraine, and Putin.  It is difficult to excerpt, but here is one short bit:

Having flipped the global chessboard with his annexation of the Crimea and an undeclared war against Ukraine, Putin effectively ended the most recent period of interregnum and inaugurated a new era in global politics. However, no one yet knows what this era will bring. The global community is still reeling in shock, when it isn’t trying to pretend that nothing extraordinary has in fact occurred. This denial of the fact that the Kremlin has dealt a blow to conventional ideas, stable geopolitical constructs, and (supposedly) successful policies proceeds from the natural instinct for self-preservation. It is also quite natural that the political forces that have grown accustomed to the status quo will try to look to the past for answers to new challenges—this is precisely what those who were unprepared for a challenge always do. It was easy enough to predict that many politicians and political analysts would explain what Putin has done to the global order by using Cold War analogies. Drawing these historical parallels is potentially useful in only one respect: if they help us to see what is truly new about the current situation, and the scale of the risks involved.

Read the whole thing.

Saturday assorted links

by on August 30, 2014 at 12:05 pm in Uncategorized | Permalink

1. Obstacles to self-driving cars.

2. Paul Bloom is against empathy.

3. Why your flight was cancelled.

4. The Google drone program.

5. Is IT spending going down in real terms?

6. Publication bias in the social sciences.

7. Are these the most boring or the most interesting people in the UK?  “But these things become detached from what it’s OK to have curiosity about.”  I thought this was a truly excellent piece.  And here is the SneezeCount website.  Read this too, and this.  After those, you don’t need to look at anything else on the internet today.

Friday assorted links

by on August 29, 2014 at 11:34 am in Uncategorized | Permalink

1. I refuse to visit this road.

2. Daniel Davies on Switzerland (very good post).

3. Photos of a Chinese Bitcoin mine.

4. Bonuses are the new raises.

5. Supercomputers make discoveries that scientists can’t.

6. Martin Wolf has a forthcoming book on the financial crisis.

It seems to be economic policy orientation toward Europe or Russia, and not either language or ethnicity.  Here is a new paper by Timothy Frye:

Language, ethnicity, and policy orientation toward Europe are key cleavages in Ukrainian politics, but there is much debate about their relative importance. To isolate the impact of candidate ethnicity, candidate native language, and candidate policy orientation on a hypothetical vote choice, I conducted a survey experiment of 1000 residents of Ukraine in June 2014 that manipulated three features of a fictional candidate running for parliament: 1) ethnicity as revealed by either a Russian or Ukrainian name 2) native language of Russian or Ukrainian and 3) support for closer economic ties with Russia or with Europe. The results reveal little difference in the average response to these 8 fictitious candidates despite the candidate’s different ethnicities, native language, and economic policy orientations. This seeming homogeneity masks vast differences in the responses of self-reported native speakers of Russian and Ukrainian. Analyzing the responses among Ukrainian and among Russian speakers yields considerable differences in the responses to the different candidates. Perhaps most striking is that among both native speakers of Russian and native speakers of Ukrainian a candidate’s economic policy orientation toward Europe or Russia appears to be a more important determinant of vote choice than a candidate’s language or ethnicity. That policy retains its importance for voters despite the intense politicization of both ethnicity and language and ongoing violence in eastern Ukraine suggests that vote choice in Ukraine has not been reduced to an ethnic or linguistic census.

Hat tip goes to www.bookforum.com.

One major advance in knowledge over the last twenty-five years of research in industrial organization is just how important — and how possible — market segmentation agreements and institutions may be.  Is this another example?:

…this summer the service provider T-Mobile began offering its customers an alternative. Under a free feature on some plans, T-Mobile users can now stream music services like Pandora, iTunes Radio, Rhapsody, and Spotify all day long without having to worry about sapping their data caches.

T-Mobile calls it “Music Freedom,” and it’s part of a quiet but powerful global trend.

Apps and Web sites that don’t count against the users’ data plan are popping up both in the United States and abroad, often under names like Wikipedia Zero or Facebook Zero. “[W]e hope that even more people will discover the mobile Internet with Facebook,” the company blogged in announcing Facebook Zero in 2010.  (The names are a riff on “zero-rated,” an economics term for products exempt from taxation.) But set against the ongoing dispute over so-called net neutrality, those apps are beginning to spark a debate about the future of an open, equal, and vibrant Internet in the United States and abroad.

And there is a trade off for consumers. In return for low-cost service, users are, in some cases, being corralled into a limited view of the Internet. Rather than wandering freely from site to site, they have gained gatekeepers who have power over what they see.

That is from Nancy Scola.

Thursday assorted links

by on August 28, 2014 at 12:11 pm in Uncategorized | Permalink

1. How sheepdogs do their job so well.

2. Is delayed gratification the best kind? (speculative)

3. Some data on grade inflation experiments.

4. Interview with David Bromwich.

5. Zebra-suited urbanists of Bolivia.

6. FT update on Swedish private schools.

I find this paper (pdf), by Anna Cieslak, Adair Morse, and Annette Vissing-Jorgensen, quite scary.  Do you?:

We document that since 1994 the US equity premium follows an alternating weekly pattern measured in FOMC cycle time, i.e. in time since the last Federal Open Market Committee meeting. The equity premium is earned entirely in weeks 0, 2, 4 and 6 in FOMC cycle time (with week 0 starting the day before a scheduled FOMC announcement day). We show that this pattern is likely to reflect a risk premium for news (about monetary policy or the macro economy) coming from the Federal Reserve: (1) The FOMC calendar is quite irregular and changes across sub-periods over which our finding is robust.  (2) Even weeks in FOMC cycle time do not line up with other macro releases. (3) Volatility in the fed funds futures market and the federal funds market (but not to the same extent in other markets) peaks during even weeks in FOMC cycle time. (4) Information processing/decision making within the Fed tends to happen bi-weekly in FOMC cycle time: Before 1994, when changes to the Fed funds target in between meetings were common, they disproportionately took place during even weeks in FOMC cycle time. In addition, after 2001 Board of Governors discount rate meetings (at which the board aggregates policy requests from regional federal reserve banks and receives staff briefings) tend to take place bi-weekly in FOMC cycle time. As for how the information gets from the Federal Reserve to the market, we rule out the Federal Reserve signaling policy via open market operations post-1994. Furthermore, the high return weeks do not systematically line up with official information  releases from the Federal Reserve or with the frequency of speeches by Fed officials.  We end with a discussion of quiet policy communications and unofficial information flows.

Say it ain’t so!

The pointer is from BH, a loyal MR commentator.

In 1997, the response rate to a typical telephone poll was a healthy 36 percent, according to Pew. By 2012, it had fallen to 9 percent. Fortunately, many surveys appear to be doing a good job of weighting the answers of people who do respond, to make up for those who don’t. Still, the long-term reasons for concern are clear: People who are more likely to avoid polls, such as anyone born after, say, 1980, are different from those who answer them.

The response rate of the Labor Department’s monthly jobs survey is far higher (about 89 percent) than that of a political poll, but it has also fallen (from 96 percent in the 1980s). Not surprisingly, the people who do not respond have different experiences in the job market than those who do.

That is from David Leonhardt.  One implication is that actual unemployment may be higher than we are measuring.

Assorted links

by on August 27, 2014 at 11:58 am in Uncategorized | Permalink

1. The benefits of early work experience are declining, especially for men.

2. Interview with Pete Best, who is happy and still alive.

3. 38 maps of the global economy.

4. How the Japanese messed up Pearl Harbor.

5. Very good (and complex) FT Alphaville post on long-term unemployment this time around; “…about 10 per cent of men who are laid off en masse are never employed again. Intriguingly, the overall health of the economy at the time of getting laid off does not seem to play much of a role, although age does.”

6. Carrying costs > liquidity premia, unsheared sheep edition.  And can a panda fake pregnancy for better treatment?

Tuesday assorted links

by on August 26, 2014 at 12:45 pm in Uncategorized | Permalink

1. The FAA vs. model airplanes.

2. What it’s like to be in a plane crash.

3. Larry Summers on reading.

4. The eleven funniest papers in the history of economics?  How about that one that got published twice (identically) in the QJE?

5. Beware tall men.

6. Political diversity will improve social psychological science (pdf), coverage of that paper here.

From David Cay Johnson:

From 2000 to 2012, American workers as a whole had a tough time, as population grew much faster than new jobs and many people gave up looking for work. There was one major exception: jobs paying $100,000 to $400,000 (in 2012 dollars).

This is what I call America’s new prosperous class. Many of these workers have an advanced degree. They no longer struggle, but they continue to work because their wealth is far from adequate to support their lifestyles.

The number of prosperous-class jobs soared to 10.8 million, an increase of 2.1 million since 2000. That is almost 10 times the growth rate of jobs paying either more or less.

Most astonishing is how much of the overall increase in wages earned by the 153.6 million people with a job in 2012 went to this narrow band of very well paid workers: Just 7 percent of all jobs pay in this range, but those workers collected 76.9 percent of the total real wage increase.

For the pointer I thank Mary Ray.  (p.s.: the paperback edition of Average is Over is out today).