Germany fact of the day

by  Tyler Cowen in

Two-thirds of all patent claims in Europe are now filed in Germany, according to the Munich law firm Meissner Bolte, which does patent litigation. In a sense, Germany has become a destination for fast, effective one-stop patent challenges, much as Britain is for libel and the state of Delaware is for registration of American companies.

Here is more, and for the pointer I thank Alex T.

How to eat well in Beijing

by  Tyler Cowen in

Look for the hutongs (traditional, alley-based neighborhoods) which are not too far from the wealthy areas, but not right on top of the wealthy areas either.  At the outer “lip” of those hutongs there will be numerous small restaurants and food stands, serving a mix of hutong residents and passers-by.  A typical small restaurant of this kind might have five to ten tables, plus there may be some larger establishments, comparable in size to small restaurants in the United States.  There also will be dumpling, kebab, fish, and other stands facing onto the street.  Eat in these places and sample as much as you can.  There will be superb snacks for less than a dollar, and in the small restaurants superb main courses for less than two dollars, and in the larger restaurants superb main courses for less than five dollars.

Try an expensive place in a fancy hotel.  Eat Yunnan food, preferably at a place with a fixed price menu.  “Dali” is a very good one.  Eat “Chinese Muslim food.”  Eat Sichuan and Hunan.  Don’t worry too much about duck, the classic Beijing dish is a little boring.  Dumplings are better here but dumplings get only so good (which is very good indeed but the gradient isn’t that steep).  Don’t neglect breakfast as an important meal.

That is how you eat well in Beijing.

The public choice approach to monetary policy

by  Tyler Cowen in

It remains neglected, even today.  Yet Martin Fackler is on the case when it comes to Japan (or try this link):

By speeding the flood of less expensive imported products into Japan, the strong yen is contributing to a broader drop in the prices of goods and services, known as deflation, that has helped retirees stretch their pensions and savings. The resulting inaction on the yen, according to a growing number of economists and politicians, reflects a new political reality, with already indecisive leaders loath to upset retirees from the postwar baby boom who make up nearly a third of the population and tend to vote in high numbers.

‘‘Japan’s tolerance of the strong yen and deflation is rooted in a clash of generations,’’ said Yutaka Harada, a professor of political science and economics at Waseda University in Tokyo. ‘‘And for now, the seniors are winning.’’

The problem, many economists warn, is that the victory comes at a high price, mortgaging the future by hastening the hollowing out of the economy as companies move abroad, and contributing to the deflation that has already exacerbated a nearly two-decade decline in Japan. It may also, ultimately, be self-defeating, threatening the very industries that created the huge trade surpluses sustaining Japan’s still comfortable living standards.

How many major political battles do the elderly actually lose?  I get a little worried about the conflation between nominal and real, and the blurring of short- vs. long-run time horizons, but still this is a point worth making:

‘‘The strong yen robs from youth, but there is not much awareness here yet of generational inequalities,’’ said another lawmaker, Keiichiro Asao, with the opposition Your Party.

Krugman on income mobility

by  Tyler Cowen in

Krugman wrote:

True, Cowen isn’t advocating a complete caste society — but it’s actually not clear why, since he is suggesting that we’ll be happier as a society if people stay comfortably in the class into which they were born.

He compares my position to this poem:

The rich man in his castle,
The poor man at his gate,
God made them high and lowly,
And ordered their estate.

Uh, no.  What I wrote was that for fixed levels of income there was no gain per se from having a higher rate of mobility churn, if not accompanied by higher standards of living.  I also wrote that the best way to get useful upward mobility was to have a high rate of economic growth and spread across many income classes.  Think of it as the difference between positive-sum notions and metrics of mobility vs. zero- or negative-sum notions and metrics.  Read my first point:

If the general standard of living is rising (and I am more than willing to admit problems in this area for the United States), mobility takes care of itself over time.  I find it more useful to focus on slow growth, if indeed that is the case.  Just look at income growth for non-wealthy families and that is more useful than all the mobility measures put together.

Or read my follow-up post:

I see two big and very real problems: slow income growth for many income classes and a problem with excessively high returns to finance at the very top.

Let’s put it this way.  Paul Krugman is a great economist.  But of all the people in my RSS feed, in terms of his quality and skill as a reader, he is not in the top 90 percent.

Signaling flips

by  Tyler Cowen

A while ago Bryan and Arnold had an interesting exchange as to whether on-line education might ever “flip” into being a higher-status signal than is currently the case.  A conversation with Karina points me to one interesting example of a signal status flip, this time from Beirut (and possibly other places as well?):

Apparently, here in Beirut, nose jobs have become so popular that those who cannot afford them, or don’t even actually need them, can still opt to wear bandages across their nose…to fake a nose job. Yup. The newest trend to hit the Beirut fashion scene is the post-op nose bandage.

There is a bit more here.

What does a contract with Coursera look like?

by  Tyler Cowen in

The contract [with University of Michigan] reveals that even Coursera isn’t yet sure how it will bring in revenue. A section at the end of the agreement, titled “Possible Company Monetization Strategies,” lists eight potential business models, including having companies sponsor courses. That means students taking a free course from Stanford University may eventually be barraged by banner ads or promotional messages. But the universities have the opportunity to veto any revenue-generating idea on a course-by-course basis, so very little is set in stone.

And this stunner:

When and if money does come in, the universities will get 6 to 15 percent of the revenue, depending on how long they offer the course (and thus how long Coursera has to profit from it). The institutions will also get 20 percent of the gross profits, after accounting for costs and previous revenue paid. That means the company gets the vast majority of the cash flow.

The full story is here, and for the pointer I thank my colleague Debra Lattanzi.

Medicaid wars, continuing

by  Tyler Cowen in

Phil Galewitz and Matthew Fleming surveyed all 50 states to find out how Medicaid budgets are changing. They found that 13 states had made cuts this year..Seven have Democratic governors; six are led by Republicans. Three are in the south and an equal number are in New England. Two, California and Connecticut, seem to really like the Medicaid program: They volunteered to start the health law’s Medicaid expansion early, well before it’s required in 2014. Others, like Louisiana and Florida, are not fans at all: They plan to sit out that Obamacare provision.

All told, it’s pretty hard to find any narrative that explains why these states have cut their Medicaid programs, aside from some broad truths: Budgets are still squeezed and Medicaid is eating up a growing chunk of state spending.

From Sarah Kliff, here is more.

Markets in everything, Indonesian traffic jockeys

by  Tyler Cowen in

To reduce the number of cars on the road, lawmakers have designated several main arteries as what they call “Three in One zones.” During the morning and afternoon rush, you can’t drive there unless you have at least three people on board. That’s why, near the entrances to the zones, men, women and children line up – raising their index finger – offering to rent themselves to commuters in a hurry.

20-year-old Litjak climbs into a black sedan, cradling her 2-month-old daughter Nabilah. Together, they’ll help a college student get to class on time. The baby gives Litjak a competitive advantage, providing two passengers for the price of one.

Litjak says she can make at least two trips in a morning, collecting two or three dollars to help pay for household expenses. She never worries about her safety, and she likes the work. People who can afford to pay have nice cars, so she sits in air conditioned comfort, listening to the radio.

She and others in this line of work are called traffic jockeys. They dress neatly each day and may have regular customers. For some, it’s their only income. Others, like 21-year-old Adik, see this as an easy way to make extra cash when he’s not on the job parking cars.

Here is more, and for the pointer I thank Nick Lawler.  It is not legal to work as a traffic jockey in Indonesia.

Assorted links

by  Tyler Cowen

1. Why is UK employment up and output down?

2. Genetics vs. paleoanthropology?

3. Price inflation and stock returns (pdf), and here, and here, and most recently here; “There is a consistent lack of positive relation between stock returns and inflation in most of the countries.”  I am urging a) a bit of caution, and b) engagement with the literature on this topic.  I do favor a more expansionary monetary policy, but I see the balance of evidence as different from how it is frequently portrayed in the blogosphere.

4. New archery gold medal winner is legally blind, and here.