Category: Uncategorized
Saturday assorted links
1. An escalator made of cardboard (short video).
3. Orson Welles, The Immortal Story, 58 minutes long, made for French TV 1968, one of his best. Jeanne Moreau too, full of MIE themes, and as I view it a critique of the wealthy, more substantive than the usual.
4. Markets in everything: pay for the chance to heist mannequin parts from a mountain of mannequin parts.
5. Progress Studies 101, by Sagar Devkate.
6. A recruiter on why restaurants are having trouble hiring. Of course this means that right now is a relatively bad time to be eating out a lot — higher variance of outcomes and even well-known restaurants have become harder to predict.
7. Lots of Democratic economists think Summers is right but they are afraid to say it. Context from Jason Furman here.
Jonathan Hazell emails me about inflation indicators
You asked Mark Carney what the best indicators were for inflation. Let me take the liberty of giving you mine.
1) Median CPI inflation, i.e. the weighted median value of CPI inflation across products. This measure tracks the underlying signal in inflation because it filters out volatile shocks hitting certain industries (e.g. airlines or used cars now, healthcare during 2010-2015, food and energy perennially). Median CPI has a good time series correlation with unemployment, better than the other series (see Ball & Mazumder, JMCB 2019).
2) 5 year, 5 year forward expected inflation. This is what markets expect inflation will be, in 5 years’ time, for the next 5 years. This measure tracks long run inflation expectations and removes the effects of short run shocks. In US data, big changes in inflation have been caused by unanchored long run inflation expectations, not by short run shocks to demand (see e.g. Hazell, Herreno, Nakamura & Steinsson 2021). So, if inflation is going to rise by a lot, long run inflation expectations are a good leading indicator.
For now, neither measure is high by historical standards but of course that could change. I hope some of this is interesting, anyway.
Omid on central bank digital currencies (from my email)
Really enjoyed your conversation with Mark [Carney] (as usual). I give him a B+ on his views on CBDCs. He gets credit for understanding that if nothing is done, then digitization means a disappearance of public money in the economy except for the banks. This has a lot of consequences, most of which are bad. There is no access for the unbanked, higher fees, lower privacy and more credit risk throughout the system.
Where Mark goes astray is by mentioning this oft proposed two-tier model for CBDCs, which is just a fallacy. Fiat money is a liability, and each unit can either be a liability of a central bank or commercial bank, it can’t be both. So if the Fed issues a digital dollar to the banks, and the banks issue private claims to their customers, we haven’t achieved anything, other than maybe a marginally better RTGS system. A real CBDC means the public can hold direct claims against the central bank, as it does today with cash.
Now, this is the point at which the skeptics say “what about disintermediation of the banks?” To that I say: so what? If lending via depository institutions (as opposed to via the bond market, money markets, etc) is a good, then the market will adjust to provide it. One way to think about the existing two-tier model is that savers are forced to subsidize borrowers. E.g., I want to make payments, so I have to open a checking account, for which the bank pays me no interest. The same model will exist with CBDCs, it’s just that banks will have to pay higher interest to attract deposits, or offer other value-added services.
CBDCs also allow lending via DeFi, which is more price efficient for savers and borrowers, so that will offset any increase in borrowing costs.
Friday assorted links
1. The Danish film Another Round is perhaps the best film ever made about alcohol. It is also a movie about Denmark. Reviews are quite positive, but it is poorly understood by the critics.
2. “Quebec needs its own emoji ‘as soon as possible,’ say legislators in unanimous vote.”
3. Goethe in China. Supposedly Xi as a teenager read Faust multiple times and knows it by heart.
4. Fabio Ghironi thread on research killers. And Ross D. has some further picks for influential intellectuals.
5. China proposed markets in everything; as I like to say, the best argument for “Woke” is to read the MR comments section. And since it constitutes a strong argument for a proposition (whether you agree with the view or not), that makes it a very very good comments section.
6. Weird stuff that might be possible, even if I don’t quite trust this piece.
Should you make it easier for people to apply?
We study how search frictions in the labor market affect firms’ ability to recruit talented workers. In a field experiment in Ethiopia, we show that an employer can attract more talented applicants by offering a small monetary incentive for making a job application. Estimates from a structural model suggest that the intervention is effective because the cost of making a job application is large, and positively correlated with jobseeker ability. We provide evidence that this positive correlation is driven by dynamic selection. In a second experiment, we show that local recruiters underestimate the positive impacts of application incentives.
That is from a new AER piece by Girum Abebe, A. Stefano Caria, and Esteban Ortiz-Ospina. I find this claim very interesting, though not completely general. You will note these results are for clerical positions in Ethiopia, and note further “The impact of ability of application incentives is driven by women, and by those jobseekers who are currently unemployed and less-experienced.” It is possible that the ease of application improves the applicant pool for those with a confidence gap, yet who are talented nonetheless. I might add that the easy nature of the Emergent Ventures application (it really doesn’t take long and requires no reference letters or vita) reflects a similar logic.
In the context of this study, it is not just that some of the higher quality candidates apply for the money, rather the money is also a signal that the application process truly is open. Otherwise why pay for applicants?
That said, for jobs or awards that are more creative than just clerical labor, you want to give each application close scrutiny and that may militate against encouraging more and more applicants. You might even want “knowing to apply in the first place” to be the biggest test standing before the final prize. What better way to test for networks?
So the mix of “hard to know about at all, easy to apply once you do” will in fact fit some situations fairly well.
Thursday assorted links
1. Ross Palmer YouTube review of Average is Over.
4. Jason Furman speaks truth on “overheating labor markets,” though in my view it goes much further than that. The evidence on this one really is not there, and that has been well-known for decades. Wages are at best moderately pro-cyclical (and that’s not even getting into causality), and for decades Keynesians were trying to argue they are not pro-cyclical at all. Except now.
5. Do the “Big Five” personality traits predict SES? And how much should that matter?
Matt Yglesias on the dynamics of Twitter
Social media is truly social in the sense that it features incredible pressures to form in-groups and out-groups and then to conform to your in-group. Unless you like and admire Cotton and Pompeo and want to be known to the world as a follower of Cotton-Pompeo Thought, it is not very compelling to speak up in favor of a minority viewpoint among scientists. Why spend your day in nasty fights on Twitter when you could be doing science? Then if you secure your impression of what “the scientists” think about something from scanning Twitter, you will perceive a consensus that is not really there. If something is a 70-30 issue but the 30 are keeping their heads down, it can look like a 98-2 issue.
I do not know a lot about science, so I will not opine how generally true this may or may not be.
But in economics, which I do know well, I think it’s a big issue. If someone tweets something you agree with, it is easy to bless it with an RT or a little heart. To take issue with it is to start a fight. And conversely, it’s much more pleasant to do a tweet that is greeted with lots of RTs and little hearts rather than one that starts fights. So I know from talking to econ PhD-havers that almost everyone is disproportionately avoiding statements they believe to be locally unpopular in their community. There is just more disagreement and dissension than you would know unless you took the time to reach out to people and speak to them in a more relaxed way.
My strong suspicion is that this is true across domains of expertise, and is creating a lot of bubbles of fake consensus that can become very misleading. And I don’t have a solution.
Here is his full Substack post, I am very happy to be a paid subscriber. The broader question of course is what we can do to limit these problems. More pseudonymous tweeters and writers? More grumpy old people who don’t care so much about their reputations? More who write for Substack? Other?
Wednesday assorted links
1. SkyHub.
3. The economics of religious festivals in Mexico.
4. Claims about housing. And Samuel Hughes and Ben Southwood on very localized zoning — “strong suburbs.”
5. MIE?: Corporate tax futures.
6. Are universities really somewhat right-wing/centrist? (Teen Vogue)
My Conversation with Mark Carney
Here is the audio, video, and transcript, definitely recommended. Here is part of his closing statement:
COWEN: Last question. You wake up each morning. Surely you still think about central banking. What for you is the open question about central banking, where you don’t know the answer, that you think about the most?
CARNEY: I gave a speech at Jackson Hole on this issue, and I started — which is the future of the international monetary system and how we adjust the international monetary system.
I’ll say parenthetically that we’re potentially headed to another example of where the structure of the system is going to cause big problems for the global economy. Because it’s quite realistic, sadly, that we’re going to have a fairly divergent recovery with a number of emerging, developing economies really lagging because of COVID — not vaccinated, limited policy space, and the knock-on effects, while major advanced economies move forward. That’s a world where rates rise and the US dollar strengthens and you get this asymmetry, and the challenge of the way our system works bears down on these economies. I think about that a lot.
And this:
COWEN: If you’re speaking in a meeting as the central bank president, do you prefer to speak first or speak last?
CARNEY: I prefer — I tend to speak early. Yes, I tend to speak early. I’m not sure that’s always the best strategy, but I tend to speak early. I will say, one thing that’s happened over the years at places like the G20, I noticed, is the prevalence of social media and devices. The audience drifts away over time, even at the G20, even on a discussion of the global economy.
And from the horse’s mouth, so to speak, do note this:
CARNEY: …I think you’re absolutely right on that, there wasn’t. It is revealed that there wasn’t a liquidity trap.
Rooftops! Finally, on more important matters:
COWEN: Are the Toronto Raptors doomed to be, on average, a subpar NBA team due to higher taxes?
And:
COWEN: What’s the best Clash album?
CARNEY: Fantastic question. London Calling, and one of my best memories — I was very fortunate; they came to Edmonton when I was in 12th grade in high school. I went to the concert and that was fantastic, yes.
COWEN: I also saw them, I think in what would have been 12th grade had I been in school that year. But London Calling is too commercial for me. I much prefer the Green album, like “Career Opportunities,” “Janie Jones.”
CARNEY: Well, “I Fought the Law” was the best song at the concert. I have to say, they had got to Combat Rock by this time, which was relative — [laughs] Combat Rock was more commercial, I thought, than London Calling, although they threw it all out the door with Sandinista!
Again, here is Mark’s new book Value(s): Building a Better World For All.
*Modern Paraguay: South America’s Best Kept Secret*
There should be more books serving as introductions to individual countries, and this one, written by Tomás Mandl, is a fine entry in the genre.
…Paraguay was South America’s first country to get electricity, railroads, and an iron foundry.
The Triple Alliance War of 1864-1870:
Although available data and sources remain contested, estimates put the figure at 25 percent of the Paraguayan population killed on the lower end, and upwards of 60 percent on the higher end…
For purposes of contrast, Poland during WWII saw “only” about 20 percent of the population killed.
Under Stroessner, the torture centers were neither secret nor undercover. And:
The clear pattern post-Stroessner is one of mild support for democracy: While in 2017 more Paraguayans agreed with the claim “democracy is preferable” than in 1995 (55 percent versus 52 percent, respectively), the average for the period was 46 percent….When Latinobarómetro asked Paraguayans to assess their country’s political regime on a range where 1 is “not democratic” and 10 is “fully democratic,” they have responded “5” consistently in almost every year of the twenty-first century.
With mandatory voting the average turnout rate is about 66 percent in recent times. And:
Notably, the largest center for Paraguayan studies is located in Argentina.
I enjoyed this sentence:
Unfamiliarity with Paraguay is not new.
Paraguay has very low FDI even by Latin American standards, it is typically rated as the most corrupt country on the continent, and a common saying is “¿Con factura o sin factura?”
Highly recommended, you can pre-order here, and yes the author does speak Guarani and he does also know the Solow growth model and why Singapore is interesting.
Cheating markets in everything
- This phone shaker device can achieve your weekly fitness goal without efforts, unlocking rewards at distances in Pokemon Go.
- The phone walker is ideal for those people who are doing corporate steps challenges to get rewards with freebies for getting fit.
- The step counter device features three kinds of working modes, running mode(fast speed), jogging mode(medium speed) and walking mode(low speed).
- It can earn 9,500 steps(running mode) in an hour equivalent to 4 miles approx, cheating your way to 10,000 steps in a short time.
- It is compatible with any IOS and Android’s smart phones whose width is less than 3.6”. If you have any questions, just feel free to click the contact seller button
Here is the Amazon listing, via Ben M.
Tuesday assorted links
1. “There are about 465,000 open positions in cybersecurity nationwide as of May 2021, according to Cyber Seek — a tech job-tracking database from the U.S. Commerce Department — and the trade group CompTIA” Link here, though if you bring up skills mismatch you still get shouted down these days.
2. One-minute Covid breath test approved in Singapore (Bloomberg). And my early April Covid predictions.
3. Predicting high-impact science. And Ashlee Vance on Celine Halioua and her anti-aging start-up and work (Bloomberg).
4. The importance of immunocompromised individuals for Covid issues.
5. Ross Douthat on Foucault is completely correct (NYT).
6. Brain synchronization remains an underdiscussed topic (NYT).
The supply of motivation is elastic — Study Web
Study Web is the space students have constructed for themselves in response to the irl system that just isn’t working. Unable to find a place or person to turn to with their academic and career anxieties, they find internet strangers—strange kin—to speak to, or simply share the same space with, online. Lacking the intrinsic inspiration to study for hours each day, online advice and group accountability provide a solution. Feeling isolated, virtual study partners create a sense of fellowship. On Study Web, while stressed, students have accepted their lot—they’re not investigating the rightness or wrongness of the pressurized environment of the Gen Z student or asking whether college is worth it at all. 12-hour Study With Me videos are seen as something to aspire to rather than rebel from. Students accept the premise that school and studying are non-negotiables. Where they come from, where they live, their beliefs and value systems are not barriers to community-building; they suffer in common.
And Study Web is huge, and weird:
The Study Web is a constellation of digital spaces and online communities—across YouTube, TikTok, Reddit, Discord, and Twitter—largely built by students for students. Videos under the #StudyTok hashtag have been viewed over half a billion times. One Discord server, Study Together, has over 120 thousand members. Study Web extends far past study groups composed of classmates, institution specific associations, or poorly designed retro forums discussing entrance requirements for professional programs. It includes but transcends Studyblrs on Tumblr that emerged in 2014 and eclipses various Reddit and Facebook study groups or inspirational images shared across Pinterest and Instagram. Populated mostly by Gen Z and the youngest of millennials, Study Web is the internet most of us don’t see, and it’s become a lifeline for students from junior high to college.
By Fadeke Adegbuyi, this is one of the best pieces I have read all year.
Further Monday assorted links
7. Yuan Longping, RIP (NYT).
8. Famous musicians pick their favorite Bob Dylan songs. Would mine be “Highway 61”? “Mr. Tambourine Man”? “Tangled Up in Blue”? “Don’t Think Twice It’s Alright”? Too many choices. Bob is today 80 years old. The most overrated is perhaps “Desolation Row”, with its pretentious lyrics?
9. Why the new Elon Musk rocket really will matter?
10. Why a new business surge in black communities during the pandemic? (NYT)