Category: Uncategorized
Assorted links
*How U.S. Economists Won World War II*
That is the subtitle, the title is Keep from All Thoughtful Men and the author is Jim Lacey. Excerpt:
Just fifty years before World War II there had been only one individual in the government with the title of economist, and that person was listed as an “economic ornithologist.” World War I saw a few trained economists brought to Washington in policy positions, but their influence remained constrained to providing advice on price administration and shipping. They had little impact on mobilization planning. It was the Great Depression that brought economists into Washington policy circles, first by the hundreds and then by the thousands. By the time World War II began, the federal government employed an estimated five thousand economists.
David Warsh reviews the book here. I found some parts boring, some parts very valuable, overall worthwhile. Contra Higgs, Lacey argues that wartime mobilization proceeded with a surprisingly low sacrifice from U.S. consumers, with most of the impact coming on postponed purchases of durables.
Here is an essay (pdf) on early pioneers of economic ornithology. I’ve never heard of a field exam in that area.
The Bitcoin crash
The Bitcoin community faced another crisis on Sunday afternoon as the price of the currency on the most popular exchange, Mt.Gox, fell from $17 to pennies in a matter of minutes. Trading was quickly suspended and visitors to the home page were redirected to a statement blaming the crash on a compromised user account. Mt.Gox’s Mark Karpeles said that the exchange would be taken offline to give administrators time to roll back the suspect transactions.
The article is here, a video is here, more articles here, with general background on Bitcoin volatility here. The pointer comes from Ken Haskell.
File under Prophets of the Marginal Revolution.
Assorted links
1. New site for tracking economic indicators.
2. Claims about chocolate eating behavior, via Eric Barker.
5. The culture that is Japan there is no Great Stagnation (“Initial tests have people saying it even tastes like beef”….maybe they should consider sale at a discount.
Sorted Turkish links
1. What’s up, and a Business Week survey.
2. Brain surgery in Turkey 5000 years ago.
3. Turkish problems with trade deficits and credit creation.
4. Why Turkey is backsliding on women’s rights.
5. What is the future of press freedom?
One possible take on the current situation is that Turkish liberties are eroding in a dangerous manner and the country will slide into some version of an Islamic state, through not-fully-democratic means yet sanctioned by the ballot box. A second take is that the liberties were not quite ever there in the first place, and Turkish society is moving to a more coherent and more sustainable equilibrium of state, religion, and citizen. Islam in Turkey is finding a way toward a more comfortable public space, albeit with bumps and mistakes along the way, and lasting radical secularization was never possible anyway. The rising middle class and Turkey’s historic uniqueness, and separation from the Persian and Arab worlds, will keep it on a “good enough” track. I incline toward the second and more optimistic view.
Central Turkey is more economically advanced than I had expected. It is downright nice here, and standards of living are reasonably high. Imagine the per capita income of Mexico or Brazil but with greater equality and stronger social cohesion. Food is even better than in Istanbul, namely it is spicier and has fresher raw ingredients.
Turkey will prove to be an important test case for whether a rapid influx of foreign capital can be done in a stable manner. It’s funny how a lot of the same economists who distrust a rapid capital influx in an international development context (“the hot money comes and goes”) are entirely happy to trust a rapid influx of capital into U.S. Treasury securities.
Assorted links
Symphony orchestras and sectoral shifts
Before the financial crisis, symphony orchestras had considerably more financial support than they do today. We now observe the Philadelphia Orchestra, one of America’s most classic musical institutions, dealing with issues related to bankruptcy. Other orchestras are on the verge on folding or at least scaling back their season’s programs.
The initial negative shock of the crisis, among its other effects, caused donors and potential donors to see that support for these projects was weaker than they thought. Many of these donors are now less than keen to keep pouring money into losing endeavors. An unraveling process has set in. It’s not just the negative wealth effect, but new information has been revealed about popularity and sustainability of the underlying venture. Neither monetary nor fiscal stimulus will prove any kind of easy cure for these institutions or, potentially, for these jobs.
There is a well-known literature in finance about how trading, combined with the possibility of sudden price dips, causes market participants to learn the shape of the market demand curve and thus revalue the appropriate overall level of prices. The mere act of trading can generate market volatility. This kind of insight is not yet sufficiently appreciated in macroeconomics. The financial crisis caused us to see that many market institutions were on shakier ground than we had thought.
You will note, once again, that this structural problem — like so many others — does not imply excess demand for labor in any sector. Why do I keep reading literally hundreds of blog posts which conceive of structural labor market problems only in terms of “‘excess supply of labor in one market, excess demand for labor in another.” That’s a simple, unforced error.
File under: Recalculation arguments for Arnold Kling. In fact, Arnold is thinking along very similar lines:
One way to view the past few years is that the financial crisis of September 2008 sent a signal to firms that had been holding on to old, costly production methods that now would be a good time to try out newer, cheaper approaches. So we had a clustering of this sort of restructuring.
Richard Bury spam markets in everything “of making books there is no end”
From Slashdot:
“Make it easy to self-publish books and the spammers will be right along too. Amazon’s Kindle marketplace has been deluged by low-quality ‘books’ selling for 99 cents each. ‘[Thousands of ebooks published each month] are built using something known as Private Label Rights, or PLR content, which is information that can be bought very cheaply online then reformatted into a digital book. These ebooks are listed for sale – often at 99 cents – alongside more traditional books on Amazon’s website, forcing readers to plow through many more titles to find what they want. Aspiring spammers can even buy a DVD box set called Autopilot Kindle Cash that claims to teach people how to publish 10 to 20 new Kindle books a day without writing a word.'”
The link is here, hat tip to Michael Rosenwald, his piece on internet advertising is here.
Assorted links
1. Some guy who reads a lot of books.
2. How to jam radio-detonated bombs, good article.
From a reader
One point on your post on U.S. money market funds’ ownership of European bank paper: much of what the U.S. money
market funds own is paper issued by the U.S. domiciled subsidiaries of those banks (a partiallist of DB’s: http://annualreport.deutsche-bank.com/2010/ar/notes/additionalnotes/38subsidiaries.html). This is according to the CEO of Federated Investments (one of the largest operators of MM funds), speaking at the KBW investment conference last week. Obviously, the turmoil in Europe isn’t helpful to these subs, but, as they have their own U.S.-domiciled assets backing them, they carry considerably less risk than parents do.
The initial post was here.
Assorted Links
1. Justin Wolfers makes Americans fat.
2. Prison is safer for black males than being on the streets.
3. Phagocytosis and Benny Hill. Youtube doubler is fun.
4. The Arty Bollocks Generator. I want one of these for statements of teaching philosophy.
Assorted links
1. Price collapse for Japanese watermelon, down to $4,000.
2. In many U.S. counties, life expectancy for women is declining.
4. UFM in Guatemala.
6. Meandering but interesting blog post, culminating in a discussion of “peak attention” and Coasean growth.
From the comments
Albert Ling writes:
How about this: Amy Chua’s method is better in raising successful kids career-wise, at the expense of emotional attachment, family warmth, etc. It’s a trade-off. If you envision your child’s future life to be of economic hardship and misery, maybe it’s a GOOD trade-off (as evidenced by the stricter methods of parenting on poorer societies, and also in the past when being poor really influenced your happiness).
If you already earn more than USD 25,000$ a year (which is the threshold after which income stops correlating positively with happiness), then it’s probably better to be a B.Caplan-style parent. (if your goal is to maximize your child’s total future happiness).
I think the answer is that simple.
Is information technology a general purpose technology?
Here is a 2006 paper by Susanto Basu and John Fernald, relevant to some current debates:
Many people point to information and communications technology (ICT) as the key for understanding the acceleration in productivity in the United States since the mid-1990s. Stories of ICT as a ‘general purpose technology’ suggest that measured TFP should rise in ICT-using sectors (reflecting either unobserved accumulation of intangible organizational capital; spillovers; or both), but with a long lag. Contemporaneously, however, investments in ICT may be associated with lower TFP as resources are diverted to reorganization and learning. We find that U.S. industry results are consistent with GPT stories: the acceleration after the mid-1990s was broadbased—located primarily in ICT-using industries rather than ICT-producing industries. Furthermore, industry TFP accelerations in the 2000s are positively correlated with (appropriately weighted) industry ICT capital growth in the 1990s. Indeed, as GPT stories would suggest, after controlling for past ICT investment, industry TFP accelerations are negatively correlated with increases in ICT usage in the 2000s.
This is further evidence for the view that we are in the preparatory stages of a longer-run boom, that many of the gains have yet to come, and the productivity-enhancing impact of IT so far has been overstated.
