Category: Data Source
Negative Equity in Underwater Homes
Calculated Risk gathers the data on underwater homes:
- There are 14.75 million underwater homes and 4.1 million of these have more than 50% negative equity (the homeowners owe 50%+ more than their homes are worth).
- The total negative equity is $771 billion.
I decided to create a picture:
*Government Size and Implications for Economic Growth*
The authors are Andreas Bergh and Magnus Henrekson and this book is a good summary of ongoing attempts to correlate the size of government with economic growth.
Nonetheless the book does not answer my two longstanding objections to how this literature is sometimes interpreted:
1. To what extent is "economic freedom" actually proxying for "quality of government?" (the link is the best blog post of this year so far, by the way)
2. Why say so much about growth rates and so little about income levels? The latter are positively correlated with size of government. You don't have to view big government as causing high per capita income, but at the very least the account of differential growth rates should be consistent with the account of differential levels of per capita income.
Why does AEI price the paperback at $20? Aren't think tanks supposed to subsidize the books they produce? Amazon, by the way, was claiming (incorrectly) that there is a hardcover at $30.
Why are so many homes unemployed?
Theories of unemployed labor are a subset of theories of unemployed resources.
The U.S. housing vacancy rate–an unemployment rate for homes–is at its highest level since at least 1965 (see figure). Why? Is it sticky prices? Lack of aggregate demand? Structural?
House prices may be sticky but they have fallen a lot–maybe not enough–but they have fallen a lot more than have wages. On the other hand, house prices rose a lot more than wages. Maybe house prices are sticky relative to the required variation in market clearing levels.
What about lack of aggregate demand? The homeownership rate was 67.2 in 2000 and today it’s 66.9. Thus, we don’t have too great a supply of houses in the aggregate so aggregate demand is likely a factor.
Is the problem structural? It does seem that we have too many houses in the South and the West where the boom was concentrated. If we think of the unemployment rate as a measure of where there are too many houses then the following figure shows that there is a positive correlation between the home vacancy rate and the unemployment rate. It’s not as tight as one might expect, however. California, for example, has a high unemployment rate but a home vacancy rate slightly below the national average and many states such as Wisconsin have plenty of unemployment but a very low home vacancy rate.
My guesstimate is 50% AD, 25% sticky prices, 25% structural. Tyler would read it differently. I do think more progress could be made if greater attention were given to theories of unemployed resources and not just unemployed labor.
Does Beer Make Bud Wiser?
Here from Razib Khan at Gene Expression is a chart of percentage alcohol drinkers against score on the Wordsum test (0-10 score; a quick and dirty correlate .71 of adult IQ.). I will let you debate causality.
Historical Financial Statistics
That is a new database, on-line, it looks very useful and it is constructed by smart people. Summary:
Welcome to Historical Financial Statistics, a free, noncommercial data set that went online in July 2010. We aim to be a source of comprehensive, authoritative, easy-to-use macroeconomic data stretching back several centuries. Our target range of coverage is from 1492 to the present, with special emphasis on the years before 1950, which few databases cover in detail.
I am told by a credible source that progress will be cumulative.
West German unemployment in the 1980s
A number of commentators in the discussion yesterday doubted whether West Germany had non-natural rate unemployment just before unification. I didn't cover this in detail because I thought it was commonly accepted, but I'll offer up more evidence and it suggests oth unemployment and a deficiency of aggregate demand at the time. Here, from the Kansas City Fed, is one typical account of West Germany, from 1989:
Thus, unemployment increased steadily from 1970 to 1988. What caused this asymmetric effect of monetary policy on unemployment? As argued below, restrictive monetary policy in combination with adverse external shocks…
The article describes West Germany as, through the 1980s, having had "persistently high unemployment." (Keep in mind that less than twenty years before the unemployment rate in West Germany was one percent, though the natural rate was rising over time.)
There were also plenty of structural reasons for West German unemployment, but those nominal and real rigidities are potentially amenable to macroeconomic policy. Here's another treatment, from 1990, noting the persistent unemployment in West Germany, in excess of the natural rate. This lengthy study, while finding AD deficiencies to be one factor behind West German unemployment, focuses on structural causes of unemployment, most of all wage rigidities. That's a moot point; those unemployed workers still should benefit from well-executed fiscal and monetary policy, at least to the extent one believes such policies to be effective. The study also finds that frictional unemployment and structural unemployment in the Lilien sectoral shift sense — the kinds that don't respond well to fiscal policy under any account — to be slight in West Germany at that time.
Number of Birds Killed
Number of birds killed by the BP oil spill: at least 2,188 and counting.
Number of birds killed by wind farms: 10,000-40,000 annually.
Number of birds killed by cars: 80 million annually.
Number of birds killed by cats: Hundreds of millions to 1 billion annually.
Don't worry there is some good news.
Number of birds killed by fisheries: tens to hundreds of thousands annually (fortunately for the birds, some of these fisheries are now shut down).
The world’s largest database of job openings for economists
It is here and the bottom line is this:
Starting from today, walras.org and VoxEU.org have joined forces to form the largest global database of job openings for PhD economists. Any job posted on walras.org is automatically also posted on VoxEU’s new job market database, which can be accessed by clicking here.
You can also access the Jobs section directly using the new Jobs tab in the main navigation or by linking to www.voxeu.org/jobs/
Gender Parity in Schooling Around the World
The world has reached gender parity in schooling and in a few years we will see a schooling ratio in favor of women. Using UNESCO statistics (more detail here) on school life expectancy, the average country has a parity level of 1.01 in favor of women or, weighting by population, .991. In other words, at current rates women can be expected to get the same number of years of education as men, as a world average.
Equal life expectancy of schooling on a world level does not mean that all is well – basically we have a relatively small number of countries in which women get much less education than men and a large number of countries in which women get somewhat more education than men. On the vertical axis in the figure below (click to enlarge) is total life expectancy in school and on the horizontal axis the ratio of female to male life expectancy in school. The figure tells us a number of interesting things. First, the largest imbalances are against women and these tend to occur in countries with a low level of total education. South Korea is an interesting outlier.
Second, in India parity is below 1 and in China it is above 1. In India female school life expectancy increased by a huge 2.5 years between 2000 and 2007 and the parity ratio increased from .77 to .9 so we can expect the (weighted) world parity level to easily tip over 1 in the next few years (if it has not done so already). The graph suggests that a ratio around 1.09 is the "norm" towards which countries are trending with development.
Interestingly, some of the Muslim countries, such as Pakistan and Afghanistan (no data for 2007-2008 but in 2004 the parity ratio was less than 0.5), are below parity but Qatar and Iran have some of the highest ratios in the world, both above US levels.
The Solow Model with Mathematica
In Modern Principles Tyler and I explain the Solow model of economic growth and show how the model can easily be run using Excel. I have also written a fun Mathematica demonstration of the Solow model.
You can see a quick animation of what the demonstration does by clicking "watch web preview" at the link above but anyone can also run the demo interactively by downloading a free copy of Mathematica Player. The Player is actually a stripped down version of Mathematica so what you see in the demo is not an animation but a computation of the equilibrium on the fly. Many of the other demonstrations in science, math, economics and other fields are also of interest.
The demographics of web search: which groups search for what?
In a recent research paper, Weber and Castillo report:
How does the web search behavior of "rich'' and "poor'' people differ? Do men and women tend to click on different results for the same query? What are some queries almost exclusively issued by African Americans? These are some of the questions we address in this study. Our research combines three data sources: the query log of a major US-based web search engine, profile information provided by 28 million of its users (birth year, gender and zip code), and US-census information including detailed demographic information aggregated at the level of ZIP code. Through this combination we can annotate each query with, e.g., the average per-capita income in the ZIP code it originated from….
Here are a few details:
What kind of web results would you personally want to see for the query "wagner"? Well, if you are a typical female US web user you probably have pages about the composer Richard Wagner in mind. However, if you are a male US web user you are more likely to be referring to a company called Wagner which produces paint sprayers. Similarly, the term most likely to complete the beginning "hal" is in general "lindsey," [an evangelist and Christian writer] whereas for people living in areas with an above average education level the most likely completion is "higdon." [an American writer and runner]
And what are the "most discriminating" search queries for various demographic groups? Suddenly I felt awkward reading this piece. Do note that the method of construction means the list will be dominated by demographically skewed neighborhoods, which need not be representative of the group as a whole.
Below the poverty line:
slaker [seems to be an informal misspelling of "slacker"]
kipasa [Spanish-language animation site]
I had never heard of any of those.
If you have a BA, the most discriminating search query is
"spencer stuart executive search," followed by some other boring-sounding choices, such as "four seasons jackson hole." To continue with some groups:
Whites:
pulloff.com [concerns tractors and motorsport]
central boiler wood furnace
firewood processors
midwest super cub
African-Americans:
trey songs bio [should be "songz"]
def jam records address
s2s magazine
madinaonline [sells body oils]
There is more information on p.5 of the paper. Can you guess which group is well-predicted by the search query "jingos para baby shower"?
For the pointer I thank David Curran.
Corporate cash hoarding as long-term trend
Via Ezra Klein, Barry Ritholz reports:
1) The average cash-to-assets ratio for corporations more than doubled from 1980 to 2004. The increase was from 10.5% to 24% over that 24 year period. That was the findings of a 2006 study by professors Thomas W. Bates and Kathleen M. Kahle (University of Arizona) and René M. Stulz (Ohio State). When looking for an explanation, the professors found that the biggest was an increase in risk.
Indeed, the phenomena of corporate cash piling up has been going on for a long long time. You can date it back to the beginning of the great bull market in 1982 to 86, went sideways til the end of the 1990 recession. It has been straight up since then, peaking with the Real Estate market in 2006. The financial crisis caused a major drop in the amount of accumulated cash, but it has since resumed its upwards climb.
There is more at the link. As I've been saying, there is less to this issue than meets the eye.
Sentences to ponder
…you could completely wipe out the poorest 81 nations in the world, with a total population of 2.8 billion, and the blow to global GDP would "only" be about 5 percent…
That's from Rortybomb. Here is more, mostly on climate change.
Robin Hanson receives ein Wunsch
German scientists are planning the country’s biggest biomedical study. The National Cohort will be an intensive investigation of the health, lifestyle and genetics of 200,000 people, at an estimated cost of €210m over 10 years.
…They intend to use the National Cohort “to investigate how chronic diseases are conditioned by lifestyle and environmental issues, as well as by genetic predisposition”.
“Technology has now advanced to the point at which we can use a population study to find and evaluate biomarkers and other tools for early detection of disease,” said Prof Kaaks.
These people will receive extensive medical examinations at the beginning and along the way. Here is one example of what will be done:
The German scientists are keen, for example, to discover how exercise protects against disease. “Better quantitative estimates are required of how much protection there is to be had and how much physical activity is required to obtain it,” said Prof Kaaks. That means studying a very large number of participants whose activity can be assessed regularly over many years or even decades.
Germany has less variation in health care access than does the U.S., but still this is another variable which could be studied, given this data.
Polls of German economists
A very interesting poll from the German FT is here (in German). In addition to answering other questions, German economists speak to who are the important economists for the 21st century. I'll add together the first two categories ("very important" and "somewhat important") for a total percentage measure for reported importance. (Correction: there were 1158 respondents.) The standings look like this:
1. Keynes: 92.4 percent
2. Paul Samuelson: 87.8 percent
3. Joseph Stiglitz: 86.0 percent
4. Milton Friedman: 84.6 percent
5. George Akerlof: 83.9 percent
6. Robert Solow: 82.5 percent
7. Joseph Schumpeter: 82.2 percent
8. Paul Krugman: 81.8 percent
9. Friedrich von Hayek: 74.6 percent
10. Amartya Sen: 71.4 percent
11. Gary Becker: 70.1 percent
12. Daniel Kahneman: 58.1 percent
13. Walter Eucken: 53.0 percent
14. Robert Shiller: 53.0 percent
15. Hyman Minsky: 34.2 percent
16. Ludwig Erhard: 30.3 percent
Based on my observation, I believe the supporters of Hayek, Eucken (a classical liberal), and Erhard are relatively old and that this strand of thought is losing ground in German academia.
The party membership of these same economists is striking for its relative rejection of the two largest parties:
SPD (the second major party and somewhat to the left of CDU/CSU)
FDP (the market-oriented party)
No preference
I take this to reflect that German economists are more intellectual, and more philosophical, than their American peers and thus more likely to adhere to a consistent philosophy of some kind or another. They are less likely to affiliate with mainstream political thought.
You will find more questions and answers here. By a 2.5 to 1 margin (roughly), German economists think that the U.S. taxation system should be more progressive. By almost 2 to 1 they think economics has become too formal. There are very mixed answers on whether Germany needs to overhaul its export-oriented growth model, but few German economists favor a total overhaul.
Here are their answers on what makes for a good economist, again all in German. These I did not find so startling.
For the pointers to this treasure trove of data, I thank Mathias Burger.