Category: Uncategorized
*The Economist* on digital money
This multi-article section from a few weeks ago was very good. Here is one excerpt:
“It feels very significant that the countries which, apart from China, are most advanced, most active and most interested in cbdcs are the medium-sized emerging economies,” says Mr Landau. “They are too big to accept the loss of monetary autonomy, and sufficiently small to be exposed to the risk of foreign-currency competition.” They may feel they have no choice.
Here is another:
The rise of intangible capital may explain several capital-market trends, including the fact that private firms are tending to stay private for longer and the popularity of mergers. Software companies find it easier to protect intellectual property in private markets. Rigid accounting rules do not cope well with intangible capital, for instance by mostly booking spending on research as an expense, discouraging it.
The shift has other broad implications. Lenders like collateral: whenever financiers make loans they worry about being repaid, but they can take valuable property in case of default. Most consumer lending is secured against houses or cars.But businesses that create intangible assets do not have such collateral. This can make it harder to secure debt-financing, which is often not available unsecured for new businesses at a reasonable rate. Stephen Cecchetti, an economist at Brandeis University, calls this the “tyranny of collateral”.
In those settings, data can matter more than the ability to pin down collateral…
The regulatory cicada culture that is American
As millions of cicadas began emerging in Loudoun County about two weeks ago, Chef Tobias Padovano at Cocina on Market in Leesburg began foraging for the noisy insects and serving them in tacos.
That is, until last week when a customer ordered and ate the cicada tacos, only to later complain to the Loudoun County Health Department, which then forced the restaurant to temporarily stop serving them.
Victor Avitto, an environmental health supervisor with the Loudoun County Health Department, told the Times-Mirror that the cicadas needed to be sourced from an approved food source, and only then it would it be fine to serve them.
“They need to be sourced from a farm that is inspected and certified,” he said.
On Wednesday, Padovano said he found an online source for cicadas from Dubai which was approved by Avitto, allowing for the sought-after cicada tacos to again be served.
Here is the full story, via HHL.
Workers aren’t coming back
Data released by the Labor Department this morning show that last month, 61.6 percent of the working-age population were active in the labor force, either working in jobs or looking for them. That is essentially unchanged from the summer of 2020.
The second most significant statistic is that wages are soaring. In May, average wages grew at a 6.1 percent annual rate. In April, they grew at an 8.7 percent annual rate.
Combined, these two statistics tell much of the story of the economy this spring: Employers are boosting wage offers in order to attract and retain workers, who are increasingly difficult to attract and retain. This is a situation you’d expect with employers’ demand for workers growing much faster than workers are returning to the labor market. Labor demand is booming, and labor supply is not keeping up.
Here is more from Michael Strain.
Friday assorted conspiracy links
1. Vanity Fair on lab leak, with autistic hero.
2. NYT previews the UFO report (based on leaks, presumably). USG is still puzzled, reports it is not “their stuff,” so I guess your “p” on alien origin should go up modestly. Here is how the NYT web headline evolved. The paper edition has the most accurate “U.S. Concedes It Can’t Identify Flying Objects.”
3. Model this: “A bride collapsed and died at her wedding. The groom then married the woman’s sister with her dead body lying in the next room.”
Crypto talks by Balaji and Vitalik
For a conference co-sponsored by Mercatus and Coin Center, here is Vitalik:
Here is Balaji:
Here are the other talks, by Nic Carter, Nevin Freeman, Erik Voorhees, and Peter van Valkenburgh.
Thursday assorted links
1. A visual of debt to gdp ratios. Note the information is not strictly comparable across countries. And where chess pieces go to die.
2. Profile of James Daunt (FT).
3. Research jobs at Charter Cities Institute.
4. United to buy 15 Boom supersonic aircraft.
5. These birds can see through magic tricks (NYT).
My Conversation with the very very smart David Deutsch
I think this episode came off as “weird and testy,” as I described it to one friend, but I like weird and testy! Here is the audio, video, and transcript. Here is one excerpt:
COWEN: How do you think the many-worlds interpretation of quantum mechanics relates to the view that, just in terms of space, the size of our current universe is infinite, and therefore everything possible is happening in it?
DEUTSCH: It complicates the discussion of probability, but there’s no overlap between that notion of infinity and the Everettian notion of infinity, if we are infinite there, because the differentiation (as I prefer to call what used to be called splitting) — when I perform an experiment which can go one of two ways, the influence of that spreads out. First, I see it. I may write it down; I may write a scientific paper. When I write a paper about it and report the results, that will cause the journal to split or to differentiate into two journals, and so on. This influence cannot spread out faster than the speed of light.
So an Everett universe is really a misnomer because what we see in real life is an Everett bubble within the universe. Everything outside the bubble is as it was; it’s undifferentiated, or, to be exact, it’s exactly as differentiated as it was before. Then, as the bubble spreads out, the universe becomes or the multiverse becomes more differentiated, but the bubble is always finite.
COWEN: How do your views relate to the philosophical modal realism of David Lewis?
DEUTSCH: There are interesting parallels. As a physicist, I’m interested in what the laws of physics tell us is so, rather than in philosophical reasoning about things, unless they impinge on a problem that I have. So yes, I’m interested in, for example, the continuity of the self — whether, if there’s another version of me a very large number of light-years away in an infinite universe, and it’s identical, is that really me? Are there two of me, one of me? I don’t entirely know the answer to that. It’s why I don’t entirely know the answer to whether I would go in a Star Trek transporter.
The modal realism certainly involves a lot of things that I don’t think exist — at least, not physically. I’m open to the idea that nonphysical things do exist: like the natural numbers, I think, exist. There’s a difference between the second even prime, which doesn’t exist, and the infinite number of prime numbers, which I think do exist. I think that there is more than one mode of existence, but the theory that all modes of existence are equally real — I see no point in that. The overlap between Everett and David Lewis is, I think, more coincidental than illuminating.
COWEN: If the universe is infinite and if David Lewis is correct, should I feel closer to the David Lewis copies of me? The copies or near copies of me in this universe? Or the near copies of me in the multiverse? It seems very crowded all of a sudden. Something whose purpose was to be economical doesn’t feel that way to me by the end of the metaphysics.
DEUTSCH: It doesn’t feel like that to you. . . . Well, as Wittgenstein is supposed to have said (I don’t know whether he really did), if it were true, what would it feel like? It would feel just like this.
Much more at the link. And:
COWEN: Are we living in a simulation?
DEUTSCH: No, because living in a simulation is precisely a case of there being a barrier beyond which we cannot understand. If we’re living in a simulation that’s running on some computer, we can’t tell whether that computer is made of silicon or iron, or whether it obeys the same laws of computation, like Turing computability and quantum computability and so on, as ours. We can’t know anything about the physics there.
Well, we can know that it is at least a superset of our physics, but that’s not saying very much; it’s not telling us very much. It’s a typical example of a theory that can be rejected out of hand for the same reason that the supernatural ones — if somebody says, “Zeus did it,” then I’m going to say, “How should I respond? If I take that on board, how should I respond to the next person that comes along and tells me that Odin did it?”
COWEN: But it seems you’re rejecting an empirical claim on methodological grounds, and I get very suspicious. Philosophers typically reject transcendental arguments like, “Oh, we must be able to perceive reality, because if we couldn’t, how could we know that we couldn’t perceive reality?” It doesn’t prove you can perceive reality, right?
And this:
COWEN: A few very practical questions to close. Given the way British elections seem to have been running, that the Tories win every time, does that mean the error-correction mechanism of the British system of government now is weaker?
DEUTSCH: No. Unfortunately, the — so, as you probably know, I favor the first-past-the-post system in the purest possible form, as it is implemented in Britain. I think that is the most error-correcting possible electoral system, although I must add that the electoral system is only a tiny facet of the institutions of criticism and consent. In general, it’s just a tiny thing, but it is the best one.
It’s not perfect. It has some of the defects of, for example, proportional representation. Proportional representation has the defect that it causes coalitions all the time. Coalitions are bad.
COWEN: You have a delegated monitor with the coalition, right? With a coalition, say in the Netherlands (which is richer than the United Kingdom), you typically have coalition governments. Some parties in the coalition are delegated monitors of the other parties. Parties are better informed than voters. Isn’t that a better Popperian mechanism for error correction?
I also tried to sum up what I think he is all about, and he reacted with scorn. That was an excellent part of the conversation. And here is a good Twitter thread from Michael Nielsen about the Conversation.
Wednesday assorted links
1. Todd Kashdan criticizing his own work.
2. “The American Economic Journal: Microeconomics (one of the very top journals that isn’t part of the holy Top-5, hallowed be thy names) managed to go an entire year without accepting a paper!” (out of 415 submissions).
3. How the NIH behaves during an emergency.
4. Increase of women in personnel management.
5. There is no Argentine bola great stagnation.
6. Speculative.
7. Sheilagh Ogilvie does Five Books on the Industrial Revolution.
Two Vaccine Updates
First, in an article on new vaccine boosters in USA today there is this revealing statement:
Any revised Moderna vaccine would include a lower dose than the original, Moore said. The company went with a high dose in its initial vaccine to guarantee effectiveness, but she said the company is confident the dose can come down, reducing side effects without compromising protection.
Arrgh! Why wait for a new vaccine??? Fractional dosing now!

The same article also notes:
One of Moderna’s co-founders, MIT professor Robert Langer, is known for his research on microneedles, tiny Band-Aid-like patches that can deliver medications without the pain of a shot. Moderna has said nothing about delivery plans, but it’s conceivable the company might try to combine the two technologies to provide a booster that doesn’t require an injection.
The skin is highly immunologically active so you can give lower doses with a microneedle patch. The microneedles are sometimes made from sugar and don’t hurt. Microneedle delivery, however, can cause scars but I say apply the patch where the sun don’t shine and let’s go!
Second, Canada’s NACI has now endorsed mix and match for the AZ and Pfizer and Moderna vaccines. First Doses First has put Canada in very good shape (now ahead of the US in percent of the population with at least one dose) and this was always part of the FDF plan–delay second doses to get out more first doses and then, when supplies increase, give second doses, possibly with a better vaccine.

Do individuals make more rational decisions when the stakes are higher?
Often yes, but this is a shibboleth of economics that doesn’t always fit the facts, as has been illustrated starkly by our behaviors during the pandemic. Many people have taken too much risk, or been too risk-averse, even with high stakes on the line. Here is one excerpt from my recent Bloomberg column:
You might wonder why we are getting these big, important decisions so wrong. I have at least two hypotheses. One is that anxiety causes people to make worse decisions. Facing the danger of a deadly pandemic, for example, the higher stakes might induce me to shift into denial, if only to protect my sanity and peace of mind. I might make worse decisions than if I were simply trying to avoid the common cold, for which the stakes are far lower.
My other hypothesis involves identity and the desire for belonging. It is no accident that red states in the U.S. are under-vaccinated relative to blue states; vaccine skepticism is in part an identity marker for Trump supporters. People tend to see big decisions as more important in shaping their identity than small ones. In essence, the significance of a decision induces all kinds of surrounding social forces to “infect” that decision with partisan influences, and that decision in turn becomes a truly credible signal of what we believe.
For most economic decisions, people do still make better choices when the stakes are higher — but this isn’t a universal principle. Are you so sure, for example, that decisions about who to marry are made more rationally than those about which TV show to watch? Maybe they are, but it’s not entirely obvious.
Note that it is now much easier to make good small stakes decisions, largely because of the internet:
An accompanying change is that low-stakes decisions are easier than ever, due largely to the internet, with one crucial caveat: The decision-maker must be relatively rational. Several decades ago, if you wanted to figure out the best paper towels to buy, you might have asked around and then collated a lot of information yourself. These days it is easy enough to search the internet for the answer. Or consider the example of credit-card rewards, which are far easier to collect, manipulate and use because of the internet.
The danger of course is that the sum of all these smaller triumphs convinces people that they are rational about big dilemmas too — despite the fact that they choose rather poorly on some of them. We are not used to a world where we are worse at big decisions than the small ones. But it has been hurtling our way for some while now.
Recommended. I also cite this: “Bryan Caplan, a colleague who studies human rationality, has put the individual Covid response in only the second percentile of “my initially mediocre expectations.””
Olaf Stapledon movie coming!?
From Iceland? Narrated by Tilda Swinton?
Via Jeet Heer, and Ilya Novak. Is it any good?
Tuesday assorted links
1. The resilience of the U.S. corporate bond market. And who needs a flying car?
2. Famous economists’ grave sites.
3. “Measured intelligence did not predict increased mate appeal in either study, whereas perceived intelligence and funniness did.” Speculative.
4. Blockchain-based smart contract for Kenyan crop insurance (speculative).
5. David Beckworth podcast with Mark Carney, mostly macro.
6. Winning probabilities of horses with fast-sounding names are overstated.
7. How they used to dance, starring Doris Day.
U.S. Largest Industries, 1890
1. Transportation
2. Agriculture and Related Industries
3. Food, Beverages, and Tobacco Products
4. Metal, Metal Products, and Machinery
5. Textiles, Textile Products, and Clothing
6. Mining and Quarrying
7. Banking
8. Wood, Lumber, and Their Products
9. Leather and Allied Products
10. Slaughtering and Meat Packing
That is from the new and excellent An Illustrated Business History of the United States, by Richard Vague. How many of you really know everything that is in here? In that same year Buffalo was the tenth largest U.S. city. And the most valuable import around that time (1891-1900) was sugar, with coffee #2 and “Hides and skins” #3.
The fly swatter had not yet been invented.
Just remember: picture books are usually better than regular books.
Is the second-cheapest wine a rip-off?
The standard economic analysis of product-line pricing by Mussa and Rosen (1978) implies that higher-quality varieties command higher absolute mark-ups. It is widely claimed that this property does not apply to wine lists. Restaurateurs are believed to overprice the second-cheapest wine to exploit naïve diners embarrassed to choose the cheapest option. This paper investigates which view is correct. We find that the mark-up on the second cheapest wine is significantly below that on the four next more expensive wines. It is an urban myth that the second-cheapest wine is an especially bad buy. Percentage mark-ups are highest on mid-range wines. This is consistent with the profit-maximising pricing of a vertically differentiated product line with no behavioral elements, although other factors may contribute to the price pattern.
That is from a new paper by David de Meza and Vikram Pathania, via The Browser (which is worth paying for).
@pmarca lets loose
Don’t underestimate yourself! The great writers of the past tended to be disassociative cranks. Diogenes Laertius says Heraclitus lived “by himself in the mountains, feeding on grasses and herbs” and died by burying himself in literal dung. Rousseau condemned his own children to the hell of an 18th century orphanage while sanctimoniously passing judgment on the rest of society. Nietzsche went insane protecting a horse from a whipping, and in his last messages to the world demanded the pope be jailed and all anti-Semites shot. You see, you fit right in.
And that is one of the more anodyne parts of the interview. And yes it has been confirmed to be real. Here is another one of the boring parts:
I predict that we — the West — are going to WEIRDify the entire world, within the next 50 years, the next two generations. We will do this not by converting non-WEIRD people to WEIRD, but by getting their kids. Their kids, and their kids’ kids, are going to grow up on the Internet at least as much as they grow up in the real world, and the pull of WEIRD culture will overwhelm all existing non-WEIRD cultures. I realize this is a very strong claim, but this process is already underway; at this point I think it’s inevitable. The cost of this will be a collapse of global cultural diversity exactly as you and Rozin predict.
Niccolo Soldo is the interviewer.