From the WSJ:

Clarivate Analytics, formerly a unit of Thomson Reuters, maintains a list of possible Nobel Prize winners based on research citations. New additions to its list this year were Colin Camerer of the California Institute of Technology and George Loewenstein of Carnegie Mellon University (“for pioneering research in behavioral economics and in neuroeconomics”); Robert Hall of Stanford University (“for his analysis of worker productivity and studies of recessions and unemployment”); and Michael Jensen of Harvard, Stewart Myers of MIT and Raghuram Rajan of the University of Chicago (“for their contributions illuminating the dimensions of decisions in corporate finance”).

Dozens of additional names appear on Clarivate’s list of possible future economics winners, including prominent figures on the American economics scene like Stanford’s John Taylor, a monetary-policy scholar who President Donald Trump is said to be considering for Federal Reserve chairman; Paul Romer of New York University, an expert on economic growth and the chief economist at the World Bank; Martin Feldstein of Harvard, who was chairman of the White House Council of Economic Advisers under President Ronald Reagan and has studied pensions, taxation and other topics in public finance; William Nordhaus of Yale University, who has studied climate change; Dale Jorgenson of Harvard, who has studied productivity; Robert Barro of Harvard, who has researched economic growth; Oliver Blanchard of the Peterson Institute for International Economics, the former top economist at the International Monetary Fund; and Richard Thaler of the University of Chicago, who has studied behavioral economics.

Former Fed chairman Ben Bernanke’s name has been floated in the past, given his academic work on the Great Depression, and his longtime collaborator Mark Gertler of NYU appears on the Clarivate list.  So does Richard Posner, the recently retired federal judge who has written on the intersection of law and economics.

I’ve never once been right, but this year I’ll predict William Nordhaus (“Green Accounting”) and Martin Weitzman (climate change and economics of risk).

China fact of the day

by on October 6, 2017 at 12:38 pm in Uncategorized | Permalink

In China, 164 people drown every day — many of them children who can’t swim

Here is further information.  Elsewhere, Camille Paglia chats with…Jordan Peterson.

Friday assorted links

by on October 6, 2017 at 11:07 am in Uncategorized | Permalink

It seems to have been a largely pro-education, egalitarian development, at least according to a new research paper by Richard Murphy, Judith Scott-Clayton, and Gillian Wyness:

Despite increasing financial pressures on higher education systems throughout the world, many governments remain resolutely opposed to the introduction of tuition fees, and some countries and states where tuition fees have been long established are now reconsidering free higher education. This paper examines the consequences of charging tuition fees on university quality, enrollments, and equity. To do so, we study the English higher education system which has, in just two decades, moved from a free college system to one in which tuition fees are among the highest in the world. Our findings suggest that England’s shift has resulted in increased funding per head, rising enrollments, and a narrowing of the participation gap between advantaged and disadvantaged students. In contrast to other systems with high tuition fees, the English system is distinct in that its income-contingent loan system keeps university free at the point of entry, and provides students with comparatively generous assistance for living expenses. We conclude that tuition fees, at least in the English case supported their goals of increasing quality, quantity, and equity in higher education.

I have long been of the view that free tuition for U.S. state schools would be an educational disaster.

How important are sectoral shocks?

by on October 6, 2017 at 1:00 am in Economics | Permalink

Enghin Atalay has a piece on that topic in the American Economic Journal: Macroeconomics, here is the abstract with emphasis added by me:

I quantify the contribution of sectoral shocks to business cycle fluctuations in aggregate output. I develop and estimate a multi-industry general equilibrium model in which each industry employs the material and capital goods produced by other sectors. Using data on US industries’ input prices and input choices,I find that the goods produced by different industries are complements to one another as inputs in downstream industries’ production functions. These complementarities indicate that industry-specific shocks are substantially more important than previously thought, accounting for at least half of aggregate volatility.

There is another recent paper, this one by Ernesto Pasten, Raphael Schoenle, and Michael Weber, an NBER Working Paper.  From p.3:

…heterogeneity in price rigidities changes the identity of sectors from which aggregate fluctuations originate, and generates GDP volatility from sectoral shocks independent of the sector-size distribution and network centrality.

In other words, sector-specific shocks are underrated as causes of aggregate fluctuations, most of all in the economic blogosphere.

Thursday assorted links

by on October 5, 2017 at 12:42 pm in Uncategorized | Permalink

That is the topic of my latest Bloomberg column, here is one excerpt:

We do not live under political normalcy, so traditional standards are not enough to guide this choice. In an age of consensus, it might be wise to nominate the candidate who knows the most about monetary policy, or who commands the most respect on Wall Street. Those remain significant factors, but the most important job of the next candidate is to prevent a polarization of opinion within the Fed itself.

I do consider some specific names at the link.

Google is the first major tech company to build the Babel fish.

The search company, which is now making a slew of its own hardware products, announced the Google Pixel Buds at a San Francisco event today (Oct. 4). The earbuds connect wirelessly with Google’s latest smartphones, but more importantly, they’re able to access Google Assistant, the company’s virtual personal concierge, which launched exactly a year ago. Through this software, Google claims the earbuds can translate 40 spoken languages nearly in real time—or at least, fast enough to hold a conversation.

Here is the story at Quartz.  It’s funny how economists used to come up with theories that platform monopolies would stifle innovation…

One of the most blatant violations of the rules against touching saliva among other taboos is described by Dubois…in his [1906] account of one of the “disgusting religious orgies” he so meticulously depicts.  In these orgies, not only do men and women eat meat and drink alcoholic beverages, but they transgress the normal saliva prohibition.  I cannot possibly improve upon Dubois’ vivid word picture: “In this orgy called sakti-puja, the pujari, or sacrificer who is generally a Brahman, first of all tastes the various kinds of meats and liquors himself, then gives the others permission to devour the rest.  Men and women thereupon begin to eat greedily, the same piece of meat passing from mouth to mouth, each person taking a bite until it is finished.  Then they start afresh on another joint, which they gnaw in the same manner, tearing the meat out of each other’s mouths.  When all the meat has been consumed, intoxicating liquors are passed around, every one drinking without repugnance out of the same cup.

That is from the quite interesting Two Tales of Crow and Sparrow: A Freudian Folkloristic Essay on Caste and Untouchability, by Alan Dundes.

Growth in the all-important US services sector picked up sharply in September, providing further evidence that the recent string of hurricanes that battered swathe of southeastern US is unlikely to have a significant impact on US third quarter growth.

The Institute for Supply Management’s non-manufacturing gauge came in at 59.8 last month – the highest reading since August 2005. It is a sharp leg up from the reading of 55.3 recorded in August and easily trounced expectations for it to dip to 55.1.

Readings above 50 point to expansion, while those below indicate contraction.

The services sector, which includes professional services, healthcare and other non-manufacturing industries, makes up about 80 per cent of US gross domestic product.

The report comes just days after another ISM survey showed US manufacturing activity grew at its fastest pace in more than 13 years in September and reinforces the view in the market that US economic recovery remains on course for the second half of the year.

That is from Pan Kwan Yuk at the FT, file under “The Show So Far.”

Sentence of the Day

by on October 4, 2017 at 3:35 pm in Economics | Permalink

…we show that the industries where concentration has risen the most are also those where there has been the fastest growth in productivity and innovation.

From Van Reenen and Patterson at HBR based on The Fall of the Labor Share and the Rise of Superstar Firms.

Wednesday assorted links

by on October 4, 2017 at 2:06 pm in Uncategorized | Permalink

Baseball fact of the day

by on October 4, 2017 at 11:30 am in Uncategorized | Permalink

Statistics showing precisely when starting pitchers become less effective have prompted teams to remove them from games earlier than before. That has increased one of the biggest drags on pace of play: pitching changes. Regular-season games this year saw an average of 8.4 pitchers used between both teams, an all-time high. That’s up from 5.8 pitchers a game 30 years ago.

This to me seems deadly:

Games this season saw an average gap of 3 minutes, 48 seconds between balls in play, an all-time high.

And the average game is now three hours, five minutes long.

That is from a WSJ article, by Brian Costa and Jared Diamond, about how the quants are slowing down the game of baseball.

Hat tip goes to Cliff Asness.

Here’s the latest video from Principles of Macroeconomics at MRUniversity. As always these videos can be used with any textbook but they go great with the best textbook, Modern Principles of Economics. The video is on situations when fiscal policy doesn’t work well or can even reduce growth and GDP.

The European Commission backed Madrid in describing the vote as illegal and said an independent Catalonia would not be part of the union. President Trump also rejected the independence movement; the Catalan nationalists’ only backers are separatist-ruled Scotland, the pariah government of Venezuela and Russia’s intelligence and propaganda apparatus, which mobilized its media outlets and social media bots in support of the separatists. Moscow evidently perceives the Catalan movement as another vehicle for dividing and weakening the democratic West.

That is from the Washington Post editorial board.  Hat tip goes to AC.