Category: Economics
Patent Policy on the Back of a Napkin
Dan Searle fellowships in economics
The Dan Searle Fellowships in Economics offer the opportunity for newly minted PhDs to spend two years pursuing research as postdoctoral fellows before entering the academic job market. Before applying, applicants must identify an appropriate mentor in a highly ranked economics department and reach a tentative arrangement to spend two years at the prospective host department.
There is more information here. I know a fair number of people who have benefited greatly from this program.
Eurozone sticky wage update
From the always essential FT Alphaville:
Société Générale points out that unit labour costs — basically, wages — have been falling quite rapidly in the peripherals, and that this is probably due to austerity measures. New data from Eurostat breaks out what the agency calls ‘non-business’ wages: the education, health services, and public administration sectors. In otherwords, ‘non-business’ is a rough proxy for the public sector:
The logical follow-on from the above being that “non-business” sectors are a big contributor to the rapidly falling unit labour costs in the periphery, especially given their large state sectors:
SocGen’s Michel Martinez writes that there are outright wage declines in Greece while in the other peripherals, labour productivity (as measured by ULC) is outpacing wage gains.
TC again: No one should doubt that depreciation and expansionary monetary policy are a much easier path to lower real wages. Yet the claim that wages are outright sticky for long periods of time, when economic pressures dictate wage declines, isn’t holding up that well.
And I would add this: They are not as wealthy as they thought they were.
Markets in everything
Remember “Murderer’s Park”? Wasn’t that Walter Block’s idea? Here is the summary of a new service:
It is Las Vegas’s latest thrill: absolute beginners flying aerobatic planes in aerial dogfights
The dogfighting sequences cost $999 and up, and the full story is here (FT$). Other links and ads for the service are here. I would have expected this first in New Zealand.
Update from Emory University — no more economics Ph.d?
The university will suspend admissions to Spanish and economics graduate programs so leaders there can redefine the missions, Forman said. Emory also will suspend admissions to the Institute for Liberal Arts so it can be restructured.
The changes will begin at the end of this academic year and finish by the end of the 2016-17 academic year. About 20 staff positions will be cut over the next five years, officials said.
Savings from the changes will be re-invested into existing programs and growing areas, such as neurosciences, contemporary China studies and digital and new media studies, Emory officials said.
Here is more. By one account, Emory had moved into the top 50 in economics. For the pointer I thank Michael Hammock.
World hunger: the problem left behind
Here is my new New York Times column, about the tall task involved in doubling world food output by 2050:
The green revolution has slowed since the early 1990s, and it has become harder to bolster crop yields, as I have discussed in my book, “An Economist Gets Lunch.” And recent research by Dani Rodrik, a professor of international political economy at Harvard, indicates that agricultural productivity improvements are among the hardest to transmit from one nation to another.
And:
In a recent address, Michael Lipton, an economist and research professor at Sussex University in Britain, offered a sobering look at Africa’s agricultural productivity. He suggests that Rwanda and Ghana are gaining, but that most of the continent is not. Production and calorie intake per capita don’t seem to be higher today than they were in the early 1960s. It remains an issue how Africa’s growing population will be fed.
And:
There is no shortage of writing — often from a locavore point of view — in support of more organic methods of farming, for both developed and developing countries. These opinions recognize that current farming methods bring serious environmental problems involving water supplies, fertilizer runoff and energy use. Yet organic farming typically involves smaller yields — 5 to 34 percent lower, as estimated in a recent study in the journal Nature, depending on the crop and the context. For all the virtues of organic approaches, it’s hard to see how global food problems can be solved by starting with a cut in yields. Claims in this area are often based on wishful thinking rather than a hard-nosed sense of what’s practical.
I can’t stress that last sentence enough, and I find it amazing what passes for a good pro-organic argument in this area.
There is also an excellent recent essay by Jeremy Grantham on agriculture (pdf), too pessimistic in my view but still more right than wrong. For an interesting look at why future gains from GMOs may be limited, at least in the short run, read R. Ford Denison’s Darwinian Agriculture. Nature already has done a lot of the optimization.
The bottom line is this: right now agriculture is a laggard sector — in part due to state interventions — and this is not totally unrelated to recent headlines about unrest in the Middle East.
Catholic markets in everything not all magazines are folding
With exorcism booming in Poland, Roman Catholic priests have joined forces with a publisher to launch what they claim is the world’s first monthly magazine focused exclusively on chasing out the devil.
“The rise in the number or exorcists from four to more than 120 over the course of 15 years in Poland is telling,” Father Aleksander Posacki, a professor of philosophy, theology and leading demonologist and exorcist told reporters in Warsaw at the Monday launch of the Egzorcysta monthly.
Ironically, he attributed the rise in demonic possessions in what remains one of Europe’s most devoutly Catholic nations partly to the switch from atheist communism to free market capitalism in 1989.
“It’s indirectly due to changes in the system: capitalism creates more opportunities to do business in the area of occultism. Fortune telling has even been categorised as employment for taxation,” Posacki told AFP.
Ice cream shadow banking markets in everything
State banking officials want to put the freeze on the owner of an ice-cream parlor who opened a community-bank alternative that pays interest in the form of gift cards for ice cream, waffles and coffee.
Ethan Clay, 31 years old, opened Whalebone Café Bank seven months ago in his shop, Oh Yeah!, a year and a half after he was hit with $1,600 in overdraft fees from a local bank where his account was overdrawn by a series of checks.
Mr. Clay says he wants to offer an alternative banking experience, and has accepted small deposits and made small loans. He claims he isn’t subject to banking rules because his operation is a gift-card savings account.
“It’s a strange case, we don’t have the authority to go close an ice-cream store,” said Ed Novak, spokesman for the Pennsylvania Department of Banking. “But we are going to do something. You can’t mess with people’s money.”
The article is here, here is Philip Wallach’s new paper (pdf) on whether we need a new Glass-Steagall.
Can Bernanke precommit?
The most visible effort to clip the Fed’s wings is a bill introduced in the House of Representatives by Kevin Brady, a Republican from Texas, who is vice-chair of the Joint Economic Committee of Congress. His bill would limit the central bank’s mandate to inflation, not employment, and restrict its monetary policy operations to short-term Treasury securities.
Were his bill now law, Mr Brady told the Financial Times, “the Fed would not be able to embark on this third round of quantitative easing”. He said the bill had taken off faster than he had hoped and already had 48 co-sponsors in Congress. “Everyone, whether they agree or not, believes it is the right time to have this discussion.”
And Mitt Romney speaks up for gerontocratic deflation:
“The value of your savings goes down. People who are living on fixed incomes don’t see much interest income any more. And the value of the dollar goes down, and the risk for long-term inflation goes up.”
The full FT story is here.
Greek Islands for Sale
Telegraph: As international inspectors in Athens scrutinise the country’s fitness to receive the latest aid payment, Prime Minister Antonis Samaras has said commercial exploitation of some islands could generate the revenue lenders need to see to continue funding the country.
The shortlist includes islands ranging in size from 500,000 square meters (5.4 million square feet) to 3 million square meters, and which can be developed into high-end integrated tourist resorts under leases lasting 30 years to 50 years, Mr Taprantzis said.
…The fund reviewed 562 of the estimated 6,000 islands and islets under Greek sovereignty. While some are already privately owned, such as Skorpios by the Onassis shipping heiress Athina Onassis, the state owns islands such as Fleves, which is near the coastal resort area of Vouliagmeni, and a cluster of three islands near Corfu. Mr Taprantzis declined to identify any of the islands.
Legislation needs to be passed to allow development of public property by third parties and reduce the number of building, environmental and zoning permits needed before the plan can proceed, Taprantzis said.
It’s a good idea to move these assets into private hands. The U.S. Federal government also has a lot of land that could be privatized. (For the U.S. see map and note that only a small portion is parkland).
Dutch markets in everything
The Netherlands is rolling out some 6,000 smart garbage cans that can only be used when residents scan an RFID-enabled ID card. Besides monitoring just how much trash someone disposes of, the cans will also measure and charge the user based on how much refuse they tossed.
Here is more. Can they join the Pigou Club? Not so clear. Still, oddly enough, I don’t think this will do much to encourage littering or illegal garbage disposal. It may encourage the purchase of less packaging and waste.
For the pointer I thank @ModeledBehavior.
It’s not just monetary policy, it’s Scott Sumner day
I haven’t seen anyone else say it yet, so I will. The Fed’s policy move today might not have happened — probably would not have happened — if not for the heroic blogging efforts of Scott Sumner. Numerous other bloggers, including the market monetarists and some Keynesians and neo Keynesians have been important too, plus Michael Woodford and some others, but Scott is really the guy who got the ball rolling and persuaded us all that there is something here and wouldn’t let us forget about it.
I disagree with Scott on a number of points (I think he overrates the importance of sticky nominal wages for instance, and I would like to force him to admit that the private sector can manufacture nominal gdp), and I see the net gains from this policy as smaller than he does. Still, Scott deserves our highest level of applause in this matter.
Here is Scott’s very latest blog post on the Bernanke press conference.
The Fed announcement
Get the details almost anywhere else, read Scott Sumner too. I’ve been tied up, but I have been able to follow my Twitter feed.
Evan Soltas wrote:
It needs to be said that today’s FOMC statement is a major intellectual win for econ bloggers and academics.
Neil Irwin:
What they’re doing is basically the Evans approach minus explicit numerical targets for unemployment/inflation that trigger tightening.
Ross Douthat:
When the true history of the Obama era is written, it will be a joint biography of Ben Bernanke and John Roberts.
Binyamin Applebaum:
Bernanke: We’re not trying to increase inflation, but we might act more slowly to reduce inflation if it should happen to happen.
I say the rate of price inflation is going up. I see this as a free lunch, and I am quite curious to find out just how big or small of a free lunch it is going to be.
Bowles, Kirman, and Sethi have a new paper on Hayek
It is here, I have yet to read it. For the pointer I thank Andrew Farrant.
Economists who are clergy
Your post on economist/artists got me thinking about economists/clergy.Obviously the most famous is Reverend Malthus. A Google search for “Economist Catholic priest” didn’t turn up much. “Economist rabbi” discloses that Israel Kirzner is the rabbi of a congregation in Brooklyn. “Economist clergyman” turned up Richard Jones but I’ve never heard of him. Economist/Jesuit turned up a number of names, all of them obscure to me.
My favored explanation is that “clergy” is an artificially higher bar than “artist”. Probably a large number of economists are and were devout people with learned and creative views on religion without having been ordained. E.g. Karl Homann is a first-rate theologian but not a priest. Robert Aumann is a first-rate Talmud scholar but not a rabbi. If the bar for “clergy” were parallel to that for “artist” these fellows would certainly make it.
Who else comes to mind? The School of Salamanca, and going back many medieval theologians wrote on economic issues. Paul Heyne. Heinrich Pesch. Galiani was an Abbey. Philip Wicksteed was a Unitarian theologian. The still underrated Richard Whately was the Archbishop of Dublin. Bishop George Berkeley wrote on monetary theory, as did Reverend Jonathan Swift.
The 18th century clergyman John Witherspoon wrote on monetary economics. Thomas Chalmers, who wrote on the Poor Laws and theories of underconsumption in the early 19th century, was ordained in the Church of Scotland.
Did all these 19th century figures really want to be economists, really want to be clergy, or both?
I thank Maria Pia Paganelli for a useful discussion of this point.