A free trade agreement for South Asia?

by  Tyler Cowen in

Are free trade agreements contagious?  The negotiations for TPP seem to be coming to a close, but there is the potential for a much more beneficial arrangement, namely for the subcontinent and thereabouts, can we toss in Ethiopia too?

India has said that all South Asian economies need to speedily work towards a free trade area within the region with a defined time-line, preferably 2020, as the first step towards achieving the joint vision of a South Asian Economic Union.

“I am confident that consensus can be achieved for a defined time-line for 100 per cent tariff liberalisation with special and differential treatment for Least Developed Countries (LDCs) and vulnerable economies,” Commerce & Industry Minister Nirmala Sitharaman said at the South Asia Economic Conclave organised by the Commerce Ministry and industry body CII on Tuesday.

While India has already allowed duty-free access to goods from LDC countries of South Asia as part of the South Asia Free Trade Agreement (SAFTA), it is ready to go to 100 per cent for non-LDCs, too, as per the Safta roadmap agreed by India with Pakistan in November 2012, Sitharaman said.

…At least four of the eight SAARC countries — which include India, Pakistan, Sri Lanka, Maldives, Nepal, Bhutan, Bangladesh and Afghanistan — are looking at a free trade area by 2020. India is willing to take asymmetric responsibility towards achieving the goal, she added.

The full story is here.

Thursday assorted links

by  Tyler Cowen

1.Was it efficient for United to bump Bob Shiller off his flight to Aspen?  It’s time to ask Air Genius Gary Leff.

2. Swiss postal service starts testing drone delivery.

3. 115 status goods for 2015 (MIE x 115, basically).  Black Simon and Garfunkel, with white Garfunkel.

4. Jeremy Bentham’s prison cooking.

5. Syria fact of the day.

6. Christopher Balding’s simple holiday (National Day) thoughts on China.

My conversation with Dani Rodrik

by  Tyler Cowen in

Here you will find the transcript, video, and podcast.  The summary is this:

Tyler and Harvard economist Dani Rodrik discuss premature deindustrialization, the world’s trilemmas, the political economy of John le Carré, what’s so special about manufacturing, Orhan Pamuk, RCTs, and why the world is second best at best.

Here is one excerpt from Rodrik, on why Turkey and some comparable countries did not fully modernize:

…my general sort of question would be 50 percent structure, 50 percent agency, which is to say you start with a lot of initial conditions that aren’t very favorable. Going back to the 19th century, you start on the wrong end of the global division of labor. Everybody else is industrialized and you’re not, plus, then, the British come and they open up your trade regime and all the craft industries you have in the 18th century are just decimated because of imports from Britain and other Western Europeans.

Then you get defeated in a world war. You start in very inauspicious circumstances.

Then agency. What happened, for example, under Mustafa Kemal Atatürk, who was the leader who made Turkey, who took Turkey from the ashes of the Ottoman Empire, erected the Turkish republic on top of that. He did a lot of very good things and a lot of very silly things, and we’re still living with the consequences of many of those things, including the good things.

I asked him this:

You were born in Turkey, you grew up in Turkey. I have so many questions about Turkey to ask you, but let me just try two or three. Let’s take the Turkish city of Konya. I’ve been to Konya. Outsiders sometimes call Konya the bible belt of Turkey. I’m not sure that’s a good comparison, but it’s a more religious city than Istanbul. It’s a kind of heartland city in Turkey.

Just a little simple question. I would put it this way. Do you trust the median voter in Konya?

And a short one from Rodrik again:

Culture is back in economics. I still have to be convinced that it’s actually adding a significant amount to what we learn.

In terms of economic prospects, he picks Brazil as the most underrated country and India as the most overrated.  And you can see what he thinks of the idea of an independent Catalonia…

You should all buy and read Dani’s new book, Economics Rules: The Rights and Wrongs of the Dismal Science, which I can recommend wholeheartedly and which I wrote a blurb for.

*Henry Kissinger*

by  Tyler Cowen in

The subtitle is 1923-1968: The Idealist, and the author is Niall Ferguson.  This is really an impressive book and we all should be envious that we did not write it ourselves.

Here is one line from Kissinger, cited by Ferguson:

“Ninety percent of the politicians give the other ten percent a bad reputation.”

Over at NYT Andrew Roberts very much likes the book and basically calls it a masterpiece.  Some people are all aflutter over this supposed Greg Grandin Gawker “take down,” but in fact both the book and the review are superb and I am glad the Times stood by it.  Definitely recommended, this is one of the year’s musts.  I know you are all mature enough not to let your opinions on Ferguson’s politics interfere with your assessment of this work.

Yelp for people

by  Tyler Cowen in

You can already rate restaurants, hotels, movies, college classes, government agencies and bowel movements online.

So the most surprising thing about Peeple — basically Yelp, but for humans — may be the fact that no one has yet had the gall to launch something like it.

When the app does launch, probably in late November, you will be able to assign reviews and one- to five-star ratings to everyone you know: your exes, your co-workers, the old guy who lives next door. You can’t opt out — once someone puts your name in the Peeple system, it’s there unless you violate the site’s terms of service. And you can’t delete bad, inaccurate or biased reviews — that would defeat the whole purpose.

Imagine every interaction you’ve ever had suddenly open to the scrutiny of the Internet public.

The piece is by the excellent Caitlin Dewey.  Currently the company is valued at $7.6 million.

Further Wednesday assorted links

by  Tyler Cowen

1. Volkswagen and the trade agreements: “In the best of cases, the United States will emerge as the “world super-regulator.””  Bravo.

2. Is academic freedom dead in Hong Kong?

3. How to get kids to eat their vegetables.  And the true nature of Masonomics (photo, view carefully).

4. Good interview with Amy Finkelstein.

5. Reciprocal cooperation in fish.

6. Problems with BitPay.

Why it’s better to ask for forgiveness than permission

by  Alex Tabarrok in

Transport for London is preparing to launch a crackdown on Uber, proposing a series of new rules that will hit the popular minicab-hailing app in one of its most popular cities.

…The proposals include a minimum five-minute wait time between ordering a private hire vehicle and it arriving, and banning operators from showing cars for hire within a smartphone app – a hallmark of the American company’s service.

No, this is not from an Ayn Rand novel.

These proposed rules so nakedly protect rent-seekers and make life worse for consumers that I don’t think they will succeed. Even if the rules fail, however, we shouldn’t be complacent about the dangers to innovation.

What made Uber different and controversial is that their Ayn Rand loving CEO followed the adage that it’s better to ask for forgiveness than permission. Uber skirted the law and went to consumers directly about whether they wanted transportation innovation. Consumers around the world responded with a resounding Yes to the Uber-referendum so regulators and rent-seekers who want to control Uber now must also fight Uber-consumers. That genie won’t go back into the bottle.

In the usual scenario, however, innovation can be quashed before consumers have a chance to know what they are missing. Had the taxi companies had an inkling of what was coming it would have been easy to to pass stricter laws in advance that would have made Uber impossible to get off the ground. Of course, in many industries today the old guard does have an inkling of what is coming and that should frighten anyone who wants to see greater innovation.

Why Weren’t Left Economists More Opposed and More Vocal on the Export-Import Bank?

by  Tyler Cowen in

That is the new piece by Veronique de Rugy, Ryan Daza, and Daniel Klein, the abstract is this:

From 2013 to the present in 2015, the Export-Import Bank has been widely and actively discussed, because its charter was expiring and because people then wrangled (and still wrangle) over its extension and possible recharter. Working from a list of the top 200 economics blogs, we examine the discourse on the Export-Import Bank. We find that classical liberal economists were very often highly vocal in opposition to the institution, but that left economists were mostly silent. The impetus of our investigation is to promote reflection on a question of political psychology: Why weren’t left economists more opposed and more vocal on the issue?

Jeremy Horpedahl asks a related question about defending Uber and Lyft.  Both pieces are from the latest issue of EconJournal Watch.

Wednesday assorted links

by  Tyler Cowen

1.French toilets for profit and the dames pipi.  And a comprehensive look at the music business.

2. Chinese economic progress through 1850.

3. Chris Blattman on fear and behavioral economics, an excellent post.

4. Some high schools are cutting their football teams.

5. Crooked Timber blog nominates alternative MacArthur winners.

6. Gene-edited micropig markets in everything the culture that is China.

7. I remain a big fan of Bob Litan and his work.

Effective altruism in 1400

by  Tyler Cowen in

A loyal MR reader writes to me:

If you taught the principles of effective altruism to a rich person in (say) 1400, what would they have thought was the most effective thing to do with their money?  What was in fact the most effective thing they could have done?

I say send some money to Henry IV.  On the year 1400 Wikipedia notes:

January – Henry IV of England quells the Epiphany Rising and executes the Earls of Kent, Huntingdon and Salisbury and the Baron le Despencer for their attempt to have Richard II restored as king.

England and the Industrial Revolution seemed to have worked out OK, and besides the Henriad provides some of Shakespeare’s most profound work, Orson Welles too.

I think you can see the problem.

But what would a rational Effective Altruist have thought at the time?  How about revising those early versions of the Poor Laws?

Alternatively, 1400 also was the year Chaucer died, and he was a pretty smart guy.  Since he worked for Henry’s father and was close to him, he might have given good advice, if only for self-interested reasons.  But who in 1400 was the best or most logical representative of Effective Altruism?  The theologian Alan of Lynn?  He might have told you to invest the money in making indexes of books, which seemed to be his main interest.  Jean Gerson, if one looks to France for a thought leader, focused his energies to reconciling the Great Schism in the papacy.  Good idea or bad?  As Zhou Enlai said…

How bad a tragedy is the Volkswagen fraud?

by  Tyler Cowen in

The NYT symposium is here, including Robert Reich, Dan Ariely, and myself, among others.  Here is my piece, excerpt:

One plausible estimate suggests this additional pollution has been killing 5 to 27 Americans each year, with that number worldwide reaching up to 404 as a maximum.

To put that number in context, the World Health Organization estimates that about seven million people die each year worldwide from air pollution. Even within the United States, early deaths from air pollution have been estimated to run about 200,000 a year, in comparison to which the losses from the Volkswagen scandal are a rounding error. For the American deaths, however, the culprits are often cars, trucks and cooking and heating emissions, so there is no single, evil, easily identified wrongdoer at fault. As Pogo recognized, often the real enemy is us.

Here are alternative estimates of the death from Volkswagen, published after my piece was set to run but the comparisons do not change fundamentally.  From that same article here are two paragraphs of note:

Don Anair, deputy director of the vehicles program at the Union of Concerned Scientists, said the precise effect of the Volkswagen fraud would require intense and complex computation.

Still, he cautioned against taking the view that the Volkswagens have reversed the progress with pollution from automobiles. Since the standards went into effect from 2004 to 2009, he said, emissions of nitrogen oxides have been 90 percent lower. “It’s not like this is going to offset the majority of the benefits of these standards,” he said. “But there will be some impact, and we need to get a better handle on it.”

“Since the standards went into effect from 2004 to 2009, he said, emissions of nitrogen oxides have been 90 percent lower.” is a sentence which I fear will not receive much attention in the current debate.

Tuesday assorted links

by  Tyler Cowen

1. Ngdp for the ECB?

2. Soviet bus stops.

3. Can we moderns no longer understand Shakespeare?  If not, when will that time arrive?

4. Markets for migrants.

5. Chinese SOEs all the way down.  And China’s monetary strangulation.

6. New data and results for business pass-throughs.  And the doctor as fundraiser.

7. Dimitri Nakassis, new MacArthur fellow, works on the economics of Bronze Age Greece and the Aegaen.  Here is his public choice model of that time (pdf).