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Wednesday assorted links

by on November 23, 2016 at 12:59 pm in Uncategorized | Permalink

Tuesday assorted links

by on November 22, 2016 at 3:08 am in Uncategorized | Permalink

Monday assorted links

by on November 21, 2016 at 11:27 am in Uncategorized | Permalink

1. Economic and financial themes in the films of Charlie Chaplin, podcast.

2. New evidence and modelling of immigrant assimilation, from James Marrone, who is on the job market from University of Chicago this year.  Unlike many such theories, he also provides data and theory on “un-assimilation.”  Marrone also has interesting work on the economics of cultural antiquities.

3. Is EM drive for real and what does it mean for Newton’s Third Law?  Quantum mechanics?

4. Abu Dhabi numbered car plate markets in everything.

5. Paul Krugman calls off the fake alien invasion.

6. Jiro the slave?  An interesting piece on the nature and meaning of work.

Here is a Washington Post look at a related issue.  I know bribing a president is illegal and it just…sounds so wrong…but what exactly does the equilibrium look like?

bribe

Here are a few points:

1. Presumably the wealthier countries would be willing to pay more for American security guarantees.

2. Countries whose wealth can be easily captured and controlled by hostile forces — oil exporters? — would be willing to pay more for protection.

3. Human rights would not matter so much for American security guarantees.

So far this is not sounding so different from the status quo.  Let’s continue:

4. A selfish president might capture income from hard-to-defend countries, not internalizing the higher costs for the U.S. taxpayer.  So American guarantees could extend too far and wide from an American perspective, although it is not obvious they will do so from a cosmopolitan perspective.

5. Presumably the president also could accept funds not to defend various nations.  So large, wealthy foreign aggressors could “buy out” the United States from defending say Georgia or Taiwan.  That sounds terrible, and perhaps it is from a cosmopolitan standpoint.  But is it contrary to the U.S. national interest?  Keep in mind if the United States becomes non-credible altogether, it would be less able to extract payments from Israel, South Korea, and other nations.  That means a bribed president may not “fold his hand” so quickly on all of these endangered small countries.  Alternatively, a bribed president may decide to let one of “the little ones” go just to prove a point to the others.

You’ll notice that #4 and #5 counteract each other.  I suspect this balance would be worse than the status quo, but that doesn’t follow a priori.

6. You could imagine an American president who allows foreign countries to fall into especially precarious situations to increase his budgetary intake from bribes.  The return to pre-emptive peace initiatives might be strongly negative.

7. An alternative perspective is that the American government already collects such bribes in the form of trade agreements, use of military bases, and so on.  The real problem is not bribery per se, but rather concentrating so many of the returns in the hands of the president.  Tariffs on American exports might go up, for instance, if the president is pocketing the bribes himself.

8. A worry is that bribes collected by a president would not lead to as much stability of policy as what might be generated by the decisions of “the foreign policy establishment.”  Perhaps commercial arrangements are intrinsically less stable than bureaucratically-generated policies.  A president’s utility function and game-theoretic behavior is probably harder to forecast than the wishes of the bureaucracy.  The resulting uncertainty would limit global trade and investment and also probably increase nuclear proliferation.  This strikes me as a major concern.

9. A related worry is that nations are so very large relative to the avaricious desires of the president.  After a small number of payments, the president might act fairly arbitrarily, as extra bribes wouldn’t matter much and the foreign policy establishment already has been cut out of the picture.  (Oddly it becomes less important if America has a truly greedy and rapacious president where the MU for money doesn’t much decline with presidential wealth.)

It is worth thinking through the dynamics on all this a little more clearly than what I am seeing so far.

Sunday assorted links

by on November 20, 2016 at 12:48 pm in Uncategorized | Permalink

Saturday assorted links

by on November 19, 2016 at 1:57 pm in Uncategorized | Permalink

Friday assorted links

by on November 18, 2016 at 12:14 pm in Uncategorized | Permalink

Thursday assorted links

by on November 17, 2016 at 11:47 am in Uncategorized | Permalink

It seems likely that Trump and a Republican Congress can agree on some big mix of tax cuts and spending.  Furthermore, there are plenty of rumors that Trump may push on the independence of the Fed and the ten-year yield leaped upon his election.  So odds are it will be a stimulus with some degree of monetary accommodation, and in that case even tax cuts for the wealthy can serve as an effective form of QE into the assets the wealthy invest in.

And yet 80% of economists are Democrats, many top economists signed a petition opposing Trump, and I can’t think of a single top economist who has endorsed Trump.  So clearly something has to give, and here are some theories that may rise or fall in status:

1. “The multiplier is high.”  That seems ready to decline in status.

2. “Even wasteful expenditures can boost demand and help pull us out of secular stagnation.”  Ditto.  “We need to do stimulus right” will make a comeback.  And I see “the distributional effects of stimulus really matter” lurking around the corner.

3. “Tax cuts aren’t as good as government spending.”  That actually may rise in status, especially if Congress gets the bargain they want — lots of tax cuts — rather than what Trump wants.

4. The notion of how a credibly irresponsible leader can improve macro performance won’t get cited as much.

5. Austrian-like theories of how there can be a boom in the short run, yet with great long-run dangers, will return to prominence, albeit with modifications to the original Austrian story.

6. Criticizing countries with trade surpluses will decline in status.

7. The efficient markets hypothesis will decline in status.  It imposes too much discipline on our judgments of leaders and their policies.  The more certain we are of our own judgments, the more that evidence contradicting those judgments should be downgraded.  Right?

Don’t get me wrong, I think most (not all) of these moves will be “economists coming to their senses,” and thus good news.  But let’s be clear about what is going on.  While I don’t expect many instances of people making claims they do not believe, in terms of what gets emphasized, stressed, and repeated, macroeconomic discourse is about to change.

Wednesday assorted links

by on November 16, 2016 at 3:13 pm in Uncategorized | Permalink

Here is the link to video, podcast, and transcript.  The Q&A segment was led by guests Ezra Klein, Megan McArdle, Mark Miller (Coyote Cafe), and Eva Summer.  Fuchsia speaks in perfect British sentences and she always had an answer ready, with charm and extreme intelligence.  Here is one excerpt:

COWEN: Three dishes one absolutely has to try are what?

DUNLOP: In Shanghai?

COWEN: In Shanghai. The city, not the region.

DUNLOP: I think you should have hong shao rou, red braised pork. Real home cooking. Delicious combination of soy sauce, rice wine, and sugar, and one of the favorite dishes.

I would recommend some Shanghainese wontons in soup stuffed with shepherd’s purse, which is a wild variety of the brassicas, and pork, just to show you the lighter, gentler side of Shanghainese cooking.

Then, perhaps, if we’re talking Shanghai, you might one to have one of these dishes that says something about Shanghai as being a mixing pot of different cultures.

There’s a very nice crab meat and potato and tomato soup served in some of my favorite Shanghainese restaurants. Which seems a little bit of a fusion with some European influences, the way they use potato and tomato in that soup with local seafood.

COWEN: As you know, the Michelin Guide recently has covered Shanghai, given some restaurants three, two, one star. There’s cheap places you can go. Conceptually, do they understand the food of Shanghai? To the extent they don’t, what are they missing?

DUNLOP: If you look at the restaurants they’ve selected, there’s a bit of a Cantonese bias. They do have some Shanghainese restaurants, but one thing that’s very conspicuous, there are some notable, some of the best Shanghainese local restaurants, which are missing from that list, in my opinion.

The reason is, I think, the methodology of Western food inspectors, which is they tend to go as individuals or small groups. Of course in many Chinese restaurants where you eat family style, to make the most of the restaurant, you have to eat as we’re doing now with a large group and a table full of dishes.

We cover much more, including her favorite parts of China, whether offal is an inferior good, whether one can acquire a taste for sea cucumber, what she thinks of Leonard Cohen, Dream of the Red Chamber, how newbies should approach Chinese food, what top Sichuan chefs thought of their trip to French Laundry, whether milk is overrated, whether Americans have done anything worthwhile with Chinese food, and her favorite Chinese movie.

Here is a short video excerpt from the Sichuan peppercorn tasting segment, namely what makes the very best peppercorns so good compared to the lesser peppercorns.

dunlop

Here you can order Fuchsia’s new and excellent book The Land of Fish and Rice.

The NYT offers a variety of Facebook criticisms.  Probably you already have heard the latest:

Donald J. Trump’s supporters were probably heartened in September, when, according to an article shared nearly a million times on Facebook, the candidate received an endorsement from Pope Francis. Their opinions on Hillary Clinton may have soured even further after reading a Denver Guardian article that also spread widely on Facebook, which reported days before the election that an F.B.I. agent suspected of involvement in leaking Mrs. Clinton’s emails was found dead in an apparent murder-suicide.

There is just one problem with these articles: They were completely fake.

Just to be clear, while I have a Facebook profile, I am not a user of the service.  The interface confuses me, and I don’t like how strictly information is filtered through the prism of sharing and social connections.  In this sense I take the criticisms to heart and they influenced my behavior long ago.

But I wish to suggest a simple comparison: how does Facebook compare in this regard to email and forwarded emails?  I haven’t seen formal numbers,  but I strongly suspect emails have been a far more important source of misinformation about Hillary Clinton (and Trump) than was Facebook.  (I do recall Matt Yglesias tweeting an estimate, and it sounded brutal for email.)  That is especially likely to hold for the elderly, who use email far more than Facebook and furthermore were more likely to support Trump.

How about comparing Facebook to what other people tell you?  What a load of crock they are.  People, pshaw.  Just think about their algorithms.  At least Facebook has access to The Washington Post.

By the way, the presidency aside, were all of the other electoral results so truly radical?  It doesn’t seem so.

In other words, we are holding Facebook to an especially high standard.  If doing so leads to improvements in Facebook (NYT), so much the better.  Still, for purposes of perspective it is probably welfare-improving if people get more of their news from current, non-improved Facebook, compared to the relevant alternatives for most people.

Now if you are going to compare Facebook to me and Alex…well, then you need to side with us.  So there is still a case for spending less time on Facebook.  That is, unless you’re going to share our content there.

like-and-share

The Niskanen Center says no, Vox says yes.  Bailey and Bookbinder at Niskanen:

…while the Clean Power Plan is a dead letter for reasons explained below, every other such executive action will be litigated and delayed. The environmental NGOs’ law departments are getting back into their 2003-2006 mode even as we write this. Not only were the great majority of similar Bush agency actions overturned by the courts, but the current makeup of both the D.C. Circuit and the other federal appellate courts are significantly more favorable to environmental litigants than they were a decade ago.

…getting rid of the CPP is not going to have much of an effect on steadily-declining power sector emissions. As EPA has indicated, the CPP would have little real impact on emission paths in the early years, as low gas prices and state renewable mandates have done most of the work already. There is no sign either will change soon and technology (e.g. LED streetlights) is driving electricity demand reductions in ways that will probably continue.

Trump’s reputed interest in freeing-up permitting of energy infrastructure (e.g., gas pipelines and drilling on public lands, if indeed it can be achieved) may have the paradoxical effect of further reducing emissions. It could make it easier to get currently very cheap Marcellus / Utica gas into the center of the country and perhaps even increase overall natural gas output. This can have only one outcome; reduced national gas prices overall and less coal consumption.

Roberts and Plumer at Vox:

You can see a partial list of past House Republican bills here. In 2013, they proposed cutting EPA funding by fully one-third. GOP committees churned out bill after bill to cut research funding for renewable energy by 50 percent, block rules on coal pollution, block rules on oil spills, block rules on pesticide spraying, accelerate oil and gas drilling permits on public land, prohibit funding for creation or expansion of wildlife refuges, cut funding for the Advanced Technology Vehicle Manufacturing Loan Program, and … well, there are 61 items on the list.

The Senate GOP isn’t far behind: In 2015, they floated a bill to cut the EPA’s budget by 9 percent and block rules on everything from ground-level ozone pollution to climate change. There may be a few more moderate GOP senators who think global warming is a problem, like Susan Collins (R-ME). But they do not dominate the caucus: Fossil-fuel enthusiasts like Mitch McConnell and James Inhofe do.

There’s no indication that Trump will buck his party on these issues.

Overall I am more persuaded by the Niskanen analysis, but both pieces are worth reading.  Here is my earlier post on the same issues.

Assorted Tuesday links

by on November 15, 2016 at 12:58 pm in Uncategorized | Permalink

1. Could TPP survive without the United States?

2. Dan Ariely has a new book coming out, Payoff.

3. Michael Lewis on Tversky and Kahneman.  Recommended, plenty of new information in the piece.

4. Fed chair rumors for 2018 (speculative).

5. Sam Tanenhaus on Dylan, including Springsteen vs. Dylan, a good piece on a topic with much chaff these days.

6. Nate Silver: “The Electoral College serves to constrain financial & ground game advantages, because you encounter diminishing returns in the swing states.”

Monday assorted links

by on November 14, 2016 at 11:50 am in Uncategorized | Permalink