Category: Uncategorized

We study the demand for safety and liquidity in the crypto ecosystem. We do so under a framework in which a representative investor allocates liquidity across stablecoin deposits in lending pools and traditional safe assets (e.g., MMF shares). Our model delivers three main predictions: (i) the stablecoin deposit premium co-moves with the Treasury premium when investors value the safety and liquidity services of stablecoins; (ii) increases in Treasury supply reduce the stablecoin deposit premium; and (iii) drops in the perceived safety and liquidity of stablecoin deposits (e.g., due to de-pegs or hacker attacks) reduce their premium. Using granular data from hundreds of DeFi pools spanning multiple protocols, tokens, and blockchains, we find evidence supporting these predictions. Investors treat stablecoin deposits as money-like instruments that are borderless and permissionless, yet as fragile as other forms of privately produced safe assets.

That is from a new NBER working paper by Murillo Campello, Angela Gallo, Lira Mota & Tammaro Terracciano.

Monday assorted links

by Tyler Cowen August 3, 2026 at 11:43 am

1. A new simulation argument?

2. PC on aesthetics.

3. An interview with Yiyang Zhuge.

4. The truth and aesthetics of going to church?

5. Some forms of math cope? And a different view.

6. At the demolition derby.

On infinite ethics

by Tyler Cowen August 3, 2026 at 3:11 am in

Philosophy

Infinite numbers have long troubled utilitarian ethicists: if the universe is boundless, then there is infinite positive utility and infinite negative utility, and we can’t even define our current state, let alone affect it. Oxford philosopher Toby Ord proposes a solution: use hyperreal numbers, a mathematical construct in which infinite sums behave more like finite ones (for example, the sum of infinitely many twos is twice as big as the sum of infinitely many ones). As with so many philosophical ideas, this solves some existing problems while creating some new ones (pinpointing some hyperreals requires choosing something called an “ultrafilter”, but this choice is underdetermined). Still, Elias Schmied calls this a real philosophical advance, of the sort which comes along only rarely and makes genuine headway into a previously-hopeless-seeming problem. I’m just surprised there’s a way of thinking about infinities under which they behave logically. Why didn’t we start with this one, instead of being told that infinity + infinity = infinity and we should just accept it? Claude tries to answer my questions.

That is from Scott Alexander (many more links at the link, many on AI safety).

Rome’s Age of Revolution

by Tyler Cowen August 3, 2026 at 12:33 am in

The author is Tim Whitmarsh and the subtitle is Augustus, Empire and the Making of Christianity. This is the most important book on the history of Christianity I have read in a long time, and it is also an important work in Roman history. Yet also fun and extremely readable. Excerpt:

The story I have told so far has emphasised the fit between Christianity and the Greek world of the early Roman Empire; I have given relatively little space to conflict. That has been quite deliberate. One of the commonest misconceptions about the early Roman Empire is that it was a time of ceaseless and inevitable suppression of virtuous Christians by a brutal governmental machine. This is a myth that has roots in antiquity itself, and has been pumped systematically into western popular culture since the nineteenth centuury. It is a remarkably durable myth, because it is both emotionally seductive and ideologically powerful. The idea that virtuous Christians were engaged in endless conflict with the Roman state makes for great narrative. But the reality is more banal: most Christians were fully integrated into Roman society, and no more or less harassed than anyone else…

My argument has been, rather, that Christianity could not have come into being in anything like the form we know it without the revolutionary impact of Augustus’ political reforms. It was this seismic change that fundamentally transformed Mediterranean thought…The most dramatic effect of the Augustan swirl was Christianity itself: a breakaway Judaean sect led by brilliant entrepreneurs who understood the opportunities offered by the new political dispensation, and rapidly reshaped their ideas to suit new audiences.

Definitely recommended, and not only to Christians and Romans.

Sunday assorted links

by Tyler Cowen August 2, 2026 at 11:58 am

1. The inverseminar, someone else presents your paper.

2. The rise of million-dollar companies with just one employee (WSJ).

3. The political party itself is a big driver of polarization.

4. Gita Gopinath is making sense.

5. GPT Pro (not Astra) on what “Astra” means.

6. David Perell art history game.

7. New model of “Racing to Ruin.”

On the Acemoglu-Autor et.al. fertility result

by Tyler Cowen August 2, 2026 at 10:16 am in

Economics

Here is criticism from Revana Sharfuddin. Here is criticism from JFV.

Saturday assorted links

by Tyler Cowen August 1, 2026 at 12:21 pm

1. What do consultants get paid for?

2. Ugly architecture creates coalitions against development.

3. London is (modestly) degentrifying.

4. Is the “no forward guidance” approach failing? (FT)

5. Chinese interview with Christopher Nolan.

6. “social media use and school grades are unrelated for adolescents…meta-analytic evidence is not in support of dramatic claims relating social media use to mischief.” Link here.

More math breakthroughs from GPT models

by Tyler Cowen August 1, 2026 at 6:53 am in

The cost of generating the proofs for all 10 of these breakthroughs combined was under $2,000 at Sol API prices. We’re excited to see what scientists and researchers are able to create with our upcoming Astra models!

That is from Noam Brown, at the link you will find his list of the ten breakthroughs. Here are some views on the import of these.

Redefining Global Health in the 21st Century

by Tyler Cowen July 31, 2026 at 1:54 pm in

While donor-driven programs undoubtedly saved millions of lives, they also created unintended distortions in national health priorities. Many governments in sub-Saharan Africa and parts of Asia actually scaled back domestic health investments, as donor program filled key gaps in HIV/AIDS, maternal and child health, and infectious disease control. In some cases, domestic health budgets shrank in real terms, even as external funding increased. This phenomenon, often referred to as “fiscal substitution,” led to national health systems that were heavily donor-dependent, externally managed, and vulnerable to funding shocks. Notably, this reliance emerged despite countries pledged to allocate at least 15% of their national budgets to health. More than two decades later, only a handful has met this target.

That is from the new and useful book by Michael John Alastair Reid and Eric Paul Goosby. But $150 for a not so thick volume!? If the authors believe in aid, as they should, perhaps they could consider giving this book away for free rather than turning it over to Elsevier…?

Friday assorted links

by Tyler Cowen July 31, 2026 at 12:05 pm

1. Tokenizing the value from compute?

2. Will they ruin the look of Dulles airport?

3. Pathways into homelessness.

4. Defensible valuations for AI companies.

5. Further reasons why very rapid economic growth is very difficult to achieve.

6. Over 20,000 precolonial earthworks in the Southwest Amazonia.

An unprecedented weapon?

by Tyler Cowen July 31, 2026 at 3:03 am

I wonder if England had a “pause” movement back then:

Trebuchets reached the peak of their development in medieval times, probably the most famous example being Edward I’s massive machine, Warwolf. This terrifying device was over sixty feet (18 meters) high and was capable of throwing a three-hundred-pound (140-kilogram) rock several hundred yards, projecting some five hundred kilojoules of energy, a thousand times the power of Roman ballistas and five thousand times as powerful as a single person. Edward used it just once, in 1304 during his wars of conquest against the Scots, to attack Stirling Castle, the last stronghold of the Scottish armies. The defenders were so petrified by the prospect of the attack that they sued for peace before Warwolf could be used, but Edward refused to let them surrender until he had tested the machine; in four days it totally destroyed one of the castle’s curtain walls.

That is from the new and interesting The Powerful Primate: How Controlling Energy Enabled us to Build Civilization, by Roland Ennos.

The Anatomy of Cyber Risk

by Tyler Cowen July 30, 2026 at 2:06 pm

This paper uses computational linguistics to introduce a novel measure of firm-level cyber risk exposure based on the quarterly earnings calls of listed firms. Our measure covers more than 14,000 firms from over 90 countries between 2003 and 2025. The measure is validated using human auditors and a large language model. We show that cyber risk exposure affects stock returns and profits, is priced in the options market, predicts actual cyberattacks, and propagates from firm to sector level. Back-of-the-envelope estimates suggest that the global cost of cyber risk exposure is around $1 trillion per year.

That is from a recent paper by Rustam Jamilov, Hélène Rey, and Ahmed Tahoun, forthcoming in the Journal of Finance.

That the market prices cyber risk is a point we should not so readily forget. Is anyone arguing that recent market declines are due to higher perceived cyber risk? Does the distribution of these declines match that hypothesis? (Are we possibly seeing the opposite of what that hypothesis might predict, namely that those companies with the best potential defenses are suffering the most?) If the cyber risk cost per year had been about $1 trillion a year, what do we think it is now? Surely members of the rationality community will defer to the scientific methods of investigating these claims…