Month: November 2016
In most cases, my review is behind the link, though a few times it leads merely to the Amazon page. If I wrote only a few words about the book, I have reproduced them directly in this post. And the books are listed, more or less, in the order I read them. Apologies if I forgot your book, each year I do neglect a few. Here goes:
Marco Santagana, Dante: The Story of His Life.
Melancholy, by László F. Földényi.
Ji Xianlin, The Cowshed: Memoirs of the Chinese Cultural Revolution. The classic account of its kind, in this edition brilliantly translated and presented.
Robin Hanson, The Age of Em. Unlike any other on this list, this work created a new genre.
Benedict Anderson, A Life Beyond Boundaries.
Tom Bissell, Apostle: Travels Among the Tombs of the Twelve. Fun, engaging, and informative, worthy of the “best of the year non-fiction” list.
Siddhartha Mukherjee, The Gene: An Intimate History.
Srinath Raghavan, India’s War: World War II and the Making of Modern South Asia.
Benjamin Grob-Fitzgibbon, Continental Drift: Britain and Europe from the End of Empire to the Rise of Euroscepticism.
Peter Parker, Housman Country: Into the Heart of England. It’s already out in the UK, which is where I bought my copy.
Lawrence Rosen, Two Arabs, a Berber, and a Jew: Entangled Lives in Morocco. Superb descriptive anthropology.
Lyndal Roper, Martin Luther: Renegade and Prophet. Due out in February, the UK edition is already out. Substantive and delightful on every page.
Kerry Brown, CEO, China: The Rise of Xi Jinping.
Richard van Glahn, The Economic History of China: From Antiquity through the 19th Century.
Christopher Goscha, The Penguin History of Modern Vietnam. The best general history of Vietnam I know, and it does not obsess over “the Vietnam War.” Readable and instructive on pretty much every page.
Andrew Scott Cooper, The Fall of Heaven: The Pahlavis and the Final Days of Imperial Iran.
William Domnarski, Richard Posner.
Peter Laurence, Becoming Jane Jacobs.
Daniel Gormally, Insanity, Passion, and Addiction: A Year Inside the Chess World. A personal favorite, you can read this as a study in labor economics as to why people hang on to crummy jobs.
Joshua Foer, Dylan Thuras, and Ella Morton, Atlas Obscura: An Explorer’s Guide to the World’s Hidden Wonders. Short descriptions of places you ought to visit, such as ossuaries, micronations, museums of invisible microbes, the floating school of Lagos, the Mistake House of Elsah, Illinois, Bangkok’s Museum of Counterfeit Goods, and the world’s largest Tesla coil in Makarau, controlled by Alan Gibbs of New Zealand. The selection is conceptual, so I like it. I will keep this book.
Jean Lucey Pratt, A Notable Woman.
Ben H. Shepherd, Hitler’s Soldiers: The German Army in the Third Reich.
Sebastian Mallaby, The Man Who Knew: The Life and Times of Alan Greenspan
Tim Harford, Messy: The Power of Disorder to Transform Our Lives.
Marina Abramović, Walk Through Walls.
Christopher de Hamel, Meetings with Remarkable Manuscripts.
I would describe this year as thick in wonderful, superb books, though I remain uncertain which of these is truly the year’s winner. So many plausible contenders! I can only promise I’ll continue to cover what comes out between now and the end of the year, and apologies if one or two of those above are from late 2015.
The NYTimes has a good piece on dam infrastructure:
Built in 1929, Lock No. 52 sits in a quiet corner of southern Illinois that happens to be the busiest spot on America’s inland waterways, where traffic from the eastern United States meets and passes traffic from the Gulf Coast and the Mississippi River. More than 80 million tons of grain, coal, fuel and other goods — worth over $22 billion — move through here each year.
The problem is that the old dam is crumbling and a new one is way behind schedule:
The average delay at No. 52 in October and November was 15 to 20 hours. At the moment, No. 52’s sister dam downriver, No. 53, is adding 48 more hours to the wait.
Dealing with both dams, it can take five days to travel just 100 miles on this stretch of the Ohio River.
It’s not just dams, there is a lot of room for relatively simple infrastructure projects which aren’t sexy like high-speed rail but are valuable. As I wrote in 2012 (no indent):
Rail congestion in Chicago, for example, is so bad that freight passing through Chicago often slows down to less than the pace of an electric wheel chair. Improvements are sometimes as simple as replacing 19th century technology with 20th century (not even 21st century!) technology. Even today (2012, improvements are being made, albeit slowly AT), for example:
…engineers at some points have to get out of their cabins, walk the length of the train back to the switch — a mile or more — operate the switch, and then trudge back to their place at the head of the train before setting out again.
In a useful article Phillip Longman points out that there are choke points on the Eastern Seaboard which severely reduce the potential for rail:
…railroads can capture only 2 percent of the container traffic traveling up and down the eastern seaboard because of obscure choke points, such as the Howard Street Tunnel in downtown Baltimore. The tunnel is too small to allow double-stack container trains through, and so antiquated it’s been listed on the National Register of Historic Places since 1973. When it shut down in 2001 due to a fire, trains had to divert as far as Cincinnati to get around it. Owner CSX has big plans for capturing more truck traffic from I-95, and for creating room for more passenger trains as well, but can’t do any of this until it finds the financing to fix or bypass this tunnel and make other infrastructure improvements down the line. In 2007, it submitted a detailed plan to the U.S. Department of Transportation to build a steel wheel interstate from Washington to Miami, but no federal funding has been forthcoming.
Longman points out that:
Railroads have gone from having too much track to having not enough. Today, the nation’s rail network is just 94,942 miles, less than half of what it was in 1970, yet it is hauling 137 percent more freight, making for extreme congestion and longer shipping times.
…. And it’s not just rail, sewers and the water supply are another example. Consider:
The average D.C. water pipe is 77 years old, but a great many were laid in the 19th century. Sewers are even older. Most should have been replaced decades ago.
Does that sound like the infrastructure of an advanced nation?
I find that a free trade zone in a province delays the age of first marriage by 1.6 years. Moreover, the probability of early marriage is reduced by 30 percentage points. The results are primarily driven by women that were in school at the time of the opening. The free trade zones increase women’s years of education, especially during secondary school.
Another paper of hers shows that indoor prostitution lowers sex crime (pdf). Her job market paper (pdf) is on how childhood exposure to illegal activities can breed criminal behavior later in life, here is the abstract:
This paper shows that exposing children to illegal labor markets makes them more likely to be criminals as adults. I exploit the timing of a large anti-drug policy in Colombia that shifted cocaine production to locations in Peru that were well-suited to growing coca. In these areas, children harvest coca leaves and transport processed cocaine. Using variation across locations, years, and cohorts, combined with administrative data on the universe of individuals in prison in Peru, affected children are 30% more likely to be incarcerated for violent and drug-related crimes as adults. The biggest impacts on adult criminality are seen among children who experienced high coca prices in their early teens, the age when child labor responds the most. No effect is found for individuals that grow up working in places where the coca produced goes primarily to the legal sector, implying that it is the accumulation of human capital specific to the illegal industry that fosters criminal careers. As children involved in the illegal industry learn how to navigate outside the rule of law, they also lose trust in government institutions. However, consistent with a model of parental incentives for human capital investments in children, the rollout of a conditional cash transfer program that encourages schooling mitigates the effects of exposure to illegal industries. Finally, I show how the program can be targeted by taking into account the geographic distribution of coca suitability and spatial spillovers. This paper takes a first step towards understanding how criminals are formed by unpacking the way in which crime-specific human capital is developed at the expense of formal human capital in bad locations.
She has numerous papers and virtually all of them look quite interesting. Other topics include whether domestic violence lowers human capital investment and the economic effects of the (former) gang truce in El Salvador. Here is her basic research portfolio.
That’s banks doing proprietary trading for their own accounts, which was limited by Dodd-Frank. But have those limitations been effective? Maybe not, at least that is what Jussi Keppo and Josef Korte suggest in their newly published paper:
We analyze the Volcker Rule’s announcement effects on U.S. bank holding companies. In line with the rule and the banks’ public compliance announcements, we find that those banks that are affected by the Volcker Rule already reduced their trading books relative to their total assets 2.34% more than other banks. However, the announcement of the rule did not reduce the banks’ overall risk taking. To keep their risk targets, the affected banks raised the riskiness of their asset returns. We also find some evidence that the affected banks raised their trading risk and decreased the hedging of their banking business.
I would not consider this the final word, but those results are hardly a surprise. Trying to control bank risk-taking on a limited number of margins is likely to misfire, given the possibilities for other portfolio adjustments.
Most of all I find it striking how many people have strong opinions on the Volcker rule, one way or another, simply because they feel they ought to be on one “side” of the issue.
Here is an overview of what is up, here is the plan itself. Since it was produced by a bureaucracy rather than a blogger, it is hard to wade through the verbiage. Nonetheless one of the bottom lines is a call for greater unity of methods and especially terms, so as to make discrete studies by different researchers more easily comparable, searchable, and aggregated into broader meta-studies, for instance:
In response to these types of measurement concerns, the Patient-Reported Outcomes Measurement Information System (PROMIS) developed a common scale or metric on which all measures of a given construct can be expressed. To achieve this, PROMIS developed and tested item banks using modern psychometric theory that, in addition to producing more precise and efficient measures, allow different measures of the same construct to be cocalibrated. As a result, different instruments measuring the same construct can be expressed on a single metric, aiding data harmonization and integration.
Another approach to addressing this data harmonization and integration challenge is to develop consensus measures for specific constructs. PhenX, for example, has developed a curated set of measurement protocols for specific phenotypic constructs. The NCI Grid-Enabled Measures website utilizes a crowdsourcing wiki approach to cataloging the various measures of a given social or behavioral construct. The National Library of Medicine has generated a directory of common data elements that serves as a repository for commonly accepted measures and data structures that, if adopted by researchers, would facilitate data integration across studies.
The original pointer is from Mitchell Eckert. Keep in mind economists that, depending on your definition of economics, the NIH arguably supports at least as much economics research as does the NSF.
You might also be interested in University of Wisconsin job market candidate Nathan Yoder, whose main paper, a theory paper, is on improving incentives for academic research. Here is the latter part of the abstract:
In keeping with current practice, the institution contracts based on the experiment’s result instead of its methodology. This removes a degree of freedom from the optimal design problem, but I show that there need not be loss from doing so. The optimal contract has two general characteristics. First, to discourage the production of false positive results, negative results supporting conventional wisdom must be rewarded. Second, the most informative results must be disproportionately rewarded. To arrive at these conclusions, I contribute to the literature by characterizing solutions and comparative statics of Bayesian persuasion problems using differentiability.
These topics remain very much understudied.
That is my latest Bloomberg column, here is one excerpt:
One way to approach Cuba’s economic fate is to consider the Caribbean region as a whole. For the most part, it has seen mediocre results since the financial crisis of 2008. Economic problems have plagued Puerto Rico, Trinidad, Jamaica, Haiti and Barbados, with only Jamaica seeing a real turnaround.
The core problems of the region include high debt, weak commodity prices, lack of economies of scale and an inability to upgrade tourist facilities to compete with the U.S., Mexico and further-flung locales. Cuba cannot service its foreign debt, and losing most of its support from Venezuela has been a massive fiscal problem.
Perhaps the country most like Cuba in the Caribbean, in terms of history, heritage and ethnic composition, is the Dominican Republic. Currently, it has a nominal gross domestic product of somewhat over $6,000 per capita, depending which source you prefer. That’s far from the bottom tier of developing economies, but it’s hardly a shining star. And Cuba will take a long time to attract a comparable level of multinational investment, or to develop its tourist facilities to a comparable level of sophistication. Well-functioning electricity and air conditioning cannot be taken for granted in Cuba, especially after the major decline in energy supplies from Venezuela.
The most optimistic forecast for Cuba is that, after a few decades of struggle and reorientation, it will end up at the income level of the Dominican Republic.
If you are wondering, the World Bank measures Cuban GDP at over $6,000 per capita, but that is based on a planned economy and an unrealistic exchange rate. In reality, Cuba probably is richer than Nicaragua, where GDP per capital is approximately $2,000, but we don’t know by how much. Cuba does have relatively high levels of health care and education, but we’ve learned from post-Soviet reform experiences that it is easy for a nation to lose those advantages. There are already shortages of many basic health care items, including medical technology and antibiotics.
There is much more at the link.
2. Bagpipe nudge.
6. If Cuba had never had a communist revolution (a research paper based on a counterfactual scenario, pdf).
A café in New York has found a way around this whole awkward dance: customers pay by the minute, rather than the cup.
The Glass Hour Café in Williamsburg, Brooklyn feels more like somebody’s living room than a coffee shop. Walking around, you see a couch, some bean bag chairs. What you won’t see at Glass Hour: a kitchen or even a cappuccino machine. You serve yourself from a simple drip coffee pot. The food? A few humble granola bars and chocolates.
The owners, who opened it in August, call it an anti-café. Instead of shelling out for food and drink, customers pay for the time they spend — 10 cents a minute or $6 an hour. Which means no one will judge you for sitting here all day long.
Pay-as-you-go cafés are new to the U.S., but there are dozens in Europe, mostly in Russia. Glass Hour’s Zlata Koshlina and her cofounders are Russian immigrants and got the idea for their cafe from a Ziferblat café in Moscow.
Here is more, via Air Genius Gary Leff. But why Russia? Is it because there is a closer association between higher income and higher status in Russia, and thus charging an explicit price for time does not bring a negative clientele composition effect?
Not so much:
The role of high tariffs in the emergence of the U.S. as a leading industrial nation in the late 19th century is still hotly debated. Despite its symbolic signifi- cance in the arguments of Free Trade, the quantitative implications of the tariffs on key features of the development are still unknown. In this paper I ask: Could the U.S. have grown as it did without the high tariffs imposed on its manufacturing imports in the late 19th century? To see this clearly, my analysis is quantitative and counterfactual in nature, effectively isolating the effects of the tariffs from other important forces. To do this, I construct a three-region general equilibrium model. The model is calibrated to match the key data during this period. Then, I disentangle the effects of the tariffs under two different assumptions. First, I assume that manufacturing productivity is exogenous to the tariffs. Then I assume that there exists learning-by-doing in U.S. manufacturing so that the tariffs positively affect productivity. Contrary to popular beliefs, I find that the effects of high manufacturing tariffs are quantitatively small. Even with learning-by-doing, tariffs only contributes about 4 percent to the growth of the manufacturing output, and a little more than 1 percentage point to its share in world manufacturing from 1870 to 1913. I then ask what the key driving forces for development are. I find that the large increase in labour force is the single most important factor behind the development of the U.S. economy.
1. TLS books of the year list. I can’t recall seeing such a good list from the TLS.
4. A tweet storm from my IO class, including on CEO pay.
5. David Brooks on Kahneman and Tversky (NYT).
This is what is circulating in the House, Trump and the Senate have yet to influence it directly:
KEY DIFFERENCES BETWEEN CURRENT U.S. CORPORATE TAXES AND HOUSE GOP PROPOSAL
Corporate Tax Rate:
Current: Depreciated over time
Proposal: Deducted immediately
Proposal: Net interest expense not deductible
Basis for Location of Taxation:
Taxation of Foreign Profits:
Current: Pay foreign tax, pay U.S. tax upon repatriation, minus foreign tax credits
Proposal: Generally repatriated without U.S. taxes, after one-time transition tax
Proposal: Tax applied to imports, removed from exports
There is more at the WSJ link, a very clear and useful piece by Richard Rubin. Do note that a stronger dollar — which we already see — will undo some of this effort to put American exports on a stronger footing. And deducting capital expenses immediately seems like an attempt to goose up the current economy in an unwise and unsustainable fashion. The lower corporate tax rate is a good idea. What are your opinions on these changes?
It seems quite a few of the poor, when they get some extra money, want to keep on buying refined sugar. Or in other words, it takes quite a bit of income (or is it education?) to “elevate taste.” Here is the job market paper by Olga Kozlova of Duke University:
This paper explores how the low-income households change the quality of their food basket when they experience a budget increase. I use the variation in the monthly household budget coming from the exogenous variation in the winter temperature that directly affects the heating bills. I show that in response to a higher budget available the expenditure share on healthy food does not increase. I find that households increase the share of expenditure on fruits, but they purchase fruit products with a higher amount of sugar. My findings suggest that there are important trade-offs in policies that subsidize food expenditure because these policies allow low-income households to purchase more of the healthy as well as the unhealthy food products.
Also on the job market, from Northwestern, here is Mara P. Squicciarini, whose job market paper argues that Catholic education held back economic growth in 19th century France. She also co-edited a book The Economics of Chocolate.
I was disappointed by most of this year’s well-known releases, and did most of my rewarding fiction reading in past classics. But these are the fiction or fiction-related works I found to be outstanding this year:
Eimear McBride, The Lesser Bohemians. A novel of an affair, with intoxicating Irish prose and a genuine energy on the page, though it is more a work of intensifying fervor than a traditional plot-based story.
Claire Louise-Bennett, Pond, more from Ireland, short, nominally fiction but more like a circular sensory experience of reading overlapping short stories, with a cumulative effect akin to that of poetry. I found this one mesmerizing.
Javier Marias, Thus Bad Begins. I have only started this, but so far I like it very much. I have enough faith in Marias to put in on the list.
Juan Gabriel Vásquez, Reputations, a short Colombian novel on memory — personal, historical, sexual, and otherwise, this was my favorite short work of the year.
The Complete Works of Primo Levi, in three volumes, edited by Ann Goldstein. By no means is all of this fiction, but I will put these books in this category. A revelation, as Levi has more works of interest, and a broader range of intellect and understanding, than I had realized. There is plenty of linguistics, economics, history, and social science in these literary pages as well as consistently beautiful writing and superb translations. This is technically from 2015, but I missed it last time around.
Emily Dickinson’s Poems as She Preserved Them, edited by Cristanne Miller. The visual presentation of poetry matters too, plus she is one of the very best.
The Found and the Lost: The Collected Novellas of Ursula K. LeGuin, self-recommending.
Elena Ferrante, Frantumaglia. A revealing mismash look into the mind of the author, giving you an integrated picture of her world view, with carefully calculated feints thrown in. I should note this one works only if you know and love her novels already. Ferrante’s “children’s” story The Beach at Night is also worthwhile, very dark, you can read it in a small number of minutes. Here is a good NYT review.
Jean-Michael Rabaté, Think Pig! Beckett at the Limit of the Human. This work of criticism is grounded in literary theory, but informative and smart nonetheless.
Michael Orthofer, The Complete Review Guide to Literary Fiction. An amazingly comprehensive and informative work, mostly about literature in translation, from the creator of the Literary Saloon blog about fiction. I liked it so much I decided to do a Conversation with Michael Orthofer. If you could own only ten works on literature, this should be one of them.
If you give me only one pick, I opt for the Primo Levi, even if you think you already know his work.
A few I didn’t get to read yet, but have hopes for are Alan Moore’s Jerusalem, and Deborah Levy’s Hot Milk, caveat emptor in both cases, plus Invisible Planets, edited by Ken Liu, a collection of Chinese science fiction.
My post on best non-fiction of the year will be coming soon, plus I’ll do new entries for any excellent fiction between now and the end of the year.