Month: December 2009
You'll find a bunch here. Here is his seminal piece on public goods, three pages long. Here are quotations in appreciation of Samuelson, from Summers, Bernanke, and others. Lucas offered the following:
“Samuelson was the Julia Child of economics, somehow teaching you the basics and giving you the feeling of becoming an insider in a complex culture all at the same time. I loved the Foundations. Like so many others in my cohort, I internalized its view that if I couldn’t formulate a problem in economic theory mathematically, I didn’t know what I was doing. I came to the position that mathematical analysis is not one of many ways of doing economic theory: It is the only way. Economic theory is mathematical analysis. Everything else is just pictures and talk.”
It's mesmerizing to watch the rate at which the Twitter feed is adding messages.
You'll find free pdfs of some of his major articles here.
You'l find the paper here and it is one of the best introductions to Samuelson's method and writing style. The caveats at the very end, as to what an efficient markets hypothesis might mean, and what the probability distributions might mean, remain valuable reading to this day.
This passage (full article here) strikes me as something Arnold Kling would link to:
Take the nearly $47 billion in stimulus cash the White House has budgeted to prime the pump for health IT adoption. Mr. Bush says he's glad his industry is getting more attention from the bully pulpit, but that "It is kind of too bad that all these software companies that we're really close to putting out of business, these terrible legacy companies, with code that was written in the '70s, are going to get life support. That's why I call it the Sunny von Bülow bill. What it is, basically, is a federally sponsored sale on old-fashioned software."
"It's designed like a box-buying campaign," he continues. "You get this fixed chunk of money for a few years, you get to pay off your EMR, like its a thing. People in Washington think in terms of things that we'll buy and then they'll be there. Buildings. Roads. Tanks. What Lockheed Martin makes. Things.
"And this isn't that. This is a market: its a set of agreements, it's a language. What's needed is a way of exchanging value and making choices, that's ethical–and, you know, nobody, nobody, not nobody, has said a word about that.
Here is Rago on Medicaid:
State Medicaid programs, by the way, are easily the worst payers, according to Athena's annual ranking. In New York, for instance, claims must be tendered on a dead-tree form instead of electronically and in blue ink–black is grounds for rejection–and then go on to spend a full 161 days, or almost a half year, in accounts receivable.
I thank Yana for the pointer.
That's a new paper by Edward Miguel, Sebastian Saiegh, and Shanker Satyanath and here is the abstract:
In recent years scholars have begun to focus on the consequences of individuals’ exposure to civil war, including its severe health and psychological consequences. Our innovation is to move beyond the survey methodology that is widespread in this literature to analyze the actual behavior of individuals with varying degrees of exposure to civil war in a common institutional setting. We exploit the presence of thousands of international soccer (football) players with different exposures to civil conflict in the European professional leagues, and find a strong relationship between the extent of civil conflict in a player’s home country and his propensity to behave violently on the soccer field, as measured by yellow and red cards. This link is robust to region fixed effects, country characteristics (e.g., rule of law, per capita income), player characteristics (e.g., age, field position, quality), outliers, and team fixed effects. Reinforcing our claim that we isolate the effect of civil war exposure rather than simple rule-breaking or something else entirely, there is no meaningful correlation between our measure of exposure to civil war and soccer performance measures not closely related to violent conduct. The result is also robust to controlling for civil wars before a player’s birth, suggesting that it is not driven by factors from the distant historical past.
One question is whether such behavior occurs because the player's psyche has somehow been brutalized or whether it is a deliberate affect aimed at a violence-expecting audience back home. It's related to which variables might best predict the propensity of an NBA player to pick up technical fouls; would that be correlated with urban upbringing, the nature of the audience (home vs. away, TV vs. live crowd, etc.) or perhaps correlated with early brushes with the law?
If you wish to skim the results, start with p.25. The Colombian players pick up a lot of yellow cards.
The subtitle is What Happens When Other Countries Have the Money and the authors are Stephen S. Cohen and Brad DeLong. Here is an excerpt:
The Asian export-led growth model must — over time — transform itself to domestic consumption and prosperity models. The American borrow-and-import model will also have to shift — again, this takes considerable time — to a model of consumption-at-the-level-you-produce. And the need to keep the confidence of those who have the money that their money is well placed in the United States serves as a constraint on U.S. policy in a way that it has never been before.
In the last three paragraphs of the book the authors describe the various stimulus attempts as something that will "buy time," but will not be sufficient to alter this basic trajectory.
I know that not everything reported in the newspaper about terrorist sting operations is reliable information, but still this passage struck me as noteworthy:
Pakistani authorities on Saturday zeroed in on the alleged mastermind of a plot to send five Northern Virginia men to Afghanistan to kill U.S. troops,
Is that how you would allocate the five men? Yet even that was not allowed:
Saifullah was unsuccessful in convincing al-Qaeda commanders that the men were not part of a CIA plot to infiltrate the terrorist network. As a result, they were marooned for days in the eastern city of Sargodha, far from the forbidding mountains of the northwest that have become a terrorist haven.
I'm not pretending to know the real story, but "remove them from proximity to packed U.S. shopping malls, send them to Sargodha" is a strategy I can live with. Alternatively, you can take this as evidence that they really were CIA plants. In which case you can ease up about all the media stories today on homegrown U.S. terrorists, etc.
One of them was an accounting student at GMU; I wonder which one of us he had for Principles?
We might think of sub-Saharan subsistence economies when we think of
Fairtrade, but the biggest recipient of Fairtrade subsidy is actually
Mexico. Mexico is the biggest producer of Fairtrade coffee with about
23% market share. Indeed, as of 2002, 181 of the 300 Fairtrade coffee producers were located in South America and the Caribbean. As Marc Sidwell points out,
while Mexico has 51 Fairtrade producers, Burundi has none, Ethiopia
four and Rwanda just 10 – meaning that "Fairtrade pays to support
relatively wealthy Mexican coffee farmers at the expense of poorer
The article offers many other points of interest. For instance:
By guaranteeing a minimum price, Fairtrade also encourages market
oversupply, which depresses global commodity prices. This locks
Fairtrade farmers into greater Fairtrade dependency and further
impoverishes farmers outside the Fairtrade umbrella. Economist Tyler
Cowen describes this as the "parallel exploitation coffee sector".
farms must not be more than 12 acres in size and they are not allowed
to employ any full-time workers. This means that during harvest season
migrant workers must be employed on short-term contracts. These rural
poor are therefore expressly excluded from the stability of long-term
employment by Fairtrade rules.
In other words, it's mostly a marketing gimmick.
1. Identity Economics: How Our Identities Shape our Work, Wages, and Well-Being, by George Akerlof and Rachel Kranton. There's a general question of how satisfying largely non-empirical treatments of this topic can be, but still the original papers behind this popular book are seminal.
2. Paul Collier, The Plundered Planet: Why We Must — and How We Can — Manage Nature for Global Prosperity. The book is not due out until May, yet I have a review copy. I admired Collier's essay on the ethical dimension of global warming, and I loved his The Bottom Billion, but I struggled to find a meaty part of this book.
3. Joan Schenkar, The Talented Miss Highsmith: The Secret Life and Serious Art of Patricia Highsmith. I can't recall having read a more sprawling, messy, obsessive, and personal biography than this one. Here's a typical bit: "Still, this fan, who knew all about cats, was allowed to select a seal-point Siamese kitten for Pat, and he and his aunt sometimes looked after Pat's cats on her trips away. One night — the circumstances were complicated and involved a fight with current lover, Jacqui — Pat ended up sleeping in the aunt's bed, where, for once, Pat herself was on the receiving end of an unwelcome sexual advance."
I don't think I can read it through to the end, but still I wish to issue a yelp of approval. By the way, she kept 300 snails as pets. Read the first Amazon review. This biography did cause me to order more of her work, namely the first novel, with the lesbian love story. Here is an NYT review of the book, which is in any case unique and revelatory.
I've been reading, and putting down, lots of other books. I've also been reading the complete letters of van Gogh, for a longer review. They are splendid.
This one is not so easily excerptable, but it's one of the best pieces-with-graphics I've seen all year. It's about all the "nudge" tricks which go into designing menus, and how to avoid being fooled by them.
You really do need the image with it (best is to buy the New York issue), but if you insist on an excerpt, here's one:
5. Columns Are Killers
According to Brandon O’Dell, one of the consultants Poundstone quotes in Priceless, it’s a big mistake to list prices in a straight column. “Customers will go down and choose from the cheapest items,” he says. At least the Balthazar menu doesn’t use leader dots to connect the dish to the price; that draws the diner’s gaze right to the numbers. Consultant Gregg Rapp tells clients to “omit dollar signs, decimal points, and cents†‰…†‰It’s not that customers can’t check prices, but most will follow whatever subtle cues are provided.”
The believe-it-or-not superlatives are so extreme and Tom Swiftian they make you smile. The L.H.C. is not merely the world’s largest particle accelerator but the largest machine ever built. At the center of just one of the four main experimental stations installed around its circumference, and not even the biggest of the four, is a magnet that generates a magnetic field 100,000 times as strong as Earth’s. And because the super-conducting, super-colliding guts of the collider must be cooled by 120 tons of liquid helium, inside the machine it’s one degree colder than outer space, thus making the L.H.C. the coldest place in the universe.
The article is here, via Yves Smith and Jim Crozier.
Way back when, before 1936, Alvin Hansen carried the torch. These days, don't listen to what they say, watch what they do:
Harvard announced Thursday that it would indefinitely suspend construction on a high-tech science complex in the Allston neighborhood of Boston because of money problems.
This was to have been the showcase of the previous regime. A lot of the work has been done, but it doesn't look like they'll ever complete the project in anything resembling finished form. The scientists will never move there. The associated spaces for retail outlets won't be much populated. Etc. The full story is here.
2. Portfolio theory: does "green buying" make you more of a jerk?
6. John Storm Roberts passes away; a career I very much admired and his books I loved.
7. Profile of Karl Case, who is retiring.