I hear it is Robert Engle and Clive Granger, not yet on the major news outlets, more to follow later today.
Addendum: Here is the press release from Stockholm. Here is a short article on cointegration, Granger’s most important contribution. Here is an introduction to ARCH models, a technique pioneered by Engle. Here is Engle’s home page, and Clive Granger’s home page.
My take: Very good picks, economists use their contributions all the time, note that their work is of less interest to the general public than is usually the case.
Therefore you spend more money in restaurants, for the full story click here. You spend less when you hear Britney Spears, although you still spend more than when you hear no music. And how about Led Zeppelin? Co-blogger Alex noted not long ago that German music makes shoppers buy German wines, and French music makes shoppers buy French wines.
Here is a link to the original research, also connecting you to a variety of other pieces on music and psychology. Music also makes you more willing to wait in line. And people like pop music more, the more attractive the singer.
Laissez-Faire Books is offering special sales this month, they have by far the cheapest prices and a very good selection of libertarian and market-oriented books, including my own books, portrayed in the right column on this blog, co-blogger Alex’s books too.
Thanks to David Bernstein for the pointer, from Volokh Conspiracy.
Or maybe you want DVD and video products for economics? Also check out Films for the Humanities & Sciences, only some of them appear to be junk.
Most auto emissions come from the dirtiest ten percent of the cars on the road. Why should we ignore this fact? Daniel Klein suggests using infra-red beams to measure the quality of auto exhaust from particular cars, as they drive by the sensors. Identify the minority of gross polluters by photographing their license plates, and then get them off the road, force them to fix their cars, or tax them. Note that your annual or bi-annual auto emissions test is easy to fake or prepare for. Under Klein’s scheme the government measures the quality of auto exhaust, and lets the car owner invest in a better result however he or she wishes to do. My main worry concerns privacy issues, but perhaps privacy is headed out the window in any case. To read about related essays on economic policy and technology, from the same book, see my previous post on electricity.
Analog television is dead in Berlin. The German capital became the world’s first jurisdiction to go all-digital on the TV dial in August, when the last of its analog stations–along with viewers’ analog TV receivers–went dark. Contrary to the fears of regulators elsewhere, there have been no shrieks of outrage. The lessons for American policymakers: The paralysis that grips the digital TV transition in the United States can be overcome, and taking away analog TV is not political suicide.
Why is this a good thing?
Given a digital configuration, broadcasters could beam many times the number of analog stations currently on the dial.
And by taking a step beyond the “Berlin switch,” new wireless networks could be unleashed. The United States long ago set aside some 67 TV channels nationwide, but the great majority of them are unused. In fact, just seven TV stations broadcast in the average market. Going digital could open up this mother lode of leftover spectrum in the TV band to productive use.
Berlin just did the switch the drastic way, and families on welfare were given vouchers to purchase the new boxes. Regulators fear “stranding” 13 million TV sets in America, but a similar voucher plan would cost about $50 million in the United States, we are told.
For the full story, read Tom Hazlett on Slate.com.
…the homogenization in question, which today is perceived most often as Americanization, is (insofar as it exists) American only in its most superficial and least durable aspects. It is above all the vehicle for popular culture–the entertainment, clothing styles, and fast foods favored by the young, and popular music (but not all of it, by any means). Here the word “culture” is being used in the rather loose sense that has prevailed because it is the entertainment industry that leads the choir in lamenting American influence. This influence may present a problem, but to identify the whole of cultural life with entertainment is a travesty.
Contrary to what Jacques Chirac maintained, globalization is not a “cultural steamroller.” It is and always has been an engine of enrichment. Think, for example, how the French artistic sensibility was revitalized by the discovery–or rather fuller knowledge–of Japanese painting afforded at the end of the nineteenth century, or by the arrival in France of African art ten or twenty years later. There are plenty of similar cases.
This is Jean-Francois Revel, writing in the latest New Criterion.
It is hard to tell you just how much I liked this article. Consider this:
And if the French film industry in 2001 has recaptured market leadership at home and found successes abroad, this is not because it is more subsidized than formerly, but because it has managed to produce a handful of films whose quality was appreciated not only by their auteurs, but by the public. A commercially successful French cinema, with international appeal, evidences a more authentic diversity than the kind preached by tedious diversity-mongers.
This article is just full of excellent bits:
…in the domain of languages too, globalization leads to variety, not uniformity. The spread of English facilitates communication and mutual influence between cultures; it is hardly a trivial matter when, thanks to the lingua franca, Japanese, Germans, Filipinos, Italians, Russians, French, Brazilians, etc., can participate in the same colloquium, sharing information and ideas.
Or how about this:
…the endowment of Harvard, certainly not the largest university in America, is close to $20 billion–more than twice the annual expenditure of France on its entire university system.
Here is another:
Giancarlo Pajetta, an important Italian Communist leader, once said: “I have finally understood what pluralism is; it’s when lots of people share my point of view.”
Highly recommended, go through the full text yourself, and prepare for the forthcoming book, entitled Anti-Americanism.
Poor nations are more protectionist than are rich nations, even when it comes to textiles. Agricultural subsidies hurt rich nations more than they hurt poor nations. Protectionism often hurts the environment more than does free trade. For more, read here.
In a few short months we have had major blackouts in New York City, England, Italy, and Scandinavia, see Lynne Kiesling’s blog for a running analysis of energy and electricity events. In each case critics have charged that ill-conceived deregulations have led to underinvestments in power grids.
To what extent could we avoid these problems by decentralizing electricity supply altogether? Why not just pull off the grid and have your own generator? How practical will this be in the future? More than ten percent of the American power supply is already produced this way.
These are exactly the kind of engineering questions that I have little sense of. But I have just read the most detailed case for decentralization to date. The authors argue:
Dispersed [electricity] generation has long been economically viable, with technology making it even more so. Natural monopoly is a myth.
The authors also give numerous details about how current regulations hinder such a decentralized market solution.
One of the authors, Alvin Lowi, is an engineer with numerous patents to his name and forty years experience. The article is in a Cato book edited by Fred Foldvary and Daniel Klein, The Half-Life of Policy Rationales, or click here for the Amazon.com link. Here is the Cato press release about the book, which looks about how new technologies can make government interventions unnecessary. Again, I cannot evaluate the arguments, but this is definitely an advance in the debate.
The NYTimes reports that “introductions of new drugs plummeted last year to 17 from a high of 53 in 1996, despite a near doubling in annual research spending, to $32 billion.” The Times blames lost lab productivity from mergers. Based on close second-hand experience – my wife is a microbiologist who worked at a pharmaceutical firm as it underwent a merger – I can attest to the fact that mergers create havoc. Reaping the potential economies of scale and scope that drive the merger requires that product lines be discontinued and new lines of hierarchy established. But the power struggles involved in the transition are dissipative and disheartening. It’s not uncommon for some research programs to be canceled and then started again as new coalitons form. The uncertainty alone is draining. The best of the researchers have no stomach for this ordeal and jump ship.
The Times gets a number of things wrong, however. It can take a dozen or more years to research, develop and get a new drug approved so it makes no sense to compare this year’s research spending with this year’s output. The fact that research spending is up even though current output is down is a positive signal of potentially better things to come.
The Times also misses the fact the FDA was approving drugs faster in the late 1990’s than for many decades previously. The FDA got burned, however, as Pulitzer prize-winning critics accused it of endangering the public. Sadly, the FDA learned its lesson and slowed down. (See here for more on FDA incentives and why the Pulitzer prize committee did us all a disservice.)
Finally, the Times says nothing about why the mergers are taking place. One reason is the rising cost of pharmaceutical research. It now costs $900 million dollars to bring the average new drug to market. Firms are merging in order to better control these costs and diversify their risks. FDA reform could lower these costs.
Last night I read my newly-arrived copy of Joseph Stiglitz’s The Roaring Nineties: A New History of the World’s Most Prosperous Decade. As you might expect from Stiglitz, it is well-written and smart.
His key theme is that, although the nineties were a wonderful time economically, they also brought some dangerous trends. Most of all, the capital market ruled resource allocation, and economic policy, like never before. We misallocated resources on a tremendous scale, such as with the telecommunications boom and bust. Stiglitz also argues against the deregulation of the nineties, as too little was done to reign in corporate abuses, such as Enron. He also believes that the Clinton administration was too obsessed with balancing the budget.
My hesitations about this book are simple: We are never given much of a recipe for how things could have been better. Stiglitz opposes the repeal of Glass-Steagall, and the Clinton telecommunications reforms. To be sure, these policies were problematic in some regards, but they did not drive the excesses of the 90s. To what extent can government policy limit a dot.com or fiber optic boom? To what extent can government policy, as opposed to intra-firm institutional reforms, limit corporate conflicts of interest? We do not get much of an inkling on these critical issues.
Occasionally Stiglitz gets specific, but his examples do not help his case: “Would the bubble have been averted if only we had only supported better accounting of executive stock options? We will never know the answer.” But the answer is almost certainly “no,” most commentators regard the option accounting issue as a red herring, here is one treatment of many.
It is OK to write a pure critique, rather than a recipe for change, but the book promises “a coherent and convincing alternative.” That is precisely what we do not get. The final chapter “Toward a New Democratic Idealism” also does not move beyond the vague. It is not enough to say we had too much deregulation and forgot our concern with social justice.
Stiglitz also expresses concern that the Clinton administration pushed “market fundamentalism” on the poorer countries of the world, while rejecting it at home. I cannot agree here. Even if you take the Stiglitzian worldview as correct and given, the quality of government in the developed countries is much higher than in the developing world. Admittedly the quality of the market is often higher as well, but why promote a regulatory regime that will bring corruption and privilege? Most poorer countries simply cannot count on good and honest regulation, and they don’t have Joe Stiglitz as the main economic advisor to their Presidents.
In the 1998-2002 GSS [General Social Survey], extreme conservatives are much more likely to report being “very happy” than extreme liberals–47.1% to 31.6%. Earlier years show a similar pattern.
This conservative happiness carries over into most other aspects of life as well. Conservatives usually report being happier in their jobs than liberals. In the 2002 GSS, for example 65.2% of extreme conservatives report being “very satisfied” with their jobs in general, while only 50% of extreme liberals report being very satisfied. When the question is broadened to satisfaction with job or housework, a similar pattern obtains. In the 1998-2002 GSS, 61.0% of extreme conservatives reported being very satisfied, compared to 53.6% of extreme liberals.
As to finances, in the 1998-2002 GSS 34% of extreme conservatives report being satisfied with their finances compared to 26.4% of extreme liberals. More extreme liberals (34.5%) than extreme conservatives (25.8%) report being “not at all satisfied” with their finances.
Conservatives usually tend to report less marital unhappiness than liberals.
I am not endorsing this link, though I do find it intriguing. But might conservatives feel a greater need to claim that all is well? For the full story, pursue this link.
Oil and gas will run out too fast for doomsday global warming scenarios to materialise, according to a controversial analysis presented this week at the University of Uppsala in Sweden. The authors warn that all the fuel will be burnt before there is enough carbon dioxide in the atmosphere to realise predictions of melting ice caps and searing temperatures.
The full story is from The New Scientist.
Tyler noted how the rotten court system in Jefferson County Mississippi is finally being investigated by the FBI. At the heart of the investigation are contributions by lawyers to elected judges. It also doesn’t help that Jefferson has a large and poor minority-population. See the links for why this is important. Email me if you want copies of the papers and don’t have a subscription to the journals.
A search on Amazon.com yielded 276 distinct performances of Beethoven’s 5th symphony, many at bargain prices. Attendance at classical concerts is steady or slightly up. The classical share of the CD market is roughly constant at 3 to 5 percent. On the other hand, many orchestras are experiencing financial difficulties, and some are closing.
Complaints about the economic fate of classical music have been common for many decades. In fact parts of the 1980s and 1990s — not long ago — were a financial golden age for the classics, driven by The Three Tenors, Gorecki, and replacing albums with CDs. The entire story comes from the Federal Reserve Bank of Boston, click here.
In my view, the biggest single dilemma is whether the next generation of philanthropists will have any loyalty to classical music institutions.
How about classical music on the radio?
Classical music stations have disappeared in many cities; one-third of the nation’s top 100 radio markets do not have a classical station. After 63 years, ChevronTexaco’s radio broadcast from the Metropolitan Opera House will be off the air next year.
I suspect that the future of classical music on the radio lies in satellite radio, read this article from today’s Washington Post. XM satellite radio has about one million subscribers and its classical stations are excellent, long pieces with high sound quality, not just another rendition of a Telemann shortie or a Boccherini guitar quintet.
Thanks to William Sjostrom for the pointer to the article.
Addendum: Kevin Brancato tells us that fewer than one percent of American symphony orchestras have gone bankrupt in recent years.
At least once they turn sixteen, or so I learned from the recent DVD release The Devil’s Playground, a 77-minute award-winning documentary, which I rented at my local Hollywood video. An Amish ritual called “rumspringa” (“running around,” note that the link shows, among other things, Amish youth drinking beer) allows youths to sample the previously forbidden delights of the outside world to their heart’s content. At this age Amish youth start having wild parties (organized by cell phone), premarital sex, and often hard drugs as well. The Amish elders believe that the youth must be allowed to sow their wild oats, if they are ever to become good Amish later. One Amazon.com reviewer wrote:
I was not prepared to see a trailer full of Amish teens drugged up to their eyeballs right on Amish land. The Amish Rumspringa teens careen around and throw such wild parties that people come from all over America to attend. Apparently, it is well known (except by me) that “Amish kids have the best parties.”
Ninety percent of Amish youth later decide to join the church and give up such wanton ways. Never before in history has a higher percentage of the Amish remained in the fold.