Category: Education

Thirty questions with Tyler Cowen

I thank Norm Geras for this interview.  A few excerpts:

What, if anything, do you worry about? > I worry about the worrying of my wife.

If you had to change your first name, what would you change it to?
> I would change my name to ‘Cowen Tyler’, which is what many
foreigners call me anyway.

Who are your sporting heroes? > Darrell Walker, former point guard for the Washington Bullets.

Do check out Norm’s main blog.  My favorite all-time blogger is, of course, Alex; I asked Norm to add this to my previous answer.

Against errands

Here is some wisdom for the new year to come:

Other days are eaten up by errands. And I know it’s usually my fault: I let errands eat up the day, to avoid facing some hard problem.

The most dangerous form of procrastination is unacknowledged type-B procrastination, because it doesn’t feel like procrastination. You’re "getting things done." Just the wrong things.

Any advice about procrastination that concentrates on crossing things off your to-do list is not only incomplete, but positively misleading, if it doesn’t consider the possibility that the to-do list is itself a form of type-B procrastination. In fact, possibility is too weak a word. Nearly everyone’s is. Unless you’re working on the biggest things you could be working on, you’re type-B procrastinating, no matter how much you’re getting done.

In his famous essay You and Your Research (which I recommend to anyone ambitious, no matter what they’re working on), Richard Hamming suggests that you ask yourself three questions:

    1. What are the most important problems in your field?
    2. Are you working on one of them?
    3. Why not?

Here is the full argumentAddendum: Here is the correct link for "You and Your Research."

My macro final

1. The pessimists commonly argue that the large U.S. trade and budget deficits eventually will require a big fall in the dollar, higher real interest rates, and a general loss of confidence in dollar-denominated assets. We all know that g > r would stop this problem in its tracks. But let us say that g is not big enough relative to r. What other non-pessimistic scenarios can you outline? How valid are they?

2. What is the difference between covered and uncovered interest parity? Which are assumed by the traditional Dornbusch model of exchange rate overshooting? None, just one, or both? How do the observed failures of the expectations theory of the term structure affect the Dornbusch model? 

3. How will the aging baby boom generation affect the following and why? Savings rates, interest rates (real, nominal, short and long term), Fed policy, inflation, and investment.

4. Targeting nominal gdp involves targeting M x V, or Money times Velocity. Do open economy considerations make this a better or worse idea? Make sure your assumptions are clearly stated.

5. Write your own exam question and answer it, do not use open economy macro as your major topic since three of the questions already cover that. The quality of the question matters as much as the quality of the answer.

Some people did very well.  #2 and #4 gave people the biggest problems.

How to spend less money

Jane Galt has a good list of suggestions, yet I don’t follow them all.  When it comes to "don’t eat out" I receive an F minus.

Arguably I have excess self-discipline, rather than the opposite problem.  That means I will try to rationalize this spending, rather than apologizing for it.

I view dying young as an enormous tragedy.  It would be so, so, so, bad.  As the economist would say, it would not equate marginal utilities of money across different world-states.  It is also very hard to insure against premature death.  The life insurance payment would help my family but it doesn’t go to poor, lil’ dead ol’ me.

Given the imperfection of post-death markets, what else can I do?  Er…I can spend money now.  If I die soon, I had bigger kicks today.  That is a kind of partial compensation for the tragedy; admittedly I run a greater risk of outliving my remaining savings.  (Quick micro quiz: Do bloggers, by offering free fun outputs, raise or lower the savings rate?) 

Can we find a testable prediction?  Religious people should save a greater fraction of their incomes.

I don’t hold the view that religious people should be indifferent to death; presumably they think they are on earth to fulfill God’s plan.  But they should have fewer purely selfish reasons to fear death.  (Good religious people, that is, or at least those who think they are good.)  A weaker selfish fear of death means less need to buy insurance against premature death.  The devout should spend less money now.

Last night we ate at Zengo’s — Latin-Asian fusion — which was excellent.  Get the hamachi, the empanadas, the ribs, and the arepas.

How to choose a charity

MR reader Jeffrey Drucker writes:

I’ll be graduating college in just a few weeks and entering the real world.  That is I’ll be a salaried employee making all budgetary decisions for myself.  Aside from the necessary components of spending, saving, and repaying my college loans I’d like to set a portion of my earnings aside for charitable donation.  I’ve always thought that charity was a crucial element of any caring libertarian’s mindset.  Now that I will be able to spend my own money, I wondered if you could provide any insight into the economic considerations of charity.

Obviously, the decision to donate is based on personal considerations and evaluations of the relative merit of different organizations.  But economically is it more sensible to donate to a wide number of worthy causes or champion just one.  Should I focus on issues closer to home or those who are in the most need the world over?  How large a percentage of my income is it reasonable to donate, what issues should I consider (value of investment opportunities, lifetime consumption)?

Putting political and intellectual non-profits aside, here are some principles for purely charitable giving: 

1. Published information on budget ratios devoted to programs and fundraising expenses is not reliable.  Many charities manipulate the data.

2. Consider neglected but long-simmering problems; read my earlier analysis of whether you should focus on the crisis of the day.

3. Hardly anyone gives enough to charity and you won’t either.  Pick a cause or causes you will become addicted to.  Tell others you won’t back down from your cause, so that you will lose face if you do.

4. My preferred approach is pure cash transfers to rural Mexicans, vis-a-vis Western Union.  You don’t get the tax break but administrative expenses are very low.  Think of Western Union as a for-profit charity.

5. In-kind aid sounds inefficient to the economist, but the commitment may make you happier.  You are wasting most of your time anyway.

6. Don’t give money to beggars, the explanation is here.

The comments are open for other suggestions.  Analytical principles are especially welcome.

Paying for Performance II

Roland Fryer’s experiment to pay school children for better grades will go into effect next year reports the New York Post.

Under the pilot, a
national testing firm will devise a series of reading and math exams to
be given to students at intervals throughout the school year.

Students
will earn the cash equivalent to a quarter of their total score – $20
for scoring 80 percent, for instance – and an additional monetary
reward for improving their grades on subsequent tests….

Levin
said details about the number of exams, what grades would be tested,
funding for the initiative – which would be paid for with private
donations – and how the cash will be distributed are still being
hammered out.

"There are people who are
worried about giving kids extra incentives for something that they
should intrinsically be able to do," Fryer said. "I understand that,
but there is a huge achievement gap in this country, and we have to be
proactive."

Thanks to Katie Newmark for the pointer.

Practice questions for my macro class

The students themselves are to write the questions into the comments section.  Do it soon, and yes that means you.  Then the students should practice these questions in their spare time, with the clock ticking.  Ideally each question, or at least some of them, should come as a surprise.  Don’t read them all until you are ready to give them a try.

Most people study to make themselves feel better about doing their work, and not to actually succeed in their chosen field of study.  They spend hours staring blankly at sheets of paper.  They should spend more time trying to solve problems or answer questions, usually under simulated exam conditions and with a clock ticking. 

Tick, tick, tick…That’s the way to go, and yes I know it hurts.

Cosby was Correct

In Debunking Cosby on Blacks Washington Post columnist Michelle Singletary attacks Bill Cosby for his speech last year to the NAACP. 

Poor blacks are bad parents because they waste what little money they have
buying high-priced, brand-name shoes, Cosby chided.

"All this child knows is gimme, gimme, gimme," Cosby said, according to
a transcript of the speech. "They are buying things for the kid. $500 sneakers.
For what?"

Cosby was lauded by white conservatives and some blacks for being brave
enough to speak out. But like the price of sneakers that Cosby got wrong, he was
incorrect about much of what he said.

…the comedian was rattling off
nonsense much like his Fat Albert character Mushmouth.

I was curious so I went to Table 2100 of the Consumer Expenditure Survey and found the following for 2003:

Average income of whites and other races: $53,292.
Average income of blacks: $34,485.

The survey then lists expenditures on a wide variety of goods from eggs and fish to books and televisions; to do a proper comparison we would have to correct for income and other demographic variables but some figures just jump out at you, including this:

Expenditures on footwear by whites and other races: $274
Expenditures on footwear by blacks: $440.

Chalk one up for the good Dr. Cosby. 

Why do parents talk with their childrens’ friends?

As a teenager, some of my friends became quite chummy with my parents.  But usually teenage children want their parents to stay quiet.  Why might a parent wish to talk to other teenagers?

1. The parent seeks to estimate the quality, or at least the politeness, of the child’s friends.

2. The parent wishes to feel connected to younger generations.

3. The parent is nervous and wishes to relieve the tension of quiet.  And not speaking is seen as an abdication of parental responsibility.

4. The parent wishes to establish the authority to do something the child does not like.

5. The parent finds those children genuinely interesting.

6. The parent wishes to pretend a reasonable relationship with the peers of their child, either to feel involved or to pretend that everything will be OK.

None of these motives are popular with the sons and daughters of the conversing parent.  If a put on my technocratic Paretian hat, this is sooner an activity to be taxed than subsidized.

Do cellphones have a role in education?

As a recording device, or for taking down illustrations or graphs, the multifunction mobile phone rivals, or will soon rival, the iPod. Few seem to have noticed, but a whole generation of students have taught themselves shorthand (texting, that is). This has not been exploited educationally.

Ringtone interruptions in a teaching or learning situation are, of course, intolerable. And having to overhear one-sided mobile chatter is as blood-boilingly irritating in the library or computer cluster as it is in the railway carriage. But texting enables rapid notetaking to oneself, silent interchange between auditors at a lecture, or participants in a seminar. Used conscientiously, even today’s generation of phones could be used for teaching purposes – to foster uninterruptive cross-interaction, rapid access to outside information sources, or simple queries ("what the hell did he just say, I missed it?")

I’d be a lot more confident about our universities’ ability to absorb the Gates tablet if, in the lecture hall, the signs on the wall said: "Please turn your mobile phones on".

My predictions: Using cell phones to record lectures is easy, and the playback should speed up the pace.  Might the linked information technology improve the lecture by adding material or explanation?  How about phones which flash red whenever the instructor says something questionable or controversial?  How about phones which monitor the reaction of the individual listener and send this message to the other listeners?  So if everyone else is sleeping, upset, or sexually excited, you would know about it.  Overall, I do not expect the balance of power to shift in favor of the lecturer.

Here is the source link, and thanks to you-know-who for the pointer.  Comments are open if you wish to offer your own predictions.

How to write a paper or give a seminar

At the Ph.d. level, that is.  John Cochrane has great advice throughout.  It starts as follows:

Figure out the one central and novel contribution of your paper.  Write this down in one paragraph.  As with all your writing, this must be concrete.

Here are John’s far more specific (and for most people less useful) suggestions for paper topics.

Thanks to Newmarks’ Door for the pointer, courtesy of Ngan Dinh.