Month: January 2017

Dating markets in everything

TrumpSingles.com is a matchmaking site where supporters of President-elect Donald Trump can connect and possibly find love.

During an appearance on “Fox & Friends,” the site’s founder said TrumpSingles helps supporters navigate a divisive year.

“Sometimes it’s tough to date when you’re a Trump supporter, so we’re making it easier to find each other, who are like-minded and have the same political views,” said David Goss, the 35-year-old Californian who launched the site in June.

TrumpSingles, which costs $19.95 per month, had 24,000 members as of Wednesday afternoon.

Here is the link, via Brent.

Skyscraper Economics

I loved Jason Barr’s Building the Skyline a history of New York from the point of view of the economics of skyscrapers. Where else will you learn so much of interest about elevators?

Elevators create a particular problem. On one hand, adding more floors to the building will produce more space from which the developer can collect more money. But at some point, a new shaft and set of elevators need to be added to handle the additional traffic. This then eats into the rentable space….Do the additional floors on top generate enough rents to cover the loss of new space from the elevators?

…skyscrapers must devote about 30% of the total space to elevators, including their shafts, hallways and machine rooms.

And then you have to get the people where they want to go quickly:

The new One World Trade Center will have the fastest cars in the Western Hemisphere, operating at a top speed of 2,000 feet a minute, though a relative snail compared with the Burj Khalifa, which delivers its tenants to any of its 164 floors at a rate of 3,543 feet per minute.

…Maximum [elevator] speed has increased at an average annual rate of 1.7% since 1913.

Barr loves skyscrapers and he writes about them beautifully. Building the skyline also has excellent photos and illustrations. It’s not for everyone but if the statistics, economics, and history of New York’s skyscrapers appeals, then this is the book to get.

Hat tip: Michael Hendrix.

How to organize your first day in a new city when you are traveling

An MR reader sends me this request:

You land in a new city – an urban area – without other commitments.
What’s the first thing you do?
What’s your first day look like?

The first thing I do is make sure blog is ready for the day to come (though that is usually pre-arranged if I am traveling).

The second thing I do is decide whether the country is worth wasting a meal on breakfast.  I might just skip it.  If not, the next thing I will do is get breakfast.  I evaluate breakfast options by walking and by sight, not by using the internet, as I find that old-fashioned method better training for all that life brings us.

Then I try to walk through at least two neighborhoods, to get a general sense of the city.  More importantly, I can then later take some time over lunch without feeling I haven’t seen anything yet.  These neighborhoods should be connected to the main drag in some way but not the main drag itself.  The main drag is often boring, though essential, and it is more likely to get a fuller treatment on day two, with only a quick peek on day one.

The best art museum will come after lunch, and then be followed by more neighborhood walking, perhaps in a more distant part of the city.  A major food market will come on day two, a vista or city lookout will come on day three.  It means less if I go to either right away, because I have less information about what I should be noticing and looking for.

The real question is what to postpone, not what to do.  Don’t attempt the most fully integrative experiences right off the bat, because you are squandering some of their potency.

China fact of the day

Shenzhen, a city in southern China known for electronics manufacturing, stood out last year, completing 11 such skyscrapers. That’s more than the US and Australia combined. The city was also China’s hottest real estate market last year.

Next was Chongqing, noted for its fast GDP growth (link in Chinese), and Guangzhou, which completed a new finance center with 111 stories and especially fast elevators.

There is much more information at the link.

Friday assorted links

Globalization and Davos Man are underrated

That is the topic of my latest Bloomberg column, here is one excerpt:

One of the biggest objections to recent globalization is that it extended international trade at a destabilizing pace. Whether or not you agree with this negative assessment, from 1950 to 2008, international trade grew about three times faster than global gross domestic product. Since then, cross-country trade has grown much more slowly, at about the pace of global GDP growth or perhaps slower. For better or worse, that is a significant deceleration.

Elites didn’t just decide trade growth had to be slowed down. Rather, the initial rapid growth had some self-reversing properties built in. For instance, China’s growth and exports slowed down as the economy matured and wages rose, trade-intensive Europe became a smaller percentage of the global economy, and protectionist nontariff pressures have recently been rising.

The wisdom behind globalization isn’t a belief that it will be steered by very wise elites. Rather, most economic processes show elements of convergence, stability and mean-reversion, without anyone planning them.

The conclusion:

I’m not saying that all is well, as I see significant possibilities for instability in the current political configuration. But the elites have in fact been working at their job, and now it is up to voters to catch up in their understanding.

Do read the whole thing.

Why weren’t floating exchange rates more popular during the Bretton Woods debates?

The excellent Douglas Irwin has a new NBER paper on that question, here is one excerpt:

Hayek (1937, 64) leveled three main criticisms against flexible exchange rates, all of which were frequently repeated during this period. First, flexible exchange rates would give rise to speculative capital flows that would be destabilizing; specifically, capital movements would reinforce exchange rate shifts arising from payments imbalances, thereby magnifying volatility and “turn what originally might have been a minor inconvenience into a major disturbance.” Second, flexible exchange rates would lead to competitive depreciations, the flexible rate counterpart to competitive devaluations, which would encourage a return to mercantilism and an increase in trade barriers. “Without stability of exchange rates it is vain to hope for any reduction of trade barriers,” he concluded (1937, 74n). Third, exchange rate instability would create risks that would discourage international trade and deter long-term foreign investment.

Frank Graham and Charles Whittlesey, both at Princeton, were among the few American economists who favored complete floating rates and monetary independence.  Now what might account for such a difference in opinion?:

1. They hadn’t yet learned that fixed rate systems just weren’t politically stable, but we now know this with the benefit of hindsight, including the failures of Bretton Woods and a new understanding that competitive devaluations don’t have to be so disastrous.

2. They were good economists, and we are plain, simple idiots.

3. Heavy-duty manufacturing exports, with only a few major exporting countries, and a lot of FDI potential in the periphery, plus plenty of highly illiquid currencies, actually militated in favor of fixed rather than floating rates at that time.

4. During that period people thought high level of international cooperation were necessary to solve problems, and this stemmed in part from the failures of World War I and later World War II.  If you favor “international cooperation” as a general value, you might then also tend to mood affiliate with the notion of fixed exchange rates.

I believe that factors #1-4 all might play a role in the complete explanation here.  Am I overlooking something?

How much fake news is needed to swing an election?

Hunt Allcott and Matthew Gentzkow have a new paper (pdf) on this topic.  I haven’t had a chance to look at it, but here is the bottom line:

… we find: (i) social media was an important but not dominant source of news in the run-up to the election, with 14 percent of Americans calling social media their “most important” source of election news; (ii) of the known false news stories that appeared in the three months before the election, those favoring Trump were shared a total of 30 million times on Facebook, while those favoring Clinton were shared eight million times; (iii) the average American saw and remembered 0.92 pro-Trump fake news stories and 0.23 pro-Clinton fake news stories, with just over half of those who recalled seeing fake news stories believing them; (iv) for fake news to have changed the outcome of the election, a single fake article would need to have had the same persuasive effect as 36 television campaign ads.

Self-recommending…

Thursday assorted links

Edward Lucas on the Baltics, Trump, Putin, and other matters

Here is one good bit of many:

I think that there are two big dangers from a Trump administration: one is a crisis, either the collapse of NATO or starting a nuclear war with another state, and the other is that he does a “grand bargain”, particularly because things probably won’t go very well for him at home and he will need a foreign policy success: he has an early summit with Putin and comes out with some kind of showy deal, which is very bad for the security of frontline states. So yes, I am worried about that. Putin can offer Trump cooperation on terrorism; he can offer cooperation on Syria. I think both of those are essentially nugatory, and if there was any real willingness to cooperate, they would be cooperating already, so you don’t need a grand bargain to have cooperation on that. But he can offer it; he can also offer some kind of deal on the front line: for example, taking missiles out of Kaliningrad in exchange for America cancelling its missile defence programmes, and possibly also going even further: Russia pulling troops back from its western military district and America pulling its forces out of the frontline. I think that would be absolutely catastrophic. So there are different levels of importance in this grand bargain, any of them bad.

Here is the whole interview.

When you get right down to it, who really cares?

From Garrett S. Christensen and Edward Miguel, from their survey of methodological problems in economic research:

Another potentially useful tool is post-publication peer review.  Formalizing post-publication peer review puts us in relatively uncharted waters.  Yet it is worth noting that all four of the AEA’s American Economic Journals allow for comments to appear on every article’s official webpage post-publication (anonymous comments are not allowed).  The feature does not appear to be widely used, but in one case…comments placed on the website have actually resulted in changes to the article between its initial online pre-publication and the final published version.

One of the biggest problems with “economics as a science” is that economists themselves cannot usually admit how irrelevant so much of the work — even the quality work — turns out to be.  I’m all for worrying about reproducibility, transparency, and the like, but sometimes I feel those micro-debates distract our attention from this bigger and broader problem and indeed help to obscure that problem.

Addendum: This website, JournalTalk, does the same thing.

My early 2009 take on Obama

I wrote it for a Spanish-language periodical, here is the end bit:

There is plenty of talk about Obama being half-black but perhaps the more important fact is that Obama is from Hawaii. Many Hawaiians barely think of themselves as North Americans and they live thousands of miles from the continent. The Hawaiian background is part of where Obama’s cosmopolitanism – which is strong and sincere – comes from.

My description may sound like a very favorable portrait of Obama on economics but he will likely encounter serious problems if he wins the election.  The important American Presidents are those like Reagan who “know a few big things” and push them unceasingly, without much regard for the pragmatic or even the reasonable.  Obama is not used to connecting with mainstream America and if he wins it is because the country is fed up with Republicans, not because the voters have absolute confidence in him.  Congress will test him.  The chance that he makes big mistakes will be small, and that’s all for the better.  But the best prediction is that he will be ineffective in tackling most of America’s biggest problems.

Here is the whole thing, not entirely correct by any means, but not so far off the mark either.

*Founder of Modern Economics: Paul Samuelson*

That is the new and truly excellent biography of Paul Samuelson, by Roger E. Backhouse, volume I alone, which covers only up to 1948, is over 700 pp.  So far I find it gripping, here is one bit:

…he ascribed his intelligence to genetics: “I began as an out-and-out believer in heredity.  My brothers and I were smart kids.  My cousins all weighed in above the average.  He was congenitally smart and made no secret of it, at one point noting in the early 1950s he was prescribed some medication that dulled his mind, giving him for the first time insight into “how the other half lives.”

Are you up for a 14 pp. discussion of what Samuelson learned from Gottfried Haberler?  I sure am…and if you are wondering, Lawrence Klein was the first student to complete a PhD in economics at MIT.