From the United Kingdom:
Manufacturers enjoyed a jump in demand that pushed growth to its fastest rate for more than two years and saw the sector take on thousands of new staff last month.
New orders were the strongest for almost 20 years and job creation accelerated, according to the Markit/CIPS UK Manufacturing PMI survey.
There is more here, and I will reiterate that this trend was not very well predicted by any macroeconomic school of thought, including liquidity trap theories, recent emphases on long-run secular stagnation, or for that matter the contrasting “of course there is mean reversion” approaches, which don’t tell us much about timing and which would appear to contradict the slow recoveries seen elsewhere. Spain, by the way, does not have an equivalent degree of cheer…
Let’s say 30-minute drone delivery to your home were legal, well-run, and, for purposes of argument, free or done at very low cost. You would buy smaller size packages and keep smaller libraries at home and in your office. Bookshelf space would be freed up, you would cook more with freshly ground spices, the physical world would stand a better chance of competing with the rapid-delivery virtual world, and Amazon Kindles would decline in value. Given that the storage costs for goods would fall (more storage by specialists, accompanied by later delivery), expected inflation would more likely be converted into price hikes today. The liquidity premium of money (NB: not currency) would rise and the liquidity premium of goods would fall. Some drug markets would be taken off the streets and the importance of gang “turf” would fall.
Addendum: What do we know about network economies in drone delivery systems? FedEx and UPS and USPS, taken together, dominate the market for physical delivery of parcels to homes. How much room would there be in the market for “lone drone” operators?
It is very important to serve up the other side of the story. Here is a 2013 paper by UCSD psychologist Hal Pashler:
While there has been much discussion of libertarians’ (generally although not universally favorable) attitudes toward liberal immigration policies, the attitudes of immigrants to the United States toward libertarian values have not previously been examined. Using data from the 2010 General Social Survey, we asked how American-born and foreign-born residents differed in attitudes toward a variety of topics upon which self-reported libertarians typically hold strong pro-liberty views (as described by Iyer et al., 2012). The results showed a marked pattern of lower support for pro-liberty views among immigrants as compared to US-born residents. These differences were generally statistically significant and sizable, with a few scattered exceptions. With increasing proportions of the US population being foreign-born, low support for libertarian values by foreign-born residents means that the political prospects of libertarian values in the US are likely to diminish over time.
The pointer is from Billy Willy. I would point out this is all the more true for the future of the economics profession, given how many recent graduate students come from outside the United States.
I had a free voucher from the summer, but decided not to go ahead with a saliva test. Here are my reasons:
1. I thought there is option value and I can always do a test later, for a better and more accurate service. (I hadn’t thought of the FDA shutting the whole thing down, but still I expect the service will return in some manner, if only under another corporate banner or from overseas.)
2. I thought the “worry cost” of negative information would exceed the benefit of whatever specific preventive measures I might take. Most useful ex ante preventive measures, such as diet and exercise, are fairly general in their application and I didn’t think there was likely much to be learned about specific measures for specific potential maladies. And here is an interesting short piece on the likelihood of false negatives.
3. One might take more preventive measures with one’s ex ante and more uncertain knowledge than with one’s ex post and more certain knowledge. For instance an absence of negative information might have encouraged me to slack on exercise, to the detriment of my eventual health outcomes.
4. I wouldn’t describe privacy concerns as my major worry, but at the margin still they counted for something. I felt eventually this service would prove equivalent to making my genome public information, via something called GenomeLeaks or the like. Why do that without having a better sense of its longer-run implications?
I’m glad I didn’t do it, glad I had the choice to decline to do it, and I am still feeling no temptation to do it in the future. I do feel a slight amount of guilt for not contributing to a future “Big Data” project, but so be it. I also am glad I am not contributing to some of the inevitably unethical uses to which eugenics will be put, and that is more than a counterbalance, given that I expect no practical benefit from reading my own test results.
James Hamilton directs our attention to a useful new paper on this topic by Alan Blinder and Mark Watson (pdf). Blinder and Watson conclude:
Democrats would no doubt like to attribute the large D-R growth gap to better macroeconomic policies, but the data do not support such a claim….It seems we must look instead to several variables that are mostly “good luck.” Specifically, Democratic presidents have experienced, on average, better oil shocks than Republicans, a better legacy of (utilization-adjusted) productivity shocks, and more optimistic consumer expectations (as measured by the Michigan ICE).
Perhaps one could attribute some of the “confidence gap” to policy differences, though the authors point out “…direct measures showing increasing optimism after Democrats are elected are hard to find.” In any case this paper is a useful corrective to some common claims about superior economic performance under Democratic Presidents. Invoking the partisan composition of Congress also does not seem to explain the observed patterns.
Since we are sometimes told that macroeconomic problems dwarf micro in importance (not a division of categories I would support, but you hear this often), well…draw your own conclusions.
Blinder and Watson also debunk a myth you commonly hear from conservatives:
In sum, with the exception of the Greenbook forecasts for the early part of the first Reagan administration, forecasts suggest little reason to believe that Democrats inherited more favorable initial conditions (in terms of likely future growth) from Republicans than Republicans did from Democrats.
This is interesting too:
There is, however, a slight tendency for both the nominal and real Federal funds rate to trend upward during Democratic presidencies and downward during Republican presidencies, suggesting that the Fed normally tightens under Democrats and eases under Republicans. Of course, such an empirical finding does not imply that the Fed is “playing politics” to favor Republicans. Rather, it is just what you would expect if the economy grows faster (with rising inflation) under Democrats and slower (with falling inflation) under Republicans—as it does.
In the UK, economic performance is overall better under the conservatives, although the difference is not statistically significant.
After World War II, commentators predicted that the welfare state would conspire with electric appliances to kill off domestic service. By 1947, 94 percent of households surveyed employed no help, and between 1951 and 1961 the number of domestic servants halved. However, Lethbridge’s story ends with a twist. Since 1978, household expenditure on domestic service has quadrupled, bringing the absolute number of domestics in London back to Victorian levels, according to some estimates.
That passage is from a Leah Price review of Lucy Lethbridge’s new book Servants: A Downstairs History of Britain From the Nineteenth Century to Modern Times.
Here is the latest:
It’s unlikely the majority of us are so overwhelmed with tweets, Facebook posts, emails and texts that we need someone – or something – to reply on our behalf.
However, this hasn’t stopped Google filing a patent for a system that would do just that.
According to the details of the latest patent filed by a software engineer at the firm, Google’s automated system would work like a social media bot and submit posts on a user’s behalf.
It would do this by scanning that user’s previous posts and replies on sites such as Facebook, Google+ and LinkedIn, as well as their emails and texts messages, to learn how that person writes.
The bot would then write replies and responses to future posts in a way that mimics that person’s usual language and tone.
The more a person uses the system, the more the bot can learn the type of responses they write and this would make the suggestions sound more human and realistic.
The full story is here. Some of you will recall that I discuss this possibility in Average is Over, and consider an equilibrium where many people secede from email altogether and the value of face time rises.
For the pointer I thank the excellent Mark Thorson.
Spain’s conservative government agreed on Friday to toughen penalties for unauthorized street protests up to a possible 600,000 euro ($816,000) fine, a crackdown that belies the peaceful record of the anti-austerity protests of recent years.
Leftists and civil rights activists have labeled the bill the “Kick in the teeth law” because it penalizes a battery of protest measures in what they say is a disregard for democracy in a country that only emerged from right-wing dictatorship in the late 1970s.
But Prime Minister Mariano Rajoy, whose People’s Party (PP) has an absolute majority in parliament, has said the Citizens’ Security Law guarantees freedom and will have the support of a majority of Spaniards.
“Offensive” slogans against Spain will be eligible for fines up to 30,000 euros. There is more here, via Pol Antras.
Reverse shoplifting edition, the link is from Japan by the way. As it is explained to me in an email:
(Del Monte whole kernel corn no salt added)
Canned corn and receipts
The artist takes one canned good to multiple supermarkets and re-buys it. This single can of corn has been re-bought from 105 supermarkets for a total of $113.07. ( as of June1, 2013 )
This procedure is possible because the stores have no way to identify individual items: the barcode printed on my can’s label, #240950, refers to its contents, and not to that particular can.
I suppose in expected value terms this is more rational and more profitable than non-reverse shoplifting, also known as shoplifting. For the pointer I thank Pamela Regis
Here is a good point about Japan:
If there’s one asterisk to put after the shocking comparative figures, it’s that the debt-to-GDP ratios don’t take into account Japan’s huge asset holdings. At the end of March 2012, Japan’s central government had assets totaling some Y600 trillion, roughly half of its total liabilities projected for next March, separate MOF data show. And those assets include Y250 trillion in cash, securities and loans. Critics often say Japan’s fiscal health could quickly improve if the government sells some of those assets, a step the MOF is reluctant to take partly on worries that doing so could deprive lawmakers of incentives to improve government finances.
Here is my July NYT column on related matters.
1. Using electronic medical records to correlate genes with illnesses.
2. It’s not always easy to retract a paper.
3. What is the best year for movies ever?
4. My 2011 post on the economics of Black Friday.
5. Are locality-backed minimum wage hikes the new trend? Keep in mind that unless you have the Sea-Tac airport or some comparably immobile resource in your district, it is harder to make them work if the wage change is local only. This is a classic instance of expressive voting at the expense of good economic policy.