Sentences about unemployment
As in the data, the price of risk in our model sharply increases in recessions. The benefit from hiring new workers therefore greatly declines, leading to a large decrease in job vacancies and an increase in unemployment of the same magnitude as in the data.
Yes, nominal wages are sticky but this is the other and all-important side of the hiring equation.
That is from a new and important NBER working paper by Patrick J. Kehoe, Pierlauro Lopez, Virgiliu Midrigan, and Elena Pastorino. There is much more to their general model than that single sentence would indicate.
(Small) markets in everything
Ralph Nader spent a career bashing corporate executives. Now he’s written a book praising some. It’s not going down too well.
Tentatively called “Twelve CEOs I Have Known and Admired,” the book is more than a little off-brand for the man who upended the world of auto safety with the blockbuster “Unsafe at Any Speed” and then attacked corporate behavior in a number of other industries.
Based on a string of rejection letters from publishers, Mr. Nader said he fears he’s been typecast, making any accolades he might have for corporate tycoons a hard sell. His literary agent, Ronald Goldfarb, advised him to change course and go negative, he says.
“He wanted chapters on bad CEOs,” Mr. Nader said of Mr. Goldfarb.
“I didn’t tell him what to write,” Mr. Goldfarb retorts. “I told him what I could sell.” The two parted ways after working on the manuscript for three months.
Mood affiliation strikes again. Nader fans don’t want to positively affiliate with CEOs, and “love letter” types do not always wish to affiliate with Nader. (By the way, here is my 2014 chat with Nader.) Here is the rest of the Jeffrey A. Trachtenberg WSJ article.
How is U.S. urban public safety changing?
This paper argues that changes in human activity during the COVID-19 pandemic led to an unusual divergence between crime rates and victimization risk in US cities. Most violent crimes declined during the pandemic. But analysis using foot traffic data shows that the risk of street crime victimization was elevated throughout 2020; people in public spaces were 15-30 percent more likely to be robbed or assaulted. This increase is unlikely to be explained by changes in crime reporting or selection into outdoor activities by potential victims. Traditional crime rates may present a misleading view of recent changes in public safety.
Here is the paper by Maxim Massenkopf and Aaron Chalfin, via the excellent Samir Varma.
Further Wednesday assorted links
1. The boycott of Russian science. In general I am more comfortable with boycotting the Russian nation directly, rather than aiming at individual “Russians” (how defined?) outside the borders, who may or may not have a legally meaningful link/liability to the Putin government. And simply calling them “oligarchs” does not change that calculus!
2. Ukrainian currency down only ten percent since November.
3. Art works being lent by Russia. So far not yet cancelled.
4. Very good FT piece on the political powerlessness of the Russian oligarchs.
5. Crypto start-ups with no real names attached (NYT), the facts of the article are more interesting than the moralizing.
Cumulative probabilities for nuclear war
From Max Roser, responding to Alex. To be clear, I don’t think you are supposed to take these as highly exact estimates with respect to event independence and the like. It is simply one way of showing that you need to think about cumulative risk.
Wednesday assorted links
An index for state capacity
This paper contributes to the literature on state capacity by developing a method that yields an index of state capacity with far more comprehensive data coverage across time and countries than has been possible previously. Unlike narrower measures of fiscal capacity or legal capacity, the index is more comprehensive, using data from the Varieties of Democracy dataset on fiscal capacity, a state’s control over its territory, the rule of law, and the provision of public goods used to support markets. Like the previous literature, it demonstrates that the historical prevalence of warfare predicts state capacity. Several exercises are performed to demonstrate the validity of the index in measuring state capacity.
That is from a newly published paper by Colin O’Reilly and Ryan H. Murphy, via the excellent Kevin Lewis.
Tuesday assorted links
1. “People emotionally tied to robots can undermine relationships with co-workers.”
2. Metaculus giving about 75% odds that Putin is still in power a year from now. And Fiona Hill on the mind of Putin.
3. Russians have dollar-denominated mortgages.
4. Those new service sector jobs who needs a bear conflict manager?
5. Do you really want that private ambulance in Sweden?
Anti-Russia sentiment is the new McCarthyism
That is the theme of my latest Bloomberg column:
The Metropolitan Opera of New York has announced it will no longer stage performers who have supported Russian President Vladimir Putin. Carnegie Hall has done the same, and the Royal Opera House in London is canceling a planned Bolshoi Ballet residency. I expect more institutions to follow suit. Russia’s contemporary art scene, already financially struggling, fears ostracism from museums and collectors, mostly because of Putin’s recent actions.
Unwise, says I. And:
It is simply not possible to draw fair or accurate lines of demarcation. What about performers who may have favored Putin in the more benign times of 2003 and now are skeptical, but have family members still living in Russia? Do they have to speak out?
Another question: Who exactly counts as Russian? Ethnic Russians? Russian citizens? Former citizens? Ethnic Russians born in Ukraine? If you were an ethnic minority born under the Soviet Union, your former Soviet passport may have explicitly stated that you were not Russian.
And what about citizens of Belarus, which according to some reports is planning to send troops into Ukraine? Might they be subject to such strictures as well? How about citizens of China, which abstained from the United Nations vote condemning Russia’s invasion? Which wars are performers from Rwanda or Democratic Republic of the Congo required to repudiate?
When exactly is this ban supposed to end?
And to close:
If anything, the McCarthyism of the 1950s is a bit more explicable than the cancel culture of the present. At least it was trying to address what was then considered a great threat. That said, McCarthyism is not a practice America should want to revive. Witch hunts, by their very nature, do not bring out the best in people, Americans very much included.
I guess we will really see who is against cancel culture and who is not.
The new Bryan Caplan blog
Betonit.blog, with an RSS feed as well. Now in my feed!
Announcing the Future Fund
We’re thrilled to announce the FTX Future Fund: a philanthropic fund making grants and investments to ambitious projects in order to improve humanity’s long-term prospects. We plan to distribute at least $100M this year, and potentially a lot more, depending on how many outstanding opportunities we find. In principle, we’d be able to deploy up to $1B this year.
We have a longlist of project ideas that we’d love to fund, but it’s not exhaustive—we’re open to a broad range of ideas. We’re particularly keen to launch massively scalable projects: projects that could grow to productively spend tens or hundreds of millions of dollars per year. Our areas of interest include the safe development of artificial intelligence, reducing catastrophic biorisk, improving institutions, economic growth, great power relations, effective altruism, and more.
If you’d like to launch one of our proposed projects, or have another idea for a project in our areas of interest—please apply!Please submit your applications by March 21 to be considered in our first open funding round.
And the team is:
Nick Beckstead (CEO), Leopold Aschenbrenner, Will MacAskill, and Ketan Ramakrishnan.
Here is much more information, including for applying, and the links on top of the page have further detail yet. Emergent Ventures winner Leopold Aschenbrenner has been a driving force behind this, congratulations to Leopold! Also notable is this:
- Our Regranting Program. We’re offering discretionary budgets to independent grantmakers. Our hope is that regrantors will fund great people and projects that weren’t on our radar! We’ve already invited the first cohort, and we’re also opening up a public process to be considered as a regrantor.
Recommended.
Cultural divergence in north and south Vietnam
Cultural norms diverge substantially across societies, often within the same country. We propose and investigate a self-domestication/selective migration hypothesis, proposing that cultural differences along the individualism–collectivism dimension are driven by the out-migration of individualistic people from collectivist core regions of states to peripheral frontier areas, and that such patterns of historical migration are reflected even in the current distribution of cultural norms. Gaining independence in 939 CE after about a thousand years of Chinese colonization, historical Vietnam emerged in the region that is now north Vietnam with a collectivist social organization. From the eleventh to the eighteenth centuries, historical Vietnam gradually expanded its territory southward to the Mekong River Delta through repeated waves of conquest and migration. Using a nationwide household survey, a population census, and a lab-in-the-field experiment, we demonstrate that areas annexed earlier to historical Vietnam are currently more prone to collectivist norms, and that these cultural norms are embodied in individual beliefs. Relying on many historical accounts, together with various robustness checks, we argue that the southward out-migration of individualistic people during the eight centuries of the territorial expansion is an important driver, among many others, of these cultural differences.
That is new work by Hoang-Ang Ho, Peter Martinsson, and Ola Olsson. Via the excellent Kevin Lewis.
How much expected surplus do we want Putin to have?
My Bloomberg column is on another topic altogether, starting with bank runs, but this part I can reframe in terms of principal-agent theory. We want to squeeze Putin so hard that he “cries Uncle”, yet without eliminating his surplus so much that he takes a lot of extra risk. Hard to achieve both of those ends at the same time! Here is one bit reflecting that dilemma:
For a point of contrast on how decentralized incentives operate on each side, consider the nuclear alert ordered by Putin on Sunday. The chance of Russian nuclear weapons being ordered into actual use is small. But Putin faces a dilemma as he attempts to manipulate the decentralized systems of the Russian military. If he gave an order for a nuclear strike on a Ukrainian city, would the Russian military obey it? Whoever did would know they could be liable for war crimes.
The outcomes here are impossible to forecast, but the uncertainty works in favor of the Ukrainians. If it became known that Putin ordered a nuclear strike and was ignored, for example, he would become the proverbial “paper tiger” rather quickly and might lose power altogether.
These decentralized mechanisms potentially shift the entire logic of the war. Russia has to win fairly quickly, or these and other forces will increasingly work against it. Ukraine thus can fight for a military stalemate, but Russia cannot. The Russian forces must take increasing levels of risk, even if those risks have what decision theorists call “negative expected value” — that is, they serve as desperate gambles and on average worsen the Russian situation.
Of course that makes the war increasingly dangerous, and not just for the Ukrainians. If Putin is afraid the forces in the field won’t always carry out his orders, for example, he may order the launch of 10 tactical nukes rather than just one.
As AK would say, “Have a nice day.”
Monday assorted links
1. Good thread on how Russia has been thinking about this conflict. “Very good thread,” said one friend.
2. “In this paper, we show that the election of a new school board member causes home values in their neighborhood to rise. This increase is identified using narrowly-decided contests and is driven by non-Democratic members, whose neighborhoods appreciate about 4% on average relative to those of losing candidates.” Link here.
3. It seems higher-priced hospitals do not deliver higher quality care.
4. Are the real lessons of Harry Potter guns and libertarianism?
Are nuclear weapons or Rogue AI the more dangerous risk?
I was going to write a long post on this question, as recently I had been urged to do by one of the leaders of the Effective Altruism movement, during a Sichuan lunch.
But then Putin declared a nuclear alert, and I figured a short post might be more effective. To be clear, I think the chance of nuclear weapons use right now is pretty low. But it is not zero, if only because of errors and misunderstandings. So imagine this kind of scenario repeated across a few centuries, with an increasing number of nuclear powers at that. And this time around, there is a truly existential threat to the current version of the Russian state, and a number of people are suggesting that Putin has gone a little wacko.
And this is in a world where, about one week ago, the conventional wisdom was that Russia would not really invade Ukraine at all, maybe just a limited police action in the east.
As for Rogue AI, here is a long Scott Alexander post (ungated) on the topic. For now I will just say that it makes my head hurt. It makes my head hurt because the topic is so complicated. And I don’t take any particular form of technological progress for granted, not along any time frame. That holds all the more true for “exotic” claims about what might be possible over the next few decades. Most of the history of the human race is that of zero economic growth, sometimes negative economic growth. And how good were past thinkers at predicting the future? Don’t just select on those who are famous because they got some big things right.
So I see nuclear war as the much greater large-scale risk, by far. We know nuclear weapons work and we know they can be deployed without any technological advances at all. And we know they are highly destructive by their very nature, whether we “align” them or not, whether we properly train them or not.
How many people, as public intellectuals, have made “let’s make sure all countries holding nuclear weapons can accurately distinguish between an incoming rocket and a flock of birds” their main thing? Zero?
https://twitter.com/mattyglesias/status/1498023624380403714