*Economist* symposium on *The Great Stagnation*
You will find it here, with contributions from Viral Acharya, Scott Sumner, Hal Varian, and Paul Seabright. From elsewhere, Noah Smith cautions economists not to invoke technology too often. Brad DeLong chimes in. From a few years ago, Austan Goolsbee measures the consumer surplus from the internet; his numbers do not refute the standard view that median income growth has become much much slower.
Assorted links
1. There is no great stagnation.
2. 88 percent of Bavarian doctors have prescribed placebos. The study (in German) is here.
3. The culture that is Japan language of decay.
4. "The search for mud is simple."
6. Why Mexican shark reunions are so amazing.
7. The culture that is Germany.
8. Will eBooks first take over in New Zealand?
9. Benjamin Barber on Libya and Qaddafi, his defense.
What is the consumer surplus of the internet?
Annie Lowrey asks:
But providing an alternative measure of what we produce or consume based on the value people derive from Wikipedia or Pandora proves an extraordinary challenge–indeed, no economist has ever really done it. Brynjolffson says it is possible, perhaps, by adding up various "consumer surpluses," measures of how much consumers would be willing to pay for a given good or service, versus how much they do pay. (You might pony up $10 for a CD, but why would you if it is free?) That might give a rough sense of the dollar value of what the Internet tends to provide for nothing–and give us an alternative sense of the value of our technologies to us, if not their ability to produce growth or revenue for us.
Here is much more.
Very good sentences
"I’m one of the few people who went to Washington to get out of politics."
Can you guess who said it? Hat tip goes to Felix Salmon.
*The Philosophical Breakfast Club*
The author is Laura J. Snyder and the subtitle is Four Remarkable Friends Who Transformed Science and Changed the World. This is an excellent book about the history and status of science in 19th century England and in particular the contributions of Charles Babbage, John Herschel, William Whewell, and Richard Jones, the latter an economist and of course Whewell debated induction and scientific method with Mill. Babbage too had writings on economics. Here is an excerpt from Snyder:
De Prony had been commissioned to produce a definitive test of logarithmic and trigonometric tables for the newly introduced metric system in France, to facilitate the accurate measurement of property as a basis for taxation.
De Prony had recently read Adam Smith's Wealth of Nations…Smith discussed the importance of a division of labor in the manufacture of pins…
De Prony was the first to see that a Smithian division of intellectual labor could be equally valuable in the work of computation of mathematical tables — although his idea had been anticipated by Leibniz, who believed that talented mathematicians should be freed from tedious calculations that could be done by "peasants."
If you enjoy the history of science, this book stands a good chance of being the best one in that genre to come out this year. Here is one good review of the book.
The elephant in the room
Paul Krugman writes:
Brad DeLong is mad at Tyler Cowen, with reason – for Cowen writes about US fiscal irresponsibility, fairly sensibly, without mentioning the elephant, and I do mean elephant, in the room: the role of the post-Reagan GOP.
Look: until 1980 or so the United States generally paid its way; the ratio of debt to GDP generally fell over time. Then starve-the-beast came to power, and fiscal realism went away. That’s the story; anyone who glosses over that, who makes it a plague-on-both-houses issue or, worse, makes it seem as if Obama is the villain, is in an essential way misleading his readers.
Brad DeLong offers further comment.
Pre-order your Derek Parfit, *On What Matters*, volumes I and II
*Time* magazine ranks the top financial blogs
The list is here, the descriptions are good ones (I wrote this on the blog Free Exchange), and the top rankings work from the bottom upwards; Krugman is #1, Felix Salmon is #2, and we are #3. And I don't even think of MR as a financial blog.
It’s time to reread Robin Hanson
Isn't it always?
Marketplace for retired economists
The AEA is attempting to make another part of the job market thick: it is linked from the main JOE page at http://www.aeaweb.org/joe/
Here is the direct link.
Available Retired Faculty Listing: "As an experiment, the AEA is initiating a listing of retired economists who may be interested in teaching on either a part-time or temporary basis. Individuals can add or delete their name at any time during the year. The listing will be active from February 1 through November 30 each year. Listings will be deleted on November 30; the service will be closed during December and January, re-opening on February 1."
Right now the list is waiting to be populated by retired faculty seeking part time or temporary work.
Assorted links
1. U.S. passport ownership by state.
2. Tim Harford's "Dear Economist" returns.
3. Modeled Behavior on TGS. NPR Morning Edition on TGS.
4. Under- and overshooters in the NBA, using game theory.
5. Dialogue between Joseph Stiglitz and his wife.
6. Don't ignore the risk preimium, when it comes to state pension assets, and more here.
7. Brad DeLong on the fiscal illusion; it's about villains.
8. Reuters and Gary Leff on gas station tacos; it's not about villains.
9. David Brooks reopens his blog.
What to do about wage polarization?
I like this Paul Krugman column, but I would have given it a different ending. Krugman writes:
So if we want a society of broadly shared prosperity, education isn’t the answer – we’ll have to go about building that society directly. We need to restore the bargaining power that labor has lost over the last 30 years, so that ordinary workers as well as superstars have the power to bargain for good wages. We need to guarantee the essentials, above all health care, to every citizen.
What we can’t do is get where we need to go just by giving workers college degrees, which may be no more than tickets to jobs that don’t exist or don’t pay middle-class wages.
I would suggest three different points of emphasis:
1. Trade unions, even if they could become strong again (which is hard to see), would likely accelerate this process of substituting capital for labor, rather than counteracting it. A one-time union wage premium, even if it does not come at the expense of other workers, will put only a small dent in the long-term trend.
2. Let's reform education, so people either make effective teams with computers, or they specialize in areas where computers are not effective. The nature of "education" is not carved in stone, even if the sector is hard to reform.
3. I have never seen it suggested that this "hollowing out" process will lead to lower output, quite the contrary. Those gains go somewhere. This is a reason to encourage the ownership of capital and on a quite broad basis. Let's start by repealing Sarbanes-Oxley, but along these lines there is much more we could do. How about low-load mutual funds backed by claims to intellectual property or whatever else will prove the scarce input for the future? Identifying that scarce input is the key to making progress on this issue.
The Great Real Estate Recalculation
We will need to rethink where bookstores should go: not always in the higher-rent suburban locations, where Borders outlets were placed, but rather in out of the way fringes. Book lovers will have to drive for longer periods of time to do their browsing, or use Amazon.
Buildings should become taller, more densely packed in, and there is a chance of vertical farming.
Best Buy stores are too large. The NoVa landscape is already starting to be littered with empty big boxes. What will be put in them? How many current "stores" should evolve into "petting zoos" designed to complement the company's web sales operations?
Some parts of the suburbs should become quite empty, while some roads should become much wider and better maintained, accompanied by congestion pricing of course.
I've already stopped using Tysons Corner Shopping Mall, mostly because the combined activities of parking and walking take too long and involve too many hassles. The mall no longer offers convenient access to its nodes.
The dinky homes in Pimmit Hills, Falls Church will be replaced with much larger and newer boxes.
In so many sectors of the economy, Manhattan has become obsolete as a shopping center, replaced by the web.
Self-driving cars have the potential to fit many more cars on the road. Traffic will become less costly, as cars evolve into portable offices.
It is not hard to imagine how The Great Real Estate Recalculation should proceed. But it will take decades to occur, and there is a chance that we get only the "hollowing out" side of the story. In the meantime, land economics will rise in importance as a field of economics, whether or not the profession realizes it.
*The Social Animal*
The author is David Brooks and the subtitle is The Hidden Sources of Love, Character and Achievement. I pre-ordered my copy some time ago and it is due out this Tuesday…
Assorted links
1. How to make money? I'm not convinced.
3. Richard Freeman selects and discusses five books on labor unions.
4. The Facebook page for our Modern Principles text; it offers a steady stream of in-class resources.
5. Nicholas Kristof on Timur Kuran and Islam.
6. Should scientists be more Luddite? (pdf) An uneven but interesting piece.