Videos of the three new Nobel lectures
They are here, I haven’t seen them.
Dr. Joel Selanikio also advances economics
EpiSurveyor is free, open-source software used to collect
data–primarily medical survey data right now, although there’s no
reason other types of data couldn’t be gathered–in areas where medical
data is often out-of-date or incomplete, when it’s even collected at
all.Because EpiSurveyor is aimed primarily at developing economies, it’s
designed to run on PDAs and mobile phones…and to transmit
collected data back to a central repository via SMS.
In other words, you can put people out into the field and get (almost) real time data on the evolution of a village economy. The data are converted into useful forms right away, and gathering the data is easier in the first place, so the assistants are less likely to shirk. Here is more, here is the associated non-profit, here is a YouTube video. Data gathering is one of the most backward features of the social sciences, so development economists, take note. But should businessmen care as well?
I asked Selanikio what EpiSurveyor could use most right now–besides money, which is always welcome.
"We really need people who could help us develop a sustainable
business model for EpiSurveyor. Ad-supported? Subscription fees? Two
tiers of features? That sort of advice, from people who are truly
qualified to give it, would be very helpful."
My answer
The criticism personally offends him and he cannot tolerate it. Surely you have known people like this in conversation [and department politics?], and they didn’t even have any guns or nuclear weapons or polonium behind them.
That’s with help from Natasha. Here was Bryan’s question:
Putin is popular…what’s the point of persecuting the opposition?…if he’s really so popular, why risk looking like a paranoid despot?
Benjamin Friedman
Right or wrong, or perhaps somewhere in between, Clark’s is about as
stimulating an account of world economic history as one is likely to
find. Let’s hope that the human traits to which he attributes economic
progress are acquired, not genetic, and that the countries that grow in
population over the next 50 years turn out to be good at imparting
them. Alternatively, we can simply hope he’s wrong.
Here is the full review.
Addendum: Here is today’s NYT essay, arguing for the genetic unity of mankind, here is a previous Slate piece. Here is a good NYT excerpt:
During World War II, both black and white American soldiers fathered
children with German women. Thus some of these children had 100 percent
European heritage and some had substantial African heritage. Tested in
later childhood, the German children of the white fathers were found to
have an average I.Q. of 97, and those of the black fathers had an
average of 96.5, a trivial difference.
Second addendum: Here is Deirdre McCloskey’s review of Clark.
Get well
Here are the updates on Bob Frank’s heart attack. He seems to be doing fine. Bob Frank is not only a great economist and writer, but he is also an extremely friendly and generous man; we wish him well. Hat tip to Mark Thoma.
Elsewhere on the health front, the very smart and very adorable Virginia Postrel is continuing to recover from cancer treatment.
Illegality means illiquidity
Guns:
There are few suppliers. While covering a certain neighborhood of
Chicago, Sudhir Venkatesh (SV), the group’s undercover man, only found
six suppliers or wholesalers at any given time. The gun brokers are
almost all over 30, and have lived in the area for their entire lives
providing them with solid networks and neighborhood trust, that help
keep them in business. Many suppliers are discouraged to enter the
market due to the difficulty in finding business and low profit
margins. In the neighborhood area, the authors estimated only 1,400 gun
sales in a year, compared to the 200,000-500,000 cocaine sales. Guns
are a durable good, so customers usually don’t need to return
frequently. Additionally, 30%-50% of attempted transactions go
unfulfilled due to all sorts of logistic problems like agreement on the
transaction location. Of the brokers that do conduct business, most
charge between $30-$50 per transaction and charge an extreme markup on
guns, possibly between a 3-5 multiple of the legal retail price. To
make the transactions monetarily worth it for themselves, suppliers and
retailers have to markup their prices in this way.
Here is much more of interest. Here is The Economist write-up of the story. One implication is that if a government has limited resources to enforce bans, it will do better by targeting durable goods, with less liquid markets, rather than frequently traded non-durables.
The Golden Compass
It lacks direction.
Tyrone on rent control
Johan Almenberg, a loyal MR reader, asked me to ask Tyrone why rent control is a good idea. I walked over to Tyrone’s crawl space, knocked, and posed the query. He ridiculed me and told me the question was really not worth his while:
You Troglodyte, surely you know the happiness literature shows that better or larger living quarters don’t make people much happier. It’s one of the pleasures we most quickly get accustomed to. So if rent control pushes everyone into a lower price, lower quality equilibrium for residences, that’s for the better. If you want high cost living, go to Monaco or Aspen; low rents were what made New York City great. The greatest American city, during the highest cultural peak of its existence, had lots of binding rent control.
Rent control also encourages new or refitted buildings to have a greater number of smaller units. In other words, it brings more population to the city and we all understand the external benefits from having more people around. Furthermore the external social benefits of cities are highest for the elderly poor, who can’t afford cars and would require external aid, and bagel-seeking young’uns, high in human capital, low in liquid wealth, and able to do great things for the world if only they are removed from the suburbs. That’s exactly who rent control puts into your city.
Johan himself offers an interesting argument:
…if rent control makes it
harder to live in a particular city temporarily, this encourages long-term
commitments. This, in turn, could increase the repeated-game character of that
city, which in turn could be good for cooperation. These sort of arguments –
admittedly vague – tend not to get mentioned.
Did I mention that Tyrone is biased, because he lives under rent control himself? That’s right, he lives upstairs in the crawlspace. It is the strongest force in the world that won’t let me charge him a price any higher than zero. And the resulting arrangement seems to work out just fine.
Karlheinz Stockhausen has died at 79
Here is one balanced appreciation. The Wikipedia page is patchy but offers lots. If you’re only going to buy one or two, I say start with Mantra and then move on to Stimmung. The hard cores should seek out Spiral. Gesang der Jünglinge is perhaps the most influential and seminal work, or perhaps Hymnen, order them here. The junk includes the Helicopter Quartet, Tierkreis, anything with an American Indian theme, and most of material from the operas. Gruppen you probably had to hear live. Momente has compelling parts but it makes me giggle. The piano music was good, although for me never a highlight. It’s easy to take potshots at his pretentiousness and stupid politics, but he created more memorable and distinct sound worlds than any other twentieth century composer, except possibly John Cage. It’s hard to imagine music without him. Miles Davis and the Beatles would agree, and they were pretty smart guys.
Addendum: Here is a YouTube of Kontakte. Here’s a bit of Gruppen. Here is a bit of Hymnen. But without real sound or live performance it mostly just sounds stupid.
A Gut Feeling
The title, Campylobacter jejuni infection increases anxiety-like behavior
in the holeboard: Possible anatomical substrates for viscerosensory
modulation of exploratory behavior, is unpromising but the paper is fascinating. The authors show that infection with certain bacteria can cause more anxious or cautious like behavior in mice, perhaps causing the infected agent to avoid predators.
The presence of certain bacteria in the gastrointestinal tract
influences behavior and brain function. For example, challenge with
live Campylobacter jejuni (C. jejuni), a common
food-born pathogen, reduces exploration of open arms of the plus maze,
consistent with anxiety-like behavior, and activates brain regions
associated with autonomic function, likely via a vagal pathway.
Could bacteria also influence our emotional state? If verified in humans this could offer insights into conditions like Crohn’s disease, irritable bowel syndrome and perhaps into fears such as agoraphobia. Long time readers will know that this study is not alone in suggesting that parasites can influence our emotions. Ever wonder why you like cats?
Hat tip to Monique van Hoek and Faculty of 1000.
When does self-deception do the most good?
Knowledge@Wharton: In your chapter, "The Dangerous and Necessary Art of Self-Deception," you write that some degree of optimistic self-deception is critical for success, and that "depressive realists," with their more accurate view of the world, fall behind. What advice would you give to a board choosing a CEO? Is it better to have an optimistic self-deceiver or a depressive realist?
Cowen: For a CEO, I’d tend to go for the realist, because at the leadership level, the costs of hubris are very high. The problem with realists is they can get depressed and feel they are not going anywhere, but this is less likely to happen to CEOs, because they are in charge.
In the lower rungs of the company, however, I would favor overly optimistic people, those who are motivated by the idea that they always have a chance of being promoted or earning more money. The higher up you are, the more I would prefer realism. A president who won’t listen can be pretty disastrous. But a senator who doesn’t listen — maybe it’s not ideal, but there are checks and balances, and if the optimism gets the senator to work harder, then that is the compensation.
Here is the full interview with me. By the way here is a recent Indian review of Inner Economist, from Mint.
The real Bush mortgage relief plan
CalculatedRisk writes:
A lot of people are very worked up over the idea that the New Hope Plan
is, in essence, the government mandating a kind of reneging on private
contracts (the PSAs or Pooling and Servicing Agreements that govern how
securitized loans are handled). I personally think you can all stand
down on that one. From what I have seen about the plan to date, it is
clear to me that it is in fact structured with the overarching goal of
making sure that it stays on the allowable side of the existing
contracts. I proceed from the assumption that nobody could write such a
convoluted and counter-intuitive plan if that wasn’t the goal. So
everyone who is thinking, “Gee, we’re violating contracts and we still
don’t get much out of it!” is thinking the wrong thing, in my view.
It’s more like “Gee, we don’t get much out of it when we don’t violate
contracts.”
The full post has more explanation than any sane person can follow, also see the NYT coverage. I don’t understand many of the details of the plan, but it seems like a push in the right direction, namely encouraging settlement within the previous contractual framework. That said, I don’t expect it to have a major positive impact.
Many critics would like to see more of a debt jubilee, but I keep thinking of two quotations reproduced over at Megan McArdle’s blog:
There are many nuances related to mortgages. For instance, if you
default, what are your rights in foreclosure? How can you redeem, and
when? But it wasn’t any nuances that tripped people up. "The monthly
payment is more than I can afford" is not a "nuance.". . the lesson here appears to be that if you see everyone else
borrowing well beyond their means, you should too, since the government
cannot credibly allow large numbers of homeowners to go into
foreclosure.
There are two main arguments for breaking the loan contracts. The first
is that we could limit human suffering. The second is that we could
forestall macroeconomic catastrophe. Put together, these arguments have captured many hearts and minds, but neither is very strong on
its own.
On the first, there are many better ways for our government to help
poor people. Maybe you respond: "The perfect should not be the enemy of the good," but I am sorry: keeping lower income people in homes and out of apartments is too far down the list of efficient transfers for that rhetoric to succeed. Can we now allow the perfect to be the enemy of the not-good? Contract-breaking is not an especially fair way to
help the poor, given that the very poorest probably never borrowed any
mortgage money in the first place, and the most responsible of the poor won’t get anything either. Should we also reimburse the non-wealthy for their unlucky investments in dot.com stocks? Go back to square one.
On the macroeconomic issues, there is a real chance of a cascading
credit crunch in the next few months. Having the federal government arbitrarily rewrite legally binding loan contracts will, if anything, make that problem worse rather than better. It will hurt bank capitalization, plus it will weaken confidence that future loan agreements will be left intact. Uncertainty is the enemy of lending. Further side effects include the savaging of the subprime loan market (currently most subprime loans are being repaid without incident, thus putting deserving borrowers into homes) and seriously curbing floating rate lending in the future.
If you think that the macroeconomic skies will fall from future
mortgage interest rate resets, I am willing to listen. But your case
had better be really really good, given the macro problems of the debt jubilee. Aid as you will, but don’t make it a tax on the lenders.
The foreclosures story combines a few popular memes: lower income people suffering, possible macroeconomic
catastrophe, and a fair amount of misleading salesmanship (can I get my money back for having bought a computer with Vista?). But if we adopt widespread contract abrogation as the intended solution, I truly fear for the future of this republic.
Addendum: Here is testimony by Randall Kroszner, via Greg Mankiw. And Arnold Kling has a very good and lengthy analysis.
The Food of the Gods
"Yes, but think of the dead!"
Another voice took up the strain. "The dead," it said. "Think of the unborn…"
Or:
"Whatever it dislocates," said Redwood, "My little boy must have the food."
Those are both from H.G. Wells’s excellent and far ahead of its time, The Food of the Gods and How it Came to Earth. The novella concerns a new tool of genetic engineering that makes people thirty-five feet tall, and of course occasions social conflict. Well’s short fiction is in general much underrated.
The best economics books of the year
Here is Arnold Kling’s list. I liked this part:
Two books that show economic intellect to advantage are Discover Your Inner Economist, by Tyler Cowen and One Economics, Many Recipes, by Dani Rodrik. Cowen’s book is a set of observations on everyday life, while Rodrik’s book looks at the high-level issue of which economic institutions to recommend for underdeveloped countries. I made the case for Cowen’s book here and the case for Rodrik’s book here.
What Cowen and Rodrik have in common is a gentle approach. In contrast to Caplan and Clark, who self-assuredly hammer away at alternative viewpoints, Cowen and Rodrik allow room for disagreement and self-doubt. Cowen and Rodrik encourage their readers to think, and I encourage readers to try to learn how to think like Cowen and Rodrik, whether or not you agree with them.
The entire list is useful, so go out and elevate the practice of holiday gift-giving.
Next MarginalRevolution book forum
You may remember our very successful book forum on Greg Clark’s A Farewell to Alms. In short, we all read the book together and I offered running commentary on the contents. There was a special encouragement for reader comments, and Greg very graciously responded at length. Next Alex and I, along with some specially invited guest bloggers, will be doing Tim Harford’s new The Logic of Life: The Rational Economics of an Irrational World. Tim’s book won’t be out until January 15, so of course the forum won’t start until a little after then. But if you wish to pre-order, now is as good a time as any.
Loyal MR readers already know about Tim, a regular columnist for The Financial Times and author of The Undercover Economist. Here is Tim’s blog, and here is Tim’s homepage.