Friday more assorted links

1. Vancouver automation.

2. “…we reexamine one of the largest partisan shifts in a modern democracy: Southern whites’ exodus from the Democratic Party. We show that defection among racially conservative whites explains the entire decline from 1958 to 1980.”  Income seems to play essentially no role.

3. Eric Chyn: “I study public housing demolitions in Chicago, which forced low-income households to relocate to less disadvantaged neighborhoods using housing vouchers. Specifically, I compare young adult outcomes of displaced children to their peers who lived in nearby public housing that was not demolished. Displaced children are more likely to be employed and earn more in young adulthood. I also find that displaced children have fewer violent crime arrests. Children displaced at young ages have lower high school dropout rates.”

4. The book The Spirit Level does not hold up to scrutiny.

5. Paul Romer on the gender gap.

6. MMT profile.

Friday assorted links

1. Robert Wiblin podcast with Daniel Ellsberg on matters nuclear.

2. What are the economic costs of physical contact in high school and college male sports?

3. Terms used in the military.

4. “Tomorrow, we’re opening Amazon 4-star, a new physical store where everything for sale is rated 4 stars and above, is a top seller, or is new and trending on Amazon.com.”  Link here.

5. “I’m honored to accept a grant from ‘s Emergent Venture’s to create a genealogy of street art, using machine learning.”  Link here.  Here is another winner: “…for my projects on brain-computer interfaces & learning!”

Which countries have the most human capital?

Here is a new Lancet paper by Stephen S. Lim, et.al., via the excellent Charles Klingman.  Finland is first, the United States is #27, and China and Russia are #44 and #49 respectively.  There is plenty of “rigor” in the paper, but I say this is a good example of what is wrong with the social sciences and more specifically the publication process.  The correct answer is a weighted average of the median, the average, the high peaks, and a country’s ability to innovate, part of which depends upon the market size a person has in his or her sights.  So in reality the United States is number one, and China and Russia should both rank much higher (Cuba and Brunei beat them out, for instance, Cuba at #41, Brunei at #29).  And does it really make sense to put North Korea (#113) between Ecuador and Egypt?  I’m fine with Finland being in the top fifteen, but I am not even sure it beats Sweden.  Overall the paper would do better by simply measuring non-natural resource-based per capita gdp, though of course that could be improved upon too.

Now, I did zero work on that one, and came up with a better result than the authors.  What does that tell you?

Addendum: You will note the first sentence of the paper’s background claims: human capital refers to “the level of education and health in a population”.  The first two sentences of the actual paper immediately contradict this: “Human capital refers to the attributes of a population that, along with physical capital such as buildings, equip­ment, and other tangible assets, contribute to economic productivity. Human capital is characterised as the aggregate levels of education, training, skills, and health in a population, affecting the rate at which technologies can be developed, adopted, and employed to increase productivity.”  The paper does an OK job of measuring the former, but absolutely fails on the latter.

How should we judge appeals to identity

Bryan Caplan wrote this in his description of GMU blogger culture:

Appealing to your identity is a reason to discount what you say, not a reason to pay extra attention.

Bryan explains more, not easy for me to summarize but do read his full account.  Let me instead try to state my own views:

1. If someone makes a claim new or foreign to you, and that person comes from a different background in some manner, you probably should up the amount of attention you give that claim because the person is from a different background.  Your marginal need to learn from that person is probably above-average, noting of course this can be countermanded by other signals.  That said, I recognize that our ability to learn from “different others” may be below average, given the possible absence of a common conceptual framework.  Nonetheless, I say be ambitious in your learning!

2. If someone makes a claim you already disagree with, and that person comes from a different background in some manner, you should try to figure out why that person might see the matter differently.  You should try harder, at the margin, precisely because the person is from a different background.  Again, this follows from a mix of marginalism and Bayesian reasoning and ambition in learning.

3. When you hear a person from a different background, try not to get too caught up in the “identity politics” of it, either positively or negatively.  Try to steer your thoughts to: “People from this background in fact have a wide diversity of views on this topic.  Still, I will try to learn from this person’s different background.”  Try not to think: “This is how group X feels about issue Y.”

4. I’ve already noted that you often learn more efficiently from people who come from similar backgrounds as yourself.  Even putting language aside, I am more likely to have a fruitful career-enhancing dialogue with another nerdy economist than with a Mongolian sheep-herder.  In this regard I worry when I hear an uncritical celebration of intellectual diversity for its own sake.  To me it too often sounds like mere mood affiliation, subservient to political ends and devoid of cognitive content.

But still, I do not wish to rebel against such sentiments too much.  At the end of the day I am left with my intellectual ambition and I really do wish to go visit Mongolia, including for the sheep herders.  And to the extent I am informed in some ways that maybe not all of my peers are, the intellectual ambition I am presenting here is a big reason why.  I seek to encourage more such ambition, rather than to give people reasons for evading it.

Mihail Sebastian, *Journal 1935-1944*

I am surprised this work is not better known.  A literary diary of a Romanian Jew, it captures the beauties of European high culture during the pre-war thirties, most of all classical music and early 20th century literature, but also the only slighter later descent into madness.  It’s his friends and fellow intellectuals who turn on him the most.  I don’t know a better source for capturing the sense of surprise and then foreboding that people must have felt as Hitler racked up one victory after another.

In late 1944, after the course of the war had reversed, Sebastian wrote:

I am not willing to be disappointed.  I don’t accept that I have any such right.  The Germans and Hitlerism have croaked.  That’s enough.

I always knew deep down that I’d happily have died to bring Germany’s collapse a fraction of an inch closer.  Germany has collapsed — and I am alive.  What more can I ask?  So many have died without seeing the beast perish with their own eyes!  We who remain alive have had that immense good fortune.

Miraculously, Sebastian survived the Holocaust and was never deported to the camps.  On 29 May 1945, however, he was hit and killed by a truck in downtown Bucharest, while walking on his way to teach class.

You can buy the work here, and I’ve since ordered one of Sebastian’s novels.  Here is a NYT review.

Let’s just simulate economic mobility on TV

…contemporary Americans are watching a record number of entertainment TV programs emphasizing “rags to riches” narratives.  Using detailed Nielsen ratings data and original content analyses, I demonstrate that such shows have become a ubiquitous part of the American media landscape over the last two decades.  In three national surveys…I find that exposure to these programs increases viewers’ beliefs in the American Dream; for heavy viewers this effect is as powerful as that of having immigrant parents.  In experiments conducted both online and in a lab-in-the-field setting establish that these media effects are causal, and stronger among Republicans.

That is from a new paper by Eunice Kim, via Matt Grossman.

Monopoly power does not seem to be up at the actual market level

Using U.S. NETS data, we present evidence that the positive trend observed in national product-market concentration between 1990 and 2014 becomes a negative trend when we focus on measures of local concentration. We document diverging trends for several geographic definitions of local markets. SIC 8 industries with diverging trends are pervasive across sectors. In these industries, top firms have contributed to the amplification of both trends. When a top firm opens a plant, local concentration declines and remains lower for at least 7 years. Our findings, therefore, reconcile the increasing national role of large firms with falling local concentration, and a likely more competitive local environment.

That is from a new NBER working paper by Esteban Rossi-Hansberg, Pierre-Daniel Sarte, and Nicholas Trachter.

Call for Emergent Ventures proposals on talent search and major life changes

Here is my earlier description of Emergent Ventures.  In addition to the general request for proposals, we are looking to fund research in two particular directions, so if you are interested I would encourage you to apply here.  Here goes:

1. What do we know about the best ways to search for additional talent?  What features characterize successful talent searches?

2. How do people make “big” decisions?  This could include the decision to migrate from one country to another, the decision to change religions, the decision to start a new business, to marry, and so on.  Are there general principles here?  What is known or believed, either theoretically or empirically?

We are open as to what form a contribution might take, but as a default I am envisioning a paper (on either) of say 60-80 pp., surveying and conceptually summarizing academic literature, but written for very smart non-academics and with a somewhat practical bent.

I encourage you to apply, both on these topics and more generally.

My Conversation with Bruno Maçães

Here is the audio and transcript, here is the opening summary:

Political scientist Bruno Maçães has built a career out of crossing the globe teaching, advising, writing, and talking to people. His recent book, born out of a six-month journey across Eurasia, is one of Tyler’s favorites.

So how does it feel to face Tyler’s rat-a-tat curiosity about your life’s work? For Bruno, the experience was “like you are a politician under attack and your portfolio is the whole of physical and metaphysical reality.”

Read on to discover how well Bruno defended that expansive portfolio, including what’s missing from liberalism, Obama’s conceptual foreign policy mistake, what economists are most wrong about, how to fall in love with Djibouti, stagnation in Europe, the diversity of Central Asia, Hitchcock’s perfect movie, China as an ever-growing global force, the book everyone under 25 should read, the creativity of Washington, D.C versus Silicon Valley, and more.

Here is one bit:

MAÇÃES: This raises deep philosophical questions and political questions. If you want Turkey to become like Europe, then you have to project European power across Turkey. If Europe no longer has that ability, then you shouldn’t be surprised that Turkey looks elsewhere.

It’s very simple. I think I say in the book that in order to be loved, you also have to be feared. This idea that you find in Europe now, that without projecting any kind of power, other countries will be attracted to the European model, that’s a form of utopianism. I just cannot see that happen.

COWEN: So Europe lacks the spirit of adventure.

MAÇÃES: That is certainly the case. I think you see that. One of the areas where the spirit of adventure today is more relevant and important is technology. You see in Europe the idea that technology’s against us, and we should resist this rather than embrace it. A very negative spirit, which I think is a good example of how adventure has disappeared from the European psyche.

And:

COWEN: Russia. Why is Russia as a world power currently underrated?

MAÇÃES: The most impressive thing about Russia is, in fact, something that you might not think at first: the power of organization. We have this image of Russia as a failed state in many respects.

But in order to keep that empire, in order to keep it together throughout the centuries, in order to develop it to some extent, in order to bring together so many ethnicities, so many religions . . . it’s fair to say that Russia has done a better job of integrating its Muslim population, which is close to 15 percent, than any other country, I would argue — certainly any other major country.

The power of the Russian state, the ability to organize, to dispose, to connect, is one of the great political stories of mankind — to see how the Russian state was able to grow and to extend itself. And that’s still there.

Original and highly recommended.  Again, here is Bruno’s book The Dawn of Eurasia: On the Trail of the New World Order.

Wednesday assorted links

What I’ve been reading

1. Santiago Levy, Under-Rewarded Efforts: The Elusive Quest for Prosperity in Mexico.  Probably the best current book on Mexico’s economy and why it has not grown more rapidly.  Most of all, Levy blames misallocation, and more specifically the attachment of too many workers to the low-productivity informal sector.  The author notes (p.34) that both the top 20 percent of the wage distribution, or even the top 1 percent, saw no wage growth from 1996 to 2015.

2. Sriya Iyer, The Economics of Religion in India.  A useful survey, which delivers on what the title promises.

3. Howard Sounes, Fab: An Intimate Life of Paul McCartney.  One of my favorite biographies, this book is also excellent on outlining the history of the Beatles (and subsequent McCartney groups) as problems in the theory and practice of management.  I now have ordered the author’s other books on music history.

4. Jeffrey D. Sachs, A New Foreign Policy: Beyond American Exceptionalism.  This book is somewhat less radical than I had been expecting, mostly concentrating on the potential gains from multilateralism, international cooperation, and international law.  Or is that the truly radical view?

5. Roger Scruton, Music as an Art.  The chapter on Schubert is the highlight, and perhaps the best explanation of that composer’s beauty and importance.  The book is otherwise high variance, with the remarks on morals and aesthetic philosophy much weaker.  At times he pops open an insight when it is least expected, such as on heavy metal music: “In the realm of pop they were the modernists, undergoing in their own way that revolution against kitsch and cliche that had set Schoenberg and Adorno on the path towards 12-tone serialism.”

Helene Rosenblatt, The Lost History of Liberalism: From Ancient Rome to the Twenty-First Century, presents liberals as moralists and debunks the notion of liberalism as so exclusively an Anglo-American phenomenon.

Dean Keith Simonton, The Genius Checklist: Nine Paradoxical Tips on How You! Can Become a Creative Genius, is a popularization of some of his earlier research on genius and creative achievement.

Notable is Stephen L. Carter’s new biography of his grandmother, Invisible: The Forgotten Story of the Black Woman Lawyer Who Took Down America’s Most Powerful Mobster.

Climate change may be more expensive than we think

That is the topic of my latest Bloomberg column, here is the closing bit:

I am struck by the costs of climate change suggested in the UN’s Intergovernmental Panel on Climate Change report, hardly a source of denialism. Its cost estimate — “1 to 5% of GDP for 4°C of warming” — is relatively reassuring. After all, global GDP is right now growing at more than 4 percent a year. If climate change cost “only” 4 percent of GDP on a one-time basis, then the world economy could make up those costs with less than a year’s worth of economic growth. In essence, the world economy would arrive at a given level of wealth about a year later than otherwise would have been the case. That sounds expensive but not tragic.

Unfortunately, that is not the right way to conceptualize the problem. Think of the 4 percent hit to GDP, if indeed that is the right number, as a highly unevenly distributed opening shot. That’s round one, and from that point on we are going to react with our human foibles and emotions, and with our

highly imperfect and sometimes corrupt political institutions. (Libertarians, who are typically most skeptical of political solutions, should be the most worried.)

Considering how the Syrian crisis has fragmented the EU as well as internal German politics, is it so crazy to think that climate change might erode international cooperation all the more? The true potential costs of climate change are just beginning to come into view.

Do moving and making big decisions tend to happen together?

We use exogenously determined, long-distance relocations of U.S. Army soldiers to investigate the impact of moving on marriage. We find that marriage rates increase sharply around the time of a move in an event study analysis. Reduced form exposure analysis reveals that an additional move over a five year period increases the likelihood of marriage by 14 percent. Moves increase childbearing by a similar magnitude, suggesting that marriages induced by a move are formed with long-term intentions. These findings are consistent with a model where the marriage decision is costly and relocation lowers the costs to making this decision. Our results have implications for understanding how people make major life decisions such as marriage, as well as the cost of migration.

That is from a new paper by Susan Payne Carter and Abigail Wozniak.  It’s as if the move jolts you out of complacency and activates your long-term planning modules.  Here are some bits from the paper, as assembled by an MR reader:

– …marriage rates rise sharply shortly before and in the first two months after a move.
– Additional moves encourage marriage, raising the likelihood of marriage and of having children present as dependents.
– The likelihood of marrying prior to five years of Army service rises by 8 percentage points with an additional domestic move, representing an increase of 14 percent from the mean marriage rate.
– We first considered a model in which relocation likely requires investment in thinking about long-term plans that may simultaneously lower the cost of considering other types of long-term commitments, like marriage.
– This suggests that the decision to marry may be affected by other events requiring long-term planning. This in turn implies that a disruptive event, like a relocation, may actually strengthen family ties rather than strain them.

For the pointers I thank two MR readers.