Month: October 2015
*Chicagonomics: The Evolution of Chicago Free Market Economics*
That is the new book from Lanny Ebenstein, I found it well-written and useful. You can read about Henry Simons, the Cowles Commission, Hayek, Jacob Marschak, of course Milton Friedman, and much mmore. Friedman, by the way, originally had intended to become an actuary.
Here is Friedman on Hayek from an Ebenstein interview from 1995:
Q: How would you describe Hayek personally?
A: In terms of his personal characteristics, Hayek was a very complicated personality. He was by no means a simple person. He was very outgoing in one sense but at the same time very private. He did not like criticism, but he never showed that he didn’t like criticism. His attitude under criticism, as I found, was to say: “Well, that’s a very interesting thing. At the moment, I am busy, but I’ll write to you about it more later.” And then he never would!
Friedman is extremely frank about Hayek in this interview, and repeatedly mentions that he objected to how Hayek treated his first wife. I have never seen Friedman be so negative, or for that matter so emotionally involved, and when it comes to The Fatal Conceit he simply avers: “It’s not up to Hayek at his best.”
You can then turn to two pages of Paul Samuelson, in a letter to Ebenstein, criticizing Milton Friedman. Ebenstein, by the way, argues that Friedman is essentially a left-wing, utilitarian thinker.
Why is Daniel Hamermesh leaving campus at UT Austin?
Economics professor emeritus Daniel Hamermesh will withdraw from his position next fall, citing concerns with campus carry legislation.
The law will allow the concealed carry of guns in campus buildings beginning Aug. 1, 2016. Hamermesh said he is not comfortable with the risk of having a student shoot at him in class. He teaches a course with 475 students enrolled, according to a letter Hamermesh wrote Sunday to UT President Gregory Fenves…
Hamermesh, who said he is under contract to teach his course in fall 2016 and fall 2017, said he will complete the semester at UT and will teach at the University of Sydney next fall.
Hamermesh said he thinks the legislation will impact the University’s ability to draw new faculty and staff to work at UT.
There is more at the link, via Catherine Rampell.
Thursday assorted links
1.Does income inequality shift the political electorate to the Right?
2. Why did soda consumption decline?
3. Kevin Drum on why American conservatives are different. And a few comments from Matt Drudge. Matt Yglesias on Hillary Clinton.
4. ISIS revenue, ISIS expenditure, and why ISIS may be unsustainable.
The problems of Harvard economics?
Here is an article in The Crimson, with many interesting bits, including about Raj Chetty. In turns out space is also a problem, even back in the mid-1980s I thought Littauer was not impressive. It has not improved:
Economics faculty also say that the kind laboratory work common in modern economics—and exemplified by Chetty’s work on government policy—require physical space that is lacking in Littauer and scattered around campus.
“You need infrastructure to run the types of projects he is running,” Antràs said.
Bernheim said Stanford was working “on much closer collaboration and integration” between its economics research buildings to provide adequate space because of Chetty’s arrival and other new hires. He would not comment on the specifics of Chetty’s hiring package, including any lab space he may receive.
And of course, Littauer is old. It hasn’t undergone a major renovation in decades and lacks a functioning air conditioning system.
Whether there are plans to renovate Littauer is uncertain. FAS Dean Michael D. Smith would not comment on any plans to add space to the building, though he noted that conversations about department space across FAS are ongoing.
Even more, the Fine Arts Library, which moved temporarily to Littauer in 2007 during the renovation of the Fogg Museum, compounds the problem of tight space in the building.
University professor Jerry R. Green said the move “pained” him and that now many books used by the Economics department are housed in the Harvard Depository.
Here are the current Harvard faculty, all via Matthew Kahn. And here Matt comments. And Niall Ferguson is leaving Harvard for Hoover.
Meeting of the minds?
Bernanke: “If you get to choose between being rich or famous, I would vote for rich.”
On Twitter, Paul Romer responded:
Nah. Rich is over-rated. It’s too hard to turn money into satisfaction.
The links are here. What should we infer from this dialogue? Model this, so says I…
Addendum: Romer adds comment on Twitter…and more…and more.
*Foolproof: Why Safety Can Be Dangerous and How Danger Makes Us Safe*
That is the new and excellent book by Greg Ip, no fluff here substance all around. From the book’s home page:
How the very things we create to protect ourselves, like money market funds or anti-lock brakes, end up being the biggest threats to our safety and wellbeing.
Here is one excerpt:
The experiment found that people with no impairment to the brain’s emotional center were much more conservative. After losing money on one coin toss, only 40 percent of them agreed to invest on the next — but 85 percent of the brain-damaged patients did. By the end of the game, the brain-damaged patients had earned an average of $25.70 while the healthy players averaged $22.60.
And another:
By Spellberg’s reckoning, the odds of an adverse reaction to an antibiotic, such as an allergic reaction, are about 1 in 10, whereas the odds that someone will suffer because antibiotics were wrongly withheld are about 1 in 10,000. Nonetheless, most physicians do not want to run the risk of letting a patient suffer when an antibiotic could help…His research in Nepal produced the depressing finding that antibiotic resistance was highest in communities with the most doctors.
Spellberg thinks trying to persuade doctors not to prescribe antibiotics is a doomed strategy. Better, he says, to develop tests that rapidly identify what bug a patient has and thus whether an antibiotic is needed.
Strongly recommended, devoured my copy in a single sitting right away, due out this coming Tuesday. By the way here is the FT review by Andrew Hill.
New York prison inmates beat Harvard debate team
Months after winning a national title, Harvard’s debate team has fallen to a group of New York prison inmates.
The showdown took place at the Eastern Correctional Facility in New York, a maximum-security prison where convicts can take courses taught by faculty from nearby Bard college, and where inmates have formed a popular debate club. Last month they invited the Ivy League undergraduates and this year’s national debate champions over for a friendly competition.
The Harvard debate team was crowned world champions in 2014. But the inmates are building a reputation of their own. In the two years since they started a debate club, the prisoners have beaten teams from the US military academy at West Point and the University of Vermont. The competition with West Point, which is now an annual affair, has grown into a rivalry.
At Bard, those who helped teach the inmates were not particularly surprised by their success.
And what did they debate?
Against Harvard the inmates had to defend a position they opposed: they had to argue that public schools should be allowed to turn away students whose parents entered the US illegally. The inmates brought up arguments that the Harvard team had not considered. Three students from Harvard’s team responded, and a panel of neutral judges declared the inmates victorious.
Note that the inmates learn without the help of the internet. The article is here, pointer from Phil Hill. Here is confirmation of the story.
Addendum: Here is commentary on how it might have happened.
A new AEA website pursues relevance
The AEA is profiling research from all seven of our journals covering the wide range of topics that economists study. Follow us on Twitter for the latest updates.
For the pointer I thank Aaron Sojourner.
China pioneers the world’s first driverless bus
While tech companies in America have focused on personal automated cars, China has gone big with what could be the beginning of mass, unmanned bus transit. The spacious vehicle, unveiled at the end of August after three years of development, recently managed a 20-mile trip through the crowded city of Zhengzhou without crashing into other motorists or bursting into flames. That same driver stayed behind the wheel, true, but maybe as technology progresses he’ll be replaced with a Johnny-Cab robot.
There is more here, including photos and video, via Air Genius Gary Leff.
Wednesday assorted links
1. Claims about China. Take that one with a grain of salt, but while it is speculative it is not absurd. Coming soon to a theater near you? An interesting and more balanced post on China.
2. Monitoring your dog (there is no great stagnation).
3. Alex interviewed on Economic Rockstar podcast.
4. A Reddit thread from people who are dying.
North African assimilation into France
The 2008-9 survey Trajectoires et origines shows that forty-four percent of the descendants of masculine immigrants of Algerian or Moroccan origin have a spouse who is neither an immigrant nor a descendant of immigrants. The rate rises to 60 percent for those of Tunisian origin, falls to 42 percent for those of Turkish origin, rises back to 65 per cent for those of sub-Saharan African origin (we cannot, in this latter case, distinguish between Muslims and non-Muslims). For women, the rates are a little lower, which is to be expected in disintegrating patrilineal cultures, but they remain at a very high level for those of Algerian (41 per cent), Moroccan (34 per cent) and sub-Saharan African (40 per cent) origin…But while exogamy is not yet a major practice, these groups have clearly been welded to French society…We need at this point to emphasize the speed with which populations from sub-Saharan Africa have integrated…
That is from Emmanuel Todd, Who is Charlie?, pp.162-163. Here is my previous post on the book.
Another risk-based model of business cycles
I say if you don’t understand risk-based models, it is difficult to grasp why recovery has been so slow, or why the cycle was so tough to begin with. Here is Mete Kilic, Jessica A. Wachter:
What is the driving force behind the cyclical behavior of unemployment and vacancies? What is the relation between job creation incentives of firms and stock market valuations? This paper proposes an explanation of labor market volatility based on time-varying risk, modeled as a small and variable probability of an economic disaster. A high probability of a disaster implies greater risk and lower future growth, which lowers the incentives of firms to invest in hiring. During periods of high disaster risk, stock market valuations are low and unemployment rises. The risk of a disaster generates a realistic equity premium, while time- variation in the disaster probability generates the correct magnitude for volatility in vacancies and unemployment. The model can thus explain the comovement of unemployment and stock market valuations present in the data.
That is a new NBER working paper.
Mark Twain in China
Huckleberry Finn has been translated into Chinese no fewer than ninety times.
That is from new and intriguing Mark Twain in China, by Selina Lai-Henderson.
I had not known that Twain played a significant role in speaking up for the Chinese in America, and fighting the prejudice against them. Later in his career he described himself as an “anti-imperialist” and “Chinese Boxer” in the fight against Western imperialism. Lai-Henderson notes:
In one of his anti-imperialist writings, “The United States of Lyncherdom” (1901), he urged American missionaries to leave China, for they should “come home and convert these Christians!”
Recommended.
Tuesday assorted links
What’s wrong with this picture?
The New York Times covers a controversy about a Texas history textbook:
Coby Burren, 15, a freshman at a suburban high school south of here, was reading the textbook in his geography class last week when a map of the United States caught his attention. On Page 126, a caption in a section about immigration referred to Africans brought to American plantations between the 1500s and 1800s as “workers” rather than slaves.
The black lives matter movement is upset that slaves are referred to as workers.
I am upset that the caption is factually incorrect even if rewritten not to use the word worker. In particular, it is not true that millions of slaves were brought from Africa to the southern United States. In fact, less than half a million came to the United States.
Here is Henry Louis Gates Jr:
The most comprehensive analysis of shipping records over the course of the slave trade is the Trans-Atlantic Slave Trade Database, edited by professors David Eltis and David Richardson. (While the editors are careful to say that all of their figures are estimates, I believe that they are the best estimates that we have, the proverbial “gold standard” in the field of the study of the slave trade.) Between 1525 and 1866, in the entire history of the slave trade to the New World, according to the Trans-Atlantic Slave Trade Database, 12.5 million Africans were shipped to the New World. 10.7 million survived the dreaded Middle Passage, disembarking in North America, the Caribbean and South America.
And how many of these 10.7 million Africans were shipped directly to North America? Only about 388,000. That’s right: a tiny percentage.
Here is the primary database for what we know about the Atlantic Slave Trade which lists 305,326 slaves brought to the USA. Gates goes on to note that some 60-70 thousand slaves initially brought to the Caribbean ended up in the United States so he estimates that perhaps 450,000 African slaves in total were brought to the U.S. over the course of the slave trade.
If you want to understand the slave trade it’s important to understand that the vast majority of the slaves taken from Africa were shipped to the Caribbean and South America. If you want to understand slavery in America it’s important to understand that most slaves in the United States were born into slavery. Also, as Gates notes, it’s a rather striking and amazing fact that “most of the 42 million members of the African-American community descend from this tiny group of less than half a million Africans.”
Regardless of whether you think that slaves are workers or not the textbook failed its students by getting the facts wrong. In a better culture, that failure would make for a controversy and a story in the New York Times.
Hat tip: Arthur Charpentier on twitter.