Yes, the Jason Furman, here is the audio and transcript, please note this was recorded in January. Here is part of the summary:
Jason joined Tyler for a wide-ranging conversation on how monopolies affect investment patterns, his top three recommendations to improve American productivity, why he’s skeptical of place-based development policies, what some pro-immigration arguments get wrong, why he’s more concerned about companies like Facebook and Google than he is Walmart and Amazon, the merits of a human rights approach to privacy, whether the EU treats tech companies fairly, having Matt Damon as a college roommate, the future of fintech, his highest objective when teaching economics, what he learned from coauthoring a paper with someone who disagrees with him, why he’s a prolific Goodreads reviewer, and more.
And here is one excerpt:
COWEN: The US is losing some of its manufacturing capacity, and certainly a lot of its manufacturing workforce. Are there external benefits to keeping those activities more in the US? Significant benefits?
FURMAN: I don’t think that manufacturing itself should be an important objective of US policy. It’s one type of job. It’s been a good type of job, but there’s other good types of jobs as well. I wouldn’t focus on where physical things are being made as opposed to where services are being made. In fact, if anything, I think the error in policy is probably a little bit too much emphasis on manufacturing and a little bit less on services.
COWEN: What do you think of the national security argument? That, say, when building a ship, we might be dependent on South Korean components. If there were a war in Asia, those might be, for some reason, unreliable. We depend on China for rare earths. We depend on Taiwan, to some extent, for high-quality chips, even though we make our own. Is the supply chain extended too long, and it was a kind of economic fantasy, and it doesn’t make national security sense?
FURMAN: I don’t consider myself an expert in any of those national security questions, so I would be open to thinking about the national security concerns associated with the supply chain. I have an awful lot in specific cases — both when I was in government and just in the world more generally — heard people make national security arguments that I found tendentious and pretty unpersuasive.
There may be some that are persuasive and that are true. There’s an awful lot that aren’t. Our administration, towards the end, worried a bit about semiconductors. When I’ve looked at that, there’s enough of a diversified world supply, enough of an ability to scale up if necessary in the United States, that I don’t think on semiconductors — there, it was protectionism under the guise of national security.
So I think we should accept the possibility of national security, take it seriously, but be really, really wary that a lot of protectionist arguments use that trappings.
Economics throughout, with a touch of Dickens. Recommended.
The AEA emails me this (web version here):
The AEA suggests that employers wait to extend interview invitations until Monday, December 7, 2020 or later.
Rationale: the AEA will deliver signals from job candidates to employers on December 2. We suggest that employers wait and review those signals and incorporate them into their decision-making, before extending interview invitations.
…The AEA suggests that employers conduct initial interviews starting on Wednesday, January 6, 2021, and that all interviews take place virtually; i.e. either by phone or online (e.g. by Zoom). We also ask that all employers indicate on EconTrack when they have extended interview invitations (https://www.aeaweb.org/
Rationale: In the past, interviews were conducted at the AEA/ASSA meetings. This promoted thickness of the market, because most candidates and employers were present at the in-person meetings, but had the disadvantage of precluding both job candidates and interviewers from fully participating in AEA/ASSA sessions. Since the 2021 AEA/ASSA meetings (which will take place Jan 3-5, 2021) will be entirely virtual, we suggest that interviews NOT take place during the AEA/ASSA meetings to allow job candidates and interviewers to participate in the conference.
Perhaps not surprisingly, they don’t offer much economic analysis of this recommendation. I have a few remarks, none of which are beyond the analytical acumen of the AEA itself:
1. This proposal could well be a tax on the more conscientious departments, which will abide by the stricture while the more rogue departments jump the gun, giving them a relative advantage in finding job candidates.
2. It is common practice for the very top departments to make phone calls to advisors early, well before Christmas, and in essence tie up their future hires before the rest of the market clears (even if the ink on the contract is not dry until later on). Whatever you might think of this practice, have any of those departments vowed to stop doing this? If not, is the new recommendation simply an exhortation that other departments ought not to copy them, thus giving them exclusive use of this practice? And did the AEA — which essentially is run by people from those top schools — ever complain about this practice?
3. In the more liquid market, as this proposal is designed to create, the better job candidates are likely to end up going to the more highly rated schools. That is the opposite of how the NBA draft works — this year the Minnesota Timberwolves (a very bad team) pick first. So maybe the more liquid market is best for the most highly rated schools — is that obviously a good thing?
4. Many job candidates don’t get any early offers at all, and this is likely to be all the more true with Covid-19 and tight state budgets. Aren’t they better off if the market clears sooner rather than later? Then they can either move on to other jobs searches, take jobs with community colleges, look for postdocs, or whatever. Why postpone those adjustments? Is their welfare being counted in this analysis? Aren’t some of them the very neediest and also most stressed people in the economics job market?
5. Let’s say instead the market is done sequentially, where first you “auction off” the candidates in highest demand, ensuring that say a department rated #17 does not tie up an offer (fruitlessly, at that) to one of the very top candidates. Won’t that #17 school then bid harder for the candidates one tier lower, thus making that part of the market more liquid? I know it doesn’t have to work out that way, but surely that is one plausible scenario?
6. In finance, there are some results that you get less “racing” behavior with batched rather than continuous trading auctions. Again, that doesn’t have to be true, but surely it is no accident that many high-frequency traders oppose the idea of periodic rather than continuous securities auctions? What exactly are the relevant conditions here?
7. Would many economists recommend that say the top tech firms not make any offers before a certain date, so as to keep that labor market “more liquid”? What exactly is the difference here?
8. Might it be possible that a permanent shift to non-coordinated interview dates, and less temporally coordinated Zoom interviews and fly-outs, would permanently lower the status and import of said AEA?
I do not wish to pretend those are the only relevant factors. But here is a simple question: does anyone connected with the AEA have the stones to actually write a cogent economic or game-theoretic analysis of this proposal? Or does the AEA not do economics any more?
That is the topic of my latest Bloomberg column, here is one excerpt:
So far the data are fragmentary, but they indicate that parties, bar-going and after-hours fraternization — not athletic practices — have been the major risks contributing to Covid-19 clusters among young people of college age. For all the talk of banning athletics, how about university regulations banning all alcohol consumption (including off-campus) for all registered students, under the pain of academic suspension? [NB: more schools have started trying at least partial versions of this since I wrote the column.]…
There is the risk that football players and other collegiate athletes will bring the virus home to their parents and older relatives. Still, that danger seems to be at least as high if they are bored and going out drinking, compared to practicing and trying to secure their place on the team. It simply is not obvious that athletics create a new risk.
Under the current system, student athletes can opt not to participate, just as many NBA players have elected not to play in the league’s “bubble.” While there are social pressures to go ahead and play, they are no different than the pressures to socialize more generally. Yet there are no calls to ban young people from socializing, even though that too is clearly a dangerous activity — perhaps the most dangerous activity — in terms of Covid-19 spread.
There is much more at the link.
Sebastian Garren, to found John Paul II Preparatory School’s South Campus in St. Louis, a hybrid on-line and in-person educational alternative for K-12, also stressing Western history and the classics.
John Durant, for career development and writing, and explorations into notions of angels.
Krishaan Khubchand, 20 years old, studying law at Birkbeck, to study mega-projects and capital allocation, he is also a Progress Studies fellow.
Vignan Velivela. He started as a robotics engineer at Cruise Automation, is a member of the Explorers Club (wiki, BBC) for his work on the lightest planetary rover at Carnegie Mellon, worked on a peer-to-peer lending startup in India that was acqui-hired by PayTm, went to college (BITS Pilani) in India studying EE and Economics, and now is co-founder of AtoB.
Wasteland Ventures (no web page), to support their efforts in talent search and development.
And two Emergent Ventures anti-Covid prizes have been awarded to:
Witold Wiecek, Bayesian statistician and consultant, for his work on the Bayesian modeling of the COVID-19 epidemic, and the design of an optimal vaccine portfolio, in cooperation with the Accelerating Health Technologies team.
Arthur W. Baker, for his efforts on incentive design for vaccines, in cooperation with the Accelerating Health Technologies team.
Here are previous winners of Emergent Ventures grants and prizes.
Classes at some elite universities will carry a warning label this fall: This course may cover material considered politically sensitive by China. And schools are weighing measures to try to shield students and faculty from prosecution by Chinese authorities.
At Princeton University, students in a Chinese politics class will use codes instead of names on their work to protect their identities. At Amherst College a professor is considering anonymous online chats so students can speak freely. And Harvard Business School may excuse students from discussing politically sensitive topics if they are worried about the risks.
The issue has become particularly pressing because at least the first semester at many universities will be taught online, meaning some students from China and Hong Kong will connect with their U.S. classmates via video links. Some academics fear the classes could be recorded and ultimately end up in the hands of Chinese authorities.
Here is more from Lucy Kraymer at the WSJ.
That is the topic of my latest Bloomberg column, here is one excerpt:
…here is why I am not yet an unreconstructed economic optimist. Covid-19 cases have acquired a stigma, and that stigma is likely to persist above and beyond the dangers associated with the virus itself.
If, say, 20 Covid-19 cases were identified within a high school today, there is a very real risk that those infected students would carry the virus home and infect older and more vulnerable people. There is also a small risk that the students would sustain damage themselves. Not surprisingly, most schools won’t reopen because they cannot deal with the burden — institutionally, legally or otherwise — of being connected to significant numbers of Covid-19 cases.
The question is how this stigma ends. If rates of death and possible long-term damage fell to half of their current levels? One-third? Less? I strongly suspect these same schools still would be unwilling to reopen, due in part to phantom risk.
If rates of death and damage fell to one-fifth of their current level, perhaps, there would be more reopenings — but there would still be a lot of reluctance to restore previous levels of attendance. How about one-tenth the level of mortality? It is hard to say when people will feel comfortable once again.
Along these lines, as long as clusters of reported cases are possible — regardless of mortality rates — many high-rise office buildings will not let workers and visitors simply pile into their elevators.
Many sites likely to experience identifiable, traceable clusters of cases will keep their doors shut, or open them on only a very limited basis. Further declines in the mortality rate won’t help much, because “37 Covid-19 Cases Identified at UC-Berkeley” is enough of a headline to create reputational risk and an institutional response. Even if everyone makes a speedy recovery, that won’t get the same kind of media coverage.
There is much more at the link, and my point will grow increasingly relevant, first of all in NYC and environs (partial herd immunity there, at least for the time being).
I had not seen this paper before, by Kevin A. Bryan, here is the abstract:
We construct a data set of job flyouts for junior economists between 2013 and 2018 to investigate three aspects of the market for “stars.” First, what is the background of students who become stars? Second, what type of research does the top of the market demand? Third, where do these students take jobs? Among other results, we show that stars are more likely to be international and male than PhDs overall, that theoretical and semi-theoretical approaches remain dominant, that American programs both produce the most stars and hire even more, that almost none are hired by the private sector, and that there is a strong shift toward having pre-PhD full-time academic research jobs.
Is this good news or bad? The paper is interesting throughout, here is another bit:
…both Americans and women are nearly twice as likely to have Applied Micro as a primary field compared to non-Americans and men.
As for country of origin of these star students, see p.5, I was surprised to see Germany rank second after the United States, with Italy and France not far behind, China coming next, then Argentina (!).
Via Soumaya Keynes.
This is a fantasy, not a prediction, still we can hold out hope, here is my latest Bloomberg column:
In my fantasy, the [Western] schools that are open to expanding their India operations will rise considerably in reputation. India, and South Asia more generally, is in the midst of a phenomenal explosion of talent in diverse fields…
You might wonder whether India actually needs all of these foreign branches, when it has some superb schools of its own, for instance the various Indian Institutes of Technology. In my fantasy, some Indian institutions of higher education will improve and force some competitors — shall we say UC Berkeley? — to leave the country. Yet many talented Indians will find attending a branch of Harvard or Yale to be an appealing option. Furthermore, the top foreign schools may form alliances with Indian institutions (as Yale has done in Singapore), giving students the best of both worlds.
This future gets better yet. Over time, the population of Indian alumni of prestigious U.S. universities will increase, relative to those who studied and graduated in America. America’s top schools thus will become engines of opportunity. It might also become obvious that the students attending in the U.S. are underperforming their Indian counterparts. What better way to light a competitive fire under the current dominant institutions?
And maybe some of the keenest and most ambitious American students will prefer to study in India rather than in America. (Perhaps a “canceled” American student could be sent to Brown Uttar Pradesh?) Wouldn’t you want to study with the very best of your peers, knowing you might be sitting next to the next generation’s Einstein, von Neumann or, of course Ramanujan?
There is more at the link, noting that this is a Swiftian fantasy of sorts.
Excellent and interesting throughout, here is the transcript, video, and audio. Here is part of the summary:
He joined Tyler for a conversation about which areas of science are making progress, the factors that have made research more expensive, why government should invest more in R&D, how lean management transformed manufacturing, how India’s congested legal system inhibits economic development, the effects of technology on Scottish football hooliganism, why firms thrive in China, how weak legal systems incentivize nepotism, why he’s not worried about the effects of remote work on American productivity (in the short-term), the drawbacks of elite graduate programs, how his first “academic love” shapes his work today, the benefits of working with co-authors, why he prefers periodicals and podcasts to reading books, and more.
Here is an excerpt:
COWEN: If I understand your estimates correctly, efficacy per researcher, as you measure it, is falling by about 5 percent a year [paper here]. That seems phenomenally high. What’s the mechanism that could account for such a rapid decline?
BLOOM: The big picture — just to make sure everyone’s on the same page — is, if you look in the US, productivity growth . . . In fact, I could go back a lot further. It’s interesting — you go much further, and you think of European and North American history. In the UK that has better data, there was very, very little productivity growth until the Industrial Revolution. Literally, from the time the Romans left in whatever, roughly 100 AD, until 1750, technological progress was very slow.
Sure, the British were more advanced at that point, but not dramatically. The estimates were like 0.1 percent a year, so very low. Then the Industrial Revolution starts, and it starts to speed up and speed up and speed up. And technological progress, in terms of productivity growth, peaks in the 1950s at something like 3 to 4 percent a year, and then it’s been falling ever since.
Then you ask that rate of fall — it’s 5 percent, roughly. It would have fallen if we held inputs constant. The one thing that’s been offsetting that fall in the rate of progress is we’ve put more and more resources into it. Again, if you think of the US, the number of research universities has exploded, the number of firms having research labs.
Thomas Edison, for example, was the first lab about 100 years ago, but post–World War II, most large American companies have been pushing huge amounts of cash into R&D. But despite all of that increase in inputs, actually, productivity growth has been slowing over the last 50 years. That’s the sense in which it’s harder and harder to find new ideas. We’re putting more inputs into labs, but actually productivity growth is falling.
COWEN: Let’s say paperwork for researchers is increasing, bureaucratization is increasing. How do we get that to be negative 5 percent a year as an effect? Is it that we’re throwing kryptonite at our top people? Your productivity is not declining 5 percent a year, or is it? COVID aside.
BLOOM: COVID aside. Yeah, it’s hard to tell your own productivity. Oddly enough, I always feel like, “Ah, you know, the stuff that I did before was better research ideas.” And then something comes along. I’d say personally, it’s very stochastic. I find it very hard to predict it. Increasingly, it comes from working with basically great, and often younger, coauthors.
Why is it happening at the aggregate level? I think there are three reasons going on. One is actually come back to Ben Jones, who had an important paper, which is called, I believe, “[Death of the] Renaissance Man.” This came out 15 years ago or something. The idea was, it takes longer and longer for us to train.
Just in economics — when I first started in economics, it was standard to do a four-year PhD. It’s now a six-year PhD, plus many of the PhD students have done a pre-doc, so they’ve done an extra two years. We’re taking three or four years longer just to get to the research frontier. There’s so much more knowledge before us, it just takes longer to train up. That’s one story.
A second story I’ve heard is, research is getting more complicated. I remember I sat down with a former CEO of SRI, Stanford Research Institute, which is a big research lab out here that’s done many things. For example, Siri came out of SRI. He said, “Increasingly it’s interdisciplinary teams now.”
It used to be you’d have one or two scientists could come up with great ideas. Now, you’re having to combine a couple. I can’t remember if he said for Siri, but he said there are three or four different research groups in SRI that were being pulled together to do that. That of course makes it more expensive. And when you think of biogenetics, combining biology and genetics, or bioengineering, there’s many more cross-field areas.
Then finally, as you say, I suspect regulation costs, various other factors are making it harder to undertake research. A lot of that’s probably good. I’d have to look at individual regulations. Health and safety, for example, is probably a good idea, but in the same way, that is almost certainly making it more expensive to run labs…
COWEN: What if I argued none of those are the central factors because, if those were true as the central factors, you would expect the wages of scientists, especially in the private sector, to be declining, say by 5 percent a year. But they’re not declining. They’re mostly going up.
Doesn’t the explanation have to be that scientific efforts used to be devoted to public goods much more, and now they’re being devoted to private goods? That’s the only explanation that’s consistent with rising wages for science but a declining social output from her research, her scientific productivity.
COWEN: What exactly is the value of management consultants? Because to many outsiders, it appears absurd that these not-so-well-trained young people come in. They tell companies what to do. Sometimes it’s even called fraudulent if they command high returns. How does this work? What’s the value added?
Formal pre-doc programmes have burgeoned, especially in elite universities such as Harvard, Stanford, the University of Chicago and Yale. Participants clean and analyse data, write papers and do administrative tasks. In exchange they may receive free or subsidised classes, a salary in the region of $50,000, potential co-authorship of the papers they work on, and, most prized of all, a letter of recommendation to a top programme.
In part pre-docs show how economic research has changed. “Economics has become more like the sciences in terms of both the methods and the production process,” says Raj Chetty of Harvard, who directs the Opportunity Insights team, a group with a reputation for working its pre-docs hard. When analysing tax records that gave access only to a certain number of people, he switched away from using part-time research assistants to a lab-like team, inspired by his own family of scientists. As bigger data sets, new techniques and generous funding made such collaboration worthwhile, others followed.
Here is much more on pre-docs from Soumaya Keynes at The Economist. I suspect this development is inevitable, but I see at least two things going on here. First, letter writers are internalizing the very high value of those letters in the form of personal services received. Second, this will push out “weirdos” and make the profession more homogenized, more obedient, more elite, more dependent on school of origin, and less interesting. I do understand the value of the training received, and don’t propose any mechanism to “stop this,” but overall it does not make me an entirely happy camper.
“As of July 22, pretty much across the board, [private] schools are planning for some sort of in-person learning in the fall,” said Amy McNamer, executive director of the Association of Independent Schools of Greater Washington, which supports 76 private schools in the region. “And I have to add this big caveat that that could change,” she said.
In online forums, parents are asking one another for advice about private schools, saying they fear that virtual learning at their public schools will be a disaster.
Here is much more from The Washington Post. Of course you will note that private decisions doth not a social optimum make. Nonetheless these particular private decisions do internalize the risks to children, parents (grandparents?), and teachers, albeit not the case load of broader society.
And those institutions are planning on reopening. We’ll see if they get there.
That is the topic of my latest Bloomberg column. Here is one excerpt:
First and most important, there is a distinction between children spreading the virus and children spreading the virus through school activities. The case against a physical reopening rests on the public health dangers, but the relevant question is relative.
Even if the schools do not physically reopen, children will still hang out together. This is especially true for teenagers, and they are also a group that, in a South Korean study, can readily spread the virus to others. Not many parents are going to quarantine their 15-year-olds at home for many months, much less their 17-year-olds. Recall that Romeo and Juliet were teenagers and came together as lovers against extreme parental opposition and during a time of plague.
It is possible that these children will spread the virus less if they were at school than if they were spending time together on their own. At least at school there would be teachers and other staff to enforce some measure of social distancing and proper hygiene practices, such as regular hand-washing…
To be sure, it’s by no means certain that schools will be safer places for children; whether they are will depend on the region. Still, the mere citation of public health dangers isn’t quite as decisive an argument against physical reopening as it may seem.
I believe I was first prompted to consider this argument by some tweets by Amihai Glazer.
Here goes, it is not for me to judge the quality of the result, but I can say that David is a very good interviewer. Here are his summary notes:
Tyler ends every episode of his podcast asking about other people’s production function. How do you get so much done? What’s the secret sauce of all that you’ve accomplished? This episode is entirely devoted to that question. But this time, I’m asking Tyler. We started by talking about why there aren’t more Tyler Cowens in the world. Then, we moved to Tyler’s process for writing, such as choosing article topics and editing his work. Later in the podcast, we discussed Tyler’s process for choosing friends, why he would travel across the world to visit a new country for just ten hours, and what he’s learned from high-powered people like Peter Thiel and Patrick Collison.
I also tried to give a few deliberately “low status boasting answers,” as I call them (rather than high status airy detachment — e.g., “it is not for me to judge the quality of the result”), label it countersignaling if you wish.
Nearly half of adults who responded to a national survey said self-doubt is one of the largest challenges they would face if they enrolled in a postsecondary education or training program.
Self-doubt was one of the top three challenges respondents cited, below time and above cost.
The new data are included in the findings from the latest “Public Viewpoints” report from Strada Education Network, which surveyed American adults on their motivations for pursuing more education, as well as the barriers they face.
The importance of mental barriers was one of the findings that stuck out the most, said Nichole Torpey-Saboe, director of research at Strada. It’s yet another layer colleges have to consider when trying to attract people without degrees for enrollment.
Here is the full story. This is what I call a “trivial” blog post. There is nothing startling in the content, and perhaps it is not so interesting to read. The comments on it won’t be very good either. Yet it represents a very important truth, and one that, while it is well-known, is probably not sufficiently emotionally internalized. And the gains would be high if more people understood this.
Could you set higher education right? Why don’t the super-wealthy pursue this route? I consider those questions in my latest Bloomberg column, here is one excerpt:
Even if enough people wanted to move to Vermont [the site of the campus for sale], this new university would basically have to re-create the talent pool at other, more established institutions, thus replicating their basic character. If anything, the new school probably would have to hire the malcontents, as they are the most likely to leave their current jobs for a new and untested venture. If you think existing universities have too much infighting and rancor, wait till you see this new project.
You might think that the leaders of the new college could shape and improve the incentives of their faculty. But that isn’t easy. For many talented people, the key incentives are outward-facing — they will be looking to get published and win rewards, prizes and eventually job offers from the outside world. Creating a new institution does not change these basic incentives, for better or worse.
Alternatively, you might try to make their rewards more inward-looking — pay them a big bonus if they contribute to campus life in the right way. But that tends to be expensive and to reward people who are good at gaming the system, again increasing the risk of fractiousness. Nor would it attract academic superstars, who typically excel at marketing themselves to the wider and wealthier outside world.
The issue is how to attract a cluster of talent. Smart people wish to go to Harvard because other smart people go there, and that creates a self-reinforcing dynamic. This is in contrast to the corporate world, where top talent is (sometimes) willing to join risky new ventures because of the financial reward. If you were an early employee at Facebook, for example, you are probably much wealthier now than if you had gone to work for Yahoo or AOL.
In other words, I believe such an enterprise would be doomed to failure. Do read the whole thing.