Category: Uncategorized

1. There is no Great Stagnation.

2. Via Chris F. Masse, Intrade on a Japanese nuclear accident, grade 5.

3. India fact of the day.

4. Olivier Blanchard’s remarks on macro (video), and comments from Arnold Kling.

5. Cults of personality.

Felix Salmon offers the case against donating money to Japan.  Read the whole thing, I don’t wish to quote it out of context.

For reasons which you can find outlined in my Discover Your Inner Economist, I am generally in sympathy with arguments like Felix’s, but not in this case.  I see a three special factors operating here:

1. The chance that your aid will be usefully deployed, and not lost to corruption, is much higher than average.

2. I believe this crisis will bring fundamental regime change to Japan (currently an underreported issue), rather than just altering the outcome of the next election.  America needs to signal its partnership with one of its most important allies.  You can help us do that.

3. Maybe you should give to a poorer country instead, but you probably won’t.  Odds are this will be an extra donation at the relevant margin.  Sorry to say, this disaster has no “close substitute.”

It may be out of date, but the starting point for any study of Japan is still Karel von Wolferen’s The Enigma of Japanese Power.   Definitely recommended.

1. John Currin and Rachel Feinstein have unusual politics, see the end of the article.

2. New neutrality results for the minimum wage.

3. Japan’s economic dilemma.

4. Hear different.

5. The compleat Will Wilkinson.

6. It turns out I read this blog post today.

1. Leijonhufvud interviews Hayek.

2. Displaced cargo containers, whole slide show here.

3. Tsunami early warning systems are effective.

4. What predicts longevity?

5. Beatles reviewed 1000 years from now (video).

6. Using the new MR search function to read about Daylight Savings Time.

I am learning how much I rely on the total familiarity of my immediate visual field.  I look at the blogging box for WordPress (which by the way isn’t that different from Typepad) and I am baffled.  In the writing process everything feels molasses slow, but I will get used to it.

We are still working out some bugs, but if you are having problems with the site please let us know in the comments.  Thanks!

Two different Tylers talk about the Tyranny of the Majority.

Earlier today:

I like Joel’s book but I think he is far too pessimistic about the prospects for diversity in the modern world.

But when discussing the different flavors of economics:

The very existence of heterodox economics brings benefits.  A
personal anecdote will suffice.  My first two publications were both in
heterodox journals: the Journal of Post Keynesian Economics and the (institutionalist) Review of Social Economy.
These articles lifted me into a top graduate school and financial aid
(can you imagine how confused the admissions committees were to see a
GMU undergrad with an apparently leftie publication record?).  I would
not have had comparable success at Econometrica.

This tale relates to the value of diversity more generally.  We will
miss much of the value of diversity by simply listing a bunch of
diverse elements and evaluating them one-by-one.  Diversity brings
broader benefits by allowing people to use niches as ladders to further
steps, frequently into the mainstream, or in my case into another
niche.  Diversity is also a form of insurance, and of course it doesn’t
always pay off.  Finally many excellent mainstream or sometimes even
right-wing economists started with an intense interest in social
justice, often gleaned from heterodox writings.  Vernon Smith was once
a socialist, and George Stigler was early on a trust-basher.

Yes the profession is getting better but we also are losing too much
diversity in terms of schools of thought.  The diminution of the
Austrian School, as an organized and intellectually alive phenomenon
seems to me a shame, even though I don’t believe in a unique Austrian
method.  Heterodoxies encourage the mainstream to be more philosophical
and more self-reflective.

Sometimes intellectual inefficiency is efficient, and my remarks about heterodox economics should be taken in this light.

The emphasis is mine.  As is the question: Isn’t the second Tyler describing the Tyranny of the Majority?  If so, what are the Waldfogel-ian fixed costs that are preventing all the different flavors of economics from flourishing?

A long story leading to an interesting question: I like to keep half an eye on heterodox economics.  A lot of this work raises interesting questions about the methodology that is my bread-and-butter.  I think of this as useful intellectual discipline: those who don’t school themselves in the limitations or ethical constraints of our frameworks, are likely to mis-use them.  And that got me thinking about a particular sub-group: The Post-Autistic Economics Movement.  Reading some (but not all) of the output of these heterodox economists can be quite illuminating.

But Post-Autistic?  Really?  What kind of insult is that? 

Two answers:

1. A pretty darn good insult.  Some of the agents in our models would in fact rightly be called autistic.  Those two words are pretty clever, and occasionally telling.
2. A terrible insult.  Post-Autistic" is designed to shock.  It is a statement more about the insulter than the insultee.  And as the subject of the insult changes, surely it loses its force.  Based on titles alone, which critical journal would you rather read: Feminist Economics, or the Post-Autistic Economics Review?  (Aside: Feminist Economics is, in my view, an excellent and underrated journal.)

But still, it got me thinking. What does an insult communicate?  At what point does an insult switch from being an insult to a statement about the insulter?  There must be a signaling story here, but I haven’t quite figured it out.  And if signaling yields a theory of insults, what would the characteristics of the optimal insult be?

So with some trepidation, let me say, comments are open.

A new book by my friend and Wharton colleague, Joel Waldfogel.  I’ve not read it yet, but based on our lunchtime conversations, I’m looking forward to it. (Hint: what does it take to get a free copy?)  Plus you’ve got to admire any book invoking the Rolling Stones in the title.

Joel has summarized the main arguments in his latest column at Slate.  Certainly a subtle and fascinating hypothesis about
how and when markets can fail us.  More commentary (from the Wharton writers) here.

An interesting (and emphatic) broadside from Richard Freeman.  And this is no Country Doctor making it up on the fly: Richard has long understood the Australian labour market better than just about any other economist, and certainly better anyone outside Australia.  (Dan Hamermesh is a close runner-up.)

My $0.02: This is what happens when conservative governments confuse decentralization and deregulation.

I love my Nintendo Wii… And while I already look like a dork swinging imaginary tennis rackets you can be assured of a whole new level of dorkiness now that Dance Dance Revolution is available for the Wii.

But I won’t be alone.  I was visiting the San Francisco Fed two weeks ago, and a Wii was hooked up to a movie screen in the cafeteria.  This time it was Wii tennis, but think about the possibilities: next time dancing economists?

Two remaining questions:

• Will Tyler be joining the fun?
• Will this hurt Betsey’s productivity?

Back when I worked in a factory as a welder, that phrase was music to my ears. At the very least, an extended smoke break was in the offing while the foreman argued with the inspector. But here I offer it as a suggestion for what to do with the World Bank. I know it is unlikely; large bureaucracies do not easily go away. The Bank for International Settlements was set up to handle war reparations and still lives on and the IMF has survived the collapse of the system it was set up to monitor (Bretton Woods).

There are several reasons for considering shutting down the WB. Its history of policy advice has not always been the greatest, and its IADB arm that makes market rate loans is not really needed in this era of global financing. And, when it comes to dispensing aid, its a monopolistic bureaucracy that seems at times more concerned with quantity than quality (David Ellerman has a nice piece on the WB that discusses its quasi monopoly status under the heading Structural Problem #1).  I believe there are viable alternative modes of disbursing aid. Consider for example organizations like Global Giving which collects vetted projects on its website. There donors can search for and contribute to specific projects. Decentralized, streamlined and "ownership" of the project seems clearly delineated.

So lets "shut ‘er down" and move on. But if we can’t not replace Wolfowitz (son of Wolfenson), lets at least do the right thing and replace him with this proud son of Oklahoma.