Category: Uncategorized
Big G
Yes, that is the title of a new paper and it is excellent indeed. Lydia Cox et.al bring you a fresh and original look at some properties of government spending:
“Big G” typically refers to aggregate government spending on a homogeneous good. In this paper, we open up this construct by analyzing the entire universe of procurement contracts of the US government and establish five facts. First, government spending is granular, that is, it is concentrated in relatively few firms and sectors. Second, relative to private expenditures its composition is biased. Third, procurement contracts are short-lived. Fourth, idiosyncratic variation dominates the fluctuation of spending. Last, government spending is concentrated in sectors with relatively sticky prices. Accounting for these facts within a stylized New Keynesian model offers new insights into the fiscal transmission mechanism: fiscal shocks hardly impact inflation, little crowding out of private expenditure exists, and the multiplier tends to be larger compared to a one-sector benchmark aligning the model with the empirical evidence.
Via the still excellent Kevin Lewis.
Are humans constantly but subconsciously smelling themselves?
Here is the opening of a lengthy abstract of a new paper by Ofer Perl, et.al., and it may help explain why it is so hard to avoid touching your face:
All primates, including humans, engage in self-face-touching at very high frequency. The functional purpose or antecedents of this behaviour remain unclear. In this hybrid review, we put forth the hypothesis that self-face-touching subserves self-smelling. We first review data implying that humans touch their faces at very high frequency. We then detail evidence from the one study that implicated an olfactory origin for this behaviour: This evidence consists of significantly increased nasal inhalation concurrent with self-face-touching, and predictable increases or decreases in self-face-touching as a function of subliminal odourant tainting. Although we speculate that self-smelling through self-face-touching is largely an unconscious act, we note that in addition, humans also consciously smell themselves at high frequency.
File under Questions that are Rarely Asked, via Michelle Dawson.
Friday assorted links
1. What do we know about superspreader events? And indoor transmission in China. And what Arnold Kling has come to believe.
2. “We show irradiance and in particular solar zenith angle in combination with cloudopacity explain COVID-19 morbidity and mortality growth better than temperature.” Interesting, though still more interpretation is needed there.
3. Covid-19 in Haiti. And what is Wuhan like right now?
4. In Germany, they consult humanities scholars about how to end the lockdown. And from a French philosopher. And we need blogs back for the pandemic.
5. “Southern New Hampshire University, known for being on the cutting edge of collegiate learning, plans to slash tuition for incoming freshmen as it drastically revamps how it conducts on-campus learning beginning in the fall.As part of the changes, tuition will be cut 61%, from $31,000 to $10,000 starting in the 2021-2022 academic year.” Link here.
6. No strong statistical evidence for the BCG vaccine claim.
7. Is the internet economy going to crash as the real economy shrinks? Several interesting points in that one.
8. de Rugy and Kling on government-backed lines of credit for small business.
9. Bundled insurance markets in everything: “COVID-19 insurance comes free with food delivery in Hong Kong now.”
10. Thread on the meaning of the new NY results.
11. Toward a theory of Tyrone.
12. Test different recovery levers. And Zeynep speaks sense.
How things are, in a few short words
If we keep the economy closed at current levels, it will continue to decay, and at some point turn into irreversible, non-linear damage. No one knows when, or how to model the course of that process. That decay also will eat into our future public health capacities, and perhaps boost hunger and poverty around the world.
If we keep people locked up at current levels, fewer of them will be exposed to the virus, and in the meantime we can develop better treatments, and also improve test and trace capabilities. No one knows how quickly those improvements will come, or how to model the course of that process, or how much net good they will do.
The relative pace of those two processes should determine our best course of action. No one knows the relative pace of either of those two processes. Yet commentators pretend to be increasingly knowledgeable, moralizing based on the pretense of knowledge they do not have.
That is where we are at! And here is my earlier post Where We Stand.
The essential Ben Thompson on isolation and quarantine
…while I have written about Taiwan’s use of cellphone-enforced quarantines for recent travelers and close contacts of those infected, I should also note that every single positive infection — symptomatic or not — is isolated away from their home and family. That is also the case in South Korea, and while it was the case for Singaporean citizens, it was not the case for migrant workers, which is a major reason why the virus has exploded in recent weeks.
Here’s the thing, though: isolating people is hard. It would be very controversial. It would require overbearing police powers that people in the West are intrinsically allergic to. Politicians that instituted such a policy would be very unpopular. It is so much easier to let tech companies build a potential magic bullet, and then demand they let government use it; most people wouldn’t know or wouldn’t care, which appears to matter more than whether or not the approach would actually work (or, to put it another way, it appears that the French government sees privacy as a club with which to beat tech companies, not a non-negotiable principle their citizens demand).
So that is why I have changed my mind: Western governments are not willing to take actions that we know work because it would be unpopular and controversial (indeed, the fact that central quarantine is so clearly a violation of liberties is arguably a benefit, because there is no way people would tolerate it once the crisis is over). And, on the flipside, that makes digital surveillance too dangerous to build. Politicians would rather leverage tech companies to violate liberty on the sly, and tech companies, once they have the capability, are all too willing to offload the responsibility of using it wisely to whatever government entity is willing to give them cover. There just isn’t much evidence that either side is willing to make hard choices.
That is from Ben’s Stratechery email newsletter, gated but you can pay to get it. There is currently the risk that “test and trace” becomes for the Left what “chloroquine” has been for Trump and parts of the political right — namely a way to make otherwise unpalatable plans sound as if they have hope for more than “develop herd immunity and bankrupt the economy in the process.”
To be clear, I fully favor “test and trace,” and I’ve worked hard to help fund some of it. That said, I wonder if we will anytime soon reach the point where it is a game changer. So when people argue we should not reopen the economy until “test and trace” is in place, I increasingly see that as a kind of emotive declaration that others do not care enough about human lives (possibly true!), rather than an actual piece of advice.
Covid-19 liability reform for the eventual reopening
That is the topic of my latest Bloomberg column, here is one excerpt:
If an infected but asymptomatic worker shows up at work and sickens coworkers, for example, should the employer be liable? The answer is far from obvious. Liability exists not to shift unmanageable risk, but rather to induce management to take possible and prudent measures of precaution.
Another problem with liability law in this context is that the potential damages are high relative to the capitalization of most businesses. Covid-19 cases often pop up in chains; there have been many cases from a single conference, or in a single church choir, or on a single cruise ship. If a business or school is host to such a chain, it could be wiped out financially by lawsuits. In these cases the liability penalties do not have their intended deterrent effect because the money to lose simply isn’t there…
Another problem with liability in this setting has to do with jury expertise. Are random members of the public really the best people to determine acceptable levels of Covid-19 risk and appropriate employer precautions? Juries are better suited for more conventional applications of liability law, such as when the handyman fixing your roof falls off your rickety ladder. Given the unprecedented nature of the current situation, many Covid-19 risk questions require experts.
Finally, there is the issue of testing. Businesses could be of immeasurable help by testing their employees for Covid-19, as additional testing can help limit the spread of the virus (if only by indicating which workers should stay home or get treatment). Yet the available tests are highly imperfect, especially with false negatives. If businesses are liable for incorrect test results, and their possible practical implications, then business will likely not perform any tests at all, to the detriment of virtually everybody.
I recommend modest liability for some sectors, and zero liability, bundled with a New Zealand-like accident compensation system, for other sectors. And of course some very dangerous sectors should not be allowed to reopen at all, though I am more sympathetic to regional experimentation than are some people on Twitter.
Thursday assorted links
1. Why is the Eastern European response better? (WSJ) And how are Swedish hospitals doing?
2. Further doubts on the LOA and Santa Clara serology stories, it now seems they really do not establish any particular results.
3. Why a vaccine will be tough, a depressing thread. And are China’s early patients shedding coronavirus?
4. Ezra Klein on why we can’t build things.
5. Why two decades of pandemic planning failed.
6. New Joshua Gans book, Economics in the Age of Covid-19, MIT Press.
7. Hollis Robbins on why some saw this coming before others.
8. New Becker-Friedman Center podcast on Pandemic Economics.
9. Various forms of presenting state-level data. What exactly is going on with Ohio?
10. Are we prepping for vaccine state capacity?
11. Department of Why Not?: “Former Labradoodle breeder tapped to lead U.S. pandemic task force.”
12. The couple that meets on the German-Danish border during lockdown (NYT).
13. The Fed and saving cities (NYT).
Why the low status of opposition to child abuse?
Michael Kaan emails me:
Hi Tyler, I’m a healthcare professional in Canada and a long-time reader of your blog. For the past couple of years, observing the culture wars and various elections, I’ve noticed that child abuse is an extremely rare topic among the cultural left: the highly visible progressive segment that drives wokeness, is culturally powerful, etc. You know what their dominant concerns are. (On the right it’s basically non-existent.)
While there’s nothing obviously wrong with their attention to sexual and racial discrimination, the energy put into it is disproportionate to the massive social cost of child abuse. Rates vary around the world, but in general it looks like about 30% of all children globally suffer some sort of serious maltreatment each year, often many times a year, repeated over multiple years.So one can easily estimate that billions of people have experienced this. In other words, more people have been abused as children than have experienced war, famine, or epidemics.
The impact and costs of this have been measured (low academic achievement, health problems, low earnings, drug and alcohol use, etc.), and child abuse is sometimes lethal. What puzzles me is why it has no legs politically. Among the woke crowd, if child abuse is mentioned it’s usually in terms of discrimination against girls or sexual minorities. But there are really no prominent voices actively campaigning to mitigate child abuse generally.Why is this? Is it overly complex? Is the phenomenon too widely dispersed demographically, so that an evil agent group isn’t easily identified? Does its persistence foreground chronic failures of the welfare state (if that’s the case)? Is it boring?
For a start, I would note that virtually everyone is again child abuse, so opposing it doesn’t make anyone significant look worse. But I am sure there is much more to it than that.
My Conversation with Philip Tetlock
Here is the audio and transcript, here is part of the summary:
He joined Tyler to discuss whether the world as a whole is becoming harder to predict, whether Goldman Sachs traders can beat forecasters, what inferences we can draw from analyzing the speech of politicians, the importance of interdisciplinary teams, the qualities he looks for in leaders, the reasons he’s skeptical machine learning will outcompete his research team, the year he thinks the ascent of the West became inevitable, how research on counterfactuals can be applied to modern debates, why people with second cultures tend to make better forecasters, how to become more fox-like, and more.
Here is one excerpt:
COWEN: If you could take just a bit of time away from your research and play in your own tournaments, are you as good as your own best superforecasters?
TETLOCK: I don’t think so. I don’t think I have the patience or the temperament for doing it. I did give it a try in the second year of the first set of forecasting tournaments back in 2012, and I monitored the aggregates. We had an aggregation algorithm that was performing very well at the time, and it was outperforming 99.8 percent of the forecasters from whom the composite was derived.
If I simply had predicted what the composite said at each point in time in that tournament, I would have been a super superforecaster. I would have been better than 99.8 percent of the superforecasters. So, even though I knew that it was unlikely that I could outperform the composite, I did research some questions where I thought the composite was excessively aggressive, and I tried to second guess it.
The net result of my efforts — instead of finishing in the top 0.02 percent or whatever, I think I finished in the middle of the superforecaster pack. That doesn’t mean I’m a superforecaster. It just means that when I tried to make a forecast better than the composite, I degraded the accuracy significantly.
COWEN: But what do you think is the kind of patience you’re lacking? Because if I look at your career, you’ve been working on these databases on this topic for what? Over 30 years. That’s incredible patience, right? More patience than most of your superforecasters have shown. Is there some dis-aggregated notion of patience where they have it and you don’t?
TETLOCK: [laughs] Yeah, they have a skill set. In the most recent tournaments, we’ve been working on with them, this becomes even more evident — their willingness to delve into the details of really pretty obscure problems for very minimal compensation is quite extraordinary. They are intrinsically cognitively motivated in a way that is quite remarkable. How am I different from that?
I guess I have a little bit of attention deficit disorder, and my attention tends to roam. I’ve not just worked on forecasting tournaments. I’ve been fairly persistent in pursuing this topic since the mid 1980s. Even before Gorbachev became general party secretary, I was doing a little bit of this. But I’ve been doing a lot of other things as well on the side. My attention tends to roam. I’m interested in taboo tradeoffs. I’m interested in accountability. There’re various things I’ve studied that don’t quite fall in this rubric.
COWEN: Doesn’t that make you more of a fox though? You know something about many different areas. I could ask you about antebellum American discourse before the Civil War, and you would know who had the smart arguments and who didn’t. Right?
And another:
TETLOCK:
…I had a very interesting correspondence with William Safire in the 1980s about forecasting tournaments. We could talk a little about it later. The upshot of this is that young people who are upwardly mobile see forecasting tournaments as an opportunity to rise. Old people like me and aging baby-boomer types who occupy relatively high status inside organizations see forecasting tournaments as a way to lose.
If I’m a senior analyst inside an intelligence agency, and say I’m on the National Intelligence Council, and I’m an expert on China and the go-to guy for the president on China, and some upstart R&D operation called IARPA says, “Hey, we’re going to run these forecasting tournaments in which we assess how well the analytic community can put probabilities on what Xi Jinping is going to do next.”
And I’ll be on a level playing field, competing against 25-year-olds, and I’m a 65-year-old, how am I likely to react to this proposal, to this new method of doing business? It doesn’t take a lot of empathy or bureaucratic imagination to suppose I’m going to try to nix this thing.
COWEN: Which nation’s government in the world do you think listens to you the most? You may not know, right?
Definitely recommended.
Wednesday assorted links
1. Is the wealth-freedom correlation weakening?
2. Mechanism design to reduce medical supply shortfalls during pandemics.
3. Vox covers Emergent Ventures/Fast Grants.
4. Good summary of the new Los Angeles prevalence results. And here is a thread of caution.
6. James Hamilton on negative oil prices.
7. Salim Furth blames the automobile, not the NYC subway. And here is criticism of the subway result from a blogger. Reading both my judgment is that the subway result does not hold up.
8. Journal of Controversial Ideas is now open and accepting papers.
9. Using Kalman filtering to estimate R.
10. “Wash Your Hands,” Roaring Lion, Trinidad calypso.
Escape from New York
We look at demographic mobility responses to Covid in NYC using mobile phone GPS, finding – wealthy flee the city – different sheltering response among demographic groups in the city – helps account for disparities in health outcomes
That is from new research by Arpit Gupta, full paper here. And:
Searches for moving to NYC suburbs are up almost 250% compared to the same period in 2019.
Story here. Of course maybe those are the same people who in 2016 promised to move to Canada.
Immigration will be largely shut down for some time to come
That is the topic of my Bloomberg column, here is one bit:
Whether or not that reaction is rational, it is easy to imagine the public being fearful about the potential of immigration to contribute to a pandemic resurgence. It does seem that regions able to restrict in-migration relatively easily — such as New Zealand, Iceland and Hawaii — have had less severe Covid-19 problems. New York City, which takes in people from around the world, has had America’s most severe outbreak. And the recent appearance of a second wave of Covid-19 in Singapore has been connected to ongoing migration there.
I have never thought the federal government would build Trump’s wall on the U.S.-Mexico border. But now I wonder whether it may well happen — perhaps in electronic form.
And:
In addition to these effects, many migrants currently living in the U.S. might go back home. Say you are from southern India and live in Atlanta, and typically your parents or grandparents come to visit once a year. That is now much harder for them to do, and will be for the foreseeable future. India also might make it more difficult for Indian-Americans to return to visit their relatives, perhaps demanding an immunity certificate for entry. Many of these current migrants will end up returning home to live in their native countries.
But not all immigration will vanish:
n spite of all those possible restrictions, the pandemic itself may offer new reasons to embrace some forms of migration, if only to help Western economies continue to function. Many jobs are now more dangerous than before, because they involve face-to-face contact and time spent in enclosed spaces. Such professions as nursing and dental assistants, for example, already attracted many immigrants even before Covid-19. Working on farms may yet become more perilous if the virus strikes farm worker communities. New migrants from poorer countries will be willing to take on these risks — for extra income of course — but most U.S. citizens won’t go near them.
The reality may be an uptick in some forms of migration, mostly for relatively hazardous jobs.
In any case, the immigration debate two or three years from now will seem virtually unrecognizable, compared to what we had been expecting.
California estimate of the day
Using daily state-level coronavirus data and a synthetic control research design, we find that California’s statewide SIPO reduced COVID-19 cases by 152,443 to 230,113 and COVID-19 deaths by 1,940 to 4,951 during the first three weeks following its enactment. Conservative back of the envelope calculations suggest that there were approximately 2 to 4 job losses per coronavirus case averted and 108 to 275 jobs losses per life saved during this short-run post-treatment period.
That is from a new NBER working paper by Friedson, McNichols, Sabia, and Dave. As you probably know from now, I am reluctant to take “how well have we done with death so far” estimates at face value, but there you go. You now have your California estimate of the day.
Tuesday assorted links
1. Estimating and classifying the labor market hit.
2. Watching Tucker Carlson is safer than watching Hannity.
3. Better governance is correlated with slower policy responses to Covid-19.
4. Tabulated data on asymptomatic infection rates.
5. Singapore getting much worse again (NYT). And are hospitalizations decelerating in Sweden?
6. How the Belgians count Covid-19 deaths. I call that one big nursing home fail, and I don’t just mean for Belgium.
7. Research paper with predictions for Stockholm.
8. Claims about heterogeneous strains — please use with extreme caution, I do not consider this verified, though it could be very important if true.
9. Study of France — only about 6% infected, other numbers too.
10. Covid-related deregulation on its way?
11. The Amish health care system.
12. The U.S. as insurer to the rest of the world during crises.
The Japanese coronavirus story
You may recall that some time ago MR posted an anonymous account of how the coronavirus problem actually was much worse in Japan than was being admitted by the Japanese government and broader establishment. It is now clear that this Cassandra was correct.
I can now reveal to you the full story of that posting behind the first link, including my role in it. Here is the opening excerpt:
By March 22nd, I strongly suspected there was a widespread coronavirus epidemic in Japan. This was not widely believed at the time. I, working with others, conducted an independent research project. By March 25th we had sufficient certainty to act. We projected that the default course of the epidemic would lead to a public health crisis.
We attempted to disseminate the results to appropriate parties, out of a sense of civic duty. We initially did this privately attached to our identities and publicly but anonymously to maximize the likelihood of being effective and minimize risks to the response effort and to the team. We were successful in accelerating the work of others.
The situation is, as of this writing, still very serious. In retrospect, our pre-registered results were largely correct. I am coming forward with them because the methods we used, and the fact that they arrived at a result correct enough to act upon prior to formal confirmation, may accelerate future work and future responses here and elsewhere.
I am an American. I speak Japanese and live in Tokyo. I have spent my entire adult life in Japan. I have no medical nor epidemiology background. My professional background is as a software engineer and entrepreneur. I presently work in technology. This project was on my own initiative and in my personal capacity.
I am honored to have played a modest role in this story, though full credit goes elsewhere, do read the whole thing. Hashing plays a key role in the longer narrative.