Category: History
Crime in Europe and the U.S.
Has there been a “reversal of fortune”? Paolo Buonanno, Francesco Drago, Roberto Galbiati, and Giulio Zanella step into these treacherous waters with a new paper (pdf):
Contrary to common perceptions, today both property and violent crimes (with the exception of homicides) are more widespread in Europe than in the US, while the opposite was true thirty years ago. We label this fact as the “reversal of misfortunes”. We investigate what accounts for the reversal by studying the causal impact of demographic changes, incarceration, abortion, unemployment and immigration on crime. For this we use time series data (1970-2008) from seven European countries and the U.S. We find that the demographic structure of the population and the incarceration rate are important determinants of crime. Our results suggest that a tougher incarceration policy may be an effective way to contrast crime in Europe. Our analysis does not provide information on how incarceration policy should be made tougher nor does it provide an answer to the question whether a such a policy would also be efficient from a cost-benefit point of view. We leave this to future research.
I would stress that there are numerous controversial claims in this paper. (I also personally believe that the heavy U.S. reliance on incarceration is morally problematic.) Nonetheless we are committed to bringing you thought-provoking material and so there you go.
For the pointer I thank Noah Smith, who should not be construed as necessarily endorsing any of these results.
More data on survival during maritime disasters
From Mikael Elinder and Oscar Erixson (pdf, final PNAS gated version here):
It’s a widespread notion that women and children are saved first in maritime disasters. The systematic evidence of this comes primarily from the sinking of RMS Titanic. By analyzing individual level data from MS Estonia – one of the largest maritime disaster in the Northern hemisphere since World War II – a different picture emerges. Estonia sunk in the Baltic Sea with 137 survivors and 852 casualties. Despite equal gender rates on Estonia, 111 men, but only 26 women survived. This striking observation, as well as econometric analyses of survival probabilities, shows that the behavior among passengers and crew was clearly inconsistent with the norm that women should be saved before men. We show that the survival patterns from several maritime disasters, including Titanic, can be explained by the behavior of the captain. Women have a survival advantage only when the captain orders that women should be given priority and threatens disobedience with violence. Otherwise women will have lower survival chances.
Claims about gold
From a new paper by Claude B. Erb and Campbell R. Harvey:
Gold objects have existed for thousands of years but gold has only been an actively traded object since 1975. Gold has often been described as an inflation hedge. If gold is an inflation hedge then on average its real return should be zero. Yet over 1, 5, 10, 15 and 20 year investment horizons the variation in the nominal and real returns of gold has not been driven by realized inflation. The real price of gold is currently high compared to history. In the past, when the real price of gold was above average, subsequent real gold returns have been below average. As a result investors in gold face a daunting dilemma: 1) seek inflation protection by paying a high real gold price that almost guarantees a decline in future purchasing power or 2) avoid gold and run the risk of a decline in future purchasing power if inflation surges. Given this situation is it time to explore “this time is different” rationalizations? We show that new mined supply is surprisingly unresponsive to prices. In addition, authoritative estimates suggest that about three quarters of the achievable world supply of gold has already been mined. On the demand side, we focus on the official gold holdings of many countries. If prominent emerging markets increase their gold holdings to average per capita or per GDP holdings of developed countries, the real price of gold may rise even further from today’s elevated levels.
Caveat emptor! Here is a photo gallery about gold.
*The New New Deal*
That is the new book about ARRA and fiscal stimulus, by Michael Grunwald, available here with the subtitle The Hidden Story of Change in the Obama Era. Excerpt:
…it was an astonishingly big bill, In constant dollars, it was more than 50 percent bigger than the entire New Deal, twice as big as the Louisiana Purchase and Marshall Plan combined. As multibillion-dollar items were being erased and inserted with casual keystrokes, Obama aides who had served under President Bill Clinton occasionally paused to recall their futile push for a mere $19 billion stimulus that seemed impossibly huge in 1993, or their vicious internal battles over a few million bucks for beloved programs that suddenly seemed too trivial to discuss.
Critics of ARRA will not agree with everything in this book, but putting mood affiliation aside for a moment, the writing, research, and conception of the work are all excellent.
What predicts when an Olympic record will fall?
It turns out that if the current holder also set the record in the past, the record is more likely to be broken at the next games.
If the current Olympic record is also the world record, it is less likely to be broken in the next games.
A change in the number of countries competing in an event is also an important indicator of whether the record will fall.
And most surprising of all, the percentage by which the existing record improved on the first Olympic record, is also a significant indicator.
There is more here, and the original paper is here. For the pointer I thank Michelle Dawson.
A misquotation episode
Brad DeLong and David Warsh criticize a quotation from me on the origins of the internet. But in fact the quotation is not from me, it is from Brian Carnell. The WSJ link, offered by Warsh but not by DeLong, has a correction to this effect.
Stephen L. Carter has a new novel out
The Impeachment of Abraham Lincoln. I should teach it next year for my Law and Literature class…
*From Miracle to Maturity: The Growth of the Korean Economy*
That is the forthcoming book by Barry Eichengreen, Dwight Perkins, and Kwanho Shin. I just pre-ordered my copy to arrive in October…
Gary Gorton’s *Misunderstanding Financial Crises*
Everything by Gary Gorton is worth reading. I am not sure when this book is due out (Amazon claims Nov.2012), but it is not out yet. The link is here.
Imagine a rewriting of earlier American financial history, though the lens of our recent financial crisis and extant ideas about bank runs through the shadow banking system. Here are two short bits:
And interestingly, the figure below shows that capital input was actually higher in countries that did not have capital requirements.
…Bank capital was not the focus of bank regulation until recently. In the 1980s regulators began focusing on bank capital as a buffer against idiosyncratic bank failures and associated losses that could have bankrupted the deposit insurance fund. But it has been recognized that historically systemic bank crises are about cash. They can be prevented or mitigated by the design of regulatory infrastructure, whether it is public or private. They cannot be prevented by bank capital.
Recommended!
Honduras may appeal to London courts
Tricky legal dispute in Central America? Sort it out in the London courts. Honduras, the state with the highest homicide rate in the world, is preparing to send appeal cases to the judicial committee of the privy council (JCPC) in Westminster.
The extraordinary expansion of UK legal jurisdiction is being negotiated in an effort to support the development of a pioneering enterprise zone in the crime-scarred republic.
The Honduran government is establishing what amounts to semi-independent city states, hoping that improved governance backed by international partners will attract business investment and create employment.
The complex constitutional agreement under discussion involves Mauritius – an island 10,000 miles away in the Indian Ocean – guaranteeing the legal framework of the courts in the development zones, known locally as La Región Especial de Desarrollo (RED).
Here is more, and for the pointer I thank P.
*Affluence and Influence*
The author is Martin Gilens and the subtitle is Economic Inequality and Political Power in America. A few points:
1. It is an interesting book.
2. It is poorly written and the first fifty pages should have been abolished.
3. It argues, using a comprehensive data set, that the preferences of poor and even middle income people are neglected or underrepresented in the policy process. The preferences of the wealthiest ten percent seem to have more sway.
4. It should take greater care to distinguish the preferences of the (often ill-informed) poor across means and ends. Say a poor or middle class person feels “I want tariffs” and also “I want prosperity.” The elites then push through free trade to produce prosperity and for that matter to get reelected and perhaps also to serve commercial interests and donors. Have they met or frustrated the preferences of the poor? By the metrics of Gilens the poor did not get their way but that is not obviously the correct conclusion. Matt makes a related point.
5. Many lower- or middle-income voters decide to vote retrospectively over outcomes (mostly), rather than over policy inputs. That suggests we should judge the responsiveness of the system in terms of how well it aims toward those outputs, not whether it gives lower-income voters their preferred policy inputs.
6. What is wrong with this simple alternative hypothesis?: Politicians seek some measure of redistribution-weighted prosperity to get reelected. Wealthier voters are better educated and smarter, so they have a better sense of which policies will bring that about. It seems the wealthier voters are getting their way on policy inputs, but a deeper look shows the pressures on politicians are quite general.
7. I would be falling prey to the fallacy of mood affiliation if I simply assumed the author wanted policy to be more responsive to the wishes of the poor and middle class. Still I can ask whether this would be a desirable end. Aren’t they less educated and less well-informed on average? Don’t they also care about politics less and derive less of their status from political processes and outcomes? Do I want them to have a greater say over social issues, including gay marriage? No.
Here is a Boston Review symposium on the book, including many responses from the notables on the sidebar, along with a response from the author.
The Great Olympic stagnation?
A FUNNY THING HAPPENED on the way to the London Olympics: Athletes stopped breaking world records. Remember the run-up to Beijing in 2008, when the sports world was abuzz over how many marks Michael Phelps would smash? He set seven world records there but hasn’t bested a global time since 2009. The Vancouver Winter Olympics in 2010 provided plenty of drama but few record-shattering wins — Shen Xue and Zhao Hongbo’s highest-ever score in pairs figure skating wasn’t exactly a Bob Beamon moment. World records are now decades old in classic men’s Olympic sports such as the long jump (1991), shot put (1990) and discus throw (1986).
Many scientists have concluded from recent events that athletic performance is hitting a wall. Geoffroy Berthelot of INSEP, a sports research institute in Paris, looked at competitions from 1896 to 2007 and found that peak scores stopped improving in 64 percent of track and field events after 1993. Giuseppe Lippi of the University of Verona examined nine Olympic sports from 1900 to 2007 and found similar results. “Improvement has substantially stopped or reached a plateau in several specialities,” he wrote. Berthelot has predicted that the “human species’ physiological frontiers will be reached” in most sports around 2027.
Yet his conclusion is more measured:
But what these researchers are detecting isn’t some final biological frontier but rather a lull in technological enhancement. Athletes have always relied on science to push the bounds of achievement. Olympic athletes’ great stagnation, then, is really a temporary halt in innovation.
That is from Peter Keating, here is more. For the pointer I thank Allison Kasic.
*Savage Continent*
That is the new book by Keith Lowe, with the subtitle Europe in the Aftermath of World War II. Excerpt:
The number of sexual relationships that took place between European women and Germans during the war is quite staggering. In Norway as many of 10 percent of women aged between fifteen and thirty had German boyfriends during the war. If the statistics on the number of children born to German soldiers are anything to go by, this was by no means unusual…
Resistance movements in occupied countries came up with all kinds of excuses for the behaviour of their women and girls. They characterized women who slept with Germans as ignorant, poor, even mentally defective. They claimed that women were raped, or that they only slept with Germans out of economic necessity. While this was undoubtedly the case for some, recent surveys show that women who slept with German soldiers came from all classes and all walks of life. On the whole European women slept with Germans not because they were forced to, or because their own men were absent, or because they needed money or food — but simply because they found the strong, “knightly” image of the German soldiers intensely attractive, especially compared to the weakened impression they had of their own menfolk. In Denmark, for example, wartime pollsters were shocked to discover that 51 per cent of Danish women openly admitted to finding German men more attractive than their own compatriots.
Nowhere was this need more keenly felt than in France…
You can buy the book here.
*The Great Persuasion*
That is the new book by Angus Burgin and the subtitle is Reinventing Free Markets since the Depression. As I had suspected, it is interesting. Here is the core thesis:
To Hayek and the other founders of the Mont Pelerin Society, Friedman’s ascent within its orbit reflected the collapse of its attempt to integrate a restrained defense of free markets into a traditionalist worldview. In the broader social environment Friedman’s rise portended, and precipitated, the triumphant return of laissez-faire.
One thing which strikes me reading this book, as it does when I reread Friedman’s 1962 Capitalism and Freedom, is how much market-oriented writers of that era were not focused on the problems of old people, even though today those problems take up a huge chunk of the budget of the federal government.
I found this excerpt interesting:
In stark contrast to the early post-war years, Friedman would conclude near the end of his career that “there are too many damn think tanks now,” adding that they simply “don’t have the talent for it.”
Growth tigers of the 1950s
If we pull out Japan, Israel, and postwar European catch-up, and do per capita growth, B.R. Shenoy’s list of top performers looks like this:
Jamaica, 6.9%
Trinidad and Tobago, 5.9%
Algeria, 5.7%
Puerto Rico, 5.5%
Rhodesia and Nysaaland, 4.1%
Turkey, 2.9%
Philippines, 2.5%
If you do absolute rather than per capita, many of those numbers go up by a few percentage points, for instance the Philippines becomes 5.8% and Algeria becomes 8.0%.
Those numbers are from B.R. Shenoy’s book Indian Economic Policy. Are there lessons? One is that parts of the Caribbean are in fact wealthier than many people think. Another is that the 1950s were a very good decade for the Caribbean, culturally too. A third lesson is that the top performers in one period may not have legs. Finally, looking at this table makes one realize, yet again, how good it was to more or less rid the world of communism.