Month: April 2023
Balaji and White on the Banks
An excellent discussion between Balaji and my colleague Larry White. I don’t think Balaji is going to win his bet but he has been ahead of the crowd on the banking crisis. It’s now obvious, for example, that what was important about SVB was not Silicon Valley but that it was a bank and Balaji was among the first to present this clearly. Like Larry, I can imagine Bitcoin and other crypto assets rising in price due to the crisis as people look to diversify away from USD and the US banking system (I am an advisor to some crypto firms) but I don’t see $1 million soon. Larry, however, understands banking issues better than anyone I know (check out his new book Better Money: Gold, Fiat or Bitcoin?) and he agrees with much of Balaji’s analysis even if not $1m BTC.
Balaji’s mic is noisy but worth listening to anyway for the signal.
The Employment Effects of Generous and Unconditional Cash Support
While unconditional cash transfers have been studied extensively in developing countries, little is known about their effects in a wealthier context. Through a randomized controlled trial, we study the employment effects of a generous and unconditional transfer targeting low-income families in Spain. Two years into the program, subjects assigned to treatment are 20 percent less likely to work than subjects assigned to a control group. Assignment to an activation plan does not attenuate adverse effects; a more lenient transfer withdrawal rate does. It appears that effects are driven by subjects with children, suggesting substitution of labour for care tasks.
Here is the full paper by Timo Verlaat, Federico Todeschini, and Xavier Ramos. Via the excellent Kevin Lewis.
*On Every Tide*
The subtitle is The Making and Remaking of the Irish World, and the author is Sean Connolly. Excerpt:
Seven out of every ten emigrants entering the United States between 1900 and 1909 were men. The female minority, moreover, came mainly as members of family groups. Emigration from Ireland initially followed much the same pattern. After 1850, however, Ireland became the only European country to send almost as many women as men across the Atlantic, the great majority as single women rather than as wives or daughters. This pattern of independent female migration was of central importance, giving Irish diasporic communities a stability they would not otherwise have had. In particular it helps to explain why Irish rates of return migration were so low: there was no need to return home to find a bride form one’s own ethnic background.
And from a bit later in the text:
There were good economic reasons why Irish women were more ready than others to take to the migrant ship. the replacement of the cottage spinning wheel by the giant water-and-steam-driven machinery of Belfast and the surrounding area, and the failure of factory-based manufacturing to thrive in other parts of the country, sharply reduced the opportunity for women to find employment, and with it their prospect of marriage.
Quite a good book.
Saturday assorted links
2. Pergamon in Berlin to close for a 14 (!!) year renovation.
3. The Comptometer. It turns out one of my ancestors, grandmother on the maternal side, was expert at using the Comptometer, in the early 20th century.
4. My June 6 2023 LSE talk on LLMs, the Hayek lecture.
5. Chess.com looking for a new CEO. Here is one very good part of the application.
6. Ross on the AI pause (NYT). And Farhad Manjoo on the TikTok ban (NYT). And WSJ profile of Sam Altman. And the Worldcoin project.
Personality Differences and Investment Decision-Making
We survey thousands of affluent American investors to examine the relationship between personalities and investment decisions. The Big Five personality traits correlate with investors’ beliefs about the stock market and economy, risk preferences, and social interaction tendencies. Two personality traits, Neuroticism and Openness, stand out in their explanatory power for equity investments. Investors with high Neuroticism and those with low Openness tend to allocate less investment to equities. We examine the underlying mechanisms and find evidence for both standard channels of preferences and beliefs and other nonstandard channels. We show consistent out-of-sample evidence in representative panels of Australian and German households.
That is from a new NBER working paper from Zhengyang Jiang, Cameron Peng, and Hongjun Yan.
The California marginal tax rate schedule, benefits included
Friends, colleagues, may I present to you: the California Marginal Tax Rate Schedule pic.twitter.com/bYaHz8giIH
— Max Ghenis (@MaxGhenis) March 21, 2023
Via Jason Crawford.
The Effects of Wealth on (Swedish) Marriage and Fertility
We estimate the effects of large, positive wealth shocks on marriage and fertility in a sample of Swedish lottery players. For male winners, wealth increases marriage formation and reduces divorce risk, suggesting wealth increases men’s attractiveness as prospective and current partners. Wealth also increases male fertility. The only discernible effect on female winners is that wealth increases their short-run (but not long-run) divorce risk. Our results for divorce are consistent with a model where the wealthier spouse retains most of his/her wealth in divorce. In support of this assumption, we show divorce settlements in Sweden often favor the richer spouse.
That is from a new NBER working paper by