Assorted Monday links

Comments

..."so my back-up pick remains an environmental prize for Bill Nordhaus, Partha Dasgupta, and Marty Weitzman."

By combining Nordhaus and Romer , its a loss for others who could share with Nordhaus and those who could share with Romer.

Just like Dixit ( and Bhagwati?) lost out when Krugman got it alone.

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" Both Nordhaus and Romer are concerned with the total size of the economic pie — growing it as well as sustaining it. Bravo to all involved."

We don't want to sustain the economic pie but keep increasing it and making it better, right? I agree with the next sentence, though.

I think what is implied is sustaining the quality of the pie.

Right, but we want to improve the quality of the pie. For example, keep improving air and water quality in the developing world. "Just say no" to the stagnation of sustainability.

So I read that the former United States is so desperate for medical supplies that they have allegedly sent several containers filled with wheat and tobacco. A gesture, they said, of good will. You wanna know what I think? Well, you're listening to my show, so I will assume you do... I think it's high time we let the colonies know what we really think of them. I think its payback time for a little tea party they threw for us a few hundred years ago. I say we go down to those docks tonight and dump that crap where everything from the Ulcered Sphincter of Arse-erica belongs! Who's with me? Who's bloody with me?

Speaking of my advisor Heckman, my job as his RA consisted to a large part with helping Heckman with his prolific trolling on EJMR. I helped craft his troll posts. We also talked each night when I was to bring him the slate of the day's posts to decide which we would good and which we would no good.

Once, Heckman had the idea for a fake newspaper article that ended with a B+ in real analysis joke. I wrote it up as a male professor being accused of sexually harassing a female communications student. At 3 A.M., my phone rings. It is Heckman. He calls me an idiot, says that I am trying to ruin the troll, and he fires me. The next morning, however, he calls me and asks for an update on a lesser project (a post about a job market candidate writing a fake letter to a department that just made him an offer). So I am not fired, but another RA gets the task of writing the troll up as a lesbian relationship between an econ professor and one of her students.

I have a theory how this came about. While Tyler and others are praising the choice as brilliant, and in retrospect it makes sense (and they are both deserving), I suspect this came about in a circuitous way.

Tyler had guessed initially Nordhaus and Weitzman with a third. I agreed but with a different third. I also agreed with Garret Jones it might be macro, with Romer and Barro as a leasding possibility, possibly with a third.

I think it got to a debate between the two fields and Nordhaus-Weitzman versus Romer-Barro. There may have been effectively a deadlock. But both Weitzman and Barro are more controversial, so it may then have been figurred out that the way out was to dump them and make it just the more conventional and widely acceptable Romer and Nordhaus, with it being able to be done more or less coherently by emphasizing the growth issue. We may never know, but I strongly suspect that this is how it went down.

'Wir haben keine fixen Betriebskosten, keine komplizierten Genehmigungsschritte, kein Personal, das versorgt werden muss. Jeder einzelne Dollar, der Emergent Ventures gespendet wird, geht an die Empfänger.'

Heinlein might point out that TANSTAAFL is not a word that a German is likely to know, which may be why the interviewer was so credulous. Or also not curious about who actually does the accounting for how those potential millions of dollars are spent. Though one assumes that this description of is accurate - 'Emergent Ventures, a new fellowship and grant program from the Mercatus Center.'

'Wir wissen es, wenn wir es sehen'

Who knew that this perspective is not just useful for Supreme Court decisions involving the 1st Amendment.

'liebevollere Familien'

Since one assumes that the interview was conducted in English, seriously, 'more loving/kinder families?'

'Es ist kein politischer Fonds.'

Of course not - it wants to improve the world, which has nothing to do with politics, or 'schlechte Regierungsführung, Terrorismus oder ungleiche Chancen.' Not everything is about 'politics' as defined through an increasingly disturbing American lens.

'Nein, er hat eine erste Unterstützung zugesagt, sie davon abhängig gemacht, dass wir mehr Geld einsammeln.'

Which, of course, will happen all by itself - without any fixed costs, personnel, etc.

'Viele Menschen in den Geistes- und Sozialwissenschaften haben einfach Angst, ihre Meinung zu sagen.'

Sounds like a road bump that we need to get beyond - but such an interview is probably not the best place to talk about the potential of eugenics to make the world a better place.

'aber in einigen Fällen werden wir den Leuten helfen, anderswo eine gewinnorientierte Risikokapitalunterstützung zu erhalten'

You can never be too cynical when looking at that second round of funding, especially concerning those who have already had a chance to look at what is going on with those Emergent Venture proposals - https://marginalrevolution.com/marginalrevolution/2018/09/comments-emergent-ventures-new-project-foment-enlightenment.html

'Ich weiß immer nicht so genau, was die Leute mit dem Begriff Populismus meinen.'

So Straussian.

'die Qualität der Regierungsführung zu verbessern'

Or maybe just one part of what government is involved in. Transportation perhaps, so people can arrive on time at their destination.

'der Privatsektor vielleicht Aufgaben übernehmen, wenn der öffentliche Sektor versagt'

Or, at least as Labour hopes in the UK after Brexit, when looking at the failure of the private rail companies to deliver good service, the trains can finally run again on time after nationalisation, without the neo-liberal EU blocking such a move.

'Und eines unserer Stipendien wird einem Forscher helfen zu untersuchen, warum sich der Fortschritt in der Wissenschaft tatsächlich verlangsamt hat.'

Actually, German has a couple of words to cover this situation - Arbeitsbeschaffungsmassnahme or Selbstzweck come to mind.

Regarding Romer on American market size as a critical fulcrum, it is not principally size that matters, or size alone, it is propagation functionality over that size. The valid argument has been made that Europe in 1870 was of comparable size as a whole and had a denser transportation net over shorter distances, with the lower costs mitigating putative size advantages for the US. This does not take into account the relative propagation advantages of the US economy however, something Romer gets at indirectly in my view but did not develop.

The USA in 1870 (or pick any date post-Constitution including today) had one legal regime and jurisdiction that counted; Europe had many. The US had one tariff regime (and fought a war in part over that); Europe had many. The US had one principal tax system; Europe many. The US had one financial market center (NYC) with a few minor ones, and one commodity market center (Chicago); Europe had one major financial center (London) but many minor ones in different jurisdictions, and had many non-networked commodity and industrial regimes. The US had one political center which mattered as far as governance; Europe had many mutually hostile political centers.

The outcome is that in the US, innovations or financial system processes propagated widely over the entirety of the economic region. There was one basin and really only one center, as NYC and Chicago were closely linked in a way that minimized competition and turbulence. The US for instance, developed a system of raising cattle in the middle of the continent, shipping them to a few stockyard centers (Chicago and KC) and shipping the products to all major markets east of the Rockies. The same was true for wheat. Railroad nets managed by single countries covered tremendous spaces with optimized propagation over their own networks. I don't mean to excise the jurisdictional and nodal influences of state governments, but these were really quite minor compared to the national 'economic space.' One large basin with mostly shallow indentations which little constrained propagation.

Europe by contrast had many basins with steep boundaries in many cases. Each basin had its own nodal center politically, though some lacked financial nodal centers. This is a very difficult space to propagate effects over efficiently; production and growth tended to be state-specific, only propagating with difficulty over boundaries, and even then only with constraint. Food production, for instance, was NEVER integrated. Most states produced, or bought, for their own basin only, with only a moderate amount of on-selling. Political control of individual, steep-walled basins further limited propagation. Many such nodes actively competed, generating turbulence at least in economic propagation effects, and at times substantially canceling such propagation effects. The result was that Europe was less than the sum of its features. Basins actively competed for resources and interdicted propagation flow, both unintentionally as an inherent outcome and intentionally in attempting to restrict flows to competitors and drive it to themselves.

This is a crude summary, and yes, some commodities were distributed from their source over much all of Europe, such as Polish wheat in its time, or North Sea fish, or Baltic timber. This is what proves the larger picture, though, because it has been argued that it was just such trans-state propagation networks which principally drove economic growth in Europe 1500-mid 1800s. That is, where propagation actually had networks that flowed with less constraint, growth followed.

Consider if the US had been a weak confederation, with powerful and parochial state jurisdictions and no common financial, tax, or tariff regime in 1870; the Confederate States of America. There would have been no propagation advantages, while the effects of distance and incomplete resource flow linkage would have been much greater. A (counterfactual) America of that sort would have been at a distinct disadvantage relative even to Europe. Even now, this description still describes the EU all too closely. There is not one legal regime, less soon to self-immolate Britain---whose departure will be a major benefit for the EU exactly because propagation over the remainder becomes more efficient and pervasive. Europe still does not have a common financial regime, but the Eurozone will essentially Blob up the rest. Much more could be said about inefficient propagation networks in Europe of today, but that is not the point here.

Romer guessed right on the scale advantages of size for the US, but missed on the network propagation advantages. He could go back and rework his basic thesis to better effect if he chooses. At the state time, he did not clearly pose the anti-propagation disadvantages of Europe c. 1870. And it may well be the DISADVANTAGES of Europe which were more determinative of relative outcomes than the advantages of the US.

I think Professor Nordhaus’ paper showing how nearly all of the value entrepreneurs create accrues to people other than themselves deserves mention as well.

The present study examines the importance of Schumpeterian profits in the United States economy. Schumpeterian profits are defined as those profits that arise when firms are able to appropriate the returns from innovative activity. We first show the underlying equations for Schumpeterian profits. We then estimate the value of these profits for the non-farm business economy. We conclude that only a minuscule fraction of the social returns from technological advances over the 1948-2001 period was captured by producers, indicating that most of the benefits of technological change are passed on to consumers rather than captured by producers.

http://www.nber.org/papers/w10433

What? Capital and established rent seekers gate-keep and capture structural advantage, established or innovative: who would have thought THAT was possible in this best of all invisible worlds . . . ?

#3. Concern trolling. The article itself engages in the inaccuracies it decries in order to push a partisan agenda, first by bringing up "marriage penalties" in the tax code (which no longer exist). Second, it incorrectly claims that it is "inaccurate" to focus on racism against black men instead of on two parent families - the latter is certainly important but it's not untruthful to report on racism against black men as an important dynamic. To report on the progress of Hispanics and black women would be inaccurate if it obscured the unique problems of black men. As usual, a lot of white people seem to be deeply uncomfortable with acknowledging that there might still be racism in America.

In other words it is concern trolling because the gist of it is basically "We are deeply concerned that your failure to report on this subject in a way that comports with our partisan narrative is causing people to have incorrect opinions. For shame! "

5. Romer used Maddison data and said U.S. GDP per capita was 75% that of the UK in 1870 and 130% higher in 1929.

I'm looking at Maddison's data and see the U.S. per capita GDP was 77% that of the U.K. (same as Romer) and 114% in 1930 - this table doesn't list 1929. But Wikipedia states that The Maddison Project puts U.S. GDP per capita in 1870 at only 65% of the U.K. and 122% in 1929.

[By 1940, the U.S. and U.K were at parity, which they were in 1920, but by 1950, the GDP per capita was at 75% that of the U.S. - about where it is today.]

"How Was Life? Global Well Being Since 1820" p.67
https://www.oecd-ilibrary.org/economics/how-was-life_9789264214262-en

https://en.wikipedia.org/wiki/List_of_regions_by_past_GDP_(PPP)_per_capita

US GDP was down so sharply from 1929 to 1930 that both could be right. The Great Depression wasn't as severe in the UK.

I have the Maddison spreadsheet open in front of me. In 1870, in 1990 Geary Khamis dollars at PPP, UK GDP per capita was $3190 and US GDP per capita was $2445. That's 77%.

Looking forward to more Paglia, but not sure how many "laser-sharp insights" and "blazing manifestos" I can endure in this "lavishly comprehensive" compendium

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