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Sunday assorted links

by on June 19, 2016 at 1:39 pm in Uncategorized | Permalink

Saturday assorted links

by on June 18, 2016 at 1:05 pm in Uncategorized | Permalink

1. “This small-scale experiment shows that my colleagues’ honesty rate greatly depends on something as simple as a pen hanging down from the refrigerator.

2. Were Spanish real wages higher in 1300 than in 1850?

3. “In fact, the economy is not a machine, and it does not have a gas pedal.”  That is Arnold Kling on macro.  And here is Yuval Levin on Arnold’s new macro book.  And from the St. Louis Fed: “The new approach is based on the idea that the economy may visit a set of possible regimes instead of converging to a single, long-run steady state.”

4. Behavioral economics guide 2016.

5. Famous authors pick their favorite European novels.  Quite a good list, not just the usual.

6. Japanese ad for Donald Trump, possible Straussian ending.

7. Raghuram Rajan will leave the Indian central bank.

From 2004 until 2010, the 30 leading German blue-chip DAX firms created more than 400,000 additional jobs abroad, according to a Handelsblatt analysis. During the same period, they cut over 200,000 jobs within Germany.

Here is the link, via David Wessel.  And note that for all of its ostensible economic successes, real wages in Germany have barely risen since 2000.

I’ve long considered capital shortfall the “real problem,” rather than focusing on immigration or trade or for that matter consumer spending.  Do note however that much of the investment flows out of the home country because the produced goods later can be traded back in, so in that sense trade is connected indirectly.  Still, there is a big analytical difference between the notions of “capital shortfall at home” and “too many goods flowing in from abroad.”

By the way, here is a wee bit of good news:

Though the number of posts they’ve created overseas still far outweighs the total added within Germany, the imbalance is leveling out. Last year saw the net addition of more than 83,000 new posts abroad. Domestic positions grew by over 22,000 over the previous year.

I see overwhelming evidence for an “investment drought” in many of the countries with wage stagnation.  As time passes, I find talk of a “global savings glut” to be increasingly misleading and ignoring the core fact of capital market segmentation.

I thank Edward Conard for a useful discussion related to this post, and I am looking forward to his next book.

Friday assorted links

by on June 17, 2016 at 11:34 am in Uncategorized | Permalink

1. My favorite things Swiss, redux.  These days I would add Peter Zumthor and the Vitra design museum outside of Basel.

2. Theatre of Harmonic Social Motion, a short essay by Anthony Morley.  What are the invisible hand mechanisms governing science?

3. When do unions oppose the minimum wage?

4. 3 a.m. interview with philosopher David Estlund.

5. How did the Brexit idea rise to prominence?

6. Big hack and theft at Ethereum, ongoing story, a big setback for “this kind of stuff.”  (Can I call it that?)  Here is Izabella Kaminska.

The Dutch are still consuming about 5 per cent less, on average, than they were almost a decade ago.

Furthermore:

Yet the employment rate for Dutch 25-54-year-olds, a reasonable measure of the economy’s underlying vigour, is still about 5 percentage points below the pre-crisis peak.

Here is a possible surprise in this context:

It has the biggest current account surplus, as a share of output, in the entire euro area, making Germany look almost Anglo-Saxon by comparison.

Much of the remainder of the Matthew C. Klein Alphaville post builds an interesting comparison between the Netherlands and Belgium, recommended.  Part of the problem may be the Dutch housing market and tough bankruptcy law.

I found this discussion of interest:

I believe I’ve sketched out an idea that enables all transfers to verify the recipient is not a prohibited person without communicating any distinguishing information to the government while optionally leaving an audit trail useful for prosecution.

  • When an individual applies for state-issued identification, let them choose a public-private key pair. Make the public key part of their identification card, and the private key remain private. Not even the issuing state would know it. Add their public key to a whitelist.

  • At the same time, perform a background check to determine if the individual is a prohibited person. If so, add their public key to a blacklist.

  • Publish the blacklist in bulk and make updates available daily. We all have access to the Internet. We can do this. Regularly update the blacklist according to adjudicating events associated with the definition of “prohibited person.” For example, at the time of conviction of a felony, and individual’s public key gets added to the blacklist.

  • Firearms sellers, private and commercial, must maintain a copy of the blacklist up-to-date at the time of sale. Perhaps use a blockchain of sorts and/or share via BitTorrent or some other distributed service.

  • At the time of sale, the recipient provides their public key to the seller. Seller verifies the public key is not on the blacklist. The seller constructs a secret cryptographic nonce and encrypts it with the recipient’s public key. Recipient decrypts with their private key and returns the nonce in plaintext to the seller to confirm their public-private key pair is valid. This form of handshaking is common place and may be automated.

  • If the recipient is on the whitelist and not on the blacklist, the transfer may proceed.

  • Optionally, the seller may record a log of the recipient’s public key, perhaps encrypted with their private key. On the event of a warranted search, the seller may choose to decrypt their log entry to reveal the identify of the recipient.This leaves the audit trail which we may be legislatively require.

Thus, no direct communication with the state on the event of a transfer is needed which prevents the creation of a registry. Prohibited persons cannot acquire firearms without unlawful behavior from the seller which satisfies the aims of universal background checks. We already have all the cryptographic primitives and communications infrastructure needed to implement this and verify its integrity.

Thoughts?

That is from kermudgeon on Reddit, via N.  Some of the comments are quite good as well.

…the market cap of four of the largest coal companies was more than $35 billion in 2011. After a flurry of regulation, it’s now a smudge on the graph below, a decline of 99 percent.

That is from Sam Batkins, via Rick Newman and Joanna Bryson 2.

That is the new article by Michael Rosenwald, here is an excerpt:

From 1976 to 1994, there were about 18 mass shootings per year, according to Fox’s data, which is drawn from  federal statistics. Between 1995 and 2004, a period covering the ban [on assault weapons], there were about 19 incidents per year. And from 2005 to 2011, after the ban expired, the average went up to nearly 21.

Fox makes an important point about what probably happened during the ban: Mass shooters can rather “easily” come up with “alternate means of mass casualty if that were necessary.”

In other words, if they can’t get an AR-15, they get a Glock.

Assault rifles are used in only about 27 percent of mass shootings, see Alex too.

Here is an additional piece worth reading: “common state and federal gun laws that outlaw assault weapons are unrelated to the likelihood of an assault weapon being used during a public shooting event. Moreover, results show that the use of assault weapons is not related to more victims or fatalities than other types of guns.”

There is more here.

Thursday assorted links

by on June 16, 2016 at 11:40 am in Uncategorized | Permalink

Wednesday assorted links

by on June 15, 2016 at 11:36 am in Uncategorized | Permalink

1. Do you wish to keep Freddie “…cranky and independent for a little while longer”?

2. Curb Your Enthusiasm is returning to HBO.

3. “This history indicates that Congress has already made an exception for itself by not adopting the 2004 overtime-pay rule update. That inaction raises the question of what Congress will do if the board recommends that both chambers adopt rules conforming to the DOL’s recent overtime-pay rule.”  Link here.

4. ““The truest Sichuanese food has only about a century or so of history behind it…” — is Sichuan food in decline? (NYT)  And how Beijing is turning Koreans into Chinese.

5. David Henderson on what to do about London housing.

6. How European women shifted away from the right and toward the left.

Tuesday assorted links

by on June 14, 2016 at 11:29 am in Uncategorized | Permalink

1. Does the Canadian trade deal with the EU provide a good model for the UK?

2. How to teach the teachers, believe me they need it.  And the movement for data analytics on students is considered promising but dangerous.

3. China nude pictures as IOU and collateral, link is safe for work…”…the lender would send the photo and her naked video footage to her family members if she could not pay back her 10,000 yuan borrowed on an annual interest rate of 24 percent within a week.”

4. “This is the sound of Britain breaking.

5. “Man finds 22-pound chunk of butter estimated to be more than 2,000 years old in Irish bog.”  I enjoyed this paragraph:

In her article “Bog Butter: A Two Thousand Year History” in The Journal of Irish Archaeology, Caroline Earwood wrote, “It is usually found as a whitish, solid mass of fatty material with a distinctive, pungent and slightly offensive smell. It is found either as a lump, or in containers which are most often made of wood but include baskets and skins.”

Then there is this:

Given that level of preservation, most of the butter is actually edible. Irish celebrity chef Kevin Thornton, who owns the Michelin-starred Thornton’s Restaurant in Dublin, claimed to have tasted a 4,000-year-old sample of bog butter.

Some of you may recall James Farewell’s 1689 poem “The Irish Hudibras” — “butter to eat with their hog, was seven years buried in a bog”.

What3Words Mongolia

by on June 14, 2016 at 7:28 am in Uncategorized | Permalink

Earlier this year I wrote that every 3m*3m place on the face of the planet can now been addressed by just three words:

what3words has identified every one of the 57 trillion 3mx3m squares on the entire planet with just three, easy to remember, words. My office, for example, not my building but my office, is token.oyster.whispering. Tyler’s office just down the hall is barons.huts.sneaky. (Especially easy to remember if you recall this is Tyrone’s office as well.)

Every location on the earth now has a fixed, easily-accessible and memorable address. Unpopulated places have addresses for the first time ever, of course, but now so do heavily populated places like favelas in Brazil where there are no roads or numbered houses. In principle, addressing could be done with latitude and longitude but that’s like trying to direct people to web sites with IP addresses–not good for humans.

The post office of Mongolia has just announced that they will use the system.

Mongolians will be the first to use the system for government mail delivery, but organizations including the United Nations, courier companies, and mapping firms like Navmii already use What3Words’ system.

Mongol Post is switching to the What3Words system because there are too few named streets in its territory. The mail network provides service over 1.5 million square km (580,000 square miles), an area that’s three times the size of Spain, though much of that area is uninhabited. Mongolia is among the world’s most sparsely populated countries, and about a quarter of its population is nomadic, according to the World Bank.

Even in the capital city of Ulaanbataar, not all streets are named. When people don’t have a street address, the current solution is for them to travel to a collection point to pick up their post, says Chris Sheldrick, the co-founder and chief executive of What3Words. People have to write a series of detailed directions, in addition to the address, so that mail-delivery people know where to drop off letters, Sheldrick say.

This is a lengthy email from an MR reader who wishes to remain anonymous.  These are his words, not mine, everything which follows:

Back in December I asked you knew of any naive measures of  “gun murders / # of civilian guns” per country, and seeing where the US falls in this distribution.

Some time after I found this WaPo data set compiled in 2012 from the UN, Small Arms Survey, and others. (There is a “data caveat” I’ll point out after the plots below.)

Here’s what I did: dropped all data into a spreadsheet and calculated the number of homicides per 100,000 guns — simply (homicide by gun) / (total guns) * 100000. Call this “H” for simplicity.

This produces numbers in a ~0-20 range for “western countries. So “H = 2.5” –> 2.5 gun-caused homicides per 100,000 guns for the year in question (2005 I believe), by country.

Here are three very quick, ugly kernel density plots from R.

The raw data plots is pasted in the end of the email (apologies for messyness!)

The vertical lines are:  mean=green,  median=blue,  USA=red.

Total world, as a limiting case:

image

US is below mean and median:  US = 3.7,  mean = 91.0,   median = 6.0

EU countries (density excludes US): 

image (1)

US is just above mean, above median:  US = 3.7,  mean = 3.1,   median = 1.9

“Post-WWII westernized” countries:

image (2)

US is just above mean, above median:    US = 3.7,  mean = 3.1,   median = 1.5

The “westernized” countries were somewhat arbitrarily those with a long “westernizing” history post-WWII. Chosen quite ad-hoc and off-the-cuff; largely it means Eastern European countries were replaced by Canada, Australia, Japan, etc.

Immediate data caveat: My earlier spot-checking against the cited sources turned up a number of discrepancies, which I couldn’t quickly figure out — mostly small, some large. Eg. I recall that some EU countries saw order-of-magnitude differences when I put in “direct from source” numbers, which is worrisome. Unfortunately I never had time to examine these further (hence the delay in reply), but perhaps some enterprising undergraduate student would be interested!

The broad strokes are still interesting. Here are some quick ‘surprises’ for me:

– The US is no longer a massive outlier, although still above average for “westernized” plots.

– Japan’s H-score is much higher I expected, ~10x the number in Norway (and higher than England, Northern Ireland, Czech Republic – the later has much less strict control and lower H).

– The Netherlands came out ~6-7x higher than median (of EU/”westernized”); ~3x the US

– Taiwan seems quite high:  ~11x median of “westernized,” ~5x US.   Was not expecting this (but not sure why).

– Ireland is ~4.5x higher than Northern Ireland

– Belgium is closest to the US in the EU states, Belgium=3.9 vs US=3.7

– All surprises, perhaps all data size related:  Denmark, Netherlands, Japan, Taiwan, Ireland, Italy (higher than US, was not expecting that), Belgium, Luxembourg

There are many possible data concerns. Sample size is very important (the few data I spot-checked varied significantly over time). Measurement is almost certainly an issue, and I dread looking into differences in the definition of “homicide” for these countries. I suspect, however, that clever methods and data collection could still provide useful information about ranges of these values (an enterprising undergrad could probably make quite the impact with careful data examination/collection and some Bayesian “Locomotive Problem“-style work).

Because of data issues, I don’t think of this as “the final word” but rather an interesting first pass.

Monday assorted links

by on June 13, 2016 at 12:40 pm in Uncategorized | Permalink

Many of you have been asking me about this NYT article on the pressures for rent control in Silicon Valley.  If no (or few) new apartment blocks will be built anyway, what is wrong with rent control in that setting?

One effect is that rent control will limit the incentive for prospective builders to fight to overturn current building restrictions.

A second effect of rent control is that it will lower the quality of the apartment stock.  This outcome has some second best properties, since a lower-quality, lower-price selection of apartments is probably what the market would have delivered under freer conditions.  Still, quality will fall in inefficient ways.  For instance sizes of apartments already are given, so landlords will cut back on maintenance.  Rather than well-maintained but smaller apartments, we will see overly large but run-down abodes.

At rent-controlled prices there will be excess demand for apartments.  The “plums” will go to those who bribe, those who are well-connected, those who are skilled at breaking the law, and, to some extent, those who have low search costs.  The latter category may include well-off people who hire others to search for them.

So overall I still don’t think this is a good idea.  Even if the current housing stock is fixed, rent control probably will create costs in excess of its benefits, and without significantly desirable distributional consequences.

Addendum: In the comments, Kommenterlein adds: “The rental housing stock isn’t fixed – it will decline rapidly with rent control as rental apartments are converted into Condos and sold at market prices.”

And David Henderson comments.