A Syrian narrative

by  Tyler Cowen in

An emergency layover in Syria’s capital was bad enough. Then passengers on Air France Flight 562 were asked to open their wallets to check if they had enough cash to pay for more fuel.

The story is here.  So what really happened?:

An Air France spokesman explained Friday that the crew inquired about passenger cash only as a “precautionary measure” because of the “very unusual circumstances.” Sanctions against Syria complicated payment for extra fuel.

He said Air France found a way to pay for the fill-up without tapping customer pockets — and apologized for the inconvenience.

For the pointer I thank Daniel Lippman.

Increased aggression during human group contests when competitive ability is more similar

by  Tyler Cowen in

From Stulp G, Kordsmeyer T, Buunk AP, Verhulst S.:

Theoretical analyses and empirical studies have revealed that conflict escalation is more likely when individuals are more similar in resource-holding potential (RHP). Conflicts can also occur between groups, but it is unknown whether conflicts also escalate more when groups are more similar in RHP. We tested this hypothesis in humans, using data from two professional sports competitions: football (the Bundesliga, the German first division of football) and basketball (the NBA, the North American National Basketball Association). We defined RHP based on the league ranks of the teams involved in the competition (i.e. their competitive ability) and measured conflict escalation by the number of fouls committed. We found that in both sports the number of fouls committed increased when the difference in RHP was smaller. Thus, we provide what is to our best knowledge the first evidence that, as in conflicts between individuals, conflicts escalate more when groups are more similar in RHP.

The paper is here, hat tip goes to Neuroskeptic.  One hypothesis is behavioral.  The other hypothesis is more directly microeconomic.  Perhaps fouling has positive expected returns within the context of the game, but costs a player long-term reputation, risks long-term retaliation, and so on, and thus the aggression is deployed more in the really important situations.

When was it obvious our recovery would be so slow? (questions that are rarely asked)

by  Tyler Cowen in

John Cochrane presents a good point:

But we’ve heard the defense over and over again: “recoveries are always slower after financial crises.”  Most recently (this is what set me off today) in the Washington Times,

Many economists say the agonizing recovery from the Great Recession…is the predictable consequence of a housing market collapse and a grave financial crisis. … any recovery was destined to be a slog.

“A housing collapse is very different from a stock market bubble and crash,” said Nobel Prize-winning economist Peter Diamond of the Massachusetts Institute of Technology. “It affects so many people. It only corrects very slowly.”This argument has been batted back and forth, but a new angle occurred to me: If it was so obvious that this recovery would be slow, then the Administration’s forecasts should have reflected it.  Were they saying at the time, “normally, the economy bounces back quickly after deep recessions, but it’s destined to be slow this time, because recoveries from housing “bubbles” and financial crises are always slow?”

No, as it turns out…

You will find further background here.  That said, my read on this is quite different than Cochrane’s.  He blames post-crash policy, whereas I blame (mostly) “The Great Stagnation.”

All this just for them?

by  Tyler Cowen in

In spite of clichés about Nascar dads and Walmart moms, the actual share of voters nationally who are up for grabs is probably between just 3 percent and 5 percent in this election, polling experts say. The Obama and Romney campaigns are expected to spend on the order of $2 billion, in part to try to sway this tiny share of the electorate.

I’ll be glad when the whole thing is over.  There is also this:

In Virginia, for example, a large number of swing voters are concentrated in Fairfax County, just outside the District of Columbia…

The full article is here.

Update on Greece

by  Tyler Cowen in

… the Greek government has imposed a moratorium on all outlays other than salaries and pensions, according to Greek newspaper Kathimerini. This means that primary spending, the public investment programme and the settlement of arrears have been halted.

…If the troika does not grant the Greek government any concessions on its bailout programme, it is highly likely that the two junior parties—the Democratic Left and Pasok—will drop out of government. This would precipitate fresh elections, the third for this year alone.

If you are Greek, when is actually the optimal time to simply stop paying your bills?

That is from Megan Greene, there is more at the link.

Scotiabank vs. Tyler Cowen?

by  Tyler Cowen in

Maybe not:

Recently, in a movie theatre in downtown Toronto, the audience was suffering through the pre-movie ads when a familiar message from Scotiabank flashed on the screen: “You’re richer than you think.” That’s when one heckler loudly offered, “Not anymore!” and the theatre erupted in laughter. It turns out that was one of the tamer responses to the ad, which is playing to mocking audiences in Cineplex theatres across the country. In Vancouver, where condo prices are crashing, the ad has been met by obscenities and even the hurling of soft drinks.

And yet a shift is upon us:

In its latest batch of ads, the line appears buried underneath a much bigger block of text, featuring a brand new message that’s a little more recession-friendly: “Make the most of what you have.”

The full story is here, and for the pointer I thank Bill Wilcox.

The balanced budget multiplier?

by  Tyler Cowen in

A Spanish mayor who became a cult hero for staging robberies at supermarkets and giving stolen groceries to the poor sets off this week on a three-week march that could embarrass the government and energise anti-austerity campaigners.

Juan Manuel Sanchez Gordillo, regional lawmaker and mayor of the town of Marinaleda – population 2,645 – in the southern region of Andalusia, said food stolen last week in the robberies went to families hit hardest by Spain’s economic crisis.

Seven people have been arrested for participating in the two raids, in which labour unionists, cheered on by supporters, piled food into supermarket carts and walked out without paying while Mr Sanchez Gordillo (59) stood outside.

He has political immunity as an elected member of Andalusia’s regional parliament, but says he would be happy to renounce it and be arrested himself.

Here is more.