Category: Uncategorized

Assorted links

by  Tyler Cowen

1. The euro crisis in Lego form, as seen by a nine-year-old.

2. There is no great stagnation.  And John Hagel reviews TGS; he does not want the mindset to spread.  And who is falling out of the middle class.

3. Misophonia.

4. The new Felix Salmon aggregation project.

5. The export of green timothy hay the culture that is Japan: “High quality timothy is whatever the customer says it is!”

Barsky and Summers and Krugman on Gibson’s Paradox

by  Tyler Cowen

From Barsky and Summers:

This paper contributes a new element to the explanations of the Gibson paradox, the puzzling correlation between interest rates and the price level seen during the gold-standard period. A shock that raises the underlying real rate of return in the economy reduces the equilibrium relative price of gold and, with the nominal price of gold pegged by the authorities, must raise the price level. The mechanism involves the allocation of gold between monetary and nonmonetary uses. The authors’ explanation helps to resolve some important anomalies in previous work and is supported by empirical evidence along a number of dimensions.

The paper is here.  Paul Krugman offers a very good explanation of a related hypothesis.  It’s one useful way of thinking about why the price of gold is rising in a deflationary time (without requiring one to deny the potential relevance of other factors).  The presentation also explains the behavior of gold prices in a TGS era, namely with low real rates of return.

I very much enjoy this puzzle.  It requires a working knowledge of many different parts of economics, not just a few.

Assorted links

by  Tyler Cowen

1. Switzerland had a twenty standard deviations event.  And here is Scott on the Swiss unlimited pledge, a real test of credibility theories.

2. Fairness games, at the cost of $8,000 or more.

3. Angry windshield notes.

4. David Leonhardt on infrastructure, circa 2008.

5. Where are the pure humans?

6. Irish debt crisis may be less severe than estimated, the paper is here, Irish commentary here, some pointed reservations but still Irish austerity continues to outperform the expectations of its critics across a variety of data points.

*Deng Xiaoping and the Transformation of China*

by  Tyler Cowen in

That is the new book by Ezra F. Vogel, excerpt:

Deng in 1978 had an equally dramatic effect on the Japanese people.  In the 2,200 years of contact between China and its island neighbor, Deng was the first Chinese leader to set foot in Japan.  He was also the first to meet the Emperor of Japan.

So far the main lesson I am drawing from this book is how provincial the Chinese leaders were circa 1978, but also how willing they were to absorb evidence and change their minds, especially following visits to Western Europe and Singapore, both of which had significant impacts on them.  I am also learning that the 1979 war with Vietnam was a more significant event than I had thought.

The publication date of the book is listed as 26 September, but Amazon shipped my copy earlier this week.

Where is the Card and Krueger paper at?

by  Tyler Cowen in

Has it held up better than many people believe?  Here is a good and sure to prove controversial overview from Arindrajit Dube.  Excerpt:

Subsequent research that built on Myth and Measurement has found that while the sizeable positive effects in some of their specifications were likely due to chance, the lack of job loss was very much a robust finding. Card and Krueger’s own subsequent analysis in 2000 using Unemployment Insurance filings by firms (which was closer to the universe of firms in the two states than their original sample) over a longer period already moved towards this view, as the employment elasticities, while still positive, were smaller in magnitude and not statistically distinguishable from zero.(1) My own work with William Lester and Michael Reich (2010) demonstrated this point by comparing contiguous counties across state borders and pooling over 64 different border segments with minimum wage differences over a 17-year period (1990-2006).

There is also a lengthy discussion of whether Neumark and Wascher overturned the central Card and Krueger result.  Read the whole post.

Addendum: Tim Worstall comments.  Matt Yglesias comments.

Robin Hanson is forming a forecasting team, Kling and Schulz have a new edition

by  Tyler Cowen in

In response to the Philip Tetlock forecasting challenge, Robin is responding:

Today I can announce that GMU hosts one of the five teams, please join us! Active participants will earn $50 a month, for about two hours of forecasting work. You can sign up here, and start forecasting as soon as you are accepted.

There is more detail at the link.  Let’s see if he turns away the zero marginal product workers.

There is also a new paperback edition out of the excellent Arnold Kling and Nick Schulz book out, now entitled Invisible Wealth: The Hidden Story of How Markets Work.  The book has new forecasts…

Assorted links

by  Tyler Cowen

1. An oldie but goodie: let’s not forget Christina Romer’s classic paper on spurious volatility in the historical data (pdf).  This is with reference to recent writings from Eichengreen and Roubini.  I don’t favor a gold standard but criticisms should start with this paper.

2. Critical review of the new MLK memorial.

3. What do anesthetics do?

4. Predictions by Pettis, mostly correct I think, in any case worth a read.

5. Some of Alan Krueger’s academic work.