Category: Uncategorized

Wednesday assorted links

1. “That work suggested it was not how many times a word was repeated that predicted whether Roy’s son learned it early, but whether it was uttered in an unusual spot in the house, a surprising time or in a distinctive linguistic context.”  Link here.

2. Neruda update (New Yorker).  The poor Tamil maid.

3. Positive rather than adverse selection into life insurance.

4. Deutsche Bahn is still using Windows 3.11 (auf deutsch).

5. The Norwegian Century is indeed upon us (in Norwegian).

6. Matt Yglesias “Tourism is good, actually” ($$).

7. Krugman, Wells, and the economics of Taylor Swift.

Will the Argentina province of La Rioja print its own currency?

Maybe so:

Milei’s austerity is biting hard in La Rioja, an olive and wine region home to 384,000 people — out of a population of 46mn — where intense heat pushes many businesses to take a siesta from 1 to 6pm. Almost 75 per cent of the province’s budget comes from redistributed taxes collected by the national government, and 67 per cent of registered workers are employed by the state.

The province’s finances had been “decimated” in recent months, governor Ricardo Quintela said in an interview, citing Milei’s halting of public works projects and his refusal to transfer the 20.8bn pesos ($26mn) that he says La Rioja is owed based on historical agreements with the central government…

In an effort to pay public workers, La Rioja’s state legislature, dominated by Quintela’s left-leaning Peronist movement, has approved a plan to issue 22.5bn pesos ($28mn) worth of so-called “bocades”. These provincial government bonds can be used to pay local taxes, bills for public services such as energy and water and — in theory — to buy goods from private companies. Bocades — nicknamed a “quasi-currency” in Argentina — will be used to top up public employees’ salaries by 30 per cent. Quintela said they would start to be issued within 90 days, though La Rioja may opt to issue them only digitally.

Quintela said that Bocades would be exchangeable for pesos at the provincially-owned bank. However, given the province’s scarce supply of pesos, the plan relies on “people starting to trust in the bonds’ value” so that they don’t exchange them immediately.

And:

Argentina’s provinces have dabbled in quasi-currencies before. In the early 2000s, amid a severe recession and several years of deflation, more than a dozen provinces including La Rioja issued bonds that functioned as currencies.

The logic of this is not surprising.  When very strong disinflationary pressures are in place, liquidity is quite scarce.  Suppliers will step into the void to try to supply it, even if the overall macroeconomic consequences are negative.  Such “local currencies” were common in the 1930s, though most of them did not last long.  Expect scrip and gift certificates to make a comeback as well, although this version of the idea transfers seigniorage to a very strapped local government.

Here is more from the FT.

Addendum: Congress just dealt with Milei agenda further setbacks.

One reason why the disinflation proved so manageable

From a new and important paper by Xiwen Bai, Jesús Fernández-Villaverde, Yiliang Li, and Francesco Zanetti:

Our analysis shows that supply chain disruptions generate stagflation, accompanied by an increase in spare capacity for producers. This higher spare capacity curtails the supply of goods to retailers and results in a surge in prices, leading to a tighter retail market. We show that, in this situation, prices become highly sensitive to changes in demand, while output remains relatively inelastic. In other words, disruptions to the supply chain enhance the effectiveness of contractionary monetary policy in taming inflation while reducing the sensitivity of output to the policy. Our results reinforce the general findings on the state-dependence of the efficacy of monetary policy.

Progress!  And arguably this is a Keynesian result:

In fact, our result resembles the celebrated analysis by Keynes (1940). Keynes argued that when output is constrained (in our case, because of supply chain disruptions, in Britain’s case in 1940, because of resources employed in World War II), policymakers can lower aggregate demand aggressively to prevent inflation without much fear of lowering production.

As I mention in GOAT, How to Pay for the War remains a neglected and underrated work by Keynes.  Note this as well:

We document how supply chain shocks drove inflation during 2021 but that, in 2022, traditional demand and supply shocks also played an important role in explaining inflation.

The pure supply-side story, as you have been hearing from Krugman just isn’t going to work, it is time to give it up.

By the way, yet another advance in this lengthy paper is this (from JFV): “…we have satellite information about every single container ship of the world in real time (ID, geolocation, speed, draft, heading,…), which allows us to do tons of things in terms of machine learning and time series econometrics that people have not been able to do before.”

Comparing Large Language Models Against Lawyers

This paper presents a groundbreaking comparison between Large Language Models and traditional legal contract reviewers, Junior Lawyers and Legal Process Outsourcers. We dissect whether LLMs can outperform humans in accuracy, speed, and cost efficiency during contract review. Our empirical analysis benchmarks LLMs against a ground truth set by Senior Lawyers, uncovering that advanced models match or exceed human accuracy in determining legal issues. In speed, LLMs complete reviews in mere seconds, eclipsing the hours required by their human counterparts. Cost wise, LLMs operate at a fraction of the price, offering a staggering 99.97 percent reduction in cost over traditional methods. These results are not just statistics, they signal a seismic shift in legal practice. LLMs stand poised to disrupt the legal industry, enhancing accessibility and efficiency of legal services. Our research asserts that the era of LLM dominance in legal contract review is upon us, challenging the status quo and calling for a reimagined future of legal workflows.

That is from a new paper by Lauren MartinNick WhitehouseStephanie YiuLizzie Catterson, and Rivindu Perera.  Via Malinga.

Tuesday assorted links

1. “…we demonstrate that when an organism needs to adapt to a multitude of environmental variables, division of labor emerges as the only viable evolutionary strategy.

2. How is AI helping ornithology?

3. Vesuvius Challenge Prize awarded, we can read the first scroll.  And a background Bloomberg piece.

4. Seafood as a resilient food solution after a nuclear war.

5. Nabeel Qureshi on whether there is a Moore’s Law for intelligence: “The shocking implication of what we have seen in this piece so far is that there may be no great, transformative breakthroughs needed to get to the critical inflection point. We already have the ingredients. As Ilya Sutskever likes to say, “the machine just wants to learn” – data, compute, and the right algorithms result in intelligence of a particular kind, and more of those inputs results in more intelligence as an output!”

6. What is Jordan Peterson doing in his new shows?

7. Enceladus questions.

My Upstream podcast with Erik Torenberg

Tyler, here are links to your appearance on Upstream, titled “Tyler Cowen on Harvard, the GOAT Economist, and Ending Stagnation.”

Spotify: https://open.spotify.com/episode/2AtAP42KpRdCxhioJSR9KY?si=bf643df853da4ec1Apple: https://podcasts.apple.com/us/podcast/tyler-cowen-on-harvard-the-goat-economist-and/id1678893467?i=1000643908309YouTube: https://www.youtube.com/watch?v=zS6B9LHRHKw

The Gershwins on free trade (that was then, this is now)

In 1927, George and Ira Gershwin put on a musical satire about trade and war entitled Strike Up the Band.  The plot centres around a middle-aged US cheesemaker, Horace J. Fletcher of Connecticut, who wants to corner the domestic dairy market.  When Fletcher hears that the US government has just slapped a fifty per cent tariff on foreign-made cheese, he sees dollar signs.  High tariffs mean his fellow citizens will have little choice but to ‘buy American’.  What’s more, the tariff’s impact soon reaches beyond the national market to sour the country’s trade relationships.. Swiss cheesemakers are particularly sharp in their demands for retaliation.  Fletcher surmises that a prolonged Swiss-American military conflict would provide the necessary fiscal and nationalistic incentives to maintain the costly tariff on foreign cheese in perpetuity.

To make his monopolistic dream of market control a reality, Fletcher sees to it that the tariff spat between the two countries leads to an all-out war.  He first creates the Very Patriotic League to drum up support for the Alpine military adventure, as well as to weed out any ‘un-American’ agitation at home.  The Very Patriotic League’s members, donning white hoods reminiscent of the Ku Klux Klan, go about excising all things Swiss from the nativist nation.  Not even the classic adventure The Swiss Family Robinson escapes notice: it gets rebranded The American Family Robinson.  With domestic anti-war dissent quelled, Fletcher next orchestrates a military invasion of Switzerland.  The farcical imperial intervention ends with a US victory.  But just as the war with Switzerland winds down and a peaceful League of Cheese established, an ultimatum arrives from Russia objecting to a US tariff on caviar.  And, it’s implied, the militant cycle repeats.

That is from the new and interesting Pax Economica: Left-Wing Visions of a Free Trade World, by Marc-William Palen.

New data on media bias

In this study, we propose a novel approach to detect supply-side media bias, independent of external factors like ownership or editors’ ideological leanings. Analyzing over 100,000 articles from The New York Times (NYT) and The Wall Street Journal (WSJ), complemented by data from 22 million tweets, we assess the factors influencing article duration on their digital homepages. By flexibly controlling for demand-side preferences, we attribute extended homepage presence of ideologically slanted articles to supply-side biases. Utilizing a machine learning model, we assign “pro-Democrat” scores to articles, revealing that both tweets count and ideological orientation significantly impact homepage longevity. Our findings show that liberal articles tend to remain longer on the NYT homepage, while conservative ones persist on the WSJ. Further analysis into articles’ transition to print and podcasts suggests that increased competition may reduce media bias, indicating a potential direction for future theoretical exploration.

That is from a recent paper by Tin Cheuk Leung and Koleman Strumpf.

John Stuart Mill on women, as explained by TC

It’s interesting to think of Mill’s argument as it relates to Hayek. So Mill is arguing you can see more than just the local information. So keep in mind, when Mill wrote, every society that he knew of, at least treated women very poorly, oppressed women. Women, because they were physically weaker, were at a big disadvantage. If you think there are some matrilineal exceptions, Mill didn’t know about them, so it appeared universal. And Mill’s chief argument is to say, you’re making a big mistake if you overly aggregate information from this one observation, that behind it is a lot of structure, and a lot of the structure is contingent, and that if I, Mill, unpack the contingency for you, you will see behind the signals. So Mill is much more rationalist than Hayek. It’s one reason why Hayek hated Mill. But clearly, on the issue of women, Mill was completely correct that women can do much better, will do much better. It’s not clear what the end of this process will be. It will just continue for a long time. Women achieving in excellent ways. And it’s Mill’s greatest work. I think it’s one of the greatest pieces of social science, and it is anti-Hayekian. It’s anti-small c conservatism.

That is from my podcast with Dwarkesh.

Amsterdam urban engineering

An average of 18 people a year reportedly drown in the city’s canals: often men, late at night, falling to their deaths while apparently taking a “wild wee”.

Last week, councillors demanded answers to questions on water safety, prompted by the death of Sam van Grondelle, a 29-year-old Amsterdammer who disappeared in October and whose body was discovered three days later in the Veemkade waterway.

As part of a multibillion-euro renovation of the city, the authorities are putting in extra ladders and grab ropes along 200km of crumbling canal wall. However, most of the walls remain high, are poorly lit and are often flanked by an ankle-high “car rail” to stop vehicles rolling in. They form a perfect trip hazard for distracted wanderers.

The authorities are focused on: “…prevention techniques and safety campaigns in the UK and Ireland.”  About ten percent of the drowned men had their flies open.  Here is the full Times of London story.

Sunday assorted links

1. The pessimistic view on Ethiopia.

2. Inside the NBA’s chess club.

3. Brian Goff on education and the cost disease.

4. Genes and depression and bad luck is endogenous.

5. TC on internet writing.  And TC on Bill Laimbeer on passive-aggressive economists.

6. How should state and local governments respond to illegal retail cannabis?

7. Diaper spa for adults, and a licensing issue too.

8. The Karpathy review of Apple Vision Pro.  I likely will try it once there is a small army of people who have figured out the ins and outs and who can serve as tutors, including for setting the thing up.  One reason I am not “first in line” with this device is that it strikes me as a “technology of greater vividness” (a bit like some drugs? or downhill skiing?), and not so much a “technology to understand people and cultures more deeply.”  I think the latter interests me more, and I also do better with the latter.  But perhaps I am wrong!  To be clear, I am not arguing that “technologies of greater vividness” are objectively or intrinsically worse, if anything more people seem to prefer them.

Non-random splat

It is heresy to say this, but I don’t think many people will be listening to the music of Jelly Roll Morton in the future.  It feels “too archived” and less vital than say Haydn, much less Mozart or Beethoven.

So many people are defending Luka on Twitter, but he doesn’t do much to make his teammates better.  And why didn’t Jalen Brunson stick around on the Mavericks?  “Who wants to play with you?” is an underrated metric for assessing player quality, not to mention hire quality more generally.  Luka is on track to be one of the five (three?) greatest scorers of all time, but not one of the fifteen greatest players.  (Are Kevin Durant and Kobe the other two?  Is Dominique Wilkins another great scorer who also was less of a complete player?)

There are various rumors about Taylor Swift and her beau.  But no one says “If those rumors were true, they would just admit it!  It wouldn’t cost them anything in terms of income or endorsements.”  That indicates there is still a significant shortage of tolerance and equal treatment in American society.

Fabio Caruana as an articulate thinker is very underrated.

In the late 1990s I went to visit the Houthis in Yemen, and I don’t think deterrence is going to work against them.

Have any economists or pundits stepped forward and admitted that they underestimated Milei?

My current reason for not buying the Apple Vision Pro is that I am afraid I won’t know how to turn it on and get it working.

Quite possibly Senegal is not a democracy any more.

The Chess Olympiad already (de facto) allows performance enhancers, though not computers.

Steakhouses are now underrated, most of all if you don’t order steak.

There is a (suddenly well-known) person on social media who so embodies modes of argumentation I find objectionable that at first I thought his was a parody account.

Zvi Mowshowitz covers my podcast with Dwarkesh Patel

It is very long, very detailed, and very good.  Interesting throughout!  Excerpt:

Dealing with the third conversation is harder. There is place where I feel Tyler is misinterpreting a few statements, in ways I find extremely frustrating and that I do not see him do in other contexts, and I pause to set the record straight in detail. I definitely see hope in finding common ground and perhaps working together. But so far I have been unable to find the road in.

Here is the whole thing.

Saturday assorted links

1. Hans Niemann okie-dokie.  And a response.

2. Should more British homes be built using straw?

3. Base models of LLMs do not seem to skew so much politically.  Substack version here.

4. Cameroon starts first malaria vaccine rollout.

5. What economists thought in the 1980s.

6. Does the solar shield idea have potential? (NYT)

7. NYT profile of Coleman Hughes, a highly intelligent and reasonable man.  Again, here is Coleman’s new book The End of Race Politics.  I will be doing a CWT with him.

8. “Richest five families in Florence 🇮🇹 from 1427 are still the richest today (archival data). Not only the top shows persistence. Any family who was in the (1427) top third is almost certain to still be there today.”  Link here.

9. Ross Douthat on Dan Wang on where the future dynamism lies (NYT).