Month: March 2012

At the Frontier of Personalized Medicine

by  Alex Tabarrok in

In an essay on frighteningly ambitious startups Paul Graham writes:

…in 2004 Bill Clinton found he was feeling short of breath. Doctors discovered that several of his arteries were over 90% blocked and 3 days later he had a quadruple bypass. It seems reasonable to assume Bill Clinton has the best medical care available. And yet even he had to wait till his arteries were over 90% blocked to learn that the number was over 90%. Surely at some point in the future we’ll know these numbers the way we now know something like our weight. Ditto for cancer. It will seem preposterous to future generations that we wait till patients have physical symptoms to be diagnosed with cancer. Cancer will show up on some sort of radar screen immediately.

An amazing paper in the March 16 issue of Cell illustrates the frontier of what is possible. Geneticist Michael Snyder of Stanford led a team that sequenced his and his mother’s genome. Then, over a two year period they used blood and other assays to track in Snyder’s body transcripts, proteins and metabolites. In the process they generated billions of data points and were able to watch in near real-time what happened as Snyder’s body fought two infections and the surprising onset of diabetes.

From a writeup in Science Daily:

…”We generated 2.67 billion individual reads of the transcriptome, which gave us a degree of analysis that has never been achieved before,” said Snyder. “This enabled us to see some very different processing and editing behaviors that no one had suspected. We also have two copies of each of our genes and we discovered they often behave differently during infection.” Overall, the researchers tracked nearly 20,000 distinct transcripts coding for 12,000 genes and measured the relative levels of more than 6,000 proteins and 1,000 metabolites in Snyder’s blood.

…The researchers identified about 2,000 genes that were expressed at higher levels during infection, including some involved in immune processes and the engulfment of infected cells, and about 2,200 genes that were expressed at lower levels, including some involved in insulin signaling and response.

…The exercise was in stark contrast to the cursory workup most of us receive when we go to the doctor for our regular physical exam. “Currently, we routinely measure fewer than 20 variables in a standard laboratory blood test,” said Snyder, who is also the Stanford W. Ascherman, MD, FACS, Professor in Genetics. “We could, and should, be measuring many, many thousands.”

One side-note: the techniques that the authors use to analyze their time-series data seem (to me) to be behind the curve compared to the VARs used in econometrics. Impulse response functions are what they need! With applications from economics to medicine to marketing, the statistics of big data is the field of the future.

Addendum: Derek Lowe offers further thoughts and Andrew S. points us to this TED video on blood tests without needles.

The return of the house call

by  Tyler Cowen in

In the Netherlands, where else?:

In early March, the NVVE opened the world’s first euthanasia clinic. It’s called the Levenseindekliniek, the “end of life clinic.” It serves as a point of contact for all Dutch people who want to die but don’t have a primary care physician prepared to help them do so. The clinic has mobile euthanasia teams, each of which consists of a doctor and a nurse. When an individual qualifies for the program after passing a screening, one of the teams makes a house call to inject two drugs. One puts the patient into a deep sleep, while the other stops all breathing, leading to death.

The rest of the story is here.  And there is this:

The sweets were distributed two years ago as part of a promotional campaign. At the time, her organization was calling for Dutch pharmacies to be allowed to sell lethal drugs to individuals with a prescription. Printed on the wrappers is the word Laatstwilpil, or “last will pill.”

*The Clash of Economic Ideas*

by  Tyler Cowen in

In 1958, on his first visit to India, the Hungarian-British development economist Peter Bauer was eager to meet the Indian economist B.R. Shenoy.  Bauer knew the name from a “Note of Dissent on the Memorandum of the Economists’ Panel,” which Shenoy had written criticizing India’s Second five-Year Plan.  In 1955 the Indian government had recruited twenty-one senior Indian economists for the Panel of Economists, chaired by the minister of finance, to review the plan.  Twenty of the economists had signed a memorandum endorsing the plan.  Professor Shenoy was the lone dissenter  Shenoy’s “Note of Dissent” was an annoyance to members of the Indian Planning Commission; to Prime Minister Nehru, who had initiated the planning effort; to Nehru’s adviser P.C. Mahalanobis, who had drafted the plan; and even to international aid officials, who overwhelmingly supported the planning effort.  Shenoy had become persona non grata in official economic policy-making circles.

Yet Shenoy turned out largely to be right.

That is from the forthcoming excellent book by Lawrence H. White, Amazon link here.  The book is not mostly about India, but it is about the role of economic ideas in shaping economic outcomes.  The chapter on India is my favorite, however, and it is perhaps the very best place to start to understand the failures of India’s planning period.

White also points our attention to Milton Friedman’s 1955 Memorandum to the Indian Government, which is I believe not well known, not even among Friedman fans.

The Age of the Shadow Bank Run

by  Tyler Cowen in

The introduction to my column is this:

I RECENTLY asked a group of colleagues — and myself — to identify the single most important development to emerge from America’s financial crisis. Most of us had a common answer: The age of the bank run has returned.

I would like to see more discussion of how the permanently high demand for T-Bills as collateral will affect the U.S. economy:

Another feature of this new order is that more and more financial transactions will be collateralized with the safest securities possible: United States Treasuries. Demand for them will remain high, and low borrowing costs will ease our fiscal problems. Still, the resulting low rates of return serve as a tax on safe savings, encourage a risky quest for yield and redistribute resources to government borrowing and spending. It isn’t healthy for the private sector when investors are so obsessed with holding wealth in the form of safe governmental guarantees.

The bottom line is this:

The core problem is that the growth of short-term credit has been outracing our ability to protect it, and since 2008 most investors have realized that these shadow-banking transactions are not risk-free.

I didn’t have space to discuss whether this was a corporate governance issue or a moral hazard issue.  Under one view, managers/CEOs could purchase capital insurance to plug the runs, they just don’t have the incentive to do so.  The downside simply isn’t that bad for them.  Under another view, the market for “runs insurance” creates too much moral hazard to be feasible, or to some extent the market exists (CDS, etc.) but it just pushes the problem back another level and may even make matters worse by creating another level of credit.  A third view is that the collateral behind these short-term loans is somewhat of a farce, since it (sometimes) has value problems precisely in those world states when it needs to be called in.  It is probably a bit of each.

The conclusion is this:

In short, no promising financial path is before us. It’s good that the American economy seems to be recovering, and this may shove some problems into the future. But banking and finance remain a mess at their core. Welcome to the 21st century.

Why is the UK economy failing?

by  Tyler Cowen in

Do not heed those who paint with a limited palette and speak only of fiscal austerity.  Via Scott Sumner, Britmouse has one report:

The Office for National Statistics’ current data on quarterly UK nominal GDP growth in 2008 is as follows, at Seasonally Adjusted Annual Rates:

  • Quarter 1: 4.3%
  • Quarter 2: -1.7%
  • Quarter 3: -5.2%
  • Quarter 4: -3.4%

That collapse in nominal spending has no precedent in the data, and is certainly worse than anything since the 1930s. . . .

There was by the way no liquidity trap, as rates were often at five percent and in general not close to zero.  Britmouse now has his (her?  its?) own blog.

Going back in time a bit further:

The stark generational rift emerging in Britain is highlighted by a Financial Times analysis showing that the real disposable household incomes of people in their 20s have stagnated over the past 10 years just as older households are capturing a much greater share of the nation’s income and wealth.

…The FT analysis of 50 years of official data also shows that the living standards of Britons in their 20s have been overtaken by those of their 60-something grandparents for the first time, with the household incomes of pensioners in their 70s and even 80s also catching up rapidly.

The data, which underpins government publications on living standards, takes no account of housing costs or wealth. Had it done so the results would have been even more dramatic, showing median living standards of people in their 20s have now slipped below those of people in their 70s and 80s.

The problems over there are deeply rooted.

Nonetheless, via David Harbottle, we learn that during the Olympics there is a home in London for rent for about $412,646 per month.  So far there appear to be no takers.  The price is listed as negotiable.

The book truck

by  Tyler Cowen in

Sometimes the number of books arriving at the house each day exceeds my ability to carry them away (not a complaint), in part because I am not always in town to bring them to the office.  Kathleen Fasanella suggests the book truck:

I have a Bretford, 36″ long shelves (6 sloped shelves), 18″ deep, 43″ or so high, 5″ Casters. 2 swivel, 2 lock. It is a welded frame so there is nothing to put together (except to snap in the casters)This model is available at highsmith…http://www.highsmith.com/Bretfordreg-Duro-Book-Truck-6-Sloped-Shelves-43Hnbspxnbsp36Wnbspxnbsp18D-c_21704649/H10251/

The model no is L3W-H10251, bottom of the page at the above link.

This is the least expensive price I found but I don’t know if this company is any good:
http://www.worthingtondirect.com/school_furniture/av_equipment/V336PB_37X18X42H__PUTTY_BEIGE__SIX_SLANT_SHELVES__MOBILE_UTILITY_TRUCK.htm?utm_source=shopzillacom&utm_medium=productfeed&utm_campaign=product

Here is her blog post on how to organize books.

I am going to buy the book truck.

“Foreign” Aid

by  Alex Tabarrok in

Astute piece in the NYTimes by Steven Lee Myers on military aid to Egypt Florida.

An intense debate within the Obama administration over resuming military assistance to Egypt, which in the end was approved Friday by Secretary of State Hillary Rodham Clinton, turned in part on a question that had nothing to do with democratic progress in Egypt but rather with American jobs at home.

…“In large part, there are U.S. jobs that are reliant on the U.S.-Egypt strong military-to-military relationship,” a senior State Department official said, speaking on condition of anonymity under rules set by the department.

…“Lockheed Martin values the relationship established between our company and the Egyptian customer since the first F-16s were delivered in the early 1980s,” said Laura F. Siebert, a spokeswoman for the company, which is based in Fort Worth.

…The M1A1 components are built in factories in Alabama, Florida, Michigan, Ohio and Pennsylvania, several of them battleground states in an election that has largely focused on jobs. Because the United States Army plans to stop buying new tanks by 2014, continued production relies on foreign contracts, often paid for by American taxpayers as military assistance.

The real competitor to driverless cars

by  Tyler Cowen in

Enter the Tacocopter.  It does not seem to be a hoax:

The Internet is going wild for Tacocopter, perhaps the next great startup out of Silicon Valley, which boasts a business plan that combines four of the most prominent touchstones of modern America: tacos, helicopters, robots and laziness.

Indeed, the concept behind Tacocopter is very simple, and very American: You order tacos on your smartphone and also beam in your GPS location information. Your order — and your location — are transmitted to an unmanned drone helicopter (grounded, near the kitchen where the tacos are made), and the tacocopter is then sent out with your food to find you and deliver your tacos to wherever you’re standing.

You pay online, so the tacos are simply dropped off at your feet by the drone helicopter, which then flies back to the restaurant to pick up its next order.

The article is here. And yet there is bad news afoot, and it is no surprise:

The U.S. government is single-handedly preventing you from ordering a taco and having it delivered to you by a totally sweet pilot-less helicopter.

For the pointer I thank @ModeledBehavior.  I believe that drone delivery is an idea worthy of further consideration; imagine delivering medicines to the elderly.

Corruption and the history of development economics

by  Tyler Cowen in

A few observations, based on some recent reading:

1. It is remarkable how little the topic is discussed in the mainstream literature before the 1990s.  Gunnar Myrdal to his credit does discuss it a bit in his Asian Drama.

2. I have seen more than a few articles suggesting Anne Krueger showed that rent-seeking accounted for 7.3 percent of Turkish gdp (in the 1960s).  That’s not what Krueger said.  Rather she showed that import licenses were equivalent to this value, and that this provided an upper bound for the amount of rent-seeking.

3. The real costs of rent-seeking and corruption are the “limits to technology transfer” argument of Parente and Prescott, not the standard rent-seeking box.  That paper alone could bring a Nobel Prize, and yet it’s hardly ever mentioned in assessments of Prescott.