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Le Weekend explains why the Coase theorem does not hold in the marriages of aging British whinersThe Lunchbox, in addition to having an interesting plot (imagine a lower-tech Indian “You’ve Got Mail”), is the best movie I’ve seen on the nature of Indian micro-transactions, whether in relationships or in the workplace.  Erving Goffman would be proud,  and the mention of Harvard is the funniest line I’ve heard in a movie in years.   Under the Skin, as I understood it, asks what kind of trades might be possible between us and one of Rilke’s angels, if the latter were to come down to earth.  The movie does indeed answer that question, and the underlying connection between Rilke and Islam is discussed here.  And here is a fascinating article about the most memorable actor in the movie.  Maybe the best piece you will read today.

I thought all three movies were excellent, and full of social science, though none is a movie that everyone will enjoy.

When I am watching a movie I often think “why isn’t the Coase theorem holding here?”  There are few movies — outside of sappy romantic comedies — in which the Coase theorem explains much of the plot.

Italy fact of the day

by on April 12, 2014 at 3:46 pm in Uncategorized | Permalink

The Italian Tourist Board spends an astounding 98 percent of its budget on salaries, with basically nothing left for its actual job of tourism promotion.

The point of the article is that hardly anyone visits southern Italy any more, thus making it one of the world’s best arbitrage opportunities. It is one of my favorite regions.

By the way:

There are trains in the Mezzogiorno that travel at an average speed of 8.7 miles an hour.

And:

Metaponto, in the Basilicata region east of Naples, has a five-track, marble-clad rail station, paid for by $25 million in European Union funds. But the last train out is an 8:21 a.m. express to Rome. If you want to go anywhere else, you have to take a bus.

In the 1970s, Italy was the world’s #1 tourist destination but now it has slipped to number five.  There has never been a better time to go.

Assorted links

by on April 12, 2014 at 12:39 pm in Uncategorized | Permalink

1. Space-saving sink and toilet combined design.

2. “Dr. Hirotaka Osawa from Tsukuba University, in Japan, has developed a new wearable device to help us with something called “emotional labor.”" The full link is here.  Recommended.

3. What is the worst kind of mistake a small German furniture store might possibly make?  Note that so far fewer than ten percent of the sold cups have been returned.

4. Indian economic recovery may not be so assured after all.

5. Romantic consensus decreases as individuals get to know each other better.

6. Land, secular stagnation models, negative rates of return, and a new proposed rustication.

7. Prefiero un otro nombre del pueblo, si?

I enjoyed this book, and I recommend that you get it for your kid.  Here is one bit of many:

Good help is hard to find.  Really hard to find.  Sure, there are lots of people with the right degrees and résumés, but the kind of employee we yearn for sticks out almost immediately.

You can buy the book here.

Assorted links

by on April 11, 2014 at 12:50 pm in Uncategorized | Permalink

1. How Germans romanticize Russia.

2. What we are learning about Medicare expenditures on pharmaceuticals.

3. What happened to Tom Lehrer?

4. The email culture that is France.

5. Markets in everything, Ayn Rand musical edition.

Assorted links

by on April 10, 2014 at 11:50 am in Uncategorized | Permalink

1. The invention of the slurpee (furthermore, Winnipeg, Manitoba is the “slurpee capital of the world”).

2. Is there a wonk bubble?

3. There is no great stagnation (take your goldfish out for a walk).  And the rise of the professional gunfighter.

4.Speculative estimates of the cost of snooping (13 cents per person per day?).

5. Ken doesn’t like Barbie.  I did like these tweets.

6. The century that is Norway.  Sadly, there will be a remake.

Sentence of the Day

by on April 10, 2014 at 10:09 am in Uncategorized | Permalink

Photovoltaic energy is already so cheap that it competes with oil, diesel and liquefied natural gas in much of Asia without subsidies.

More here.

Yes, it seems that may be so.  There is a new paper (pdf) by John M. Nunley, Adam Pugh, Nicholas Romero, and R. Alan Seals, the abstract is this:

We use experimental data from a resume-audit study to estimate the impact of particular college majors and internship experience on employment prospects. Our experimental design relies on the randomization of resume characteristics to identify the causal e ffects of these attributes on job opportunities. Despite applying exclusively to business-related job openings, we nd no evidence that business degrees improve employment prospects. Furthermore, we find no evidence linking particular degrees to interview-request rates. By contrast, internship experience increases the interview-request rate by about 14 percent. In addition, the “returns” to internship experience are larger for non-business majors than for business majors.

Their underemployment paper (pdf) is also interesting:

We conduct a resume audit to estimate the impact of unemployment and underemployment on the employment prospects facing recent college graduates. We find no evidence that employers use current or past unemployment spells, regardless of their length, to inform hiring decisions. By contrast, college graduates who became underemployed after graduation receive about 15-30 percent fewer interview requests than job seekers who became “adequately” employed after graduation. Internship experience obtained while completing one’s degree reduces the negative e ffects of underemployment substantially.

No wonder the market-clearing rate for internship is so…low.

Assorted links

by on April 9, 2014 at 12:03 pm in Uncategorized | Permalink

1. What happens when you conduct a census of the Mexican educational system?

2. Monopsony in motion, MP3 file, a song by the Anarchist Econometricians of A.  What do you know about them?  And Felix Salmon on Wonkonomics.

3. Can robots solve the Malaysian mystery?

4. Do poverty traps really exist?

5. An early history of cryptocurrencies.

6. A watch for blind people (mostly being bought by the sighted, note “you can check the time in a social or work setting without appearing rude.”)

7. Medicare average is over.

In the comments of Askblog, Matt writes:

…the “secular stagnation” hypothesis is in dire need of some cogent back-of-the-envelope estimates, and I don’t think it holds up very well. A long-term fall in the average real interest rate from, say, 2% to -1%, would be absolutely extraordinary. It would imply massive increases in the valuation of long-lived, inelastically supplied assets like land, and massive increases in the quantity of long-lived, elastically supplied capital like structures.

Just to illustrate how extreme the implications can be, consider the following (sloppy) calculation. The BEA’s average depreciation rate for private structures is currently about 2.5%. A decline in the real interest rate from 2% to -1% implies a decline in user cost r+delta from 4.5% to 1.5%, of a factor of three. If the demand for structures is unit elastic (as economists, unjustifiably from an empirical standpoint, tend to assume with Cobb-Douglas functional forms), this would imply a threefold increase in the steady-state quantity. Since structures are already 175% of GDP, this would imply an additional increase of 350% of GDP, more than doubling the overall private capital stock and nearly doubling national net worth. The transition to this level would require such an extraordinary, prolonged investment boom that we would not face slack demand for many, many years.

(There are many things wrong with this calculation, but even an effect a fraction of this size serves my point, especially when you keep in mind that land values would be skyrocketing as well. The bottom line is that proponents of secular stagnation have not yet contended with some of the basic numbers.)

There is more here.  That is via David Beckworth.

I am still waiting for a model of secular stagnation that rationalizes both a negative real interest rate and positive investment, which indeed we are observing in most countries circa 2014.  That means, by the way, I don’t quite agree with Matt’s sentence “The transition to this level would require such an extraordinary, prolonged investment boom that we would not face slack demand for many, many years.”  There are some “reasoning from a price change” issues floating around in the background here.  Is it the productivity of just new capital that has fallen to bring the natural interest rate to negative one?  Or the rate of return on old capital too, in which case the value of the extant capital stock is not given by the calculation in question?  Tough stuff, but you know where the burden of proof lies.  Can this all fit together with the fact that nominal gdp is now well above its pre-crash peak?  And that we are seeing positive net investment?  In any case I agree with Matt’s broader point that the implied magnitudes here don’t seem to fit the facts or even to come close.

Speaking of Piketty (or did I mean to write “speaking of Scott Sumner?”), Scott has a question:

…here’s what confuses me.  Some of the reviews seem to imply that Piketty argues that real rate of return on capital represents the rate at which the wealth of the upper classes grow.  Is that right?  If so, what is the basis of that argument?  I don’t think anyone seriously expects the grandchildren of a Bill Gates or a Warren Buffett to be 10 times as wealthy as they are.

Assorted links

by on April 8, 2014 at 11:22 am in Uncategorized | Permalink

1. The demand for coordinated sentiment.

2. A small idea to reduce distracted driving.

3. Which two sports have a smaller field than physics predicts? (hint: squash and Jai alai).

4. How U.S. A.I.D. is shifting its strategy.

5. Long-term unemployment and older workers.

6. Using Google Glass at work.

7. Yglesias provides a guide to Piketty.

We found that only one out of six Americans can find Ukraine on a map, and that this lack of knowledge is related to preferences: The farther their guesses were from Ukraine’s actual location, the more they wanted the U.S.  to intervene with military force.

…the median respondent was about 1,800 miles off — roughly the distance from Chicago to Los Angeles — locating Ukraine somewhere in an area bordered by Portugal on the west, Sudan on the south, Kazakhstan on the east, and Finland on the north.

That is from Monkey Cage, there is more here.  The guesses look like this:

Ukraine_Full-1024x535

For points I thank Kevin Lewis and Samir Varma.

INTIMACY is a high-tech fashion project exploring the relation between intimacy and technology. Its high-tech garments entitled ‘Intimacy White’ and ‘Intimacy Black’ are made out of opaque smart e-foils that become increasingly transparent based on close and personal encounters with people.

Social interactions determine the garmentsʼ level of transparency, creating a sensual play of disclosure.

INTIMACY 2.0 features Studio Roosegaardeʼs new, wearable dresses composed of leather and smart e-foils which are daringly perfect to wear on the red carpet. In response to the heartbeat of each person, INTIMACY 2.0 becomes more or less transparent.

There is more information here, and for the pointer I thank Samir Varma.

Assorted links

by on April 7, 2014 at 12:17 pm in Uncategorized | Permalink

1. Children need to learn context to know when to stop.

2. What are the legal obstacles to becoming a new internet service provider?

3. Is the American language becoming more polite and considerate?

4. Can you read seriously online?

5. Why fewer people are dying in car crashes these days.  And Toyota is reintroducing some humans to work with robots.

6. The bovine internet.

Assorted links

by on April 6, 2014 at 3:53 pm in Uncategorized | Permalink

1. The old version of China Star has reopened out near Fair Oaks under a new name.

2. Do selfies encourage more plastic surgery?  And barter markets in everything: payments in selfies, Beyonce edition.

3. Mango trees and African sadness.

4. “Dad’s Resume.”  An excellent piece.

5. How many people does it take to colonize another star system? (maybe more than you think, via The Browser)