Month: January 2006

Facts about Argentine inflation

1. Twenty years ago the inflation rate was about 5000 percent annually.

2. Argentina has been growing at nine percent for three years now.

3. By paying off its IMF debt, the central bank is trading in U.S. dollars for Argentina government bonds.

4. The current one-week repo rate is at 5 percent.

5. The price inflation rate is running about 12 percent.

6. Striking Buenos Aires subway workers asked for a 58 percent wage increase.  They received a 22 percent boost but with the right to renegotiate in a few months’ time.

7. Nestor Kirchner, the President of Argentina, enjoys unprecedented approval ratings of 75 percent.

8. Kirchner has moved to build an alliance with Hugo Chavez.

9. Kirchner will not admit he has made any mistakes, and he is seeking greater control over judicial nominations, and perhaps over the media as well.

10. He is seeking to extend his emergency powers over this economy.  Supermarkets had agreed to temporary price freezes, but these may be renewed and broader wage and price controls may be coming.

Would anyone care to guess the inflation rate in Argentina three years from now?  On the positive side, the country is running a budget surplus (hey, maybe this would test the fiscal theory of the price level!?).  For these facts, see The Wall Street Journal 22 December p.A12 and this excellent New York Times article.

You didn’t really think I was done blogging about this place, did you?

Private Education in India

Sebastian Mallaby has a good column on the explosion in private schooling in India and the implications for theories of development:

More than four out of five Indian engineering students attend
private colleges, whose potential growth seems limitless. …

Something similar is happening to the Indian
school system…Since the early 1990s the percentage of 6-to-14-year-olds
attending private school has jumped from less than a tenth to roughly a
quarter of the total in that cohort, according to India’s National
Council of Applied Economic Research. And this number may be on the low
side. James Tooley of the University of Newcastle in Britain has found
that in some Indian slums about two-thirds of the children attend
private schools, many of which are not officially recognized and so may
escape the attention of nationwide surveys.

The causes of this
private-school explosion shed interesting light on debates about
development, not just in India but throughout the poor world. The
standard assumption among anti-poverty campaigners is that education
leads to development…the recent private-education boom in India shows how causality can also
flow the other way…Since India embraced the
market in the early 1990s, parents have acquired a reason to invest in
education; they have seen the salaries in the go-go private sector, and
they want their children to have a shot at earning them… Once parents understand that education buys their kids into the new
India, they demand it so avidly that public money for schoolrooms
becomes almost superfluous.

… Apparently unconnected development policies —
cuts in tariffs and oppressive business regulation, or projects to
build roads and power grids — can sometimes stimulate new educational
enrollment at least as much as direct investments in colleges or

See my earlier post for some more references.

I know that we have a number of readers in and from India so comments are open if you have further information.

In praise of books

If you want to get recognition long-haul, it seems to me writing books is more contribution because most of us need orientation. In this day of practically infinite knowledge, we need orientation to find our way. Let me tell you what infinite knowledge is. Since from the time of Newton to now, we have come close to doubling knowledge every 17 years, more or less. And we cope with that, essentially, by specialization. In the next 340 years at that rate, there will be 20 doublings, i.e. a million, and there will be a million fields of specialty for every one field now. It isn’t going to happen. The present growth of knowledge will choke itself off until we get different tools. I believe that books which try to digest, coordinate, get rid of the duplication, get rid of the less fruitful methods and present the underlying ideas clearly of what we know now, will be the things the future generations will value. Public talks are necessary; private talks are necessary; written papers are necessary. But I am inclined to believe that, in the long-haul, books which leave out what’s not essential are more important than books which tell you everything because you don’t want to know everything. I don’t want to know that much about penguins is the usual reply. You just want to know the essence.

That is another bit from "You and Your Research," by Richard Hamming, do read this important piece.  Being an author of books, I am happy to hear this argument, but I can think of other strategies:

1. Influence the long-run by mattering now with specialized research; this is especially effective if social opinion has a "unit root" and persists (for purposes of contrast, imagine long-term mean reversion, in which case short-run victories wash out).  While you may get less long-term recognition, you will get more short-term recognition. 

2. Work on projects with the highest expected value of impact.

3. Build up a specialized field that will have long-run influence.  Take your pride in the progress of the field, not in how long your name sticks around.  What is so special about your name anyway?  (Analogy: would you rather your distant descendants know your name, know your contributions but not your name, or resemble you but not know either?  It is not obvious that the former option should win out.)

4. Do what you want.  If you don’t love your daily grind, it won’t matter for the scientific long-run anyway.

Comments are open…

Lester Brown vs. Broken Watch

It’s no contest.  A broken watch is correct twice a day.

Hundreds of millions of Chinese have been lifted out of abject poverty in the last several decades but trust Lester Brown to see the downside (Brown, of course, is sadly joined by Paul Krugman and neo-cons itching for another cold-war).  In his latest book, Brown argues that the Chinese will soon be eating little children.  Well, not exactly, but he does think that Chinese eating will cause little children to die.  Writing in the Washington Post, Bill McKibben summarizes the Brown argument (which he endorses):

The Chinese, in particular, are constantly converting farmland to
factory sites (even as they learn to eat more meat), and they have
plenty of American cash stored up to pay for any shortfall. But if they
do so, the first casualties will be the world’s really poor nations,
already reeling from increases in the price of fuel.

Of course this is an old story for Lester Brown who in 1973 said:

The soaring demand for food, spurred by continued population
growth and rising affluence, has begun to outrun the productive
capacity of the world’s farmers and fishermen.  The result has been
declining food reserves, skyrocketing food prices, food rationing in
three of the world’s most populous countries, intense international
competition for exportable food supplies, and export controls on major
foodstuffs by the world’s principal food supplier.

Isn’t it amazing how rising affluence leads directly to mass starvation?  Some people just can’t be happy. 

To be clear, I do think that issues of food production and demography are important  (although what is most important is regional poverty – I have few worries about global food production per se), it’s just Lester Brown who should not be taken seriously.

Daily Ablution has some good links on these issues.  Comments are open.

Argentina fact of the day

Circa 1910, percentage of Buenos Aires school children with two parents born in Argentina: 21 percent

Circa 1910, percentage of Buenos Aires school children with two parents born in Italy: 41 percent

That is from Ivonne Bordelois´s El pais que nos habla, a study of the evolution of Spanish in this wonderful, wonderful country.  But I am on my way home now, so we will move on to blogging about other locales, including good ol’ Washington D.C….

BPS Research Digest

More and more of you read us through an RSS feed, so I will direct your attention to a new item on our blogroll, the British Psychological Society Research Digest.  Every two weeks they post a series of articles on new psychology results, typically with relevance to social science.  Scroll through the site, or here is a recent piece on depression and sensitivity to the emotions of others.

Further subjective impressions of Argentina

…the good stores just don’t have the larger sizes for their finest items.  What else? 

Piegari was the best food, Olsen the best restaurant decor (they serve Swedish food, oddly enough), and Ataneo (the Santa Fe branch, set in a former Art Deco movie theater) is the most attractive bookstore I have seen anywhere.  If it wasn’t for that tiny matter of per capita wages, I would live here.  It is my favorite city, period.  I don’t care that I go to bed before most of them wake up; I am not that social anyway. 

The people here don’t seem very Catholic.  But most of the politics revolves what has happened to various dead bodies.  Older people still speculate about what happened to Eva’s corpse during its missing years, a topic fraught with political implications.  And for two decades the "desaparecidos" (disappeared ones), killed under the military dictatorship, have dominated the national consciousness.

When the New Year comes everyone rips out the pages of their old calendars and leaves them on the street.  It makes for a mess.  You can walk just about anywhere in the central bank without encountering hostile or even inquisitive security guards.

I recognized only one name on the top ten music charts, namely Madonna at number four.  The new Saramago book — not yet available in English — is number one in book sales.  Taxi drivers know not only Borges but also Ernesto Sabato. 

A quality apartment in an excellent part of town can sell for as little as $U.S. 50,000.  I have stocked up on DVDs of recent Argentine movies.

Have you heard of the appropriately-named "Faena Hotel and Universe"?  The Hotel as Womb.  The people who stay here (that’s not us) are pampered by a personal assistant and barely leave their quarters.  The modern world has not ceased to produce architectural wonders.

Get the bitter [amargo] chocolate ice cream.  Go to Uruguay with low expectations and you will be charmed. 

Tango shows are mostly a waste, unless you have an inside connection to a dance group or some good lessons.  And don’t be put off by the fact that two-thirds of your meals boil down to a choice of either lomo or pasta; both are superb.

Woe to the young Argentine woman who is perceived as overweight.

Our guide at Recoleta had indigenous features, but she insisted repeatedly (and to a foreign audience) that her family was white and she simply had too much of a sun tan.  She has been learning about the histories of the families in the graves since she was five years old; she can talk for hours about them without notes and has an opinion of each and every family and its moral character.  Auto-Icon, or the cemetary as Panopticon.

Why do so many stores and restaurants use the "ring the bell" system?  These are not diamond merchants seeking to protect their wares.  I suspect that clientele effects are especially strong in this city.  Perhaps "regulars" are more willing to ring the bell, and these same regulars are more valuable as customers.  Signalling is rampant.

Don’t expect major sights of the kind you find in a Frommer’s guidebook.  Use the Time Out guide to find experiences.

Contrary to what my wife thinks, people here are not happier than in the United States.  She won´t go to the parts of town that prove her wrong.  Nine years ago, there were no beggars opening taxi doors for you, expecting a peso in return.  The shanties near the airport are extreme.  The poor of Buenos Aires have it good compared to parts of northern Argentina, but Salta and Jujuy will have to wait for another trip.

Go to Kumana’ for the best corn empanadas, fifty cents a piece.  El Obrero is excellent Italian home cooking, with amazing soccer decor, again for a pittance.  Cafe Uriarte was first-rate.  La Brigada has the best baby lamb intestines you can imagine.

You have a status quo bias.  And like most people, you probably overinvest in goods and underinvest in experiences.  Get off your bum and go.  Many major cities in the USA have direct connections to Buenos Aires.  You fly overnight and sleep on the plane.  You wake up in a new universe. 

In the meantime, thank god or luck that you were born where you were, unless of course that was northern Argentina.  Happy New Year to you all.

The ten sexiest geeks?

The list is by, and one of them is an economist.  Excerpt:

Paul Zak, co-chair of economics at Claremont Graduate University, for teaching us about the "trust hormone," oxytocin, and whittling away at some long-held myths about the sexes. In a recent study he found that men, not women, react hormonally when they’re not trusted, and that men tend to take negotiations over money personally. With all that, it’s almost not fair he’s such a looker.

Dare I reveal my Austrian roots and ask sexy to whom?  Sexy to geeks perhaps?  They um…need more women on this list.