Month: April 2021
In this issue (.pdf):
Will you live longer if you move to a place where people live longer? Commenting on an American Economic Review article, Robert Kaestner examines the causality behind an association between Medicare enrollees’ longevity and their post-Katrina migration from New Orleans to various destinations. Tatyana Deryugina and David Molitor reply to Kaestner.
Does machine learning improve corporate fraud detection? Commenting on a Journal of Accounting Research article, Stephen Walker investigates the findings for the effectiveness of machine learning in detecting accounting fraud. Yang Bao, Bin Ke, Bin Li, Y. Julia Yu, and Jie Zhang reply to Walker.
Is institutional quality impacted by immigration from poor or corrupt countries? Garett Jones and Ryan Fraser suggest overcontrol bias in works studying the issue, propose to investigate the matter using simpler evidence, and find indications of adverse impact on economic freedom. Jamie Bologna Pavlik, Estefania Lujan Padilla, and Benjamin Powell controvert the suggestion of overcontrol bias and provide new results finding against any such adverse impact.
Adam Smith in Love: Enrique Guerra-Pujol considers several pieces of evidence and concludes that Adam Smith very likely knew from personal experience what it meant to be in love with another person.
A final inning on colonial money: Ronald Michener has persistently challenged the scholarship of Farley Grubb on colonial money. Here, Professor Grubb replies to Michener’s last rejoinder, focused again on the experience of colonial New Jersey.
Against Standard Deviation as a Quality Control Maxim in Anthropometry: Austin Sandler discusses a pervasive practice in his field of anthropometry: Rejecting data sets in which standard deviations are ‘too big.’ He describes the origin and spread of this practice and its rationales, and argues against it.
Readworthy 2050: We complete the fielding of the question: What 21st-century works will merit a close reading in 2050? New responses are provided by Mitchell Langbert, Andrés Marroquín, Steven G. Medema, Alberto Mingardi, Paul D. Mueller, Stephen R. Munzer, Evan W. Osborne, Justin T. Pickett, Rupert Read and Frank M. Scavelli, Hugh Rockoff, Kurt Schuler, Daniel J. Schwekendiek, Per Skedinger, E. Frank Stephenson, Scott Sumner, Cass R. Sunstein, Slaviša Tasić, Clifford F. Thies, and Richard E. Wagner. (The first tranche is here.)
The History of Economic Thought as a Refined Liberal Art: Kevin Quinn reflects on intellectual history as a way of cultivating our humanity, with compliments for Don Lavoie.
Call for papers:
EJW invites ‘journal watch’ submissions beyond Econ.
EJW fosters open exchange. We welcome proposals and submissions of diverse viewpoints.
Here’s a question I’ve been mulling in recent months: Is Alex Tabarrok right? Are people dying because our coronavirus response is far too conservative?
I don’t mean conservative in the politicized, left-right sense. Tabarrok, an economist at George Mason University and a blogger at Marginal Revolution, is a libertarian, and I am very much not. But over the past year, he has emerged as a relentless critic of America’s coronavirus response, in ways that left me feeling like a Burkean in our conversations.
He called for vastly more spending to build vaccine manufacturing capacity, for giving half-doses of Moderna’s vaccine and delaying second doses of Pfizer’s, for using the Oxford-AstraZeneca vaccine, for the Food and Drug Administration to authorize rapid at-home tests, for accelerating research through human challenge trials. The through line of Tabarrok’s critique is that regulators and politicians have been too cautious, too reluctant to upend old institutions and protocols, so fearful of the consequences of change that they’ve permitted calamities through inaction.
Tabarrok hasn’t been alone. Combinations of these policies have been endorsed by epidemiologists, like Harvard’s Michael Mina and Brown’s Ashish Jha; by other economists, like Tabarrok’s colleague Tyler Cowen and the Nobel laureates Paul Romer and Michael Kremer; and by sociologists, like Zeynep Tufekci (who’s also a Times Opinion contributor). But Tabarrok is unusual in backing all of them, and doing so early and confrontationally. He’s become a thorn in the side of public health experts who defend the ways regulators are balancing risk. More than one groaned when I mentioned his name.
But as best as I can tell, Tabarrok has repeatedly been proved right, and ideas that sounded radical when he first argued for them command broader support now. What I’ve come to think of as the Tabarrok agenda has come closest to being adopted in Britain, which delayed second doses, approved the Oxford-AstraZeneca vaccine despite its data issues, is pushing at-home testing and permitted human challenge trials, in which volunteers are exposed to the coronavirus to speed the testing of treatments. And for now it’s working: Britain has vaccinated a larger percentage of its population than the rest of Europe and the United States have and is seeing lower daily case rates and deaths.
Despite the past centuries’ economic setbacks and challenges, are there reasons for optimism about Africa’s economic prospects? We provide a conceptual framework and empirical evidence that show how the nature of African society has led to three sets of unrecognized “latent assets.” First, success in African society is talent driven and Africa has experienced high levels of perceived and actual social mobility. A society where talented individuals rise to the top and optimism prevails is an excellent basis for entrepreneurship and innovation. Second, Africans, like westerners who built the world’s most successful effective states, are highly skeptical of authority and attuned to the abuse of power. We argue that these attitudes can be a critical basis for building better institutions. Third, Africa is “cosmopolitan.” Africans are the most multilingual people in the world, have high levels of religious tolerance, and are welcoming to strangers. The experience of navigating cultural and linguistic diversity sets Africans up for success in a globalized world.
That is the topic of my latest Bloomberg column, here is one excerpt:
Recently the CBO issued a working paper considering what would happen if U.S. government expenditures were to consume an additional 5% to 10% of GDP. The results are pretty grim: By 2030, because of higher taxes and higher borrowing, the level of GDP would be 3 to 10 percentage points lower. The largest losses are suffered by young Americans, who would go through more of their lives with a lower capital stock, leading to lower wages. Worse yet, the losses are highest when the spending is financed by progressive taxation — a very popular idea in today’s Democratic Party.
As with the CBO’s minimum-wage analysis, you may not agree with every aspect of this study. The authors themselves note that it neglects any productivity gains that might follow from the expenditures. Still, these estimates represent a real challenge to those who favor more government spending.
This analysis has mostly been ignored rather than attacked, which is unfortunate for those of us who would prefer a robust debate. In the meantime, “If you can’t even convince the CBO” seems like a good standard of proof for Democrats to accept — and one they themselves insisted on not very long ago.
For the pointer to the new CBO study I thank Corey Frederick Kallen.