1. The history of Japanese stock prices.

2. The new NEOM exhibit.

3. Who are the top 15 liberal economists of France, 1695–1776?

4. New Netflix trailer, “They Cloned Tyrone.”

5. Young people are leaving big U.S. cities.

6. The accelerationists were always going to win.

7. Coleman Hughes piece.  Note #9  And Kevin Bryan.  Solve for the equilibrium!

Of course, as a partial aid.  Instead we get this, as outlined to me by correspondent Raghuveer Parthasarathy:

On the same day of your post on a Nature editorial on AI the NIH blogged about its new policy statement, “The Use of Generative Artificial Intelligence Technologies is Prohibited for the NIH Peer Review Process“; its blog post is “Using AI in Peer Review Is a Breach of Confidentiality“. It’s bizarre. There are legitimate arguments to be made for avoiding AI when reviewing grants, but these aren’t present; rather, it’s that using AI would violate confidentiality:

“Reviewers are trusted and required to maintain confidentiality throughout the application review process. Thus, using AI to assist in peer review would involve a breach of confidentiality. In a recently released guide notice, we explain that NIH scientific peer reviewers are prohibited from using natural language processors, large language models, or other generative AI technologies for analyzing and formulating peer review critiques for grant applications and R&D contract proposals. Reviewers have long been required to certify and sign an agreement that says they will not share applications, proposals, or meeting materials with anyone who has not been officially designated to participate in the peer review process. “

The comments at the blog are good, with nearly everyone pointing out that one can host AI locally, avoiding sharing confidential information. The official policy (second link above) is as unclear as the blog post, prohibiting AI, ” the NIH prohibits NIH scientific peer reviewers from using natural language processors, large language models, or other generative Artificial Intelligence (AI) technologies”, but then later referring to “online generative AI tools”. The lack of understanding, or of clear writing, is striking.

 My own blog comment: “As others have pointed out, this policy rationale makes little sense, regardless of one’s thoughts on whether AI should or shouldn’t be used in peer review… Presumably the authors mean non-local AI services, but if so, that should be stated. Or do the authors mean ideas that come from unsourced others? (If that’s the case, why is confidentiality the issue?)”

He is absolutely correct, and dare we expect just a wee bit better from our scientific authorities?

A minuscule handbag measuring just 657 by 222 by 700 microns (or less than 0.03 inches wide) sold for over $63,000 at an online auction Wednesday.

Barely visible to the human eye, the fluorescent yellowish-green bag is based on a popular Louis Vuitton design — though it is the work of a New York art collective, not the luxury label itself.

Dubbing its diminutive creation “Microscopic Handbag,” the Brooklyn-based group MSCHF claims the bag is narrow enough to pass through the eye of a needle and is smaller than a grain of sea salt (though that may depend on how coarse you like your salt).

The object was made using two-photon polymerization, a manufacturing technology used to 3D-print micro-scale plastic parts. It was sold alongside a microscope equipped with a digital display through which the bag can be viewed.

There is a (blown-up) photo at the link.  Via Anecdotal.

1. Education vs. cohort control.

2. Economics of generic medicines.

3. Cecilia Rouse is the new president of Brookings.

4. Oregon school performance is cratering.

5. The oldest known customer complaint?

6. How much does IQ explain why liberals are overrepresented in sociology?

7. Not my view, sad! I would opt for Aztec UFOs, with amates.

8. This link includes a Patrick Collison and Lant Pritchett dialogue.

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

Those who remember or read about the 1980s may consider the price of gold to be a highly dramatic variable. During the postwar Bretton Woods years, the price of gold was pegged at $35 an ounce, but after Richard Nixon severed the dollar’s final link to gold in 1971, prices soared to more than $800 an ounce by 1980. Fortunes were made, gold bugs proliferated and the price of the precious metal became a daily fascination. Many commentators considered the high price of gold to be a harbinger of disaster for both fiat currency and Western civilization.

Even if it’s trading around a record high of $2,000 these days, gold is a little boring and likely to remain so for the foreseeable future. According to a new study from the National Bureau of Economic Research, gold prices have followed some fairly standard principles since at least 1990. To put it simply, gold prices decline when real interest rates rise. That is because gold itself has zero direct yield, so at higher interest rates the opportunity cost of holding gold goes up. [FN here] In this regard, gold is like many other assets, including crypto, tech companies, and real estate.

The price of gold also goes up (down) when demand for it as a commodity goes up (down). So, if say China becomes a major global economic power, the Chinese economy will need more gold, if only for its commodity uses, and that in turn will boost gold prices, as it did starting in 2002. There is also sizeable gold jewelry demand from India, so as that country becomes wealthier that too will boost the demand for gold and thus its price.

Under both mechanisms, gold is no longer a good hedge against bad times, as it correlates with both low interest rates and global economic growth. Gold becomes another cyclical economic asset, and that is a big part of the reason why gold prices are no longer followed so closely or seen as useful harbingers of social and economic collapse. Instead, it is perfectly fine to have a high or rising price of gold.

The footnote reads as follows: “Note that the correlation between gold prices and interest rates is strongest when rates are low. At higher rates, many investors won’t enter the gold market at all, and the commodity demands for gold become a more important determinant of price.”

1. Humans have used enough groundwater to shift the earth’s tilt.

2. Claims about recent problems in northeast (USA) airspace.

3. Hans Niemann lawsuit against Magnus Carlsen dismissed, some parts dismissed “with prejudice.”

4. Ernie 3.5, the new Baidu model.  你好吗!

5. Are there five billion dormant cell phones sitting around?  What should we do with them?

6. Why transformative AI is very hard to achieve.

7. Most people do not do so well on the Ideological Turing Test (one of Bryan Caplan’s greatest contributions).

8. I still don’t believe this version of the UFO story.

Put aside ngdp targeting and other possible options, should be raise the target rate to three or possibly four percent?  No, as I argue in my latest Bloomberg column.  After some of the standard economic treatments, I also make a political economy argument:

Might it be that a 4% steady state rate of inflation simply isn’t politically stable? A party defending a 4% target might be vulnerable to an opposition party pledging a lower target, or to a populist party pledging some imaginary “free lunch” that does away with inflation altogether. When a 4% inflation target was first proposed, these political risks seemed far less plausible than they do today.

The “liquidity trap” arguments for a 4% inflation rate are complex, and I strongly suspect they are not political winners, given the unpopularity of inflation. For better or worse, this is no longer a world in which elites can simply do what they deem best, without much popular support.

Most of all I am struck by how, once we are in the range of four to five percent inflation, the voices for the four percent inflation target have gone relatively silent.