Category: Uncategorized
A simple model of grabby aliens
According to a hard-steps model of advanced life timing, humans seem puzzlingly early. We offer an explanation: an early deadline is set by ‘grabby’ civilizations (GC), who expand rapidly, never die alone, change the appearance of the volumes they control, and who are not born within other GC volumes. If we might soon become grabby, then today is near a sample origin date of such a GC. A selection effect explains why we don’t see them even though they probably control over a third of the universe now. Each parameter in our three parameter model can be estimated to within roughly a factor of four, allowing principled predictions of GC origins, spacing, appearance, and durations till we see or meet them.
That is a new paper from Robin Hanson, Daniel Martin, Calvin McCarter, and Jonathan Paulson. And here is Robin’s associated blog post.
*Empire of Silver*
The subtitle is A New Monetary History of China, and the author is Jin Xu. This is the first book this year to go straight to my “best books of the year list,” here is one excerpt:
Let’s shift the scene back to 1262, when the two poles of world civilization, Venice in the West and the Southern Song in the East, both faced the specter of war, and funding for these wars hung by a thread. Almost simultaneously, the authorities of both places came up with plans to deal with their emergencies, both involving the most advanced financial innovations of that time. The Southern Song’s Jia Sidao raised military funding by using the steadily devaluing huizi to buy up public land the strip the populace of wealth. Venice took a different road: Its parliament authorized the government to mortgage its tax revenue, and when a fiscal deficit developed, the administration issued government bonds paying interest of 5 percent. In retrospect, Venice’s financial innovation summoned the magic power of public debt as capital and effectively led Europe into an era of financial revolution. As for china, the excessively issued huizi did not regain the favor of the market; rather, public discontent and unrest threw open the door for invasion by the Mongolians.
…we witness China taking the lead on finance and currency, but in the wrong direction. China, at a very early stage, had “flying money” (feiqian) for remitting funds, as well as pawnshops, silver shops, and other such establishments for credit transfer; the Song dynasty’s paper currency originated in private institutions; and private local banks (qianzhuang) and money-exchange shops (piaohao) experienced extraordinary growth in the Ming and Qing dynasties. So why didn’t China produce a modern banking industry?
…The unbankability of China’s currency led to the failure of China’s paper currency system and forced it to take the silver route. Without banks, and without the coinage of silver, progressing from bank notes to paper currency was out of the question. Currency could only exist in the form of confusing and outmoded metage currency.
Definitely recommended, you can buy it here. And “metage” — what a good word!
Tuesday assorted links
1. Is the English strain picking up some features of the South African strain? And the new strains do seem somewhat more dangerous.
2. Joe Stiglitz comes perilously close to the Austrian theory of the business cycle.
3. Update on the Russian vaccine (New Yorker). And this WSJ piece. It seems to work? And yet more.
4. ““What we didn’t anticipate was that they would break the law,” Goldenfeld said — that some students, even after testing positive and being told to quarantine, would attend parties anyway.” A look at some of the models.
5. “Dubai announced Monday the creation of a “space court” to settle commercial disputes, as the UAE — which is sending a probe to Mars — builds its presence in the space sector.” Link here.
6. My on-line talk to PayPal. Mostly Q&A, and they did ask me about Nirvana’s “Aneurysm.”
Thwarted markets in everything
Philadelphia health officials say they’re no longer providing vaccines to a 9-month-old start-up that has begun inoculating thousands of city residents, citing the group’s quiet switch to a for-profit entity.
“We have recently been made aware of a change in Philly Fighting COVID’s corporate status that took place without our knowledge, from nonprofit to for-profit,” said Health Department spokesperson Jim Garrow.
The move comes days after WHYY News and Billy Penn reported that Philly Fighting COVID had established a for-profit arm, and that when the group pivoted from providing community testing to performing vaccinations, it left several partner organizations in the lurch.
Here is the full story.
Monday assorted links
Sci-founder fellowship
Sci-Founder Fellowship is a program to help early career scientists start companies of their own. We believe that companies can often be the best way to pursue translational research, and not enough scientists consider this as serious option.
The Fellowship program provides an investment up to $400,000 to each founding team to get started, along with mentorship and a peer-network of other scientists starting companies to help support you.
We will mentor you — our team includes the former director of Y Combinator’s research non-profit, a co-founder of Color Genomics, and a co-founder of Mammoth Biosciences.
If you think you could be a good fit, please apply here.
Have more questions? Take a look at our FAQ.
Here is the link.
Sunday assorted links
1. Fauci. Compare that to revisiting the Balaji thread.
2. Why are grandiose narcissists more effective at organizational politics?
4. What is the quality of CDC software?
5. Migrants to the U.S. are much more productive than migrants to other locales.
6. Atif Mian is still caught up in the Junker Fallacy.
7. Why the South African strain may not become dominant in the U.S.
What I Have Been Reading (Alex)
The Economics of Small Things–An Indian economist in the United States offers a sweet and gentle introduction to economics drawn from his personal and professional life. I enjoyed many of the essays though I have to disagree with one–it makes a difference whether you go to the mangoes or the mangoes come to you as Tyler and I showed!
Wretched Refuse?: The Political Economy of Immigration and Institutions–Kudos to Nowrasteh and Powell for doing the work that critics of immigration have never done–that is, actually test for the effect of immigration on culture and cohesion. I can do no better than quote The Economist, “Wretched Refuse?” is… full of charts and regression analysis. It is also highly original, and takes a chainsaw to the most intellectually respectable case against immigration. No serious economist denies that when people move from poor countries to rich ones, they become more productive and their wages soar. It seems likely, therefore, that more migration would make the world much richer. However, some scholars think that too large an influx from, say, Congo to Canada would make Canada more like Congo—ie, the immigrants would import Congolese habits, and gradually make Canadian institutions more like the corrupt and lawless ones that keep Congo poor. Yet remarkably little effort has been made to test this hypothesis. Messrs Nowrasteh and Powell do so as rigorously as they can.”
The Infinite Machine–I was disappointed in this history of Ethereum. It doesn’t try to explain any of the technical details of Ethereum which is ok but it also doesn’t go into great detail on the personalities, leaving one with a journalistic history of what happened with some short glosses on the people.
The Splendid and the Vile: A Saga of Churchill, Family, and Defiance During the Blitz–As the bombs fall on London, Churchill struggles to increase the production of aircraft, to diplomatically bring the United States into the war, to hold his government together even as British forces are defeated abroad. Meanwhile his teenage daughter falls in love, his son deals with a gambling problem and divorce and his aide looks for a wife. The Splendid and the Vile is a tremendous story of Churchill’s first year in office based on meticulous research and told at a thrilling, breakneck pace. A great read at any time. A poignant and apt read now.
Causal Inference: The Mixtape–an excellent introduction to causal inference. The Mixtape marks the beginning of the DAG era in econometrics.
Perhaps it is the high-skilled rather than low-skilled migrants who induce resentment?
(7) Intergenerational Mobility of Immigrants in the United States over Two Centuries
By Ran Abramitzky, Leah Boustan, Elisa Jacome and Santiago Perez
Using millions of father-son pairs spanning more than 100 years of US history, we find that children of immigrants from nearly every sending country have higher rates of upward mobility than children of the US-born. Immigrants’ advantage is similar historically and today despite dramatic shifts in sending countries and US immigration policy. Immigrants achieve this advantage in part by choosing to settle in locations that offer better prospects for their children. Full-Text Access | Supplementary Materials
That is from the new AER.
Saturday assorted links
1. Henry Farrell reviews Mike Konczal.
2. Wombats, Cowen’s Second Law, and to the benefit of all. It is an article that keeps on surprising you.
3. Why was autocratic rule more stable in China than in Europe?
4. One guy who helped to drive GameStop (WSJ).
5. A review of the definition of market manipulation, for those of us who need it.
6. Our FDA regulatory state is failing us against Curative as well.
7. Game theory and the search for life, clever.
Short selling and the price discovery process
We show that stock prices are more accurate when short sellers are more active. First, in a large panel of NYSE-listed stocks, intraday informational efficiency of prices improves with greater shorting flow. Second, at monthly and annual horizons, more shorting flow accelerates the incorporation of public information into prices. Third, greater shorting flow reduces post-earnings-announcement drift for negative earnings surprises. Fourth, short sellers change their trading around extreme return events in a way that aids price discovery and reduces divergence from fundamental values. These results are robust to various econometric specifications, and their magnitude is economically meaningful.
That is from 2013 research by Boehmer and Wu. Next, beware of any paper doing cross-sectional comparisons across 111 countries, but here is how the resulting correlations go (link):
We find that when short-selling is possible, aggregate stock returns are less volatile and there is greater liquidity. When countries start to permit short-selling, aggregate stock price increases, implying lower a cost of capital. There is no evidence that short-sale restrictions affect either the level of skewness of returns or the probability of a market crash. Collectively, our empirical evidence suggests that allowing short-selling enhances market quality.
While I would not draw very firm conclusions from that, it is not going to help the case against short-selling. Here is a general literature survey from 2020. Lots is murky, but again the evidence is not supporting the often rather polemic critics. A very general point is that short selling is less different from “plain selling” than you might think, all the more so if you consider dynamic portfolio strategies (which can replicate just about any underlying desired net position).
Furthermore, these days there is more choice than ever before. If the asset you have in mind is somehow too fragile to withstand short-selling pressure, but is valuable nonetheless, staying private never has been easier and with some degree of liquidity to boot.
Cash transfers are better than price controls
Really, and yes there is a trade-off at the relevant margin. That is the theme of my latest Bloomberg column, here is one excerpt:
Or consider Treasury Secretary Janet Yellen. She supports the proposed hike, as she noted in her confirmation hearing last week, yet in 2014 she endorsed the view that a minimum wage hike would lead to significant job loss. Maybe now she knows better, but if the 2014 Janet Yellen could have been so fooled, then perhaps this debate is not so settled.
Why then push so hard for a policy with such murky outcomes? It would raise the wages of many workers, destroy the jobs of some low-skilled workers, and perhaps lower the hours and thus pay of many other workers.
The burden of the minimum wage is unclear as well. Perhaps it leads to higher retail prices, although many proponents suggest it comes largely out of business profits. This too is unclear, and again raises questions about the wisdom of pushing so hard for such a non-transparent set of reallocations and transfers.
In contrast, consider the plan for cash grants to families with children. Under one proposed plan, these grants would be between $3,000 and $3,600 a year, depending on the age of the child.
The benefits here are obvious and transparent, namely that families are better off when they have more money. Perhaps some families would use that money in self-destructive ways, but this basic view — that more money increases the chance for better outcomes — is not really contested.
And please — most policies are not self-financing! So you should do more of the better policy, rather than pushing for both.
Friday assorted links
1. The next Michael Lewis book (NYT).
2. Novovax data, including against the South African strain. And wide confidence intervals.
3. Carolyn Hopkins.
4. Chinese government is collecting Americans’ DNA.
5. John Cochrane on GameStop, etc.
6. And how Robinhood ran out of cash (NYT). The misinformation in the MR comments section and elsewhere on this is egregious. Here is yet more common sense, though I don’t quite agree with all the framing.
US and UK promotion for *Stubborn Attachments*
Vaccine politics in Europe and America
The contentiousness is much worse in Europe, where zero- and negative-sum thinking is the order of the day. That is the theme of my latest Bloomberg column, here is one bit:
In most of Europe, it’s hard to see much good news. It’s one thing not to have a vaccine. It’s far worse to turn on television or go on the internet and see people in other countries being vaccinated as their pandemics recede. Most of Europe will not be making significant vaccination progress until April, and even then shortages may remain.
At stake is the very legitimacy of the EU. Most of the vaccination contracts were handled at the EU level, although Germany sidestepped the agreed-upon procedures and cut some deals. If the EU fails at the most significant crisis in a generation, it may not maintain much legitimacy.
And:
When people judge how painful an experience was, they often place a high value on first and last impressions. The last impressions of the U.S. and U.K. will be pretty positive. Most of the U.S. pandemic will be over by July, even under a subpar vaccination schedule. And it may turn out that mRNA vaccines are more protective against the new strains of Covid than any alternatives….
Many European countries may end up with fewer deaths per capita than the U.S. But at the end of the pandemic many Europeans may feel like their leaders failed them, that they suffered lockdowns for many months but received little in return. Right now vaccine politics is all about momentum, and so far only a few countries have it.
Here is a related piece by Bruno M. And a good piece (slow to start) on what went wrong in the EU.