Eurozone sticky wage update

by  Tyler Cowen in

From the always essential FT Alphaville:

Société Générale points out that unit labour costs — basically, wages — have been falling quite rapidly in the peripherals, and that this is probably due to austerity measures. New data from Eurostat breaks out what the agency calls ‘non-business’ wages: the education, health services, and public administration sectors. In otherwords, ‘non-business’ is a rough proxy for the public sector:

The logical follow-on from the above being that “non-business” sectors are a big contributor to the rapidly falling unit labour costs in the periphery, especially given their large state sectors:

SocGen’s Michel Martinez writes that there are outright wage declines in Greece while in the other peripherals, labour productivity (as measured by ULC) is outpacing wage gains.

TC again: No one should doubt that depreciation and expansionary monetary policy are a much easier path to lower real wages.  Yet the claim that wages are outright sticky for long periods of time, when economic pressures dictate wage declines, isn’t holding up that well.

And I would add this: They are not as wealthy as they thought they were.

Why 8 1/2 x 11?

by  Alex Tabarrok in

Most books aren’t printed on 8 1/2 x 11 paper so why are these the standard paper dimensions? Paul Stanley offers an answer:

…we have ended up with paper sizes that were never designed or adapted for printing with 10-12 point proportionally spaced type. They were designed for handwriting (which is usually much bigger) or for typewriters. Typewriters produced 10 or 12 characters per inch: so on (say) 8.5 inch wide paper, with 1 inch margins, you had 6.5 inches of type, giving … around 65 to 78 characters: in other words something pretty close to ideal. But if you type in a standard proportionally spaced font (worse, in Times — which is rather condensed because it was designed to be used in narrow columns) at 12 point, you will get about 90 to 100 characters in the line.

The standard paper dimensions are thus not optimized for reading using printed fonts so typographers try to make adjustments. One adjustment is to abandon the standard paper size which is what books do. Another is to make the margins very wide which is the Latex default.

[Another] answer — which is what most wordprocessors did — was to stick to the standard “document design” (margins of an inch or so) and just use proportionally spaced fonts as if they were typewriter text. This produces very long lines, which are not comfortable to read. But that discomfort can be somewhat alleviated by increasing the space between lines (1.5 or double space), which helps prevent “doubling”, and by avoiding type sizes below about 11 or 12 points (depending very much on the design of the font).

Another possibility is to use the margins for marginalia, which I like. (Stanley points to the Latex tufte class as a way to do this.) One could also a two-column format or just make the text bigger.

Stanley concludes:

These are all potentially valid design choices. I happen to think that the most conventional one (stick with 1 inch margins, and add line spacing to prevent doubling) is probably the worst of them, and that it only seems “right” because we are accustomed to it. And it doesn’t generally save paper, because unless you use single spacing you lose vertically the extra space that you gain horizontally.

We need to fix this problem. Now is the time for a margin revolution.

Hat tip: John Cook at The Endeavour.

Small business under Proposition 37 (GMO labeling in California)

by  Tyler Cowen in

I advise anyone who favors Proposition 37 to read the text of the law.  It is full of bad ideas and questionable distinctions, many of which are not apparent from the more superficial descriptions of the proposal.  Here is one of them:

Retailers (such as grocery stores) would be primarily responsible for complying with the measure by ensuring that their food products are correctly labeled. Products that are labeled as GE would be in compliance. For each product that is not labeled as GE, a retailer generally must be able to document why that product is exempt from labeling. There are two main ways in which a retailer could document that a product is exempt: (1) by obtaining a sworn statement from the provider of the product (such as a wholesaler) indicating that the product has not been intentionally or knowingly genetically engineered or (2) by receiving independent certification that the product does not contain GE ingredients. Other entities throughout the food supply chain (such as farmers and food manufacturers) may also be responsible for maintaining these records.

I call this the “how to kill off small farmers and retailers” provision.  And what would it do to local farmers’ markets to have the burden of proof so shifted?  Who is best situated to handle possible lawsuits or shakedown lawsuits?  The larger corporations.

It is interesting to see what receives an exception from the labeling provisions: alcohol, restaurant food, and animal meats raised from genetically engineered crops.  (Lobby much?)  For varying reasons, those are some of the outputs most likely to be harmful to you or to the environment.

Prop. 37 also exempts milk, cheese, and meat and it exempts “small” amounts of transgenic material in foodstuffs.  According to critics of the bill it exempts 2/3 or so of the food products which Californians consume.

I do not think it is very well thought through.

Fox and Mitchum on the Flynn Effect and how it works

by  Tyler Cowen in

James R. Flynn recommends this paper, by Fox and Mitchum, in his new book:

Secular gains in intelligence test scores have perplexed researchers since they were documented by Flynn (1984, 1987). Gains are most pronounced on abstract, so-called culture-free tests, prompting Flynn (2007) to attribute them to problem solving skills availed by scientifically advanced cultures. We propose that recent-born individuals have adopted an approach to analogy that enables them to infer higher-level relations requiring roles that are not intrinsic to the objects that constitute initial representations of items. This proposal is translated into item-specific predictions about differences between cohorts in pass rates and item-response patterns on the Raven’s Matrices, a seemingly culture-free test that registers the largest Flynn effect. Consistent with predictions, archival data reveal that individuals born around 1940 are less able to map objects at higher levels of relational abstraction than individuals born around 1990. Polytomous Rasch models verify predicted violations of measurement invariance as raw scores are found to underestimate the number of analogical rules inferred by members of the earlier cohort relative to members of the later cohort who achieve the same overall score. The work provides a plausible cognitive account of the Flynn effect, furthers understanding of the cognition of matrix reasoning, and underscores the need to consider how test-takers select item responses.

The paper is here (pdf).

Markets in everything

by  Tyler Cowen in

Remember “Murderer’s Park”?  Wasn’t that Walter Block’s idea?  Here is the summary of a new service:

It is Las Vegas’s latest thrill: absolute beginners flying aerobatic planes in aerial dogfights

The dogfighting sequences cost $999 and up, and the full story is here (FT$).  Other links and ads for the service are here.  I would have expected this first in New Zealand.

Should there be required labeling of GMOs?

by  Tyler Cowen in

Here is one on-the-mark take (of many):

…there have been more than 300 independent medical studies on the health and safety of genetically modified foods. The World Health Organization, the National Academy of Sciences, the American Medical Association and many others have reached the same determination that foods made using GM ingredients are safe, and in fact are substantially equivalent to conventional alternatives. As a result, the FDA does not require labels on foods with genetically modified ingredients because it acknowledges they may mislead consumers into thinking there could be adverse health effects, which has no basis in scientific evidence.

Or try the National Academy of Sciences from 2010:

Many U.S. farmers who grow genetically engineered (GE) crops are realizing substantial economic and environmental benefits — such as lower production costs, fewer pest problems, reduced use of pesticides, and better yields — compared with conventional crops, says a new report from the National Research Council.

Here is a good NYT summary Op-Ed on that report.  There is not the scientific evidence for Mark Bittman’s recent evaluation that:

G.M.O.’s, to date, have neither become a panacea — far from it — nor created Frankenfoods, though by most estimates the evidence is far more damning than it is supportive.

It’s the tag there that is problematic.  He doesn’t offer a citation, nor has he in past columns offered convincing material to back this evaluation (you can read here for a somewhat more detailed account from Bittman; it simply minimizes benefits and does not support “by most estimates the evidence is far more damning than it is supportive”).  This earlier critique of Bittman is on the mark on virtually every point.

The standards of evidence being applied here are extremely weak.  In that last Bittman link he wrote that:

…The surge in suicides among Indian farmers has been attributed by some, at least in part, to G.E. crops…

The link is to a sensationalistic Daily Mail (tabloid) story, yet that gets translated into “has been attributed by some.”  In that story, the suicides were caused by indebtedness and supposedly the debts were in part caused by a desire by farmers to buy GMO crops.  In comparable terms one could write that anything one spends money on could cause suicide through the medium of indebtedness.

By the way, the Wikipedia treatment gives some more detailed citations suggesting that GMO crops are not a significant cause of farmer suicides in India.  The most careful study of the matter reports this:

We first show that there is no evidence in available data of a “resurgence” of farmer suicides in India in the last five years. Second, we find that Bt cotton technology has been very effective overall in India. However, the context in which Bt cotton was introduced has generated disappointing results in some particular districts and seasons. Third, our analysis clearly shows that Bt cotton is neither a necessary nor a sufficient condition for the occurrence of farmer suicides. In contrast, many other factors have likely played a prominent role.

I would in fact be more supportive of the GMO labeling idea if renowned food writers such as Bittman, and many others including left-wing economists, would come out and boldly proclaim the science about GMOs to their readers.  Too often the tendency is to use a “I’ll try not to say anything literally incorrect, while insinuating there are big problems” method of scoring points against big agriculture.  (Another common trope is to switch the discussion to “distribution” and to suggest, either explicitly or implicitly, that a net benefit technology such as GMOs is somehow unnecessary or undesirable; dare I utter the words “mood affiliation“?)  GMO labeling is the one issue which has gained legal traction, so critics of “Big Ag” just can’t bring themselves to give it up.

Bittman’s whole column is about GMOs, but he gets at the important point only in his final sentence:

[With better information] We’d be able to make saner choices, and those choices would greatly affect Big Food’s ability to freely use genetically manipulated materials, an almost unlimited assortment of drugs and inhumane and environmentally destructive animal-production methods.

Overuse of antibiotics and animal treatment (both cruelty and environmental issues) — now those are two very real problems, backed by overwhelming scientific evidence.  The fact that the California referendum is instead about GMOs — which have overwhelming scientific evidence for net benefit and minimal risks — is the real scandal.

It’s time that our most renowned food writers woke up to that difference.  In the meantime, they are doing both us and themselves a deep disservice.

From a loyal MR reader

by  Tyler Cowen in

I read through the Heckman debate. He does what he always does. One response is terrible (quality of early intervention doesn’t matter, just do a lot of it) but most of them make decent points. Carol Dweck hints at the problem of writing people off.

No one considers neurodiversity. No one considers that many successful people take big risks, follow their impulses, fail to comply, have bad habits, and otherwise misbehave. Heckman himself may be an example.

Update from Emory University — no more economics Ph.d?

by  Tyler Cowen in

The university will suspend admissions to Spanish and economics graduate programs so leaders there can redefine the missions, Forman said. Emory also will suspend admissions to the Institute for Liberal Arts so it can be restructured.

The changes will begin at the end of this academic year and finish by the end of the 2016-17 academic year. About 20 staff positions will be cut over the next five years, officials said.

Savings from the changes will be re-invested into existing programs and growing areas, such as neurosciences, contemporary China studies and digital and new media studies, Emory officials said.

Here is more.  By one account, Emory had moved into the top 50 in economics.  For the pointer I thank Michael Hammock.

World hunger: the problem left behind

by  Tyler Cowen in

Here is my new New York Times column, about the tall task involved in doubling world food output by 2050:

The green revolution has slowed since the early 1990s, and it has become harder to bolster crop yields, as I have discussed in my book, “An Economist Gets Lunch.” And recent research by Dani Rodrik, a professor of international political economy at Harvard, indicates that agricultural productivity improvements are among the hardest to transmit from one nation to another.

And:

In a recent address, Michael Lipton, an economist and research professor at Sussex University in Britain, offered a sobering look at Africa’s agricultural productivity. He suggests that Rwanda and Ghana are gaining, but that most of the continent is not. Production and calorie intake per capita don’t seem to be higher today than they were in the early 1960s. It remains an issue how Africa’s growing population will be fed.

And:

There is no shortage of writing — often from a locavore point of view — in support of more organic methods of farming, for both developed and developing countries. These opinions recognize that current farming methods bring serious environmental problems involving water supplies, fertilizer runoff and energy use. Yet organic farming typically involves smaller yields — 5 to 34 percent lower, as estimated in a recent study in the journal Nature, depending on the crop and the context. For all the virtues of organic approaches, it’s hard to see how global food problems can be solved by starting with a cut in yields. Claims in this area are often based on wishful thinking rather than a hard-nosed sense of what’s practical.

I can’t stress that last sentence enough, and I find it amazing what passes for a good pro-organic argument in this area.

There is also an excellent recent essay by Jeremy Grantham on agriculture (pdf), too pessimistic in my view but still more right than wrong.  For an interesting look at why future gains from GMOs may be limited, at least in the short run, read R. Ford Denison’s Darwinian Agriculture.  Nature already has done a lot of the optimization.

The bottom line is this: right now agriculture is a laggard sector — in part due to state interventions — and this is not totally unrelated to recent headlines about unrest in the Middle East.

Catholic markets in everything not all magazines are folding

by  Tyler Cowen in

With exorcism booming in Poland, Roman Catholic priests have joined forces with a publisher to launch what they claim is the world’s first monthly magazine focused exclusively on chasing out the devil.

“The rise in the number or exorcists from four to more than 120 over the course of 15 years in Poland is telling,” Father Aleksander Posacki, a professor of philosophy, theology and leading demonologist and exorcist told reporters in Warsaw at the Monday launch of the Egzorcysta monthly.

Ironically, he attributed the rise in demonic possessions in what remains one of Europe’s most devoutly Catholic nations partly to the switch from atheist communism to free market capitalism in 1989.

“It’s indirectly due to changes in the system: capitalism creates more opportunities to do business in the area of occultism. Fortune telling has even been categorised as employment for taxation,” Posacki told AFP.

Here is more, via Bookslut.