Not the United States

by  Tyler Cowen in

The father was detained in February; three months later the mother was also taken away by authorities. They had allegedly shared extremist Islamist content on their mobile phones, family friends said. Despite protests from relatives, two of their children, aged 18 and 15, were then detained and their younger two, aged seven and nine, were sent to a state welfare centre. “The grandfather even wept, but the authorities would not let him keep his grandchildren,” recalled an acquaintance.

So what’s up?:

As the Trump administration struggles to reunite migrants and their children forcibly separated at the US border, China has been separating families on a far larger scale as part of a rapidly intensifying security campaign.

That is from Emily Feng at the FT, via Comrade Balding.

It’s all about investment, not tariffs and trade wars

by  Tyler Cowen in

I’ve been saying this for a while, here is an excellent piece by Shawn Donnan at the FT:

Since it was first created in 1975 as an inter-agency committee, Cfius has been able to review foreign investments only on narrow national security grounds. But if it adopts the broad Trumpian definition of national security as economic security, this could open a whole new range of transactions to its scrutiny. Might a mid-western auto plant that makes components purely for civilian vehicles suddenly be treated as a national security asset and be banned from foreign ownership?

Presidents have for years resisted efforts in Congress to require Cfius to consider an economic benefits test when it approves large foreign investments, as similar bodies do in countries such as Australia and Canada. Mr Trump, however, seems to be embracing the idea.  Legislation to reform Cfius, which the Trump administration will have broad powers to shape in its implementation, is nearing its final journey through Congress.

Maybe they’ll have to revise the Star Wars prequels too…

Lower travel costs boost scientific collaboration

by  Tyler Cowen in

Here is a kind of gravity equation for science:

We develop a simple theoretical framework for thinking about how geographic frictions, and in particular travel costs, shape scientists’ collaboration decisions and the types of projects that are developed locally versus over distance. We then take advantage of a quasi-experiment – the introduction of new routes by a low-cost airline – to test the predictions of the theory. Results show that travel costs constitute an important friction to collaboration: after a low-cost airline enters, the number of collaborations increases by 50%, a result that is robust to multiple falsification tests and causal in nature. The reduction in geographic frictions is particularly beneficial for high quality scientists that are otherwise embedded in worse local environments. Consistent with the theory, lower travel costs also endogenously change the types of projects scientists engage in at different levels of distance. After the shock, we observe an increase in higher quality and novel projects, as well as projects that take advantage of complementary knowledge and skills between sub-fields, and that rely on specialized equipment. We test the generalizability of our findings from chemistry to a broader dataset of scientific publications, and to a different field where specialized equipment is less likely to be relevant, mathematics. Last, we discuss implications for the formation of collaborative R&D teams over distance.

That is from a new paper by Christian Catalini, Christian Fons-Rosen, and Patrick Gaulé.

Monday assorted links

by  Tyler Cowen

1. Don’t fear the inverted yield curve.

2. “Our results provide the first evidence that legal access to SSM improved health for adult gay men.”

3. “Our findings suggest black doctors could help reduce cardiovascular mortality by 16 deaths per 100,000 per year — leading to a 19% reduction in the black-white male gap in cardiovascular mortality.”

4. Somehow I have ended up looking at Gibeau Orange Julep.

5. Wingsuit terrain flying.  That is a video, more here.

Why doesn’t Mexico’s economy grow more quickly?

by  Tyler Cowen in

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

Instead, it is education that is arguably Mexico’s most fundamental problem. In most emerging economies, if you are ambitious and seek higher wages, you will invest in more education. Mexicans have traditionally had another choice — crossing the border to work in the U.S. Mexicans who make this choice can move from earning a dollar or two a day to 10 or 15 dollars an hour, though with higher living costs. It is hard to beat that boost simply by finishing high school or even college in Mexico.

And:

Admittedly, this [informal, grey or black market] labor can be and often is absorbed into the more formal, more productive sectors of the economy, including exports. But the rate of absorption is quite slow, which in turn helps to set the slow growth rate of the economy. And in any case neither the high-productivity nor the low-productivity firms have that much room to grow within their respective categories, a major difference from many other emerging economies.

The odds are that Mexico will have to opt for the slow but steady long game, as Denmark once did.

Do better scientists smile more?

by  Tyler Cowen in

Theory and research indicates that individuals with more frequent positive emotions are better at attaining goals at work and in everyday life. In the current study we examined whether the expression of genuine positive emotions by scientists was positively correlated with work-related accomplishments, defined by bibliometric (e.g. number of citations) and sociometric (number of followers for scholarly updates) indices. Using a sample of 440 scientists from a social networking site for researchers, multiple raters coded smile intensity (full smile, partial smile, or no smile) in publicly available photographs. We found that scientists who presented a full smile had the same quantity of publications yet of higher quality (e.g. citations per paper) and attracted more followers to their updates compared to less positive emotionally expressive peers; results remained after controlling for age and sex. Thin-slicing approaches to the beneficial effects of positive emotionality offer an ecologically valid approach to complement experimental and longitudinal evidence. Evidence linking positive emotional expressions to scientific impact and social influence provides further support for broaden and build models of positive emotions.

I wonder for which fields this might not be true…?

The paper has many authors, including my colleague Todd B. Kashdan.  Via the excellent Kevin Lewis.

Corruption and sensitive soccer games

by  Tyler Cowen in

We utilize data from sensitive soccer games in 75 countries between the years 2001 and 2013. In these games one team was in immediate danger of relegation to a lower division (Team A) and another team was not affected by the result (Team B). Using within-country variation, our difference-in-difference analysis reveals that the more corrupt the country, according to Corruption Perceptions Index, the higher is the probability that Team A would achieve the desired result in the sensitive games relative to achieving this result in other, non-sensitive games against the same team. We also find that in the later stages of the following year, the probability that Team A would lose against Team B compared to losing against a similar team (usually better than Team B) is significantly higher in more corrupt countries than in less corrupt countries. This result serves as evidence of quid pro quo behavior.

That is a recently published paper by Guy Elaad, Alex Krumer, and Jeffrey Kantor.  For the pointer I thank the excellent Kevin Lewis.

CIVIL and the future of media?

by  Tyler Cowen in

David Siegel emails me:

CIVIL is a new start-up from Consensys, whose goal is to change journalism.

The Civil marketplace is built on a protocol that in turn is built on the Ethereum blockchain.

This ecosystem is built around a token-curated registry, using what we call a “skin-in-the-game coin,” the CVL. This is an application of mechanism design to blockchain-based tokens that can be acquired, exchanged, and go up in value, creating a new micro-economy for – in this case – truthy journalism. The basic unit of Civil is a newsroom. A newsroom is a person or group who can publish anything they like. They can charge readers using CVL tokens or credit cards or anything else. What makes Civil interesting is that anyone can challenge a story’s veracity.

To challenge a story, you send some CVL coins to a smart contract. The community then votes on the veracity of the story, or even the newsroom itself. Anyone who votes must stake coins. If the story is voted true, those who voted true take the pot – they win all the staked tokens. If the community finds it’s false, then those who voted for false share the purse. This skin-in-the-game mechanism is the next evolution of communities like Steem and is game-theoretically far more advanced than Reddit or Quora. It promises to eliminate fake ratings, reviews, and content farms pumping out propaganda. By creating token-based games that reward virtuous behavior – the first one of which was Bitcoin – today’s blockchain entrepreneurs promise to bring us a new era of less biased news, better blogging, more accurate ratings, and potentially better science.

Trump’s gender gap also concerns intensity of preference

by  Tyler Cowen in

Among self-identified Republicans, Trump’s approval is 91 percent among men and 82 percent among women. But the gap in intensity of support is what is particularly telling. While 68 percent of male Republicans say they strongly approve of the way Trump is handling his job, just 31 percent of female Republicans say the same — a whopping 37-point difference.

There is a double-digit difference between all men and women in their evaluation of Trump’s handling of immigration, and likewise among Republican men and women. On trade, Republican men and women are in general agreement in giving positive marks, but they are widely separated in whether they feel strongly about that support.

On his handling of the economy, the gap is even larger. Across the entire population, more than 6 in 10 men give him positive marks for the economy, but fewer than 4 in 10 women say the same. Among Republicans, there is a 27-point difference between men and women in the level of strong approval expressed for the way the president is dealing with the economy.

Here is the full story by Dan Balz.

Theo asks, and I intersperse my answers

by  Tyler Cowen in

Dear Tyler,

Due to the asymmetry of fame I feel that I know you quite well so I am just going to bombard you with random questions and hope that you see fit to answer some of them.

You seem to value journalism very highly. Is it just out of necessity as a generalist, or does popular writing on a topic have important information that can’t be learned from the academic/scholarly side?

Journalists have to try to explain things that actually happened to other human beings, often educated ones but not specialists either.  It is hard to overrate the importance of that process to developing one’s thoughts and self, no matter what you may think of particular journalists in today’s MSM.

Related: Which elite profession or slice of society is most opaque to journalists and “book-learning” in general? (Oddly some of the categories that come to mind are those which are some of the most written-about – food, sex, friends, law, politics. But it’s probably maths.)

Making things.  Archaeology.  These days, tech.  Maths.  Journalism.

How much less interesting would it be to read Shakespeare if no-one else ever had? Does the answer differ much across top-tier “great” artists?

It would not be less interesting at all, maybe more interesting, because the shock of discovery would be all the greater.  Admittedly, many artists require lots of discussion with other people, maybe rock and roll most of all?  But not Shakespeare.

Overrated vs underrated: The New Yorker. How about Samin Nosrat?

The New Yorker has had a consistent voice and remarkable brand for more decades than I can remember (I recall Patrick Collison making a similar point, perhaps in a podcast?).  Since I am now above the median age for the United States, that makes them underrated.  The literariness of the historical New York and Northeast and the integration of American and European culture also have become underrated topic areas, and The New Yorker still does them, so that too makes the magazine underrated.

And who is Samin Nosrat?  She must therefore be underrated.

Does the world have too many writers, or not enough? What about comparative literature professors? How should we think about the future of literary culture when the written word is becoming so much more culturally dominant at the same time as books and journalism are falling apart?

What variable are we changing at the margin?  If people watch less TV and write more, that is probably a plus.  I also would favor fewer photographs and more writing.  But I wouldn’t cut back on charity to increase the quantity of writing.  If only comparative literature professors were people who simply loved books — at the margin a bit more like used book store owners and somewhat less like professors — and would compare them to each other…then I would want more of them.  Until then, I don’t know how to keep the extra ones busy.

Why does the USA not have open borders with Canada?

I believe America should have open borders with any nation that has a more generous welfare state than we do.  That covers Canada, even though Canadian insurance coverage for mental health and dentistry isn’t nearly as good as you might think.  As to why we don’t have open borders with Canada, I don’t think American voters would see that as solving any concrete problem (can’t we get many of the best Canadians anyway?), and it would feel a bit like giving up control, so why do it?

To what extent are Trump, Brexit, Orban, Erdogan, rising murder rates and stalling trade growth worldwide part of the same phenomenon? If they aren’t completely separate, which way does the contagion run?

Yes, no, and maybe so, get back to me in a few years’ time.

Have a great day…

You too!

Mobile money in Somaliland

by  Tyler Cowen in

Since its launch in 2009, Zaad, which means “to grow” in Somali, has swelled to 850,000 users—roughly one-quarter of the nation’s population. Locals use the platform on battered old cellphones and, less frequently, on smartphones and a designated app.

Without mobile money, cash has a hard time flowing through the country. No commercial banks really operate here, and hauling physical cash over rough roads is time-consuming. Companies use Zaad for their monthly payrolls, instead of handing wads of cash to their employees.

Today, each user on average makes 35 Zaad transactions a month, and Somalilanders say they try to use Zaad for most transactions. A rudimentary texting system makes it easy even for the many Somalilanders who are illiterate.

It seems to be a kind of free banking:

Apart from phone-to-phone transactions, users can top up their mobile wallets by handing cash—shillings [the Somaliland currency] or dollars—over to an official agent, who is often a single person in a shack on the side of the road.

“This service has been a driving force for the smooth operation of our economy,” said Abdikarim Dil, Telesom’s chief executive.

Since mobile-money services aren’t regulated by the central bank, they aren’t subject to the restrictions that traditional banks face, including requirements meant to block terror financing.

Here is the story (WSJ) by the consistently interesting Matina Stevis-Gridneff (there are few journalists better to read these days), via the excellent Samir Varma.