Which countries have the best and worst flags?

by  Tyler Cowen in

Virginia Postrel directs us to this more-revealing-than-you-might-think question.  Look here.  But I cannot fathom their decision to rank the Gambian flag number one.  My personal favorites have long been Brazil ("Order and Progress", maybe you have to have been there) and Haiti, in part for the story of how they took out the white from the flag of France.  Japan and Switzerland are good too, iconic you might say.  The moon and star in the Turkish flag for a long time seemed cool to me.

Here are the losers, they are the most fun to look at.  The flag of Mozambique, with its AK-47, might come in last place.  The Falkland Islands flag is another lemon.

Here are the research papers of the Otago guy who evaluated the flags.  Here’s the guy’s grading system for the flags.

How economically important is an inspirational president?

by  Tyler Cowen in

Mark Thompson, a loyal MR reader, writes:

I’m wondering
if you would be willing to address the question of whether and how much
of an economic effect a President can have simply by making people feel
good about themselves.

Mark’s own answer is here.  I’ll say that the personality of the president matters most in models with multiple equilibria.  There can be a high-output equilibrium and a low-output equilibrium, and perhaps the mood and demeanor of the President can shift the country from one to another.  "Good morning, America!" etc.

But are these models true?  I’ve never seen general evidence for their applicability, although I recall Ronald Reagan’s smile and Jimmy Carter’s pessimistic sweater.  Furthermore GDP growth rates are statistically indistinguishable from a random walk (NB: in a test with low power), which doesn’t help these models either.  Since the temperament of the politician seems to persist over time, you would think that patterns in GDP would be more predictable than they are.  But they aren’t.

Note that if you buy into multiple equilibria models of business cycles, it is a matter of great importance when the Fed acts to stimulate the economy.  It would probably be too late now because the pessimistic mood already has set in.  But more vigorous action, say a few months ago, might have kept spirits high.  That’s if you buy into those models.

What have economists learned in the last year?

by  Tyler Cowen in

Here is my latest New York Times column, on four things that we have learned over the last year.  Here is the opening:

Harry S. Truman once said he wanted to talk to a one-armed economist, “so that the guy
could never make a statement and then say: ‘on the other hand.’ ” Yet
economic knowledge continues to progress in unexpected ways. Here are a
few of the things we learned in the last 12 months…

But to continue the lunchtime debate with some of my colleagues, the piece ends as follows:

Knowledge is a wonderful thing, but sometimes simply knowing what we
don’t know is a form of understanding. So beware the one-armed
economist; sometimes a good economist could use two or even three arms
or more.

I would make one modification to the tone of the piece: A number of days elapsed between the final draft and publication; I now estimate the probability of a recession higher than the rhetoric of this piece might to some people indicate.

If I were Ezra Klein

by  Tyler Cowen in

Just to define our terms, I take Ezra Klein to be a guy who believes that a single-payer system is clearly a good idea and that in the meantime government-provided universal health care coverage is far better than the status quo, albeit highly imperfect compared to single-payer systems. 

If I were Ezra Klein, I would love Barack Obama and his willingness to drop the forced mandate idea.  But Ezra doesn’t seem to love Barack Obama for that.

I would think that Americans are a fairly libertarian people in some (selective) regards, and that we need to frame progress as "new and concession-laden, choice-friendly version of national health care."  I would know full well that lack of a mandate has efficiency problems, because otherwise people don’t sign up until they get sick and adverse selection makes it unprofitable to sell insurance.

But then, if I were Ezra Klein, I would think: "Ah, at that point there is no turning back.  Private health insurance companies will have to look to government for further financial aid.  This might even evolve into single payer someday, and that is probably the only way we would ever get there, given American Exceptionalism."  I also would think: "I [President Obama] can change my mind on the mandate later, if need be.  Only policy wonks follow the flip flops on such details.  And perhaps the mandate could be implemented indirectly — maybe at the state level, or framed in some other way — so that my hands are clean of apparent contradiction."  I also would think: "The mandate can’t force everyone to buy health insurance anyway — forced auto insurance mandates don’t always work — so the mandate by no means eliminates the adverse selection problem anyway."

Most of all, I would think that Democrats should not waste their energy fighting — prematurely I might add — intra-party battles over issues of mostly symbolic importance.

If I were Ezra Klein, I would think that only Barack Obama has the calm, reassuring manner required to lead America down a difficult and controversial path.  Only Barack Obama (and not Hillary Clinton) would enjoy a true honeymoon period as President, and maybe that is what is required to push through major health care reform.  Only Barack Obama would be seen as approaching this issue from a fresh start and without biases.

If I were Ezra Klein, I would worship at the shrine of Barack Obama.  I would send Barack Obama random postcards of love, affection, and yes money.

But I am not Ezra Klein, and I am not sending postcards to anybody.  Instead, I am sending you this blog post on "If I were Ezra Klein."

Addendum: If Ezra Klein were Ezra Klein.

Why isn’t legalized prostitution more popular?

by  Tyler Cowen in

Some of this was new to me:

An in-depth look at the legal brothel regime reveals
that while the system is preferable, it is stunted by unequal
bargaining power between the prostitutes and brothel owners owing to
collusive arrangements with local sheriffs. But since a regulated
brothel system, with all its faults, provides a safer environment for
prostitutes and their customers than prohibition while maintaining a
sufficient barrier between the prostitution activity and the community
to ameliorate citizen complaints, I ask why this system is not in use
in other jurisdictions, specifically Las Vegas, Nevada. Using
public-choice analysis, the paper concludes that lower employment costs
for casino and hotel owners due to kick backs received by hotel
employees from prostitutes and their customers, the interests of rural
governments to maximize revenues from tourism generated by brothels,
and the interest of Las Vegas legislators to portray the town as
family-friendly maintains the status quo of illegality.

Here is much more, hat tip to www.bookforum.com.  The author is Ashlie Warnick, to whom I once taught macroeconomics.

Addendum: Here’s something else on the same general topic, call it a new installment in Markets for Everything, hat tip to Freakonomics blog.

Markets in everything, food fight edition

by  Tyler Cowen in

Juniors Rachel Whitcomb, Elizabeth Soergel and Taylor Procida are among those who protested an offer last month by the principal of Wilde Lake High School to pay students to identify participants in a cafeteria food fight.

…an intense debate erupted within the Columbia
school community over whether administrators should reward students for
informing on misbehaving peers. Last month, the student newspaper, the
Wilde Lake Paw Print, published three columns by students critical of
the principal’s offer.

"I find the administration’s recent use of monetary incentives
considerably more frightening than a food fight," wrote editor
Katherine Driessen, a senior.

Have you wondered how corporate scandals can go on for so long?:

Philip Soergel, a parent who complained to Howard schools
administrators about the principal’s offer, said: "We were aghast. I
had never heard of this. Kids are getting these kinds of lessons in how
to tattle on one another."

Here is the story.  It seems no one has turned in the perpetrators, I guess the price isn’t very high.

The health care graph

by  Tyler Cowen in

Amenablemortality

Here is Ezra Klein, here is Paul Krugman on the same.  If we put the partisanship aside, and view this as raw statistics, what lessons can be drawn?  The biggest surprise is Japan — a country whose health care institutions are not generally popular — at number two.  Spain and Italy and #4 and #5 are less extreme examples of the same point.  Do the Germans and Danes really kill so many extra people through their health care systems?  Would you really rather get sick in Greece?

Nothing in this post is intended as apology for the United States health care system, but if we are going to look at the numbers let’s consider all of them.  If there is any lesson about the French  — who are a clear first — it is that they do something right for health care apart from having so much government involvement.  What might that be?  What do we learn about what makes for a good health care system?  Is there a correlation between health care performance and policy?  I don’t see it, maybe there is one, but I’m wondering if people are willing to draw lessons from this diagram consistently or not.

I might add I find it easy to believe that American health care institutions make a disproportionate share of stupid errors, or are responsible for lots of patient mistreatments, so I am not trying to undo our presence on the right hand side of this graph.  I do, however, walk away suspicious of the concept of "amenable" mortality.

Addendum: It’s much worse than I thought, read this, which includes a free link to the supposedly gated study.

Second addendum: Out there on the mea culpa watch, or not, here is DSquared.

Book Forum reminder — The Logic of Life

by  Tyler Cowen in

Don’t forget to pre-order your copy of Tim Harford’s The Logic of Life: The Rational Economics of an Irrational World.  Alex and I will be starting our Book Forum soon, along with some prestigious guest reviewers, and Tim’s book will start appearing in book stores this Tuesday.  Tim is one of the world’s best popular writers on economics, and we only select those books that we feel will yield maximally interesting book forums.

The Division of Personality is Limited by the Division of Labor

by  Alex Tabarrok

Here is the abstract to Why can’t a
man be more like a woman? Sex differences in Big Five personality traits
across 55 cultures.

Previous research suggested that sex differences in personality traits
are larger in prosperous, healthy, and egalitarian cultures in which
women have more opportunities equal with those of men. In this article,
the authors report cross-cultural findings in which this unintuitive
result was replicated across samples from 55 nations (N = 17,637). On
responses to the Big Five Inventory, women reported higher levels of
neuroticism, extraversion, agreeableness, and conscientiousness than did
men across most nations. These findings converge with previous studies in
which different Big Five measures and more limited samples of nations
were used. Overall, higher levels of human development–including long
and healthy life, equal access to knowledge and education, and economic
wealth–were the main nation-level predictors of larger sex differences
in personality. Changes in men’s personality traits appeared to be the
primary cause of sex difference variation across cultures. It is proposed
that heightened levels of sexual dimorphism result from personality
traits of men and women being less constrained and more able to naturally
diverge in developed nations. In less fortunate social and economic
conditions, innate personality differences between men and women may be
attenuated.

Unlike the authors, I don’t find it unintuitive that personality differences between men and women increase in developed economies.  All personality differences increase in developed economies.  If Robin Williams Chris Rock (see comments) were a Bangladeshi rice farmer he might still be funny but he’d also have to be a hard-working, diligent rice farmer and that would push his personality closer to the mean of all rice farmers.  The division of labor both opens up the possibility of becoming who you truly are and it magnifies and extends who you can be.

Hat tip to Robin Hanson.

Another way to limit draws in chess

by  Tyler Cowen in

A compromise is that a draw offer should remain valid for some fixed period,
  say ten moves. This will allow the person who has been offered a draw to test
  whether the offer was truly justified, e.g. by trying a daring line which may
  or may not be refuted by the opponent. If it is he can claim the draw on his tenth move, even if his position is losing. The limitation to ten moves avoids the potential problem of people playing on interminably after a draw offer, waiting for their opponents to blunder or overstep the time.

That is John Nunn, here is more.  A draw, of course, is a form of trade, albeit one with some negative social externalities (a quick draw makes chess more boring for the spectators).  If you want to limit trades in some markets, a similar rule could be contemplated.  If you offer to buy a currency at a particular price, you have to keep a similar offer open for one week to some number of other market participants.  Solve for the resulting equilibrium, and see how it matters.

The Diving Bell and the Butterfly

by  Tyler Cowen in

This movie, with its hints of Metamorphosis and Maya Deren, probably will stand as one of the best of the last ten years.  Of course it has a deeply economic theme: how much of the value of life stems from our ability to trade, and how much from our ability to play games of pure coordination?  Plus the French health care system is so good that all the nurses are beautiful and pay infinite attention to a single patient, or maybe that is just how French movies are made.