Month: October 2012
Looking at pictures of cute animals makes you work more carefully and deliberately
A new study by Japanese researchers now shows there are more benefits to looking at pictures of these universal delights than just getting a case of the warm and fuzzies. Afterwards, we concentrate better.
Such is the “Power of Kawaii”, as a paper documenting the research is appropriately titled. The Japanese word “kawaii” means cute. The paper was published in the online edition of the U.S. journal Plos One on Thursday. Through three separate experiments a team of scientists from Hiroshima University showed that people showed higher levels of concentration after looking at pictures of puppies or kittens.
For the pointer I thank Mark Thorson.
A third Industrial Revolution?
James Tien has a new paper:
The outputs or products of an economy can be divided into services products and goods products (due to manufacturing, construction, agriculture and mining). To date, the services and goods products have, for the most part, been separately mass produced. However, in contrast to the first and second industrial revolutions which respectively focused on the development and the mass production of goods, the next – or third – industrial revolution is focused on the integration of services and/or goods; it is beginning in this second decade of the 21st Century. The Third Industrial Revolution (TIR) is based on the confluence of three major technological enablers (i.e., big data analytics, adaptive services and digital manufacturing); they underpin the integration or mass customization of services and/or goods. As detailed in an earlier paper, we regard mass customization as the simultaneous and real-time management of supply and demand chains, based on a taxonomy that can be defined in terms of its underpinning component and management foci. The benefits of real-time mass customization cannot be over-stated as goods and services become indistinguishable and are co-produced – as “servgoods” – in real-time, resulting in an overwhelming economic advantage to the industrialized countries where the consuming customers are at the same time the co-producing producers.
Keywords: Big data, decision analytics, goods, adaptive services, digital manufacturing, value chain,
supply chain, demand chain, mass production, mass customization, industrial revolution
For the pointer I thank the excellent Kevin Lewis.
Assorted links
2. New critique of Woodford and ngdp targeting, from Gavyn Davies and others.
3. Fish fraud, and excellent material on Iranian hyperinflation.
4. Some of the maple syrup is seized, and the policy uncertainty costs of horse nationalism.
5. There is no great stagnation (the ostrich pillow), and Thiel and Kasparov and Rogoff and Shuttleworth will debate.
Hyperinflation in Iran
Steve Hanke estimates that Iran’s monthly inflation rate has reached 70%.
When President Obama signed the Comprehensive Iran Sanctions, Accountability, and Divestment Act, in July 2010, the official Iranian rial-U.S. dollar exchange rate was very close to the black-market rate. But, as the accompanying chart shows, the official and black-market rates have increasingly diverged since July 2010. This decline began to accelerate last month, when Iranians witnessed a dramatic 9.65% drop in the value of the rial, over the course of a single weekend (8-10 September 2012). The free-fall has continued since then. On 2 October 2012, the black-market exchange rate reached 35,000 IRR/USD – a rate which reflects a 65% decline in the rial, relative to the U.S. dollar.
The rial’s death spiral is wiping out the currency’s purchasing power. In consequence, Iran is now experiencing a devastating increase in prices – hyperinflation.
Iran’s hyperinflation is still well below world leader Hungary whose inflation rate in July of 1946 reached 4.19 × 10^16 percent per month or Zimbabwe’s more recent November of 2008 rate of 7.96 × 10^10 percent per month.
Social Networks and Risk of Homicide Victimization in an African American Community
That is a new paper from Andrew V. Papachristos and Christopher Wildeman, here is the abstract:
This study estimates the association of an individual’s position in a social network with their risk of homicide victimization across a high crime African American community in Chicago. Data are drawn from five years of arrest and victimization incidents from the Chicago Police Department. Results indicate that the risk of homicide is highly concentrated within the study community: 41 percent of all gun homicides in the study community occurred within a social network containing less than 4 percent of the neighborhood’s population. Logistic regression models demonstrate that network-level indicators reduce the association between individual-level risk factors and the risk of homicide victimization, as well as improve overall prediction of individual victimization. In particular, social distance to a homicide victim is negatively and strongly associated with individual victimization: each social tie removed from a homicide victim decreases one’s odds of being a homicide victim by approximately 57 percent. Findings suggest that understanding the social networks of offenders can allow researchers to more precisely predict individual homicide victimization within high crime communities.
Some of those sentences could be framed for their importance. For the pointer I thank DP.
Here are other papers by Andrew Papachristos. Here is a paper by Christopher Wildeman.
The new Fable of the Bees literature
From the American Journal of Agricultural Economics, there is a new paper by Randal R. Rucker, Walter N. Thurman, and Michael Burgett (Dept. of Entomology), here is the abstract:
The world’s most extensive markets for pollination services are those for honey bee pollination in the United States. These markets play important roles in coordinating the behavior of migratory beekeepers, who both produce honey and provide substitutes for ecosystem pollination services. We analyze the economic forces that drive migratory beekeeping and theoretically and empirically analyze the determinants of pollination fees in a larger and richer data set than has been studied before. Our empirical results expand our understanding of pollination markets and market-supporting institutions that internalize external effects.
This is a deep and thoughtful analysis which extends the tradition of Steven Cheung. There is an earlier ungated version here. Here is a related paper from UC Davis, and here is a related paper on the economics of honeybee pollination in Georgia. Here is a very good summary of the main piece.
For the pointer I thank Michelle Dawson.
Emails I receive (the consumer surplus of the internet)
…the origins of your name, off by a letter.
RL
> Put the following text into google: freemason Cowan Tyler What is the result?
Interesting. “Tyler” is the title of an officer in the Masonic hierarchy, while a “cowan” is a stonemason who is not a member of the Freemasons guild. This from “Freemasonry for Dummies”:
The Tyler’s job is to keep off all “cowans and eavesdroppers” (for more on the Tyler, see Chapter 5). The term cowan is unusual and its origin is probably from a very old Anglo-Saxon word meaning “dog.” Cowan came to be a Scottish word used as a putdown to describe stonemasons who did not join the Freemasons guild, while the English used it to describe Masons who built rough stone walls without mortar and did not know the true secrets of Freemasonry.
Assorted links
Natural Products Association opposes California GMO labelling proposition
Read their reasons here.
For the pointer I thank Mark Thorson.
What kind of austerity did Great Britain implement in the 1920s?
When it comes to the post-WWI period, Paul Krugman recently argued: “…Britain demonstrated a fairly awesome commitment to austerity…” (and see here today’s post).
The cited IMF report notes with disapproval:
…the U.K. government implemented a policy mix of severe fiscal austerity and tight monetary policy. The primary surplus was kept near 7 percent of GDP throughout the 1920s. This was accomplished through large expenditure decreases, courtesy of the “Geddes axe,” and a continuation of the higher tax levels introduced during the war.
Is this portrait true? I say yes and no. For 1918-1920, government spending plummets, mostly because of demobilization and the end of the war, source here.
Yet there is an alternative perspective. Even after the demobilization is over, consider that in 1910 British government spending was about 10% of gdp and in the 1920s it runs near 25% of gdp. Is that such an awesome commitment to austerity?
If we consider a more finely grained approach, and focus on shorter-term rates of change, we do see real restraint on the spending side:
…spending was cut by 10% in real terms in two years, while tax as a share of GDP remained constant. The budget deficit was reduced from 7% GDP in 1920 to near balance in 1923, followed by a swift recovery. Defence bore the brunt of the cuts.
As mentioned in the quotation (“followed by a swift recovery”), this transition went reasonably well. If you read this very up to date, very careful with the data paper (try p.10), you see a notable gdp plunge from 1920-1921, mostly from a coal strike and a series of postwar shocks, and then solid growth from 1921 to 1926, running over and after the period when Britain was cutting government spending. It seems that policy was hardly a macroeconomic catastrophe. Things do go south in 1926, but it is well known that is from bad monetary and exchange rate policy, plus a major coal strike.
Or read Barry Eichengreen (pdf). He notes that Britain under-performs relative to other European nations in the first half of the 1920s, although he focuses much more on monetary policy and real factors, rather than fiscal policy. Furthermore, that’s hardly the only period when Britain was under-performing its rivals on the continent.
In other words, I don’t see how the episode as a whole supports the interpretative weight being placed upon it as an anti-austerity parable. Note that when it comes to the U.S. (switching from the UK for a moment), Krugman wrote the entirely defensible sentence: “…even a cursory examination of the available data suggests that 1921 has few useful lessons for the kind of slump we’re facing now.” If the UK in 1921 shows more relevance, that has yet to be shown.
In which they fail to credit Miss A. Elk
“Why sauropods had long necks; and why giraffes have short necks”
The necks of the sauropod dinosaurs reached 15 m in length: six times longer than that of the world record giraffe and five times longer than those of all other terrestrial animals. Several anatomical features enabled this extreme elongation, including: absolutely large body size and quadrupedal stance providing a stable platform for a long neck; a small, light head that did not orally process food; cervical vertebrae that were both numerous and individually elongate; an efficient air-sac-based respiratory system; and distinctive cervical architecture. Relevant features of sauropod cervical vertebrae include: pneumatic chambers that enabled the bone to be positioned in a mechanically efficient way within the envelope; and muscular attachments of varying importance to the neural spines, epipophyses and cervical ribs. Other long-necked tetrapods lacked important features of sauropods, preventing the evolution of longer necks: for example, giraffes have relatively small torsos and large, heavy heads, share the usual mammalian constraint of only seven cervical vertebrae, and lack an air-sac system and pneumatic bones. Among non-sauropods, their saurischian relatives the theropod dinosaurs seem to have been best placed to evolve long necks, and indeed they probably surpassed those of giraffes. But 150 million years of evolution did not suffice for them to exceed a relatively modest 2.5 m.
The link is here, and for the pointer I thank Michelle Dawson. The inspiration for this paper can be found here.
The political business cycle in Honduras
In Honduras, one of Latin America’s poorest countries and also its most dangerous, candidates dole out another kind of political swag: coffins for the destitute.
Charities organized by politicians scour poor neighborhoods in search of families of murder victims who cannot afford funeral services or even a simple casket to bury their beloved. There are plenty of takers in this Central American country, where two out of three workers earn less than the minimum wage of $300 a month, and more than 136 people are killed every week.
Here is more, courtesy of Daniel Lippman; here is Daniel’s piece on Medicaid cuts for dental services.
*Information Wants to be Shared*
That is the new Harvard Business Review Press book by Joshua Gans, Amazon link here, $3.99, recommended. Here is Joshua’s blog.
Questions that are rarely asked
It is estimated that less than $1B is spent in the U.S. each year on education research, with the federal government spending about $700M and universities, foundations and the private sector spending about $300M. That may sound like a lot, but it’s not. Consider that medicine and education should be two sides of the same coin. Both are services that developed democracies have decided all citizens are entitled to regardless of birth, station or resources. Medicine advances human health and happiness. Education advances economic productivity and happiness. Then consider that $140B is spent in the U.S. each year on medical research.
How to explain the 140:1 ratio?
Here is more.
Assorted links
1. Three frank questions about your research.
2. NYU Stern School now has some class macro materials on-line, and some short Jeff Ely videos on microeconomics.
3. The backlash against foodies, and the Swiss are at the Ricardian margin with cows. No SMS in Romansch? But is it art?
4. The new approach of Jeffrey Sachs and the UN to sustainable development.
5. Pakistan in the past, with photos.
6. My earlier post on how to improve the Presidential debates.