Who reads Chinese fashion magazines?

 Lena Yang, general manager of Hearst Magazines China, who oversees nine publications including Elle and Marie Claire, says that the typical reader of Hearst Magazines in China is a 29.5-year-old woman who is more likely to be single than married. She has an average income of about $1,431 a month and spends $938 a season on luxury watches, $982 on handbags and shoes and $1,066 on clothes.

Ms. Yang says these women often live at home and turn to their parents and grandparents to pay for them. The study also showed that many readers in their 20s saved little.

“Most of them, they are a single child,” Ms. Yang said. “That means they don’t have to pay for their rent. So all of that goes to pocket money. They have the parents support them and the grandparents. They actually have six persons to support them.”

Here is more.

Oops

Just half of those given a prescription to prevent heart disease actually adhere to refilling their medications, researchers find in the Journal of American Medicine. That lack of compliance, they estimate, results in 113,00 deaths annually.

That is from Sarah Kliff, here is more.

Pharmaceutical innovation is very, very good

From Frank Lichtenberg:

We examine the impact of pharmaceutical innovation, as measured by the vintage of prescription drugs used, on longevity, using longitudinal, country-level data on 30 developing and high-income countries during the period 2000-2009. We control for fixed country and year effects, real per capita income, the unemployment rate, mean years of schooling, the urbanization rate, real per capita health expenditure (public and private), the DPT immunization rate, HIV prevalence and tuberculosis incidence. Life expectancy at all ages and survival rates above age 25 increased faster in countries with larger increases in drug vintage. The increase in drug vintage was the only variable that was significantly related to all of these measures of longevity growth. Controlling for all of the other potential determinants of longevity did not reduce the vintage coefficient by more than 20%. Pharmaceutical innovation is estimated to have accounted for almost three-fourths of the 1.74-year increase in life expectancy at birth in the 30 countries in our sample between 2000 and 2009, and for about one third of the 9.1-year difference in life expectancy at birth in 2009 between the top 5 countries (ranked by drug vintage in 2009) and the bottom 5 countries (ranked by the same criterion).

Dani Rodrik redoes his convergence result with better data

And it still holds up.  He concludes with this scary bit:

Almost all of the growth miracles of the last 60 years were based on rapid industrialization. Today, technological changes and global competition are fostering rapid de-industrialization (in terms of employment shares) almost everywhere.  This makes me wonder whether the kind of rapid growth experienced by countries like South Korea, Taiwan, and China will ever become possible elsewhere.

The new paper can be downloaded here.

Eight top young economists on where the field is going

It starts with Nicholas Bloom and Raj Chetty, and includes Ali Wyne and Peter Leeson and Justin Wolfers,  among other luminaries,  courtesy of Big Think.  Here is Bloom:

I do not think that any one single breakthrough will happen.  The progress is likely to be heavily empirical—simply because more and more data is becoming available, and it is easy to analyze with fast computers (so empirics is now advancing faster than theory)—and spread across many hundreds of topics.  So economics has gone from Victorian science, where one genius in his shed could invent the steam engine over the weekend, to industrial science, where innovation comes in thousands of tiny steps made by dozens of research teams.

Here is Wolfers:

Economic theory will become a tool we use to structure our investigation of the data.  Equally, economics is not the only social science engaged in this race: our friends in political science and sociology use similar tools; computer scientists are grappling with “big data” and machine learning; and statisticians are developing new tools.  Whichever field adapts best will win.  I think it will be economics.

China piranha arbitrage

The local government of Liuzhou in southern China’s Guangxi Zhuang autonomous region has ended its hunt for rogue piranha fish after offering a reward which attracted thousands of hopeful fishers to local rivers. The quest to capture the troublesome fish — whose presence in the river is unexplained — has become farcical, with online retailers offering to sell and deliver piranhas to the region for 12 yuan (US$1.80) apiece.

The story is here and for the pointer I thank Peter Metrinko.

I once suggested this in jest

Yet Ireland will do it for real:

About 1,850 housing developments, unfinished after the bubble burst in 2008, pockmark the Irish landscape, according to government figures. This week, Ireland’s National Asset Management Agency, the state agency set up in 2009 to purge banks of their most toxic commercial property loans, started the destruction of an apartment block for the first time.

“There’ll be some places where the most sensible decision that can be made will be to demolish,” Housing Minister Jan O’Sullivan said in an interview in her Dublin office on July 10. “If nobody wants to live in them, then the most practical thing to do possibly will be to demolish what is there.”

In part it is a safety issue.

What if there is a rain delay?

Slim and bespectacled, Elmendorf could play a college professor on TV.  “A quiet man who thinks carefully about everything,” the New York Times once said of him.  Indeed, he deliberately chose a baseball game for one of his first dates with his future wife.  “You want to be sure there’s something going on to fill the lull in the conversation but not like a movie where you can’t talk,” he explained.

That is from David Wessel’s Red Ink: Inside the High-Stakes Politics of the Federal Budget, which I enjoyed very much.

My favorite things China

1. Novel: Soul Mountain, by Gao Xingjian.  Parts of Dream of the Red Chamber are splendid, but it is hard to keep track of the whole thing and also I wonder whether any of the available editions in English are satisfactory.

2. Movie: The Story of Qiu Ju.  A real charmer.

3. Comedian: Jackie Chan.

4. Movie, set in, but not a Chinese movie: How about TranssiberianShanghai Noon?  Are any of those old movies set in China any good?

5. Book, non-fiction: James Fallows, China Airborne.  I am also a fan of the book where the guy drives a car around China.  The Private Life of Chairman Mao is a stunner, maybe the best book I know on tyranny.

6. Book, set in, fiction (not by Chinese author): Edgar Snow, Red Star Over China.  Pearl Buck I find boring.

7. Sculpture: Tang horses, some images are here.

8. Contemporary Chinese artist: Cai Guo-Qiang, images here.  His one man show at the Guggenheim is one of the best exhibitions I’ve ever seen.  Try this video, apologies for the ad at the beginning.

9. Chinese traditional music: I am interested in Chinese opera, but don’t quite feel I’ve heard the real thing.  I once heard an electrified performance, but my sense is the music is all about the timbre and needs to be heard in an nowadays-almost-impossible-to-achieve setting, given that I am not a 17th century Chinese noble.  Any advice?  By the way, here is a good article on recent developments in Chinese (semi-classical) music.

10. Cookbooks: Fuchsia Dunlop’s two Chinese cookbooks are not only two of the best cookbooks ever they are two of the best books ever.

11. Best book about Chinese fiction: Sabina Knight, Chinese Literature: A Very Short Introduction.  This short book is a marvel of economy, substance, and style.

12. Pianist: Yundi Li, try this video of Chopin’s 2nd Scherzo.

13. Architect: I.M. Pei.  We have friends who live in a Pei-designed house, and it is splendid.

14. Movie director: John Woo was born in China.  The Killer might be his best movie, but Once a Thief is arguably the most underrated.  WindTalkers is quite good too and also underrated.

I am not counting either Hong Kong or Taiwan for these categories.  I also am not counting American-born, ethnic Chinese, such as Maya Lin.  And J.G. Ballard was born in Shanghai, but what category do I put him in?

The value of microfoundations

Here is Noah Smith on microfoundations, responding to Matt Yglesias (here and here, here is also a Krugman post on the topic).  I am usually pro-microfoundations, though without any particular philosophy of science-derived attachment to the idea.  Here is why:

1. In some very important, simple, and intuitive models, there is nominal stickiness but money is still neutralCaplin and Spulber 1980 is one of my favorite pieces and time spent studying their model will be repaid with value.  I don’t think the model applies to 2007-2009, or say 1929-1933, when we have “out of the ordinary” shocks, but it may apply to many other time periods.

2. Often the data suggest that money is neutral or roughly neutral or at least the data are not inconsistent with neutrality.  I know that one does not hear much about that in today’s economics blogosphere, but I kid you not.  Again, I differ strongly from this literature for “the times which really matter,” such as 2007-2009 or 1929-1933, but still I take the data seriously.  Try this relatively “atheoretical” piece by Harald Uhlig, which does not reject monetary neutrality (nor does it cover 2007-2009).  Nominal stickiness models have trouble explaining why money doesn’t matter more than in fact it does.  Understanding microfoundations will keep you out of the trouble you will get in if you keep trying to use money to expand output.

3. We can try to nudge people into more flexible wages, but again that requires some understanding of microfoundations.  The Fed can prevent any risk of a deflationary downward spiral, and please note it is no coincidence we are in the two percent inflation range.  You don’t have to view this as a high return activity to favor it  (it is funny how the mere mention of wage nudges will cause many people to suddenly turn against the nudge idea, at least temporarily.)

4. Microfoundations don’t have to mean intertemporal maximization with extreme assumptions about rational or well-behaved preferences.  George Akelof has written some of the best papers on microfoundations.  Nor do microfoundations have to mean staking out an extreme position on the Lucas critique.

5. There are plenty of flex-wage professions which still have been seeing high unemployment.  Like real estate agents.  Or what happened to all those Mexicans who used to stand around on street corners?  Were their wages sticky too?  I don’t think so.  Does their return to unemployment or underemployment in Puebla refute the sticky wage model?  I personally don’t think so, but it’s hard to answer that question — an obvious one to a critical observer — without a clear sense of microfoundations.

6. Just how bad is monopoly?  We wish to know when designing a competition policy.  Under some microfoundations models, the existence of market power is essential for ongoing stickiness, in other models not.  This question matters, and we need microfoundations to better resolve it.

7. Should a government subsidize, tax, or be neutral toward contract indexation?  Try answering that question, or even getting started on it, without some sensible microfoundations.

8. If you are trying to end a hyperinflation or high rate of inflation, do you need to get fiscal policy right, in some kind of credible manner, before enacting monetary restraint?  It is hard to imagine answering this question without good microfoundations.

I could go on.  I am worried that people are rejecting microfoundations because they think microfoundations imply objectionable attitudes toward macro policy.  But note: if those attitudes are objectionable and indeed wrong, they won’t be implied!  It is entirely defensible to argue “we should have a more expansionary monetary policy today, even without the microfoundations to support that view.”  It is much tougher to argue “economics should deemphasize microfoundations altogether.”  The broader the range of questions one considers, the more important microfoundations turn out to be.