Principles of Macroeconomics, the new course by Tyler and myself, has just launched at MRUniversity. We will be covering unemployment, inflation, business cycles, growth and much more. The first section which is up now covers GDP including

As usual, all the videos are free and will work with any textbook although of course they go best with the best textbook, Modern Principles.

Here is the introduction to GDP:

London Scout poses for her mother, Sai De Silva, in Dumbo for her Instagram account.  The 4-year-old has more than 100,000 followers.

That is the photo caption to this NYT story.  And just so you are not confused, “London Scout” is a name, and “Dumbo” is a part of New York City.

It is going slowly, to say the least:

Heaving under mountains of paperwork, the government has spent more than $1 billion trying to replace its antiquated approach to managing immigration with a system of digitized records, online applications and a full suite of nearly 100 electronic forms.

A decade in, all that officials have to show for the effort is a single form that’s now available for online applications and a single type of fee that immigrants pay electronically. The 94 other forms can be filed only with paper.

This project, run by U.S. Citizenship and Immigration Services, was originally supposed to cost a half-billion dollars and be finished in 2013. Instead, it’s now projected to reach up to $3.1 billion and be done nearly four years from now, putting in jeopardy efforts to overhaul the nation’s immigration policies, handle immigrants already seeking citizenship and detect national security threats, according to documents and interviews with former and current federal officials.

The article is here, hat tip goes to Felix Salmon.

Bhagwan Chowdhry, a professor of finance at UCLA, has nominated Satoshi Nakamoto, the creator of Bitcoin, for a Nobel prize in economics. It’s an excellent choice. Nakamoto made a fundamental breakthrough that combined cryptography and a distributed database to create the first decentralized cryptocurrency. Moreover, Nakamoto implemented his theoretical breakthrough to create a working cryptocurrency with real benefits to potentially billions of consumers.

Chowdry writes:

The invention of bitcoin — a digital currency — is nothing short of revolutionary….It offers many advantages over both physical and paper currencies. It is secure, relying on almost unbreakable cryptographic code, can be divided into millions of smaller sub-units, and can be transferred securely and nearly instantaneously from one person to any other person in the world with access to internet bypassing governments, central banks and financial intermediaries such as Visa, Mastercard, Paypal or commercial banks eliminating time delays and transactions costs.

But beyond demonstrating the possibility of creating a reliable digital currency, Satoshi Nakamoto’s Bitcoin Protocol has spawned exciting innovations in the FinTech space by showing how many financial contracts — not just currencies — can be digitized, securely verified and stored, and transferred instantaneously from one party to another.

…Not only will Satoshi Nakamoto’s contribution change the way we think about money, it is likely to upend the role central banks play in conducting monetary policy, destroy high-cost money transfer services such as Western Union, eliminate the 2-4% transactions tax imposed by intermediaries such as Visa, MasterCard and Paypal, eliminate the time-consuming and expensive notary and escrow services and indeed transform the landscape of legal contracts completely. Many industries such as Banking, Finance, Law will see a big upheaval. The consumers will be big beneficiaries and indeed the poor and marginal sections of the society will reap the benefits of financial and social inclusion in the coming decades. I can barely think of another innovation in Economic and Finance in the last several decades whose influence surpasses the welfare increases that will be engendered by Satoshi Nakamoto’s brilliant, path-breaking invention. That is why I am nominating him for the Nobel Prize in Economics.

Since no one knows who Nakamoto is it might seem difficult to award him a prize but Chowdry notes that bitcoin itself provides a solution:

The Nobel committee can easily buy bitcoins for the award money from any reputed online Bitcoin exchange and transfer it to him instantaneously. A very early bitcoin transaction suggests that the bitcoin address 1HLoD9E4SDFFPDiYfNYnkBLQ85Y51J3Zb1 likely belongs to him. Of course, he could easily and verifiably let the committee know which address he wants the money to be transferred to.

The Amazon bookstore (hi, future!)

by on November 5, 2015 at 10:21 am in Books, Web/Tech | Permalink

Every book is tagged with a custom label featuring its aggregate rating on Amazon.com, along with a review from the website. There are no prices. To get a book’s price, you must use the Amazon app on your smartphone to scan the barcode. This act will provide you with the product listing, all the title’s reviews on Amazon.com, and the price. If you don’t have a smartphone or the app handy, associates are on hand to assist.

An associate at the store also confirmed what many news reports about Amazon Books have stated, that the store only stocks books with Amazon.com ratings of four stars and above [TC: is this really wise?]. The associate also confirmed that prices for books in the store are identical to those of the books sold online. And, since book prices on Amazon.com can fluctuate regularly, so can prices in the store. The associate said one thing they are vigilant about in the store is ensuring customers don’t get confused by receiving different price quotes at different times.

The store, which aims to seamlessly transition the online shopping experience to a real world scenario, allows you to use credits associated with your account at the register. However, you cannot order merchandise online and have it delivered to the store.

There is more here, interesting throughout, via M.  Can anyone from Seattle report on this?

A man dubbed the Drone Slayer for shooting a miniature aircraft out of the sky has had a criminal case against him thrown out.

William Meredith drew his shotgun and took out a Phantom 3 drone after spotting it above his home in Hillview, Kentucky, this summer – landing him in jail and prompting legal proceedings.

Mr Meredith was charged with criminal mischief and wanton endangerment for destroying the $900 drone in July – but this week had both of them thrown out by a judge.

There is more here, via the excellent Mark Thorson.  And here is a previous installment in the series.

The standard story is that traffic deaths will dwindle, cities will spread out magnificently, and you’ll all be reading MR on your morning commute rather than fighting the traffic.  Maybe so, but what other options are at least worth considering, if only out of contrarian orneriness?:

1. Driverless cars are not actually much better than the really good German streetcar systems.  Those come closer to door-to-door service than many people realize, and of course they have lower energy and congestion costs.

2. The need for exact mapping of streets will restrict driverless vehicles to well-known, well-trodden paths, much like bus lines.  There is nothing wrong with that, but ultimately it won’t do more than save the cost of the bus driver.  Or worse yet — some automobile lanes may be turned over to municipal driverless vehicles in a way which makes traffic problems worse.  It will end up as a way to push cars out of the picture, without building up the broader mass transit network very much.

3. Driverless cars will give governments a chance to “redo” the whole driving side of American life.  Is this so great?  (Imagine if we had to write a new Constitution today.)  Just think, with driverless cars and laissez-faire there will be so many car trips, a city might collapse under the weight of its own congestion.  So a quantity-rationed system will be introduced, and ultimately all of driving will end up more controlled and more regulated, based on licenses in fact and no I don’t mean drivers’ licenses.

Most generally, your predictions for driverless cars should depend heavily upon: a) will there be rational congestion pricing?, and b) how rapidly will cities rezone to take advantage of the new opportunities?  I am not sure we should be especially optimistic about either a) or b).

Or put it this way: the absence of congestion pricing in most major urban centers means we are already bad at running roads, for whatever public choice reasons.  So maybe we’ll get a bad version of driverless cars too.

For a conversation related to this post I am indebted to Alex Tabarrok and also Joe Bous.

The title says it all.  That is the new book by Shane Greenstein of Harvard Business School, the subtitle is Innovation, Privatization, and the Birth of a New Network.  This extensive history is the best counter I know to the view that the internet as we know it was most of all a government project.  Definitely recommended.

The self-tracking pill

by on October 15, 2015 at 1:30 pm in Medicine, Science, Web/Tech | Permalink

Some morning in the future, you take a pill — maybe something for depression or cholesterol. You take it every morning.

Buried inside the pill is a sand-sized grain, one millimeter square and a third of a millimeter thick, made from copper, magnesium, and silicon. When the pill reaches your stomach, your stomach acids form a circuit with the copper and magnesium, powering up a microchip. Soon, the entire contraption will dissolve, but in the five minutes before that happens, the chip taps out a steady rhythm of electrical pulses, barely audible over the body’s background hum.

The signal travels as far as a patch stuck to your skin near the navel, which verifies the signal, then transmits it wirelessly to your smartphone, which passes it along to your doctor. There’s now a verifiable record that the pill reached your stomach.

This is the vision of Proteus, a new drug-device accepted for review by the Food and Drug Administration last month. The company says it’s the first in a new generation of smart drugs, a new source of data for patients and doctors alike. But bioethicists worry that the same data could be used to control patients, infringing on the intensely personal right to refuse medication and giving insurers new power over patients’ lives. As the device moves closer to market, it raises a serious question: Is tracking medicine worth the risk?

That is from Russell Brandom.

There is a new Clay Shirky book

by on October 15, 2015 at 10:06 am in Books, Web/Tech | Permalink

Little Rice: Smartphones, Xiaomi, and the Chinese Dream, and here is a piece derived from the book.


Named Robocoach, the fitness-minded cyborg will be deployed to over 20 senior activity centres to help caregivers run exercise classes for residents.

The project is sponsored by Singapore’s Infocomm Development Authority as part of the government’s Smart Nation plan — a large-scale multibillion dollar government initiative to use Internet technologies to modernise different facets of Singaporean life and infrastructure.

There is more here.

While tech companies in America have focused on personal automated cars, China has gone big with what could be the beginning of mass, unmanned bus transit. The spacious vehicle, unveiled at the end of August after three years of development, recently managed a 20-mile trip through the crowded city of Zhengzhou without crashing into other motorists or bursting into flames. That same driver stayed behind the wheel, true, but maybe as technology progresses he’ll be replaced with a Johnny-Cab robot.

There is more here, including photos and video, via Air Genius Gary Leff.

You can already rate restaurants, hotels, movies, college classes, government agencies and bowel movements online.

So the most surprising thing about Peeple — basically Yelp, but for humans — may be the fact that no one has yet had the gall to launch something like it.

When the app does launch, probably in late November, you will be able to assign reviews and one- to five-star ratings to everyone you know: your exes, your co-workers, the old guy who lives next door. You can’t opt out — once someone puts your name in the Peeple system, it’s there unless you violate the site’s terms of service. And you can’t delete bad, inaccurate or biased reviews — that would defeat the whole purpose.

Imagine every interaction you’ve ever had suddenly open to the scrutiny of the Internet public.

The piece is by the excellent Caitlin Dewey.  Currently the company is valued at $7.6 million.

That is the title of my new piece in MIT Technology Review. It’s about a near future where bosses can measure the productivity of workers through software and surveillance more accurately than is now the case.  Productivity will go up, but it is not all rosy, here is one excerpt:

Individuals don’t in fact enjoy being evaluated all the time, especially when the results are not always stellar: for most people, one piece of negative feedback outweighs five pieces of positive feedback. To the extent that measurement raises income inequality, perhaps it makes relations among the workers tenser and less friendly. Life under a meritocracy can be a little tough, unfriendly, and discouraging, especially for those whose morale is easily damaged. Privacy in this world will be harder to come by, and perhaps “second chances” will be more difficult to find, given the permanence of electronic data. We may end up favoring “goody two-shoes” personality types who were on the straight and narrow from their earliest years and disfavor those who rebelled at young ages, even if those people might end up being more creative later on.

The closer is this:

I wonder, by the way, if MIT Technology Review will tell me how many people clicked on this article.

Do read the whole thing.

Claims about cars

by on September 27, 2015 at 2:21 pm in Current Affairs, Economics, Law, Science, Web/Tech | Permalink

New high-end cars are among the most sophisticated machines on the planet, containing 100 million or more lines of code. Compare that with about 60 million lines of code in all of Facebook or 50 million in the Large Hadron Collider.

The Gelles, Tabuchi, and Dolan NYT piece is interesting throughout.  I thought of a parallel with empirical research in economics.  In the 1980s, often you could pick up a research paper and know rather quickly how good it was, if only by glancing at the basic technique and source of data.  These days the model, estimation, and data collection are so complicated and non-transparent that the errors, however large or small they be, are very difficult to find.