Month: January 2014
The strongest Freestyle chess tournament since 2008
InfinityChess is pleased to announce a super strong Freestyle Tournament starting on February 4, 2014. It’s a round robin for 30 of the best freestyle and engine players from all over the world. The total prize money is $ 20,000 USD.
There is more information here, and note that these are likely to prove the best chess games played — ever — as well as a notable contribution to the science and data of man-machine interaction.
By the way, is there anyone who can donate temporary use of a leading edge server for remote use, 12-32 cores? Please email me if you can, thanks in advance, and credit (or anonymity) for you can be arranged if desired.
Given the suddenly prominent role of Freestyle chess in economics, Big Data, and the social sciences (see also The Second Machine Age), I hope this event receives some of the media attention which it deserves.
Assorted links
2. New Year resolutions for 2014.
3. Robin Harding FT piece on Piketty and inheritance: “In France, Prof Piketty charts how the annual flow of inheritances was between 20 per cent and 25 per cent of national disposable income in the 19th century. It fell to about 5 per cent in the middle of the 20th century after two world wars destroyed most of the inheritable capital stock, followed by rapid growth, high taxes on capital, inflation that eroded existing financial wealth and labour-friendly laws.
But the flow of inheritances in the country is now back to 19th-century levels; it is heading that way in the US and UK too.”
4. Can you still buy classical music in NYC these days?
5. Prison inmates think they are better than you are and morally superior. And when doctors Google their patients.
Is the Sugar Quota JUSTIFIED?
Justified, one of the best written and most entertaining shows on television, premiered last night. I liked this exchange between two drawling criminals:
Where’s the rest of the money?
That’s all we got from the candy company.
Yeah, what candy company is that Dillie?
The one that bought the sugar.
The joke is that we think the criminals are talking in street code about another white powder but, as we learn later, they actually are part of a sugar smuggling operation. The US sugar quota has increased the US price of sugar well above world levels and this has in fact pushed a number of candy companies to the wall. I suspect that few of them have turned to the black market for their sugar although I wouldn’t put this past some unethical confectioners. Nevertheless, sugar smuggling is not unknown.
In the 1980s when the US price of sugar was pushed as much as four times higher than the world price there were many smuggling schemes if not actual sugar-runners. In our textbook, Modern Principles, Tyler and I discuss one scheme where Canadian entrepreneurs shipped super-sweet iced tea to the United States where the “tea” was then sifted and the sugar resold. And from 2000 here is a great moment for US democracy, namely US Senator Byron Dorgan rising in support of legislation:
…to prevent molasses stuffed with sugar from being allowed into this country.
As others have stated, the molasses in question is stuffed with South American sugar in Canada [those Canadians again, AT], and then transported into the United States. The sugar is then spun out of this concoction and sold in this country while the molasses is sent right back across the border to be stuffed with more sugar–and the smuggling cycle starts over again.
Jewish persecutions and weather shocks
There is a recent paper by Robert Warren Anderson, Noel D. Johnson, and Mark Koyama, and the abstract is this:
What factors caused the persecution of minorities in medieval and early modern Europe? We build a model that predicts that minority communities were more likely to be expropriated in the wake of negative income shocks. Using panel data consisting of 1,366 city-level persecutions of Jews from 936 European cities between 1100 and 1800, we test whether persecutions were more likely in colder growing seasons. A one standard deviation decrease in average growing season temperature increased the probability of a persecution between one-half and one percentage points (relative to a baseline probability of two percent). This effect was strongest in regions with poor soil quality or located within weak states. We argue that long-run decline in violence against Jews between 1500 and 1800 is partly attributable to increases in fiscal and legal capacity across many European states.
In the Matt-Ezra debate over whether too hot or too cold is worse, this Irishman has to side against the blustery winter.
From the comments, on being a government economist
DC Economist writes:
I am in this cohort of economists (although ashamedly a non-responder to the NSF SED survey – I filled it out but neglected to mail it). And I did chose a government job over an academic offer and I’ve never been sorry that I did.
All my academic offers (2002) were from public institutions, mostly on the west coast and mid-west. For the next five years of my career, almost all of those departments had pay freezes. Meanwhile, I was quickly promoted in my government job. While the cost of living in DC eats a comfortable share of that salary differential, it was decidedly better financial move in retrospect to take the federal job. (I did not know that ex ante; my federal starting salary was actually lower than the starting pay for my best academic offer, and I assumed I was making a financial sacrifice to take a job I genuinely preferred.)
You can make even more money in consulting, but it’s a different world, and I’ve known a fair number of economists who move back and forth between consulting and government, depending on their relative preference for money vs. interesting work. Colleagues that have moved back and forth between academia and government have often voiced to me their extreme surprise how interesting and rewarding the work can be.
I just got back from recruiting at the AEAs and as always, I remain truly surprised how strongly candidates prefer academic jobs to government work. Academic jobs often have serious drawbacks — geography, teaching, collegiality (the incentives are stronger for us to all get along on this side of the market), the gut-wrenching uncertainty of the tenure track. Government jobs often offer better opportunities to do research (especially empirical work) and find similar co-authors. DC is also a great place to be an economist – lots of jobs, lots of interesting work – and the policy work is often more rewarding than teaching can often be. The one serious drawback is a lack of sabbaticals and summer research time. I often groan at the inevitable co-author email flood in May – let’s get back to our paper! – while I’m still working as hard in June as I was in March. But that’s not enough to tempt me back to academia – I’m much, much happier here.
But every year I offer a job to a junior candidate who turns me down for a really marginal academic job. I understand being turned down for a good-to-great academic offer, but turning this job down for a really marginal academic department makes no sense at all to me. And yet so many junior candidates can’t seem to imagine themselves in another line of work that they torpedo their own research opportunities to take a lower-paying, high-teaching load, academic job. Maybe they are just not that into research, and would rather have their summers off than be placed somewhere where they will work harder but have better opportunities for research. Or maybe they worry that all government jobs are being some boring government bureaucrat and they can’t see past that initial bias (those jobs do exist, but those agencies aren’t often looking for Ph.D. economists at AEAs to fill them).
Graduate students really should be more strongly considering some of the great government jobs in the DC area. You really can have a great, rewarding career here.
Law and Literature syllabus 2014
The first class is today! Here is my reading list:
The New English Bible, Oxford Study Edition
Glaspell’s Trifles, available on-line.
Billy Budd and Other Tales, by Hermann Melville.
The Metamorphosis, In the Penal Colony, and Other Stories, by Franz Kafka, edited and translated by Joachim Neugroschel.
In the Belly of the Beast, by Jack Henry Abbott.
Conrad Black, A Matter of Principle.
Sherlock Holmes, The Complete Novels and Stories, Sir Arthur Conan Doyle, volume 1.
I, Robot, by Isaac Asimov.
Moby Dick, by Hermann Melville, excerpts, chapters 89 and 90, available on-line.
Year’s Best SF 9, edited by David G. Hartwell and Kathryn Cramer.
Death and the Maiden, Ariel Dorfman.
The Pledge, Friedrich Durrenmatt.
Haruki Murakami, Underground.
Honore de Balzac, Colonel Chabert.
Thomas Pynchon, The Crying of Lot 49.
M.E. Thomas, Confessions of a Sociopath.
Alan Moore, V for Vendetta.
Gillian Flynn, Gone Girl.
Some additions to this list will be made as we proceed. We also will view a few movies on legal themes, I will be back in touch on these.
I am likely to use A Separation and Memories of Murder as two of the movies, along with a new release depending on schedule.
*The Up Side of Down*
That is the forthcoming book by Megan McArdle and the subtitle is Why Failing Well is the Key to Success. I think this book will be a big deal. It is extremely well written, engages the reader, is based upon entirely fresh anecdotes and research results, and develops an important point. I look forward to seeing it make its mark.
Assorted links
1. Should the West have governed South Sudan?
2. Russell Jacoby on The New York Review of Books. And testing the “broken windows” theory of crime.
3. Markets in everything: used lottery tickets.
4. Panasonic to begin mass production of powered exoskeleton.
5. An argument why Christmas should fall on a weekend.
6. Is the Turkish economy about to crash?
7. Tumblr of internet refrigerators.
8. Pot and plastic.
The mortality costs of extremely cold weather
Here is an NBER paper from 2007 — perhaps it is timely today — by Olivier Deschenes and Enrico Moretti:
We estimate the effect of extreme weather on life expectancy in the US. Using high frequency mortality data, we find that both extreme heat and extreme cold result in immediate increases in mortality. However, the increase in mortality following extreme heat appears entirely driven by temporal displacement, while the increase in mortality following extreme cold is long lasting. The aggregate effect of cold on mortality is quantitatively large. We estimate that the number of annual deaths attributable to cold temperature is 27,940 or 1.3% of total deaths in the US. This effect is even larger in low income areas. Because the U.S. population has been moving from cold Northeastern states to the warmer Southwestern states, our findings have implications for understanding the causes of long-term increases in life expectancy. We calculate that every year, 5,400 deaths are delayed by changes in exposure to cold temperature induced by mobility. These longevity gains associated with long term trends in geographical mobility account for 8%-15% of the total gains in life expectancy experienced by the US population over the past 30 years. Thus mobility is an important but previously overlooked determinant of increased longevity in the United States. We also find that the probability of moving to a state that has fewer days of extreme cold is higher for the age groups that are predicted to benefit more in terms of lower mortality compared to the age groups that are predicted to benefit less.
Ungated versions of the paper can be found here. Addendum: The published version is here, with slightly different numbers.
Are the minimum wage and EITC complements? And if so, when?
In response to Greg Mankiw’s recent NYT piece, I’ve been hearing the argument again that the minimum wage and wage subsidies are complements. According to this view, if you have only wage subsidies, employers will lower what they offer to the workers and capture too much of the value of the subsidy. A higher minimum wage is supposed to prevent this from happening and thus ensure that workers capture more of the gains.
Even if you accept every premise of this argument, I am not sure how it is supposed to apply today, at least within a Keynesian framework. For the Keynesians, the employment problem today is almost purely one of demand, not labor supply. To spur more hiring, we therefore should wish the employers to capture more of the surplus. A belief in hysteresis makes it all the more compelling simply to get potential workers into a job as soon as possible.
So a higher minimum wage and wage subsidies might be complements at some time period, but they should not be effective complements today. Furthermore, if demand problems are going to be with us for a long time (not my view), a higher minimum wage and wage subsidies might not be complements anytime soon.
I recall @ModeledBehavior having made some related points on Twitter.
The gambling demand for Bitcoin
Usually the house wins! (With the exceptions of counting cards at blackjack or beating the table at poker.) So why not try a game where the odds are — if not outright “better” — at least a lot less clear? Enter Bitcoin. No matter what your theory of its future value, there is no simple story which flat out amounts to “the house wins,” if only because of the opaqueness of the matter. It is also a fun gamble and bundled with various symbolic commitments to future tech, libertarianism, and so on. For many people that is better than affiliating with Vegas, the local football team, or perhaps Macau. You can follow the price on as frequent a basis as you wish, rather than having to wait for a sporting event to take place. And unlike in equities, futures, and options markets, you can feel — rightfully or not — that the pros also don’t know what they are doing.
I can’t find a reliable source on how much is spent on gambling each year, legal and illegal, but a variety of unreliable sources are suggesting a few hundred billion a year for the U.S. alone. It’s likely to be well over a trillion dollars worth for the world as a whole.
Let’s say one percent of that gambling demand spills over into the cryptocurrency arena. That’s a flow of $10 billion a year to fund new cryptocurrencies or bid up the value of old ones, maybe more. Bitcoin also may interest people in gambling who otherwise do not gamble or think of themselves as gambling types.
I don’t gamble and I don’t enjoy gambling, but if I were going to gamble, I would prefer to gamble with Bitcoin than to bet on a dog race. And it has to be better than buying a lottery ticket.
To the extent we are uncertain about the future gambling demand for Bitcoin, the price of Bitcoin will be correspondingly volatile. And we have no solid sources for trying to estimate such future demands. At the very least it seems likely that such demand has not yet peaked or close to it. In any case, the trading of Bitcoin itself will reveal information about the shape of the demand curve and thus the trading of the asset can inject further volatility into the market, a standard result when not everything is a flat, horizontal demand curve.
Humane Studies Fellowships and Mercatus Center fellowships
For Humane Studies fellowships, the deadline is January 31st, 2014. “The Humane Studies Fellowship can provide grants for up to $15,000.00 in addition to opening the door to participation in a number of the Institute for Humane Studies’ programs. The code “HSFFeeWaiver” can be used to waive the application fee up until the final deadline.”
More information about the fellowship and where to apply can be found here:http://www.theihs.org/humane-studies-fellowships. Any questions can be addressed to [email protected].
And:
The Mercatus PhD Fellowship is a three-year, competitive, full-time fellowship program for students who are pursuing a doctoral degree in economics at George Mason University. It includes full tuition support, a stipend, and experience as a research assistant. It is a total award of up to $120,000 over three years. The application deadline is February 1, 2014.
The MA Fellowship is a two-year, competitive, full-time fellowship program for students pursuing a master’s degree in economics at George Mason University, public policy emphasis, application deadline is March 1, 2014.
The Adam Smith Fellowship is a one-year, competitive fellowship for graduate students attending PhD programs at any university, in a variety of fields, including economics, philosophy, political science, and sociology. Smith Fellows receive a stipend and attend workshops and seminars on the Austrian, Virginia, and Bloomington schools of political economy. It is a total award of up to $10,000 for the year. The application deadline is March 15, 2014.
Growing old before they grow rich, the culture that is Iran
Mass-produced condoms reached Iranians, as a month’s supply of birth control cost the equivalent of 10 cents in 1992. The birth rate dropped precipitously, now reportedly standing at 1.8 children per couple with a population of some 77 million people. Experts now say that drive might have been too successful, estimating that Iran’s population growth could reach zero in the next 20 years if the trend is not reversed.
The story is here. Government clinics are no longer supplying vasectomy operations, but it remains to be seen if this trend can be stopped or reversed. Unemployment, job insecurity, inflation, and the cost of housing are all cited as factors behind the low fertility rate, but it is unclear that even economic improvement will put such trends in reverse. You will recall from Singapore that economic improvement can drive or keep down birth rates for its own reasons.
Assorted links
1. 100 Greatest Swedes? So much for factor endowment theories…
2. What makes a football player smart?
4. Gavin Kelly on Average is Over and The Second Machine Age.
5. “Spike Away,” maybe more useful in Japan and India than Singapore, where it was the result of a two-day workshop at the National University.
6. Zimbabwe now has dollarized prices, and then some.
7. A fifteen-year-old in Delhi owns what is perhaps the world’s greatest pencil collection.
Military CEOs
That is the title of a new paper by Efraim Benmelech and Carola Frydman, here is the abstract:
There is mounting evidence of the influence of personal characteristics of CEOs on corporate outcomes. In this paper we analyze the relation between military service of CEOs and managerial decisions, financial policies, and corporate outcomes. Exploiting exogenous variation in the propensity to serve in the military, we show that military service is associated with conservative corporate policies and ethical behavior. Military CEOs pursue lower corporate investment, are less likely to be involved in corporate fraudulent activity, and perform better during industry downturns. Taken together, our results show that military service has significant explanatory power for managerial decisions and firm outcomes.
Here are some other writings on military CEOs.