Tuesday assorted links
If you must discuss today’s events…
…comments are open. Just don’t expect Alex and I to read it…
The Amazon nuclear project
Nuclear power plants are designed to withstand a plane crash. We are now getting a live experiment in whether the nuclear sector is built of similar stuff, after federal regulators dropped a bomb on Friday night. In a 2-1 vote, the Federal Energy Regulatory Commission rejected an amended interconnection agreement for the deal that sparked a frenzy for nuclear power stocks earlier this year: Amazon.com’s acquisition of a datacenter co-located with a reactor owned by Talen Energy Corp. Few saw it coming, and the sector dived on Monday morning.
Here is more from Bloomberg, via Nicanor.
How much is a rare bee worth?
Plans by Mark Zuckerberg’s Meta to build an AI data centre in the US that runs on nuclear power were thwarted in part because a rare species of bee was discovered on land earmarked for the project, according to people familiar with the matter.
Zuckerberg had planned to strike a deal with an existing nuclear power plant operator to provide emissions-free electricity for a new data centre supporting his artificial intelligence ambitions.
However, the potential deal faced multiple complications including environmental and regulatory challenges, these people said.
Here is more from the FT.
Generative AI and the Nature of Work
Here is a new paper by the following set of authors: Manuel Hoffmann Harvard Business School, Sam Boysel Harvard Business School, Frank Nagle Harvard Business School, Sida Peng Microsoft Corporation, Kevin Xu GitHub, Inc. Here is the abstract:
Recent advances in artificial intelligence (AI) technology demonstrate considerable potential to complement human capital intensive activities. While an emerging literature documents wide-ranging productivity effects of AI, relatively little attention has been paid to how AI might change the nature of work itself. How do individuals, especially those in the knowledge economy, adjust how they work when they start using AI? Using the setting of open source software, we study individual level effects that AI has on task allocation. We exploit a natural experiment arising from the deployment of GitHub Copilot, a generative AI code completion tool for software developers. Leveraging millions of work activities over a two year period, we use a program eligibility threshold to investigate the impact of AI technology on the task allocation of software developers within a quasi-experimental regression discontinuity design. We find that having access to Copilot induces such individuals to shift task allocation towards their core work of coding activities and away from non-core project management activities. We identify two underlying mechanisms driving this shift – an increase in autonomous rather than collaborative work, and an increase in exploration activities rather than exploitation. The main effects are greater for individuals with relatively lower ability. Overall, our estimates point towards a large potential for AI to transform work processes and to potentially flatten organizational hierarchies in the knowledge economy.
Via the excellent Kevin Lewis.
Causal claims in economics
From a new and very interesting web site on that topic:
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Significant Increase in Causal Claims: The average proportion of causal claims in papers rose significantly from approximately 5% in 1990 to around 28% in 2020, reflecting the impact of the credibility revolution in economics.
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Growth in Causal Inference Methods and decline in Theoretical and Simulation Methods…
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Intricate Causal Narratives Enhance Publication and Citation Impact: Papers featuring intricate and interconnected causal narratives are more likely to be published in top-tier journals, particularly the top 5 journals, and receive more citations, especially within those journals.
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Key Measures of Causal Narrative Complexity: Increases in the number of unique paths and the longest path length in causal knowledge graphs are positively associated with both publication in leading economics journals and higher citation counts. This highlights the value placed on depth and complexity in causal narratives.
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Depth Over Quantity in Causal Claims: While the overall number of claims made is positively correlated with top journal publications, the number of causal edges alone does not show the same positive association with publication outcomes or citation counts. This suggests that depth over breadth in causal claims is valued...
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Novel Causal Relationships Enhance Publication but Not Citation Impact: Papers introducing novel causal relationships that have not been previously documented are more likely to be published in top 5 journals, indicating a premium on originality for publication success. However, this does not necessarily translate into higher citation counts once published.
Here is an associated tweet storm,
Obviously it can be argued either way, but I see these results as more negative for the causality revolution than positive? It seems there is too much emphasis on generating a defensible results from a hitherto unused data set. I understand the signaling value here, but the social value is not always obvious. I am struck by how often I meet economics graduate students who can reason about programming more effectively than they can reason about the real world.
Monday assorted links
Specialization trends in economics
This article conducts a comprehensive analysis of specialization trends within and across fields of economics research. We collect data on 24,273 articles published between 1970 and 2016 in general research economics outlets and employ machine learning techniques to enrich the collected data. Results indicate that theory and econometric methods papers are becoming increasingly specialized, with a narrowing scope and steady or declining citations from outside economics and from other fields of economics research. Conversely, applied papers are covering a broader range of topics, receiving more extramural citations from fields like medicine, and psychology. Trends in applied theory articles are unclear.
That is from a new paper by Sebastian Galiani, Ramiro H. Gálvez, and Ian Nachman, via Robin Hanson.
Does the internet limit immigrant assimilation?
This paper documents the effects of new communication technologies on immigrants’ socio-economic integration, spatial and job segregation, and networking behavior. Combining data on home-country Internet expansion shocks with data on immigrants’ linguistic skill, naturalization, location choice, and employment in the US, I find that home-country Internet slows down immigrants’ social and economic integration. The effect is driven by lower-skilled and younger immigrants. On the other hand, home-country Internet decreases spatial and job segregation with co-nationals, and increases immigrants’ subjective well-being. For the mechanisms, I use the American Time Use Survey data to show that home-country Internet changes networking behavior of immigrants. I also explore the role of (i) return intentions, (ii) international phone calls, and (iii) Facebook usage. The evidence is consistent with a simple Roy model, augmented with a choice between destination- and origin-country ties. Overall, this paper shows how new ICTs transform the links between immigration, diversity, and social cohesion.
That is from the job market paper of Alexander Yarkin from Brown University.
Sunday assorted links
1. Profile of Donald Harris and his economic thought (New Yorker…note I knew of Donald long before I knew of Kamala, and definitely though of him as a Marxist).
2. Final James C. Scott book is coming.
3. Economic effects of Evangelical Christianity.
Local Labor Market Effects of Amazon
Does the entry of a large employer to a local labor market increase welfare for residents? To answer this question, I analyze the local effects of the dramatic expansion of Amazon’s fulfillment center (FC) network from 2010 onward. I exploit the staggered roll-out of FCs across large U.S. metros in a difference-in-difference framework. I find Amazon’s entry in a metro increases the total employment rate by 1.0 percentage point and average wages by 0.7 percent. The composition of employment shifts from retail and wholesale trade to warehousing and tradeable services, primarily driven by younger workers. Employment gains are concentrated among non-college workers. Rents increase by 1.1 percent, utility costs increase by 6.0 percent, and home values increase by 5.6 percent. I interpret these results through the lens of a static spatial equilibrium model. I find a net increase in aggregate welfare: the average worker is willing to pay $329 per year (0.8 percent of income) to live in a large city with Amazon. The welfare gains are primarily driven by rising home values; the increase in employment, wages, and sectoral shifts account for only one-tenth of the increase. These positive impacts are partially offset by rising local costs of living and the declining value of non-wage amenities in large cities. Government subsidies have a negligible effect on welfare as they are a small share of state and local budgets.
That is from the job market paper of Evan R. Cunningham, of the University of Minnesota.
Increasing the Supply of Very High-IQ Workers
I have argued that there are on the order of just 164 thousand very high-IQ workers in the United States. How do we get more? Ian Calaway on the job market from Stanford has an interesting paper arguing that early math mentors can be a force multiplier for students with superior math abilities. Calaway estimates that having a math mentor at a school, someone who runs a math club and organizes entry into top math competitions, increases the number of students earning PhDs and pursing careers as scientists and professors. Not every school has such a math mentor but Calaway estimates (after taking into account underlying abilities, he’s not naive) that over 27 years, math mentors identified 9,092 American Math Competitions students (the cream of the crop) but there were 11,168 missing students of very high ability.
These 11,168 additional students represent the missing exceptional math talents who would have participated in the AMC and been identified as exceptional if they had access to a mentor…these mentors would have increased the number of these students attending selective universities (3,017 students), majoring in STEM (3,465 students), earning PhDs (1,652 students), and pursuing careers as scientists and professors (1,850 students) during this twenty-seven year period.
11,168 missing students of very high ability over 27 years may not sound like much but we are talking about the very top talent level. A footnote illustrates:
Sergey Brin (Google), Mark Zuckerberg (Meta), Peter Thiel (PayPal), and Sam Altman (OpenAI) were all top AMC scorers (Committee on the American Mathematics
Competitions, 1980–2023)
High-IQ individuals don’t simply vanish without mentorship; they likely still have decent careers. However, even if you are skeptical about the social value of earning a PhD, the number of mentored individuals who go on to start firms or earn patents appears substantial. Just as athletic talent can wither without guidance, it seems that intellectual talent may also be underutilized without proper mentorship, with many high-IQ individuals failing to reach their full potential.
Spinoza is ten years old today
Happy Birthday Spinoza!
Emergent Ventures winners, 38th cohort
Sandro Luna, Austin, easier ways of getting blood pressure readings.
Divyan Bavan, Ontario, 17, machine learning for biology.
Michael Domarkas, 17, Surrey, UK, general career support for the biosciences.
Saras Agrawal, 17, Alberta, AI to monitor heart attack risk.
Charmaine Lee, NYC, music composition and performance.
Jodi Ettenberg, Ottawa, podcast on how to deal with adversity.
Jiya Singhal, Stavanger, Norway, high school, AI to detect skin cancer.
Janine Leger, Texas, for building full-time communities around the globe.
Rishi Mehta, Toronto, a device to limit falls of the elderly.
Ivan Lin, Sydney, 16, travel grant to the Bay Area.
Fearghal Desmond and Ryan Morrissey, Cork and Limerick, Induct, and a travel grant to SF.
Filip Cerny, 18, Prague, general career support, building out entrepreneurship in Czechia.
James Vitali, London, to write a book about the political future of the UK, general career support.
Harry Law, Cambridge, UK, historian of science, to write a history of AI.
Joshua Muthu, Warwick, UK, economic models of cities and building.
Kyla Scanlon, Venice, CA, to produce content on economics, including a new documentary, and also for travel support.
Pieter Garicano, WDC and Europe, general career support, writing on Europe, progress, and technology.
Ukraine cohort:
Nazar Drugov, Cambridge, MA, and MIT, and Ukraine, 17, to make Khanmigo fully functional in Ukrainian.
Aleksandra Peeva, Berlin, to study Russian sanctions.
Mariia Marinichenko, physics and math instruction in Ukrainian for Ukrainians.
Anastasiya Dobrobabenko, STEM education for a school near Kyiv.
Saturday assorted links
1. “Using spatial regression discontinuity and instrumental variable designs, we find that areas with greater historical exposure to homesteading are poorer and more rural today.” From Harvard job market candidate Ross Mattheis.
2. Steve Mariotti, RIP (NYT).
3. Costco hearing aids as loss leader (WSJ).
4. Interview with Cynthia Haven.
5. The new trench warfare in Ukraine (NYT).
6. How macro works if people think about the economy in only a “shallow” fashion.