Month: March 2018

My Tokyo advice for Scott Sumner

Eat both quality French and Italian food there.

They still have real CD shops, if that matters to you.

Spend some time in the underground/subway city parts, maybe Shinjuku station, a few others.

Not sure if the old fish market is still up and running, worth a visit if it is.

Get your iPhone ready for translate functions, print and voice.

Getting lost there is great, don’t obsess over sights.

National Museum. The Western museums are decent but also not essential.

Look for a neighborhood with immigrants.

Sample Tokyo at all possible hours, if you can.

Kinokuniya bookstore is quite good. Overall I don’t love the Roppongi part of town, though, fancy bars and restaurants for expats, though fun in its own way.

Visit a Japanese working class district, such as Ikebukuro, also a major subway stop.

Look for vending machines and collections of vending machines.

The arcades there, including for children, are pretty amazing.

Try Pachinko once.

Tyler

Addendum: Here are the suggestions from Scott’s readers.

Sunday assorted links

1. Interview with Ken Rogoff (on chess).

2. The economic impact of major league baseball in the Dominican Republic.

3. More on autonomous vehicle safety (NYT).  And uh-oh.  More here.  Do you prefer zombies eating kitties!?  And at this point I don’t think the “Google city” in Toronto ever will be built, do you?

4. Paul Samuelson’s changing views on women.

5. Bach and sex.

6. Fraser Nelson argues the Brexit process is proving manageable (WSJ).

Iranian “CyberAttack” Threatens Elsevier Not USA

Here’s what Geoffrey Berman, U.S. attorney for the Southern District of New York, said when announcing charges against a group of Iranian “cyber attackers”:

“We have worked tirelessly to identify you,” Berman said. “You cannot hide behind a keyboard halfway around the world and expect not to be held to account. Together, along with our law enforcement partners, we will work relentlessly and creatively to apply the legal tools at our disposal to unmask and charge you. We will do all we can to bring you to justice. While the defendants remain at large, they are now fugitives from the American judicial system.

So what are these horrendous people being charged with? Stealing unreleased scripts of Game of Thrones and a bunch of academic articles. I am not making this up.

…members of the conspiracy used stolen account credentials to obtain unauthorized access to victim professor accounts, through which they then exfiltrated intellectual property, research, and other academic data and documents from the systems of compromised universities, including, among other things, academic journals, theses, dissertations, and electronic books.

(That is from the press release and here is the earlier press release on GOT, with which this has been combined in many news accounts. The full indictment is here).

In other words, the Iranians were running something like Sci-Hub, the website that some of you have probably used to bypass publisher paywalls to read articles linked to on MR that you haven’t paid for. I don’t defend such actions but neither do I want the federal attorney  working tirelessly to identify you. As crimes go this is a yawner.

Indeed, since Sci-Hub is already used in Iran, one wonders how useful the additional Iranian hacking was. A few companies are also listed as targets, although they turn out to be publishers, a stock image company, two online car companies etc. A few government agencies are thrown in for good measure although that appears to be window dressing.

The federal attorney claims the hacking (hacking not attacking) cost billions which they estimate because:

Through the course of the conspiracy, U.S.-based universities spent over approximately $3.4 billion to procure and access such data and intellectual property.

As Tim Worstall puts it:

That’s just DoJ making up some number to make them look good. The direct losses in this scheme almost certainly amount to zero, bupkiss, nada. Universities certainly haven’t lost anything – the data was copied, not taken. The publishers might have lost a bit, but even then it would only be the revenue they would have got from papers that would have been bought if they hadn’t been copied. A useful estimate of the size of that loss still being zero, bupkiss, nada.

Frankly, this is a joke of an indictment. But headlines like “US Charges 9 Iranians With Massive Cyberattack” are certainly fortuitously timed for new national security designate John Bolton and others who want to take a hardline on Iran.

U.S. metro regions with the biggest intra-national trade deficits and surpluses

First, the biggest deficits (data for 2010, in billions of dollars):

Washington: -$86 billion

Miami: -$68 billion

San Francisco: -$41 billion

Atlanta: -$35 billion

Baltimore: -$33 billion

…Next, the biggest surpluses:

Los Angeles: +$63 billion

Memphis: +$29 billion

Greensboro: +$18 billion

Corpus Christi: +$18 billion

New Orleans: +$15 billion

Buffalo/Niagara Falls also has a sizable trade surplus as a percent of its gdp.

Which is the better list to be on?  Very often the surplus or deficit has a lot to do with demographics and population changes:

Now, I don’t think many people would consider New Orleans an economic winner. In fact, its population declined 11 percent from 2000 to 2010, partly because of Katrina, but also because of wider problems. And that very decline means that savings generated in New Orleans go elsewhere in search of returns.

That is from Paul Krugman at the NYT.  When it comes to Australia, by the way, one reason the country can run perpetual trade deficits, without inducing a financial crisis, is because of its rapidly growing population.

You might be interested in this Andrea Ferrero piece from the 2010 JME:

This paper investigates the contribution of productivity growth, demographics and fiscal policy in accounting for the evolution of the US external imbalances against industrialized countries during the last three decades. Productivity growth plays a dominant role. Demographics explain a non-negligible and nearly permanent component of the US trade deficit. Furthermore, the international demographic transition is crucial for large US external imbalances to be consistent with the persistent decline of world real interest rates observed in the data. Fiscal policy is of minor importance.

Productivity growth matters because foreign countries wish to invest capital in countries, such as the U.S., which employ it relatively well.

Saturday assorted links

1. The consequences of economic development.

2. A postulate for rival firms with common owners.

3. 44 African countries sign a free trade deal (though not Nigeria).

4. Profile of Vaclav Smil.

5. “He said the stone defence was intended as a last resort if evacuations failed.

6. “…we estimate that approximately 95% of the potential predictive accuracy attainable for an individual is available within the social ties of that individual only, without requiring the individual’s data.”  Link here.

Why an American third party remains unlikely

Donald Trump would not be President today if he had tried to mount a third-party candidacy rather than running as a Republican. Bernie Sanders would not be a national leader if he had just stayed in third-party politics in backwater Vermont rather than caucusing with the Democrats and contesting for control of the Democratic Party. So the existing parties are a shortcut to power for ambitious politicians. The parties are porous to those ambitions. In the process, they take on new influences, and new policy priorities.

So it’s really remarkable when you reflect back on what the Republican Party was at its founding and look at what it is today. And the Democratic Party as well. They’ve literally exchanged places. The Republican Party was a Northern party that was for African-American rights, high-taxes, and internal improvements.

That is by Frances Lee, the entire symposium is interesting.  Christopher Caldwell tells us: “The Democrats have become the party of sexual morality.”

How economists use Twitter

When using Twitter, both economists and natural scientists communicate mostly with people outside their profession, but economists tweet less, mention fewer people and have fewer conversations with strangers than a comparable group of experts in the sciences. That is the central finding of research by Marina Della Giusta and colleagues, to be presented at the Royal Economic Society’s annual conference at the University of Sussex in Brighton in March 2018.

Their study also finds that economists use less accessible language with words that are more complex and more abbreviations. What’s more, their tone is more distant, less personal and less inclusive than that used by scientists.

The researchers reached these conclusions gathering data on tens of thousands of tweets from the Twitter accounts of both the top 25 economists and 25 scientists as identified by IDEAS and sciencemag. The top three economists are Paul Krugman, Joseph Stiglitz and Erik Brynjolfsson; the top three scientists are Neil deGrasse Tyson, Brian Cox and Richard Dawkins.

Here is further information, via Romesh Vaitilingam.  But I cannot find the original research paper on-line.  These are interesting results, but still I would like to see the shape of the entire distribution…

Testing the eggheads in the cryptocurrency market

Some of the world’s best-known economists on Thursday announced plans to create what could be described as the thinking person’s cryptocurrency. Saga aims to address many of the criticisms frequently thrown at bitcoin, the world’s biggest cryptocurrency, to position itself as an alternative digital currency that is more acceptable to the financial and political establishment.

It is being launched by a Swiss foundation with an advisory board featuring Jacob Frenkel, chairman of JPMorgan Chase International and former governor of the Bank of Israel; Myron Scholes, the Nobel Prize-winning economist; and Dan Galai, co-creator of the Vix volatility index. The Saga token aims to avoid the wild price swings of many cryptocurrencies by tethering itself to reserves deposited in a basket of fiat currencies at commercial banks. Holders of Saga will be able to claim their money back by cashing in the cryptocurrency.

The currency also aims to avoid the anonymity afforded by bitcoin, which has raised financial crime concerns with regulators and bankers. Saga will require owners to pass anti-money laundering checks and allow national authorities to check the identity of a holder when required.

Oh so respectable sounding!  They’re not doing an ICO, instead there is a variable fractional reserve system, and the ruling principle is that Saga, the asset, “entitles its investors to a rising number of Saga as usage of the cryptocurrency grows.”  It sounds like a bet on the notion that bootstrapping is central to crypto success.  But do investors really want “safe harbours from the raging volatility”?  Do investors want a currency at all?  By the way, this one is proof of stake, not proof of work.

Here is their web site, and here is the White Paper.  Here are other readings on the asset.  Here is the original FT article, FTAlphaville is less impressed.

Do the participants have too much skin in other games?  So far I don’t see the point of doing this one, as it doesn’t create an asset with a truly different risk profile than the others, not from what I can see.

Further adventures in median voter land, GOP Omnibus edition

GOP House

GOP Senate

GOP White House

Planned Parenthood still getting $500 million in taxpayer funding

That is from a tweet by Peter J Hasson.  One of the most underreported and insidious forms of media bias is underestimation of the median voter theorem.  Unlike many forms of media bias, partisans on neither side have an incentive to reveal this one.  It really does make a lot of political struggles much less interesting and dramatic.  Here is my earlier post on “Three Word Explanations.”

Friday assorted links

1. The rate of draws is not going up in chess, even though play is improving and likely the perfectly played game is a forced draw (model this).  And Noah Feldman on game theory in the Middle East, the Saudis and Kushner too.

2. The perfect oil field.

3. A claim that India is becoming a minoritarian dystopia.

4. Diamonds embedded in the human being are the new trend in engagement rings.

5. The academic who defended colonialism.  Good piece.

6. I did a short podcast with the new Institute for Innovative Governance Research about…innovative governance, starting with charter cities and seasteading but also going beyond that.  Here is an associated essay by Mark Lutter.

Cryptocurrencies in everything

A cryptocurrency called Agrocoin is giving buyers a chance to invest in some of the world’s spiciest peppers.

Mexico’s Amar Hidroponia, which grows only habanero chilis, started selling digital tokens in September as a way to raise capital from smaller investors. Each 500 peso ($27) Agrocoin is backed by a square meter of hydroponic production in Quintana Roo state. The company says it expects to pay a yearly dividend equal to about 30 percent of the cost, depending on output and demand.

Here is the full Bloomberg story.

My March 28 talk at MIT

What happens when a simulated system becomes more real than the system itself?  Will the internet become “more real” than the world of ideas it is mirroring? Do we academics live in a simulacra?  If the “alt right” exists mainly on the internet, does that make it more or less powerful?  Do all innovations improve system quality, and if so why is a lot of food worse than before and home design was better in 1910-1930?  How does the world of ideas fit into this picture?

Here are details on the lunch seminar.

Are the Amish unhappy?

We were able to recruit 52 Amish participants for our study of which 56 % were male and for which the average age was 44. Interestingly, the average levels of life satisfaction as measured by the SWLS (Diener et al., 1985) was 4.4; just above the neutral point. Above neutral scores are consistent with the idea that “most people are mildly happy” (Diener & Diener, 1996), and that mild happiness is evolutionarily advantageous (Fredrickson, 2001). Comparatively, the Amish satisfaction in our study can be interpreted as meaning that the Amish fall lower than members of many other groups. In a study of more than 13 thousand college students from 31 nations, for example, only students from Kenya (whose average life satisfaction was 4.0) scored lower than the Amish (Diener & Diener, 1995).

Anecdotally, the Amish society in which we conducted our study was fraught with contrasts. On the one hand, the Amish had a pronounced pro-social attitude. One man I interviewed, for example, had donated tens of thousands of US Dollars toward the medical treatment of his neighbor’s son, with no thought of repayment. Similarly, the Amish often helped one another in quilting, construction, and food preparation. On the other hand, these neighborly behaviors were confined to in-group members. There was a conspicuous degree of prejudice toward out-group members, especially ethnic or religious minorities. One bishop, for example, asked me whether I thought the space shuttle Challenger exploded because there was a Jewish person (Judith Resnick) aboard.

Another set of contrasts could be found in the relationship between the Amish and the larger “English” society in which they live. While on the one hand there is a strong cultural push to remain separate from industrialized society. The Amish I spoke with were highly invested in publicly conforming to group norms related to abstaining from the use of industrial technologies and from remaining aloof from broader society. Privately, however, the Amish revealed themselves to be as curious and as human as people from any other society. One participant, for example, admitted that he used his workplace telephone—an allowable technology—to phone a newspaper number that hosts recordings of the world’s news. Another informant revealed that she had secretly flown on an airplane. These examples reflect the on-going tension of a society that must—individually and collectively—continually re-negotiate its relation to the larger society in which it exists. Where subjective well-being is concerned, the tension between retaining traditions and adapting to new circumstances is an interesting issue for research.

…global and specific domain satisfaction should, theoretically, be in agreement. For example, if a person is satisfied with her romantic life, her friendships, and her family relationships—all specific domains—she should, logically, report about the same amount of satisfaction with her overall social life (the global domain). Diener and colleagues found that this correspondence occurred in some cultures, such as Japan. In other cultures, however, they discovered an inflationary effect. People in Colombia and the United States, for instance, are likely to inflate their global reports of satisfaction over that reported for specific satisfaction.

That is by Robert Biswas-Diener, there is much of interest in this paper on happiness in small societies.  Via Rolf Degen.  By the way, this article about Norway is worth a ponder too.

What should I ask Balaji Srinivasan?

I will be doing a Conversation with him, no associated public event.  Here is his home page, here is his bio:

Balaji S. Srinivasan is the CEO of Earn.com and a Board Partner at Andreessen Horowitz. Prior to taking the CEO role at Earn.com, Dr. Srinivasan was a General Partner at Andreessen Horowitz. Before joining a16z, he was the cofounder and CTO of Founders Fund-backed Counsyl, where he won the Wall Street Journal Innovation Award for Medicine and was named to the MIT TR35.

Dr. Srinivasan holds a BS, MS, and PhD in Electrical Engineering and an MS in Chemical Engineering from Stanford University. He also teaches the occasional class at Stanford, including an online MOOC in 2013 which reached 250,000+ students worldwide.

His latest Medium essay was on ICOs and tokens.  I thank you all in advance for your wise counsel.