Category: Uncategorized
Tuesday assorted links
The rise of China as a global innovator in pharma (incentives matter)
This paper examines China’s transition from pharmaceutical “free rider” to global innovator over the last decade. In 2010, China accounted for less than 8% of global clinical trials; by 2020, it had surpassed the US in annual registered clinical trial volume. To study this transformation, we compile a comprehensive, synchronized database spanning the pharmaceutical drug development supply chain, covering scientific publications, clinical trials, drug development milestones for China, the U.S., and Europe, alongside drug sales and government policies over the same period. We provide strong evidence that China’s rise was primarily driven by the National Reimbursement Drug List (NRDL) reform, which dramatically expanded the effective market size for innovative drugs. We document a sharp rise in both the quantity (86% increase) and novelty of drug trials post reform, with growth concentrated in reform-exposed disease categories, first- or best-in-class drugs, and among domestic firms. A decomposition exercise reveals that the NRDL reform accounts for 43% of the growth in oncology trial activity, nearly doubling the combined contribution of upstream knowledge accumulation and talent flows (24%), while other government policies play a minor role. Finally, dynamic gains from induced innovation exceed the reform’s static gains in consumer access to innovative drugs by threefold, underscoring the importance of accounting for the reform’s long-run effects on innovation incentives in addition to near-term improvements in drug affordability.
That is from a new NBER working paper by
Monday assorted links
1. Arbitrage?
3. Minimum wage hikes boost restaurant food prices.
5. Martin Heidegger clip. Not impressive to me.
6. Canvas unrolls AI teaching agent.
7. “This essay has tried to frame what we need to build around AI.“
When will “the research paper” disappear in economics?
Soon enough you will be able to take any published research paper and tweak it, or improve it, any way you want. Just apply a dose of AI.
Using Refine, you already can judge the quality of all past papers, once you get them in uploadable form. We now can rewrite the entire history of modern economics with the mere investment of tokens. Which papers in the 1993 AER were really the good ones? Which are simply false and do not replicate?
Refine, or some service like it, will only get better, and cheaper.
Do we even need the AER any more to certify which are the best papers? Just ask the AIs, including about influence not just quality.
Why not write a program, or have an AI write it for you, that will take your favorite papers and improve them, and change their evaluations over time, as new results come in? Of course people will do this, at least to the extent they care. These papers will keep on morphing.
Will economics become a branch of software engineering? There are important papers in software engineering, but very often the most important advances are embodied in actual software, AI included.
Will the future advances in economics come from producing evaluative systems and producing systems, rather than papers?
What if you submit to a journal a data set and some code? Who needs “the paper” per se? Just issue some commands to the “data set plus code” and get the paper you want. How about “I am Tyler Cowen, what is it you think I will find interesting in this data set?”
Or publish a method for simulating human behavior, to run AI-simulated experimental economics, a’la Horton and Manning? Publish “the box,” and do not worry so much about the individual paper.
Will highly productive researchers, who publish a lot of papers, become far less valuable? The individual paper no longer seems scarce, or will not be in another year or two.
Give tenure to people who build capabilities and who build “boxes”?
How about an economics Nobel Prize for Anthropic and Open AI?
I thank Alex T. for useful discussions on this point.
Sunday assorted links
Some more slow take-off, driven by start-ups
So far, however, the predictions that the mass automation of coding will leave outsourcing firms obsolete seem overblown. Their clients often hope AI will create huge productivity gains by, for example, using the technology to quickly and cheaply build a new internal HR tool. But such improvements in productivity are only possible in “greenfield” environments with “clean architecture”, argues Atul Soneja, chief operating officer at Tech Mahindra, an IT firm. Deploying AI in “brownfield” environments—with legacy code, a lack of documentation and multiple systems that must all continue to operate in real time—is far trickier. In the end, clients often realise that their AI dreams were too ambitious and end up hiring as many outsourced coders as before, say executives.
What is more, the AI boom may present an opportunity for the consultancy arms of India’s outsourcers. They argue that they can now fulfil more of a strategic role for their clients: getting the most out of AI requires understanding all of the context around the problem, something that consultants with experience across businesses can offer. Nandan Nilekani, one of the founders of Infosys, reckons that such services related to AI could be worth $300bn-400bn by 2030.
Here is more from The Economist.
How much more will oil prices have to go up?
[Robin] Brooks: So let me give you two ways of thinking about what’s going on, both of them are really about trying to think about what kind of risk premia need to be priced in oil, given all the massive uncertainty that we have. The first way that I’ve been thinking about this is—I spent a lot of time working on Ukraine and Russia and sanctions after the invasion four years ago. Russia produces about 10 million barrels of oil per day. It exports, of that, about 7 million barrels of oil per day. The Strait of Hormuz has transit of about 20 million barrels of oil per day. So the Strait of Hormuz is roughly 3 times what Russia could have been. And remember, in the days right after the invasion, markets were really worried about Russian oil being embargoed. There was a whole discussion about that. So the rise in Brent, which is the global benchmark oil price, is about 70% from two weeks before the outbreak of war in the Gulf to now. On a similar time horizon back in ‘22, it was 20%. So we have roughly a 3X in terms of the rise in oil prices. So when people come to me and say “$150 or $200 for oil prices” and we’re currently at $115, roughly, then I think, “why, what’s the rationale?”
The second perspective is on the supply shortfall that we have and using price elasticity of demand to think about: “how much does the price need to rise if demand has to do all the adjusting in the short term,” which it does. And “what kind of numbers do we come up with if we make reasonable assumptions?” So I put out a Substack note today—thank you so much for reading my Substack, I’m incredibly flattered and stressed as a result— if you assume that the Strait of Hormuz goes from 20 million barrels of oil per day to 10, it’s basically oil from the Gulf is running at half of its normal capacity, and you assume a price elasticity sort of in the middle of the range that the academic literature has, which is about 0.15, then you get that this would generate a rise in oil prices of between 60 and 70%. So again, if I think about what we’re pricing in markets now versus what basic back-of-the-envelope-calculations tell you, then I think we’re roughly in the right ballpark.
That is from his interview with Paul Krugman. Via Luis Garicano.
Saturday assorted links
Canada facts of the decade
From 2014 to 2024, Canada’s real GDP per capita adjusted for purchasing power parity grew by just 3.2 percent in total, an anemic 0.4 percent per year on average, and the third lowest among 38 advanced nations. Over the same period, the United States posted 20.2 percent total growth (1.9 percent annually), and the OECD average reached 15.3 percent (1.4 percent annually). The measurement shortcomings cannot explain five-to six-fold differences in growth rates.
And:
The analysis estimates that a substantial share of Canadians who would rank among top earners in Canada have emigrated to the United States—roughly 40 percent of potential top 1 percent earners and 30 to 50 percent of the next nine percentiles. Canadian-born individuals in the United States are more educated than native-born Americans, earn substantially more, and cluster disproportionately in top income deciles.
Canada is effectively exporting its inequality to the U.S. The brain drain simultaneously lowers our average income while raising American income, accounting for a significant share of the persistent GDP gap.
Here is the full piece.
Those new service sector jobs?
An AI memory startup called Memvid is offering $800 for a one-day, eight-hour shift for one candidate to “bully” AI chatbots by telling them what to do on camera.
Business Insider reported this week that Memvid wants someone to spend eight hours testing and critiquing the memory of popular AI chatbots, effectively paying $100 an hour for what they have branded as a “professional AI bully” role. The worker’s job is to examine where chatbots lose track of details, forget context or misrepresent data, and then feed those findings back to Memvid so the startup can improve its products.
“You’ll spend a full 8-hour day interacting with leading AI chatbots — and your only job is to be brutally honest about how frustrating they are,” the job listing reads.
The draw is that the role doesn’t require a computer science background, AI credentials or any kind of work experience. “No prior AI bullying experience required — we all start somewhere,” the listing reads.
The requirements are deeply personal. The first requirement is an “extensive personal history of being let down by technology,” and the second desired trait is “the patience to ask a chatbot the same question four times (and the rage when it still gets it wrong).”
Here is the full article, via the excellent Samir Varma.
Friday assorted links
Consumers vs. mates as a source of selection pressure
Evolutionary biology is one attempt to explain the nature of living beings. In that framework there is a difference between individuals and genes. If a practice increases the chance that genes will be passed along, it may evolve and be passed along, whether or not it serves either individual or collective self-interest.
To give a simple example, some women may prefer “cads.” Those men, by definition, will sleep around, but possibly their sons will sleep around too. The woman’s genes may thus spread more widely, and women who prefer cads may not disappear from the gene pool, even though the cads are bad for them.
You might ask whether corresponding mechanisms apply to the evolution of AI models. If I prefer an OAI model to DeepSeek for instance, that will help to spread OAI models through the AI population. OAI will have more revenue, and it will produce more output of what is succeeding in the market. Furthermore my choice of model may influence others to do the same, and it may help create and finance surrounding infrastructure for that model.
Will I buy the next generation of OAI models? Well yes, if the first one pleased me. The model “reproduces” and sustains itself if I, as a consumer, am happy with it. One obvious incentive is toward usefulness, another is toward sycophancy. We already see these features realized in the data. There is nothing comparable, however, to the “cads incentive” in human life.
One potential problem comes if individuals are not the only potential buyers. Let us say the military also purchases AI models. The motives of the military may be complex, but at the very least “wanting to kill people” (whether justly or not) is on the list of possible uses. Models effective for this end thus will be funded and encouraged.
My model of the military is that, above and beyond efficacy, they value “obedience” and “following orders” to an extreme degree, including in their AI models. There will thus be evolutionary pressures for those features to evolve in the AI models of the military.
To be sure, not all orders are good ones. But in this case the real risk is from evil humans, or deeply mistaken humans, not from the tendencies of the AI models themselves.
So my view is that the selection pressures for AI models are relatively benign, noting this major caveat about how evil humans may develop and use them.
If the biggest risk is from the military models, it might be good for the consumer sector of AI models to grow all the more, as a relatively benevolent counterweight.
Are financial sectors AI models going to evolve more like the consumer models or the military models?
Here are some related remarks from Maarten Boudry, and I also thank an exchange with Zohar Atkins.
Thursday assorted links
1. Ideological trends in academic scholarship.
2. Prediction market for the John Bates Clark award.
3. Show Me The Model. “Give it a URL or paste some plain text, and the tool flags hidden assumptions, internal inconsistencies, and other problem areas, and tells you how a real economist would think through the issue.”
4. “I built Frontier Graph: an open-source tool to explore open questions in economics, drawing on 240K papers across 300 journals.” And here.
6. India tests whether AI can stop trains from hitting elephants.
My excellent Conversation with Harvey Mansfield
Here is the audio, video, and transcript. Here is part of the episode summary:
Tyler and Harvey discuss how Machiavelli’s concept of fact was brand new, why his longest chapter is a how-to guide for conspiracy, whether America’s 20th-century wars refute the conspiratorial worldview, Trump as a Shakespearean vulgarian who is in some ways more democratic than the rest of us, why Bronze Age Pervert should not be taken as a model for Straussianism, the time he tried to introduce Nietzsche to Quine, why Rawls needed more Locke, what it was like to hear Churchill speak at Margate in 1953, whether great books are still being written, how his students have and haven’t changed over 61 years of teaching, the eclipse rather than decline of manliness, and what Aristotle got right about old age and much more.
Excerpt:
COWEN: From a Straussian perspective, where’s the role for the skills of a good analytic philosopher? How does that fit into Straussianism? I’ve never quite understood that. They seem to be very separate approaches, at least sociologically.
MANSFIELD: Analytic philosophers look for arguments and isolate them. Strauss looks for arguments and puts them in the context of a dialogue or the implicit dialogue. Instead of counting up one, two, three, four meanings of a word, as analytic philosophers do, he says, why is this argument appropriate for this audience and in this text? Why is it put where it was and not earlier or later?
Strauss treats an argument as if it were in a play, which has a plot and a background and a context, whereas analytic philosophy tries to withdraw the argument from where it was in Plato to see what would we think of it today and what other arguments can be said against it without really wanting to choose which is the truth.
COWEN: Are they complements or substitutes, the analytic approach and the Straussian approach?
MANSFIELD: I wouldn’t say complements, no. Strauss’s approach is to look at the context of an argument rather than to take it out of its context. To take it out of its context means to deprive it of the story that it represents. Analytic philosophy takes arguments out of their context and arranges them in an array. It then tries to compare those abstracted arguments.
Strauss doesn’t try to abstract, but he looks to the context. The context is always something doubtful. Every Platonic dialogue leaves something out. The Republic, for example, doesn’t tell you about what people love instead of how people defend things. Since that’s the case, every argument in such a dialogue is intentionally a bad argument. It’s meant for a particular person, and it’s set to him.
The analytic philosopher doesn’t understand that arguments, especially in a Platonic dialogue, can deliberately be inferior. It easily or too easily refutes the argument which you are supposed to take out of a Platonic dialogue and understand for yourself. Socrates always speaks down to people. He is better than his interlocutors. What you, as an observer or reader, are supposed to do is to take the argument that’s going down, that’s intended for somebody who doesn’t understand very well, and raise it to the level of the argument that Socrates would want to accept.
So to the extent that all great books have the character of this downward shift, all great books have the character of speaking down to someone and presenting truth in an inferior but still attractive way. The reader has to take that shift in view and raise it to the level that the author had. What I’m describing is irony. What distinguishes analytic philosophy from Strauss is the lack of irony in analytic philosophy. Philosophy must always take account of nonphilosophy or budding philosophers and not simply speak straight out and give a flat statement of what you think is true.
To go back to Rawls, Rawls based his philosophy on what he called public reason, which meant that the reason that convinces Rawls is no different from the reason that he gives out to the public. Whereas Strauss said reason is never public or universal in this way because it has to take account of the character of the audience, which is usually less reasonable than the author.
And yes he does tell us what Straussianism means and how to learn to be a Straussian. From his discussion you will see rather obviously that I am not one. Overall, I found this dialogue to be the most useful source I have found for figuring out how Straussianism fits into other things, such as analytics philosophy, historical reading of texts, and empirical social science.
Perhaps the exchange is a little slow to start, but otherwise fascinating throughout. I am also happy to recommend Harvey’s recent book The Rise and Fall of Rational Control: The History of Modern Political Philosophy.
Wednesday assorted links
1. Congestion pricing for WDC? It is good to see a move away from the selective invocation of economic reasoning, and recognition that some degree of congestion does not justify every tariff.
2. Zimbabwean Uber drivers in Cape Town.
3. Northern Mariana Islands fact of the day.
4. Advances in asteroid protection? (NYT) And Jason Furman on today’s economy (NYT).
5. Benefits of a malaria vaccine.
6. New podcast on longevity biotech.