The AEA is profiling research from all seven of our journals covering the wide range of topics that economists study. Follow us on Twitter for the latest updates.
For the pointer I thank Aaron Sojourner.
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.
2. Monitoring your dog (there is no great stagnation).
The 2008-9 survey Trajectoires et origines shows that forty-four percent of the descendants of masculine immigrants of Algerian or Moroccan origin have a spouse who is neither an immigrant nor a descendant of immigrants. The rate rises to 60 percent for those of Tunisian origin, falls to 42 percent for those of Turkish origin, rises back to 65 per cent for those of sub-Saharan African origin (we cannot, in this latter case, distinguish between Muslims and non-Muslims). For women, the rates are a little lower, which is to be expected in disintegrating patrilineal cultures, but they remain at a very high level for those of Algerian (41 per cent), Moroccan (34 per cent) and sub-Saharan African (40 per cent) origin…But while exogamy is not yet a major practice, these groups have clearly been welded to French society…We need at this point to emphasize the speed with which populations from sub-Saharan Africa have integrated…
What is the driving force behind the cyclical behavior of unemployment and vacancies? What is the relation between job creation incentives of firms and stock market valuations? This paper proposes an explanation of labor market volatility based on time-varying risk, modeled as a small and variable probability of an economic disaster. A high probability of a disaster implies greater risk and lower future growth, which lowers the incentives of firms to invest in hiring. During periods of high disaster risk, stock market valuations are low and unemployment rises. The risk of a disaster generates a realistic equity premium, while time- variation in the disaster probability generates the correct magnitude for volatility in vacancies and unemployment. The model can thus explain the comovement of unemployment and stock market valuations present in the data.
That is a new NBER working paper.
Huckleberry Finn has been translated into Chinese no fewer than ninety times.
That is from new and intriguing Mark Twain in China, by Selina Lai-Henderson.
I had not known that Twain played a significant role in speaking up for the Chinese in America, and fighting the prejudice against them. Later in his career he described himself as an “anti-imperialist” and “Chinese Boxer” in the fight against Western imperialism. Lai-Henderson notes:
In one of his anti-imperialist writings, “The United States of Lyncherdom” (1901), he urged American missionaries to leave China, for they should “come home and convert these Christians!”
5. Largest age cohort by county. Look at the northeast.
The New York Times covers a controversy about a Texas history textbook:
Coby Burren, 15, a freshman at a suburban high school south of here, was reading the textbook in his geography class last week when a map of the United States caught his attention. On Page 126, a caption in a section about immigration referred to Africans brought to American plantations between the 1500s and 1800s as “workers” rather than slaves.
The black lives matter movement is upset that slaves are referred to as workers.
I am upset that the caption is factually incorrect even if rewritten not to use the word worker. In particular, it is not true that millions of slaves were brought from Africa to the southern United States. In fact, less than half a million came to the United States.
Here is Henry Louis Gates Jr:
The most comprehensive analysis of shipping records over the course of the slave trade is the Trans-Atlantic Slave Trade Database, edited by professors David Eltis and David Richardson. (While the editors are careful to say that all of their figures are estimates, I believe that they are the best estimates that we have, the proverbial “gold standard” in the field of the study of the slave trade.) Between 1525 and 1866, in the entire history of the slave trade to the New World, according to the Trans-Atlantic Slave Trade Database, 12.5 million Africans were shipped to the New World. 10.7 million survived the dreaded Middle Passage, disembarking in North America, the Caribbean and South America.
And how many of these 10.7 million Africans were shipped directly to North America? Only about 388,000. That’s right: a tiny percentage.
Here is the primary database for what we know about the Atlantic Slave Trade which lists 305,326 slaves brought to the USA. Gates goes on to note that some 60-70 thousand slaves initially brought to the Caribbean ended up in the United States so he estimates that perhaps 450,000 African slaves in total were brought to the U.S. over the course of the slave trade.
If you want to understand the slave trade it’s important to understand that the vast majority of the slaves taken from Africa were shipped to the Caribbean and South America. If you want to understand slavery in America it’s important to understand that most slaves in the United States were born into slavery. Also, as Gates notes, it’s a rather striking and amazing fact that “most of the 42 million members of the African-American community descend from this tiny group of less than half a million Africans.”
Regardless of whether you think that slaves are workers or not the textbook failed its students by getting the facts wrong. In a better culture, that failure would make for a controversy and a story in the New York Times.
Hat tip: Arthur Charpentier on twitter.
1. When it comes to South Carolina, he is a cornball, but a likable one.
2. He played Strato-O-Matic baseball as a kid. No mention of Jim Bunning in that context.
3. After two years at Harvard, he had taken only Econ 101. Later Dale Jorgensen became his mentor.
4. He is a fan of Borges, with the influence coming from his wife, who has taught Spanish literature.
5. He regrets his earlier tough rhetoric on the Japanese central bank.
6. Greenspan’s marriage proposal to Andrea Mitchell was riddled with his trademark ambiguity. Bernanke, in contrast, proposed after two months of courtship.
7. Bernanke underestimated the extent of the housing bubble. Various negative consequences were to ensue from the collapse of housing prices.
8. “I had never gone overboard on libertarianism…”
9. Ben got really, really mad at the AIG chief executives, in fact he “seethed.”
10. The Fed did not have a good, legal way to bail out Lehman. It needed a buyer, and no buyer was to be found. A short-term infusion of cash would not have sufficed. And Ben was afraid at the time that if he confessed the Fed’s impotence in this regard, the market reaction would have been negative.
11. The idea of a mortgage cram down made good sense but was never politically feasible.
12. “So, by setting the interest rate we paid on reserves high enough, we could prevent the federal funds rate from falling too low.”
13. I found the discussions of Wachovia and WaMu came the closest to offering new perspective and information. Perhaps he was able to say more because these actions did not skirt the possibility of the Fed exceeding its mandate.
14. He had a favorable impression of the frankness of John McCain.
15. He thought QE should been done through the purchase of corporate bonds, but the Fed didn’t have the right kind of authority at that time.
16. He argues that the idea of ngdp targeting is too complicated and could not easily be made credible, given that the Fed has built up its reputation as an inflation fighter. It also raises the risk that a non-credible ngdp target wouldn’t boost output, but would deliver price inflation, thereby resurrecting stagflation as a potential problem. (By the way, here is Scott’s response.)
17. He is still upset at the coverage he received from Paul Krugman.
18. In Nunavut he passed on raw seal meat and a dogsled ride.
The bottom lines: This book has way, way more economics than I expected and probably more than the publisher wanted. It really is Ben’s attempt to defend his place in history, and yes the book does deliver a huge dose of Bernanke. This is not ghostwritten fluff. It does not however dish much “dirt” or shed much new light on the key episodes of the financial crisis. Both in public and in the book Ben has been extremely gentlemanly. Still, as I kept on reading I could not escape the feeling that he is deeply, deeply annoyed by many of his critics, and very much determined to tell the story from his point of view. That is what you get from this book.
Information is convex to noise. The paradox is that increase in sample size magnifies the role of noise (or luck); it makes tail values even more extreme. There are some problems associated with big data and the increase of variables available for epidemiological and other “empirical” research.
Here is a bit more information:
Greater performance for (temporary) “star” traders We are getting more information, but with constant “consciousness”, “desk space”, or “visibility”. Google News, Bloomberg News, etc. have space for, say, <100 items at any point in time. But there are millions of events every day. As the world is more connected, with the global dominating over the local, the number of sources of news is multiplying. But your consciousness remains limited. So we are experiencing a winner-take-all effect in information: like a large movie theatre with a small door. Likewise we are getting more data. The size of the door is remaining constant, the theater is getting larger. The winner-take-all effects in information space corresponds to more noise, less signal. In other words the spurious dominates.
That is from a Marc Andreessen link (but what is the source?). He also links to the March Playboy piece on why the world is getting weirder all the time, previously linked by MR but worth a reread nonetheless.
The Martian is the most Randian movie in years, perhaps in decades. Ayn Rand is best known for her defense of capitalism but her defense of reason was even more fundamental to her thought. The Martian has no bearing on politics but it reminded me of Rand’s essay on Apollo 11 and the moon landing, the launch of which she witnessed from Kennedy Space Center.
Rand wrote that the Apollo 11 mission “conveyed the sense that we were watching a magnificent work of art – a play dramatizing a single theme: the efficacy of man’s mind.” The efficacy of man’s mind and the power of reason is exactly the theme of The Martian.
As Rand continued:
That we had seen a demonstration of man at his best, no one could doubt…And no one could doubt that we had seen an achievement of man in his capacity as a rational being–an achievement of reason, of logic, of mathematics, of total dedication to the absolutism of reality.
The difference is that Apollo 11 gave the sense that we were watching a magnificent work of art but it was real. While the Martian gives the sense that we are watching something real but it is a magnificent work of art. Have we not been diminished? Nevertheless, the sense of life of the event and the movie are the same and the movie is gripping, thrilling and uplifting, a triumph for Ridley Scott and the author, Andy Weir.
Addendum: See Tyler’s review as well.
Nathan Robinson of Harvard has an opinion:
In this paper, I take the position that a large portion of contemporary academic work is an appalling waste of human intelligence that cannot be justified under any mainstream normative ethics. Part I builds a four-step argument for why this is the case, while Part II responds to arguments for the contrary position offered in Cass Sunstein’s “In Defense of Law Reviews.” First, in Part I(A), I make the case that there is a large crisis of suffering in the world today. (Part I does not take me very long.). In Part I(B), I assess various theories of “the role of the intellectual,” concluding that the only role for the intellectual is for the intellectual to cease to exist. In Part I(C), I assess the contemporary state of the academy, showing that, contrary to the theory advanced in Part I(B), many intellectuals insist on continuing to exist. In Part I(D), I propose a new path forward, whereby present-day intellectuals take on a useful social function by spreading truths that help to alleviate the crisis of suffering outlined in Part I(A).
At least it’s his only paper.
The pointer is from the excellent Kevin Lewis.
There are now websites dedicated to “kitlers” (cats that look like Hitler),YouTube videos that remix documentary footage to turn Hitler into a dexterous disco dancer, and innumerable parodic appropriations of Bruno Ganz’s psychotic rants in Oliver Hirschbiegel’s film Downfall that are refashioned to criticize a plethora of contemporary cultural discontents ranging from Kim Kardashian, traffic jams and Indian call centres to Rebecca Black’s song “Friday.” Disparate as they may sound, thse phenomena are, according to the American historian Gavriel D. Rosenfeld, all signs of a widespread “normalization” of Nazism in contemporary culture.
That is from Anna Katharina Schaffner’s review of Rosenfeld’s Hi Hitler! How the Nazi Past is Being Normalized in Contemporary Culture, September 11th issue of the TLS.
In that same TLS is this extraordinary Lidija Haas review of Ferrante, one of the best book reviews I’ve read in years.
And here is an interesting article on Nazi porcelain.
1. Larissa MacFarquhar, Strangers Drowning: Grappling with Impossible Idealism, Drastic Choices, and the Overpowering Urge to Help. Profiles of people who are obsessed with helping others. That is a wonderful premise for a book, somehow for my taste it didn’t run quite deep enough. Still, many people will like this one a great deal.
2. Nicholas Stargardt, The German War: A Nation Under Arms, 1939-1945. I read only about a fifth of this one. I thought it was a very high quality treatment of how German citizens perceived WWII, and also quite readable. It didn’t match my interests at the moment, but I am happy to recommend it.
3. J.M. Coetzee and Arabella Kurtz, The Good Story: Exchanges on Truth, Fiction and Psychotherapy. A running dialogue between Coetzee and a psychotherapist, some of it is interesting. Some of it. But after the early sections on the dangers of storytelling, I got bored. Surely at some point empiricial psychology deserved a mention.
4. Harry G. Frankfurt, On Inequality. A very short book, but longer than the blurb I wrote for it: “Economic equality is one of today’s most overrated ideas, and Harry G. Frankfurt’s highly compelling book explains exactly why.”
5. Philip E. Tetlock and Dan Gardner, Superforecasting: The Art and Science of Prediction. What makes some people very good at forecasting? Self-recommending, here is a good Q&A with Tetlock. The real question of course is why isn’t everyone working on this?