I am afraid I rather severely failed this test, as proposed by the British magazine Country Life.  I cannot “train a rose,” nor did I even know what that meant.  I also don’t own a tweed suit, nor do I tip my “gamekeeper in the shooting field.”  “Sings lustily in church” is yet another fail, though I am punctual and do not own a chihuahua, nor would I, as is stipulated.

I was puzzled by a response to this quiz in a recent David Tang FT column.  He answered:

32. Would not go to Puerto Rico

Been there once already — ghastly.

I am pleased to have gone twice, from which I can only conclude that at least one of us does not know what a gentleman is.  I might have defined the concept as someone who is kind, tolerant, strong as required, and respectful of social mores when appropriate.

Further Saturday assorted links

by on November 14, 2015 at 2:42 pm in Uncategorized | Permalink

1. The battle to save Silicon Valley’s oldest trailer park.

2. Pearlstein reviews Rodrik.

3. On “masculinised” appearance.

4. I enjoyed the way in which I understood nothing in this NYT David Mitchell review.

5. Conversations with North Koreans.

Saturday assorted links

by on November 14, 2015 at 8:38 am in Uncategorized | Permalink

1. Who is Jeffrey Flier?

2. Integrating the disabled in Vermont.

3. Cop pulls over Google driverless car for driving too slowly.  And Dubai firemen to get jetpacks?  More here.

4. How to spend $48.5 million, without consuming $48.5 million in real resources.

5. The most googled diets by city.

6. Good Noah Smith post on the assimilation of black immigrants.

7. Arnold Kling’s macroeconomic frameworkRyan Avent’s macroeconomic framework, he believes in the Phillips Curve (and the Lucas supply function?) more than I do.

Friday assorted links

by on November 13, 2015 at 12:22 pm in Uncategorized | Permalink

1. Redistribution under Obamacare (NB: it seems the numbers have since turned more negative).

2. What we are learning about development economics.

3. Caplan on Caplan vs. Jones, and I will repeat and second his call for you to buy, or better yet review, Garett’s new book The Hive Mind.

4. What is happening with the number and size of nations?

5. Financial incentives to help women stop smoking seem to be effective, paper here.

6. Eugene Volokh on freedom of speech and academic freedom.

A while ago Scott Sumner laid out at least part of his framework, I thought I should lay out some key parts of mine.  Here goes:

1. In world history, 99% of all business cycles are real business cycles.  No criticism of RBC can change this fact.  Furthermore the propagation mechanism for a “Keynesian business cycle” (arguably a misleading phrase) also relies on RBC theory.

2. In the more recent segment of world history, a lot of cycles have been caused by negative nominal shocks.  I consider the Christina and David Romer “shock identification” paper (pdf, and note the name order) to be one of the very best pieces of research in all of macroeconomics.  Sometimes central banks tighten when they shouldn’t, and this leads to a recession, due mainly to nominal wage stickiness.

3. Workers are laid off because employers are often (not always) afraid to cut their nominal wages, for fear of busting workplace morale, or in Europe often for legal and union-related reasons.

4. Overall I favor a nominal gdp rule for monetary policy.  But most of its gains would come in a few key historical episodes, such as 1929-1932, or 2008-2009.  In most periods I don’t think we know what the correct monetary policy should be, nor do we know that it matters.  Still, that uncertainty does not militate against an ngdp rule.

5. Once workers are unemployed, nominal wage stickiness is no longer the main reason why they stay unemployed.  In fact nominal wage stickiness is largely taken out of the equation because there is no preexisting nominal wage contract for these workers.  There may, however, be some residual stickiness due to irrational reservation wages, also known as voluntary unemployment due to stupidity.  (You will find a different perspective in Scott’s musical chairs model, which I may cover more soon.)

5b. Monetary stimulus to be effective needs to be applied very early in the job destruction process of a recession.  It is much harder to put the pieces back together again, so urgency is of the essence.

6. The successful reemployment of workers depends upon a matching problem, a’la Pissarides, Mortensen, and others.  Yet this matching problem is poorly understood, and it can involve a mix of nominal and real imperfections.  Sometimes it is solved more quickly than expected, such as in the recent UK experience, and other times more slowly than expected, as in current Spain.  Most of the claims you will read about this reemployment of workers are wrong, enslaved to ideology or dogmatism, or at the very least unjustified.  Hardly anyone wants to admit this.

7. Really bad recessions involve deficient aggregate demand, negative shocks to intermediation, some chronic supply-side problems, negative wealth effects, and increases in the risk premium, all together.  It is hard to find a quick fix.  Furthermore models where AS and AD curves are independent and separable are often misleading, despite their analytic convenience.

8. Given that weak AD is only one of the problems in a bad downturn, and that confidence, risk, and supply side problems matter too, the best question to ask about fiscal policy is how well the money is being spent.  The “jack up AD no matter” approach is, in the final political equilibrium, not doing good fiscal policy any favors.

9. You should neither rule out nor overstate the relevance of Hayek and Minsky.  Their views have much in common, despite the difference in ideological mood affiliation and who — government or the market — gets blamed for the downturn.  For really bad recessions, usually both institutions are complicit to say the least.

10. All propositions about real interest rates are wrong.

There is more, but I’ll stop there for now.

Thursday assorted links

by on November 12, 2015 at 12:32 pm in Uncategorized | Permalink

1. Very good Ian Leslie FT piece on how advertising works, or doesn’t.

2. Caplan-Jones immigration debate link.

3. Case-Deaton vs. Deaton-Case (NYT).

4. Uber for philosophers?  And Udacity is taking the next steps, warning there is a video at the link.

5. The euro was pointless.

6. Facebook’s Siri, namely M.  And NYT feature on driverless cars, not just the usual.

Let’s say you believe in secular stagnation and you believe that the prior “short run” of macroeconomics now can stretch for ten, twenty years or more.  In the meantime sufficient adjustments will not occur.

And let’s say you believe workers have lost bargaining power and are paid less than their marginal products in a systematic way, as has been argued by many Progressives.

And let’s say you believe nominal wages are quite sticky for extended periods of time, not just a year or two.

Does not a bit of price deflation help to set things right again?  The resulting increase in real wages might even — heaven forbid — boost real consumption.  And yet there should not be many layoffs, as employers are still earning extra profits on these workers.

Please note that I do not in general believe in the above propositions as stated, I am simply wondering how all of the pieces fit together.  It seems to me that if you believe workers are significantly underpaid relative to marginal product, nominal wage stickiness should be a much smaller problem than otherwise.  Deflation too.


Wednesday assorted links

by on November 11, 2015 at 11:59 am in Uncategorized | Permalink

1. Chess players’ fame versus their merit.

2. Haggis recipe could be tweaked to beat U.S. ban.

3. Who has the edge in getting organs for transplant? (guess)

4. Sumner on Bernanke, more here.  And it is scary that Bernanke feels the need to write a blog post opposing the notion that Congress raid the capital of the Fed.  It gets sent to the Treasury anyway.

5. NYT obituary of Rene Girard, with lots on Peter Thiel too.  It is also odd what this piece leaves out.

6. More from Gelman on mortality rates.

Tuesday assorted links

by on November 10, 2015 at 11:47 am in Uncategorized | Permalink

1. Singapore’s “vertical village” named building of the year.

2. “This film [Spectre] doesn’t exactly hide its place within Lovecraftian mythology.”  An interesting piece, but I have to say the film stunk past the first thirty minutes.  I find it more interesting that such a mediocre Bond film is today achieving such cultural resonance.  And Hollywood average is over, uh-oh I say (NYT).

3. There is no great stagnation: a new Uber-like app for casual fighting for free.

4. Sarah Kliff reviews the Amazon bookstore.  And what college students spend on textbooks is going down each year.  It’s less than what many sources claim.

5. Reading suggestions from Dan Wang.

Against kindergarten?

by on November 8, 2015 at 8:11 pm in Data Source, Education, Uncategorized | Permalink

A new study on the mental health effects of kindergarten enrollment ages found strong evidence that a one-year delay dramatically improves a child’s self-regulation abilities even into later childhood.

According to the study co-authored by Stanford Graduate School of Education Professor Thomas Dee, children who started kindergarten a year later showed significantly lower levels of inattention and hyperactivity, which are jointly considered a key indicator of self regulation. The beneficial result was found to persist even at age 11.

“We found that delaying kindergarten for one year reduced inattention and hyperactivity by 73 percent for an average child at age 11,” Dee said, “and it virtually eliminated the probability that an average child at that age would have an ‘abnormal,’ or higher-than-normal rating for the inattentive-hyperactive behavioral measure.”

The study, aptly titled, “The Gift of Time? School Starting Age and Mental Health,” was published Oct. 5, by the National Bureau of Economic Research. A version of the article is also available here as a working paper from the Stanford Center for Education Policy Analysis at the GSE.

I have not yet read the study, but it seems to me this paper, along with some other recent results, does not exactly help the case for preschool…

For the pointer I thank Peter Metrinko.

Sunday assorted links

by on November 8, 2015 at 1:24 pm in Uncategorized | Permalink

1. “Another bizarre feature of our early prototype was its propensity to respond with “I love you” to seemingly anything.

2. More details on rising white mortality.

3. “At this point, it takes a lot for Star Wars-branded crap to surprise us.”  And there is no great stagnation: Chinese smart phone doubles as a chopping board.

4. Ramanujan: still better than you think.  And India may move to a national sales tax, lower barriers to interstate commerce.

5. Benhabib, Bisin, and Luo (pdf): in the Piketty tradition, but a more useful disaggregation of the data, slides here (also pdf).  For most of you the slides are more useful than the paper.  On p.58 of the slides: “Estimate of inter-generational correlation on returns on wealth is about zero”.

6. Surge pricing for parking meters.

Here is my latest NYT Upshot column, on the topic of the Affordable Care Act.  Here is what is to me the key excerpt:

But there is another way of looking at it, one used in traditional economics, which focuses on how much people are willing to pay as an indication of their real preferences. Using this measure, if everyone covered by the insurance mandate were to buy health insurance as the law dictated, more than half of them would be worse off.

This may seem startling. But in an economic study, researchers measured such preferences by looking at data known as market demand curves. Practically speaking, these demand curves implied that individuals would rather take some risk with their health — and spend their money on other things — partly because they knew that even without insurance they still would receive some health care. These were the findings of a provocative National Bureau of Economic Research working paper, “The Price of Responsibility: The Impact of Health Reform on Non-Poor Uninsureds” by Mark Pauly, Adam Leive, and Scott Harrington; the authors are at the Wharton School at the University of Pennsylvania.

One implication is that the preferences of many people subject to the insurance mandate are likely to become more negative in the months ahead. For those without subsidies, federal officials estimate, the cost of insurance policies is likely to increase by an average of another 7.5 percent; even more in states like Oklahoma and Mississippi. The individuals who are likely losers from the mandate have incomes 250 percent or more above the federal poverty level ($11,770 for a single person, more for larger families), the paper said. They are by no means the poorest Americans, but many of them are not wealthy, either. So the Affordable Care Act may not be as egalitarian as it might look initially, once we take this perspective into account.

I should stress that, at this point, I don’t see any realistic alternative to trying to improve ACA.  Still, I find it distressing how infrequently this problem is acknowledged or dealt with, probably from a mix of epistemic closure, a “health insurance simply has to make people better off” attitude, and a dose of “let’s not give any ammunition to the enemy.”  In fact, I think a lot of Democratic-leaning economists and commentators are doing a real disservice to their own causes on this one.

It’s worth noting that Kentucky, one of the best-functioning ACA state exchanges, just elected a Republican governor who very explicitly pledged to tank the current set-up as much as possible, Medicaid too.  I think it’s time to admit this is not just Tea Party activism or Hee Haw political stupidity, rather a large number of the people subject to the mandate simply are not better off as would be judged by their own preferences.  And that is not a secondary problem of Obamacare, it is a primary problem.

Interestingly, I found the NYT reader comments on my piece to be fairly supportive, which is not always the case.  There’s a good deal of “this happened to me, too,” and not so much raw invective about whatever defects I may have.

I think it is a big mistake to argue Obamacare is on the verge of collapse, or whatever other exaggeration of the day may be at hand.  Still, I don’t find the current set-up of the exchanges to be entirely stable, at least not in terms of ongoing popularity, much less consumer sovereignty.

A key question is what happens moving forward.  One option, which I had not initially expected, is for the exchanges to narrow and evolve into an expanded version of some of the earlier plans for a segregated high-risk pool.  In that case, the argument would morph from “don’t worry, enough people will sign up for the exchanges” into “the welfare effects here are still positive, because fortunately not everyone signs up for the exchanges.”  The high risk pool would then at some point require additional subsidies.  In the past, I argued that the penalties for not signing up were too low, but under this scenario it may be desirable to lower rather than raise those penalties.

We’ll see.  The piece covers other issues as well, do read the whole thing.

Here is Megan on the costs of ACA plans.  Here are some interesting calculations from Jed Graham.

Saturday assorted links

by on November 7, 2015 at 12:23 pm in Uncategorized | Permalink

1. “The Russian navy had to lease and purchase eight commercial transports in order to deliver supplies for the operation at the level of up to 50 sorties a day (which means one sortie per aircraft).” Link here.  And: “Over the last three years I have found that the best way of learning what is really happening in the war is to visit military hospitals.

2. Ted Gioia praises John Fowles.

3. This could pass as satire.  (That link was taken down but it is still posted here.)  Don’t neglect the subtitle of the publication itself.  In fact you could have convinced me it was a bad right-wing satire of something that doesn’t happen, but I’ve seen it so many times in my Twitter feed I think it must be true.

4. Jonathan Haidt talk on how Ethical Systems Design could reduce inequality.

5. “…just 6% of Africans qualify as middle class, which it defines as those earning $10-$20 a day. On this measure the number of middle-income earners in Africa barely changed in the decade to 2011.

6. JEP piece on how the Fed plans to raise interest rates and how monetary policy works today.  Boring, but a very good explainer.

7. Maryland real estate, an interior, no grain in sight.

Friday assorted links

by on November 6, 2015 at 12:43 pm in Uncategorized | Permalink

1. Tracking Air Horse One.  And birds save old documents in their nests.

2. The shifting popularity of musical genres over the last ten years.  Uh-oh.

3. On the global ZLB economy.  And Brad DeLong reviews Bernanke.

4. Calorie counts on menus don’t seem to help, paper here.

5. An Austrian [sic] dispute over peoples’ quantitative easing, ask your granny!  Or not.

6. Which religion produces the most generous children? (speculative)

7. Maybe those journals were right to reject the Case and Deaton article.

If you pulled over one hundred people on the street, and asked them to state a religious belief they hold, I’m not sure you would get any answer more plausible than “the pyramids were built for the storage of grain.”  Would you now?

Yet we mock Ben Carson for this, but we do not make fun of those who believe openly in the Trinity, Virgin Birth, ex cathedra, and many other beliefs which are to my mind slightly less plausible claims.  It’s not so different from the old prejudice that Mormon beliefs are somehow “weirder” than those of traditional Christians, except now it is secularists picking and choosing their religious targets on the supposed basis of sophistication.  The Seventh Day Adventists, Carson’s church, are of course weirder yet.

I doubt the storage claim is true as a dominant explanation, but should there not be some storage — of something — in a profit-maximizing or rent-maximizing model of pyramid supply and inventory management?  Maybe Ben’s economic intuition confirmed what he had heard in church.  And what about Coase’s durable goods monopoly model?  In that treatment the monopolist stores grain, admittedly for the pyramids variable Coase was hermetic in his exposition, perhaps properly so given how much is at stake here.  And “remains of storage pests have been found in grain recovered from pyramid tombs.”  Further argumentation along these lines can be found in F. Zacher’s classic 1937 article “Vorratsschädlinge und Vorratsschutz, ihre Bedeutung für Volksernährung und Weltwirtschaft” (Cowen’s Second Law), which by now has been cited over nineteen times (twenty in fact).

The Quran notes that the pyramids were made of baked clay, when instead according to many standard accounts much of the pyramids are made of quarried limestone (yet even that question is murky and I would not entirely count out the Quranic exposition).  Presumably many Muslims, who ascribe a holy status to the Quran, would defend the baked clay proposition in some manner.  How often is that thrown in their faces?

Might Joe Lieberman, an Orthodox Jew, possibly hold some views about Joseph which are not literally true?  After all, those stories do come from the Torah.

Besides, our Founding Fathers had some pretty strange notions about pyramids.  Most of them did a pretty good job in office.

What Ben Carson has done is to commit the unpardonable sin of talking about his religion as if he actually takes it seriously.

Loyal MR readers will know that I am myself a non-believer.  But what I find strangest of all is not Ben Carson’s pyramids beliefs, but rather the notion that we should selectively pick on some religious claims rather than others.  The notion that it is fine to believe something about a deity or deities, or a divine book, as long as you do not take that said belief very seriously and treat it only as a social affiliation or an ornamental badge of honor.

Bully for Ben Carson for reminding us that a religion actually consists of beliefs about the world.  And if you’re trying to understand his continuing popularity, maybe that is the place to start.