Month: November 2011

“The quantum state cannot be interpreted statistically”

The summary is here, the new paper is here (pdf), abstract:

Quantum states are the key mathematical objects in quantum theory. It is therefore surprising that physicists have been unable to agree on what a quantum state represents. There are at least two opposing schools of thought, each almost as old as quantum theory itself. One is that a pure state is a physical property of system, much like position and momentum in classical mechanics. Another is that even a pure state has only a statistical significance, akin to a probability distribution in statistical mechanics. Here we show that, given only very mild assumptions, the statistical interpretation of the quantum state is inconsistent with the predictions of quantum theory. This result holds even in the presence of small amounts of experimental noise, and is therefore amenable to experimental test using present or near-future technology. If the predictions of quantum theory are confirmed, such a test would show that distinct quantum states must correspond to physically distinct states of reality.

I have no ability to judge this, but it seems serious people are taking it seriously.  Hat tip goes to Kevin Drum.

My view too

“The strength reflects an expected bounce due to lower commodity prices and getting Japan back up and running,” says Mark Zandi, chief economist at Moody’s Analytics. “Growth would be measurably stronger if not for fallout from the debt ceiling debacle and European debt crisis. The economy’s fundamentals (balance sheet) are much improved, but growth will slow sharply early next year unless U.S. and European policymakers get a number of things roughly right in the next few weeks.”

Original source here, and please note that the good news consists of positive real shocks and the bad news consists of negative real shocks, not the other way around!

*Enriching the Earth*

The author is Vaclav Smil and the subtitle is Fritz Haber, Carl Bosch, and the Transformation of World Food Production, excerpt:

…the single most important change affecting the world’s population — its expansion from 1.6 billion people in 1900 to today’s 6 billion — would not have been possible without the synthesis of ammonia.

…All the children to be seen running around or leading docile water buffaloes in China’s southern provinces, throughout the Nile Delta, or in the manicured landscapes of Java got their body proteins, via urea their parents spread on bunded fields, from the Haber-Bosch synthesis of ammonia.

Another wondrous discovery from late 19th century/turn of the century Germany, though on the other side of the balance Haber played a critical role in inventing the German poison gases used in World War I.  Have I mentioned that Vaclav Smil is one of the most important thinkers/writers today, in any field?  It is worth reading all of his books, and there are not many people (with many books that is!) you can say that about.

By the way, many people think that Clara Immerwahr (Fritz Haber’s first wife, and the first female PhD at the University of Breslau) looks like Taylor Swift:

*Race Against the Machine* and TGS, a comparison

Race Against the Machine is compared to TGS in this forthcoming Economist article, and see this earlier piece.  Short bit:

Erik Brynjolfsson, an economist, and Andrew McAfee, a technology expert, argue in their new e-book, “Race Against the Machine”, that too much innovation is the bane of struggling workers. Progress in information and communication technology (ICT) may be occurring too fast for labour markets to keep up.

I agree a version of this is happening (though I wouldn’t use the phrase “too much”) and I don’t see my analysis as so different from theirs.  Possibly the three of us could agree on these propositions:

1. IT has seen rapid innovation since the 1990s, and it has led to great gains, but not so much for ordinary workers.

2. Had innovation gains been much greater in non-IT sectors, median living standards would have gone up much more.

I’m not sure if Erik and Andrew would agree with my:

3. Innovation gains in non-IT sectors have been much slower than usual (by post 1870 standards) in the post 1973 period.

I would make a few other points which I suspect they would not agree with, or would wish to reframe:

4. IT productivity was highest in 1995-1998 and those were splendid years for wages and the labor market.  That is one reason why I focus on the “glass half empty problem” (low non-IT innovation post 1973), rather than the “too much IT innovation for labor’s good” argument.  I do think the “too much innovation for labor’s good” argument explains why the productivity statistics from 2001-2004 didn’t translate into significant real wage gains and that is an important phenomenon.  But it’s at the side of my argument rather than central to it.  It’s central to their argument.

5. The S&P 500 has been flat, in real terms, for well over a decade.  I thus see a truly gloomy productivity picture post 1997-98 or so, weighing IT successes against other problems and slowdowns.  (I see this as one issue for their account, since they are asserting good times for capital in recent years.)  More generally, the productivity picture for the U.S. between 1995-1998 is quite good and IT-based, and 1973-1995 is poorly understood, highly mixed, but overall still quite inadequate with the 1970s and early 1990s having been worse than most people realize.  Overall I see the bad productivity years as bad years for the workers, not vice versa.  I also see the broader technological stagnation as setting in well before the IT boom of the 1990s.

6. The biggest employment problems, namely those of late, have come when output is low and/or falling, not rising.  That is another reason why my agreement with some of their major propositions comes at the side of my argument rather than being central to it.  I understand how the TGS argument fits into the cyclical story of 2007-2011 (excess confidence and overextension, Minsky moment, AD contraction, AS problems slow down the recovery), but I don’t understand how the Race Against the Machine story interacts with the cycle, or if it is even supposed to.

I had a long chat with Erik earlier in the week and found large areas of agreement on many matters (without wishing to speak for him in any formal sense, don’t attribute any of this to him!).  We also have quite similar predictions about the future, and this blog post is solely about the past.  These “side arguments” I am referring to are already in the process of becoming more central and they will shape our future.  The story of a largely stagnant median will become progressively less important relative to the story of labor market polarization, and I suspect that over time Erik and I (I didn’t get to chat with Andrew as much) will agree increasingly.

Addendum: Arnold Kling comments.

The Shock of Modern Slavery

The great Nicholas Kristof has another difficult to, must-read piece today on human trafficking. Including this arresting statistic:

By my calculations, at least 10 times as many girls are now trafficked into brothels annually as African slaves were transported to the New World in the peak years of the trans-Atlantic slave trade.

FYI, at its peak the trans-Atlantic slave trade was on the order of one hundred thousand per year. Figures on human trafficking differ widely but one million is on the lower end so Kristof’s estimate is sadly reasonable.

Best economics books of the year

1. Best behavioral economics books of the year, Daniel Kahneman, Thinking, Fast and Slow, and Bryan Caplan, Selfish Reasons to Have More Kids.

2. Best economic history book, Alexander Field, A Great Leap Forward: 1930s Depression and U.S. Economic Growth.

3. Second best eBook of the year, Erik Brynjolfsson and Andrew McAfee, Race Against the Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy.  By the way, here is my recent debate with Erik; we both agreed in advance to mix things up and generate controversy, so interpret the exchange accordingly.  In reality, Erik and I agree about many many things and Matt Yglesias notes as much.  (We do, however, seem to disagree about what this graph means.)  Arnold Kling comments on the debate itself.

4. Best economics/business book of the year: Tim Harford’s Adapt.

5. Best Austrian or Austrian-influenced book of the year: Daniel B. Klein, Knowledge and Coordination: A Liberal Interpretation.  It’s not out yet, I’ll cover it more when it appears, more information here.

6. Best economics textbook, Ahem!  I don’t mean my favorite economics textbook (though it is that too), rather best economics textbook.  The revised second edition of Micro just appeared, the macro is due out any day now.

Overall if I had to pick one, text aside, it might be the Alexander Field book, but this is a diverse lot with something for everybody.

Why is teen employment down?

Christopher L. Smith, at the Fed, makes the best stab at this question to date:

Since the beginning of the recent recession, the employment-population ratio for high-school age youth (16-17 years old) has fallen by nearly a third, to its lowest level ever.  However, this recession has exacerbated a longer-run downward trend that actually began in the 1990s and accelerated in the early 2000s.  There is little research regarding why teen employment has fallen.  Some earlier work emphasized labor supply explanations related to schooling and education, such as an increased emphasis on college preparation (Aaronson, Park, and Sullivan 2006), while others have argued that adult immigrants have crowded out teens, at least in part because adult immigrants and native teens tend to be employed in similar occupations (Sum, Garrington, and Khatiwada 2006, Camarota and Jensenius 2010, Smith 2012).  This paper presents updated trends in teen employment and participation across multiple demographic characteristics, and argues that, in addition to immigration, occupational polarization in the U.S. adult labor market has resulted in increased competition for jobs that teens traditionally hold.  Testing various supply and demand explanations for the decline since the mid-1980s, I find that demand factors can explain at least half of the decline unexplained by the business cycle, and that supply factors can explain much of the remaining decline.

This paper is now the place where all others should start.  I thank several loyal MR readers for the pointer.

Page turners

…he’s [Jonathan Gruber] writing a graphic novel explaining the [health care] bill, which will be published by Farrar, Strauss & Giroux in December. He said the opponents were mostly to blame for the bill’s bad press, and only sort of entertained a question about whether the Obama administration could have done a better job of selling it.

Other parts of the story indicate that Gruber is upset.  Hat tip goes to Austin Frakt on Twitter.

Western Australian de gustibus, on multiple fronts

Mr. Dinnison, who has mined copper, tin, nickel and gold, drills holes that are then packed with explosives to extract ore. He wears a $5,000 gold chain crucifix. “I’m not religious, but I am conscious that what I do is serious,” he said. “But then you come home and you have all that cash.”

Despite having earned roughly US$1 million since he started, he has no savings and doesn’t apologize. “The mines are so dull, that when you get back here, everything is stimulation and excitement,” he said. “The money I spend supports other businesses because of the [stuff] I blow it on.”

There is more of interest here.

Switzerland fact of the day

Nearly half the marriages in Switzerland are international ones, up from a third in 1990.

Yet language still matters:

…the Swiss “marry out” in particular ways. The German-speaking Swiss marry largely neighbouring Germans; the Francophone Swiss marry the French; Italian-speakers marry Italians.

Story here, and here are some more numbers:

According to Gavin Jones of the National University of Singapore, 5% of marriages in Japan in 2008-09 included a foreign spouse (with four times as many foreign wives as husbands). Before 1980, the share had been below 1%. In South Korea, over 10% of marriages included a foreigner in 2010, up from 3.5% in 2000. In both countries, the share of cross-border marriages seems to have stabilised lately, perhaps as a result of the global economic slowdown.

…in France the proportion of international marriage rose from about 10% in 1996 to 16% in 2009. In Germany, the rise is a little lower, from 11.3% in 1990 to 13.7% in 2010.

…In most developing countries, the share of men married to foreign women was less than 2% in 2000 (0.7% in Ghana and Bolivia; 0.2% in Colombia and the Philippines; 3.3% in South Africa)…only 4.6% of Americans were married to a foreigner in 2010, up from 2.4% in 1970.

A good start

Italy holds 2,451.8 tonnes of gold – the third highest of any central bank in the world. Only the US, with 8,133.5 tonnes and Germany, with 3.401 tonnes holds more. The International Monetary fund also has reserves of 2,814 tonnes.

One tonne is the equivalent of 32,150.75 Troy ounces. The gold price is currently at about $1,764 per troy ounce, so one tonne of gold is worth about $57.6m. This means Italy’s total central bank holdings are worth around $141bn (£88.6bn).

The link is here.  File under “Further reasons to think the Germans won’t tolerate ten percent inflation.”