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The notice is here, signers include Bob Solow and Dani Rodrik.  I agree with their arguments, and you will find my slightly different but still consistent earlier critique here.  Here is one bit from the press release:

“It’s a widely shared opinion among economists that the court’s attempt to force Argentina into a default that nobody – not the debtor nor more than 90 percent of creditors – wants, is wrong and damaging,” said Mark Weisbrot, economist and Co-Director of the Center for Economic and Policy Research, who helped circulate the letter.

Matt Levine has a good post on the situation here.

Assorted links

by on July 31, 2014 at 1:05 pm in Uncategorized | Permalink

1. Further evidence for political insider trading, this time for hedge funds.

2. You call it “3-D printing optimism,” I call it “order transmission and cheap delivery pessimism.”  Amazon enters the game.

3. Google search and stock prices, further results.

4. Indian monkey costume markets in everything, Parliamentary edition.  And lingerie for Chinese peaches.

5. China will liberalize its internal passport system.  And The Woman in Black settles in Winchester,VA.

6. Broody octopus keeps four-year vigil.

7. In which we learn that Neel Kashkari is very good at impersonating a zero marginal product worker.  That skill usually does not operate in reverse.

8. Brad DeLong on Jeff Faux and NAFTA.  I mostly agree, but also think rural Mexican corn farmers need to be leaving that sector in any case.

State corporate law requires that “natural persons” provide director services. This Article puts this obligation to scrutiny, and concludes that there are significant gains that could be realized by permitting firms (be they partnerships, corporations, or other business entities) to provide board services. We call these firms “board service providers” (BSPs). We argue that hiring a BSP to provide board services instead of a loose group of sole proprietorships will increase board accountability, both from markets and from courts. The potential economies of scale and scope in the board services industry (including vertical integration of consultants and other board member support functions), as well as the benefits of risk pooling and talent allocation, mean that large professional director services firms may arise, and thereby create a market for corporate governance distinct from the market for corporate control. More transparency about board performance, including better pricing of governance by the market, as well as increased reputational assets at stake in board decisions, means improved corporate governance, all else being equal. But our goal in this Article is not necessarily to increase shareholder control over firms; we show how a firm providing board services could be used to increase managerial power as well. This shows the neutrality of our proposed reform, which can therefore be thought of as a reconceptualization of what a board is rather than a claim about the optimal locus of corporate power.

That is from a Stanford Law Review piece by Stephen M. Bainbridge and M. Todd Henderson.  For the pointer I thank Kevin Lewis.

Eduardo Porter interviewed me in addition to his column, here is one excerpt:

What about other consequences of inequality? There is evidence that it hurts mobility, sapping young men’s incentives to succeed. Some have suggested it corrupts our political system and could fuel social unrest.

We know very little about what income inequality tends to cause in politics. We do see that income inequality is up considerably and crime is down considerably. We do know that older societies, as we are becoming, tend to be more peaceful and stable. We also see that a rising middle class often leads to political instability, such as in Thailand or Turkey or Brazil or for that matter the United States in the 1960s. Many young American men may be experiencing a crisis of confidence these days, but the problem lies in the absolute quality of their opportunities, not the gap between them and Bill Gates.

And this:

If we are looking for a remedy, a greater interest in strict religions would help many of the poor a lot — how about Mormonism for a start? Just look at the data. Many other religions prohibit or severely limit alcohol, drugs and gambling. That said, this has to happen privately rather than as a matter of state policy.

Here is the whole thing.

As the conflict rages, displacing hundreds of thousands, U.N. and Palestinian officials say some families have made a macabre calculation: to split up, with each group seeking refuge in different parts of Gaza. If one part of the family gets killed, others will live on to help the survivors and keep their dynasty alive.

But most families, officials say, still move together as a source of strength and comfort. Some are now living with other relatives, further increasing their familial size, while others have taken shelter in U.N.-run schools and other refuges.

From Sudarsan Raghavan, there is more here.  Note that if there is a “single (cost-adjusted) safest perceived place,” splitting up the family into two or more locations is increasing the net expected danger to some family members, without making any members safer.

Assorted links

by on July 30, 2014 at 12:59 pm in Uncategorized | Permalink

1. Free behavioral economics resource guide, 130 pp.

2. Visualizing Africa’s progress.

3. New marriage bureau for ISIS fighters.

4. Amazon explains its stance on Hachette.

5. Did Singapore pop its housing bubble?  “Local protectionism” is a huge legal problem in China.

6. Is Abenomics slowing down?

He has a very good column on this topic today, here is one excerpt:

“The returns to growth are going to people in other countries, most notably China, and generally to people with high I.Q., no matter where they live,” said Tyler Cowen, a professor of economics at George Mason University and a contributor to the Economic View column in The New York Times. “I don’t really know how you could undermine this dynamic, short of wrecking the world. Trying to deny that logic is going to fail or worse, backfire.”

Mr. Cowen, who describes himself as a libertarian with a lowercase “l,” is the author of “Average Is Over: Powering America Beyond the Age of the Great Stagnation,” (Dutton, 2013), which posits that technology and globalization have essentially split the labor market in two: high and low earners. Far fewer stable jobs are left over in the middle to support what through much of the 20th century we called the middle class.

In his view, the defining challenge of our era is that workers in the bottom half of the distribution can no longer trust that their living standard will double every generation. “The right moral question is ‘are poor people rising to a higher standard of living?’ Inequality itself is the wrong thing to look at,” he told me. The real problem is slow growth.

“The best way to address rising inequality is to focus on increasing educational attainment,” Professor Mankiw said. Mr. Cowen adds other potentially useful policies, like expanding the earned-income tax credit or using urban policy to, say, make it easier for people who are not rich to live in San Francisco.

The full story is here, interesting throughout.

While European governments deny paying ransoms, an investigation by The New York Times found that Al Qaeda and its direct affiliates have earned at least $125 million in revenue from kidnappings since 2008, of which $66 million was paid just in the past year.

In various news releases and statements, the United States Treasury Department has cited ransom amounts that, taken together, put the total at around $165 million over the same period.

These payments were made almost exclusively by European governments, who funnel the money through a network of proxies, sometimes masking it as development aid, according to interviews conducted for this article with former hostages, negotiators, diplomats and government officials in 10 countries in Europe, Africa and the Middle East. The inner workings of the kidnapping business were also revealed in thousands of pages of internal Qaeda documents found by this reporter while on assignment for The Associated Press in northern Mali last year.

In its early years Al Qaeda received most of its money from deep-pocketed donors, but counterterrorism officials now believe the group finances the bulk of its recruitment, training and arms purchases from ransoms paid to free Europeans.

The full story is here. by Rukmini Callimachi.  Oh, and don’t forget this:

Negotiators take a reported 10 percent of the ransom, creating an incentive on both sides of the Mediterranean to increase the overall payout, according to former hostages and senior counterterrorism officials.

It turns out that Al Qaeda hardly ever executes prisoners any more.

For the pointer I thank Michael Rosenwald.

Assorted links

by on July 29, 2014 at 2:26 pm in Uncategorized | Permalink

1. Anti-surveillance make-up.

2. Textiles and the emergence of gender equality in China.

3. Excerpt from the new Murakami bookKnausgaard Bingo.  A gentle introduction to “the Dark Enlightenment.”

4. Principals see poverty.

5. Turning billboards into tiny houses for the homeless.

6. The Achilles Heel of Dodd-Frank.  And the new trend of tattoo removal.

These were the results:

1. People responded to first messages 44% more often.

2. “conversations went deeper”

3. Contact details were exchanged more quickly.

Furthermore:

When the photos were restored at 4PM, 2,200 people were in the middle of conversations that had started “blind”. Those conversations melted away.

That said, the people who actually used the “Blind Date App” if anything seemed slightly happier with their dates.  The full report from OKCupid is here.  Yet here is the combined chart drawn from when people score “looks” and “personality” separately.

By the way, I would never try to match you up with a book I fear you may not like, at least not without telling you or otherwise signaling that incompatibility in advance.

Here is one way to boost the employment to population ratio, two birds with one stone you might say:

Feng’s 23 year-old son, “Xiao Feng” (小冯) started playing video games in high school. Through his years of playing various online games, he supposedly thought himself a master of Chinese online role playing games. According to his father, Xiao Feng had good grades in school, so they allowed him to play games; but when he couldn’t land a job they started looking into things. He, however, says he simply couldn’t find any work that he liked. Feng was annoyed that his son couldn’t even tough it out for three months at a software development company.

Unhappy with his son not finding a job, Feng decided to hire players in his son’s favorite online games to hunt down Xiao Feng. It is unknown where or how Feng found the in-game assassins—every one of the players he hired were stronger and higher leveled than Xiao Feng. Feng’s idea was that his son would get bored of playing games if he was killed every time he logged on, and that he would start putting more effort into getting a job.

The full story is here, and for the pointer I thank Michael Smiddy.

Assorted links

by on July 28, 2014 at 1:11 pm in Uncategorized | Permalink

1. “One was falsely accused of being a moslem, and the other was falsely accused of not being a moslem.”

2. A measure of systemic risk for China.

3. A new and better way of using consumption risk to explain the global cross-section of returns? (pdf)

4. In praise of Lloyd Metzler.  And John Cochrane defends reverse repo and criticizes Sheila Bair.

5. A theory (highly speculative) about what Israel has been trying to prevent.

6. Ronald Coase and the Fabians agreed on policy toward the BBC, with new substantive material by Coase, previously unavailable.

There is a newly published paper by Paola Profeta, Simona Scabrosetti, and Stanley L. Winer.  The most concrete statement of the argument is that wealth is held disproportionately by the elderly, and they will oppose wealth taxes just as they oppose cuts in Medicare.  And since 1965 wealth taxation has in fact gone down in many Western countries, even though some theoretical arguments may militate in its favor.  The abstract of the paper is this:

We present an empirical model of wealth transfer taxation in the revenue systems of the G7 countries—Canada, France, Germany, Italy, Japan, the UK, and the US—over the period from 1965 to 2009. Our model emphasizes the influences of population aging and of the stock of household wealth in an explanation of the past and likely future of this tax source. Simulations with the model using U.N. demographic projections and projections of household wealth suggest that even in France and Germany where reliance on wealth transfer taxation has been increasing for part of the period studied, wealth transfer taxes can be expected to wither away as population aging deepens over the next two decades. Our results indicate that recent tax designs that rely upon the taxation of wealth transfers to preserve equity in the face of declining taxation of capital incomes may be, in this respect, politically infeasible for the foreseeable future. We conclude by using the case of wealth transfer taxation to raise the general question of the extent to which the consistency of a proposed reform with expected political equilibria ought to play a role in the design of a normative policy blueprint.

An ungated version is here.  For the pointer I thank the excellent Kevin Lewis.

In the United States, at least 70 percent of all the food we eat each year passes through a cold chain. By contrast, in China, less than a quarter of the country’s meat supply is slaughtered, transported, stored or sold under refrigeration. The equivalent number for fruit and vegetables is just 5 percent.

The article has other points of interest, an excellent piece by Nicola Twilley.

Assorted links

by on July 27, 2014 at 1:12 pm in Uncategorized | Permalink

1. The “merge rudely” movement.

2. John Nye on inequality.

3. Does the North Carolina experiment prove anything?

4. Is there planned obsolescence for iPhones?

5. Sticky real wages and the Great Reset.  And the new economics of the family.

6. Malcolm Gladwell shares life lessons, including on board games.