Dean Ball speaks
o1 and o1-pro are a cut above other models at economic history writing. they can combine knowledge of historical facts with economic analysis in a *much* more creative and cogent way than earlier models. it’s not just math and code, folks.
Here is the link.
What I’ve been reading
Emily Nussbaum, Cue the Sun! The Invention of Reality TV. Despite its excellent reviews, I resisted buying this book for a while, because most books on TV are not good. It is intrinsically difficult to write about the medium, and also many of the people who want to just aren’t that smart. But the Nussbaum book is a true winner, the Candid Camera chapter alone makes it worth it. Did you know that Richard Lewis was on the show at age 16? Recommended, both for its entertainment and its substance value.
Africa: the Definitive Visual History of a Continent, Penguin Random House. One of my favorite picture books of all time. It teaches the broader history of Africa by region rather than by country. First-rate maps and photos throughout.
Rose Lane Says: Thoughts on Race, Liberty, and Equality, 1942-1945. A hitherto little-known corner of libertarian thought, these short essays are very good and could be a useful tonic for some of what has gone wrong. Edited by David T. Beito and Marcus Witcher.
Emily Herring, Herald of a Restless World: How Henri Bergson Brought Philosophy to the People. It is good to see more on Bergson in English. I had not known that the best man at his wedding was Marcel Proust (they were cousins by marriage and Proust was not yet famous). Still, the book did not convince me that I have been underrating Bergson.
John Callanan, Man-Devil: The Mind and Times of Bernard Mandeville, The Wickedest Man in Europe, is a good treatment of an underrated and still under-read Dutch thinker.
Marshall B. Reinsdorf and Louise Sheiner, The Measure of Economics: Measuring Productivity in an Age of Technological Change, is a very useful and well-reasoned book.
Ann Schmiesing, The Brothers Grimm: A Biography fleshes out of our knowledge of the German Romantic period.
Of interest to some is Oliver Keenan, Why Aquinas Matters Now.
The importance of transportation for productivity
We quantify the aggregate, regional and sectoral impacts of transportation productivity growth on the US economy over the period 1947-2017. Using a multi-region, multi-sector model that explicitly captures produced transportation services as a key input to interregional trade, we find that the calibrated change in transportation productivity had a sizable impact on aggregate welfare, magnified by a factor of 2.3 compared to its sectoral share in GDP. The amplification mechanism results from the complementarity between transport services and tradable goods, interacting with sectoral and spatial linkages. The geographical implications are highly uneven, with the West and Southwest benefiting the most from market access improvements while the Northeast experiences a decline. Sectoral impacts are largest in transportation-intensive activities like agriculture, mining and heavy manufacturing. Our results demonstrate the outsized and heterogeneous impact of the transportation sector in shaping US economic activity through specialization and spatial transformation.
That is from a recent NBER working paper by
New claims about cosmology
New claims about cosmology. Paper here. Big if true. It seems the key innovation is to make time pass at varying speeds in different parts of the galaxy?
Monday assorted links
1. The World Bank is backing mega-dams again.
2. Good review of the new McCartney biography.
4. Pick-up truck as Pakistani status symbol.
5. “We’re building Retainit, an AI-powered game for the podcasts you’re already listening to.
We’d love to hear whether CWT listeners enjoy this AI-hosted game show for the Stephen Kotkin episode. Beta users seem to love this feature, but we’d like to gather a lot more feedback!
Our mobile app goes live in public beta next month. Our goal is to build a game that (i) helps avid podcast listeners remember 10x more from podcasts and (ii) is more fun & addictive than Candy Crush.”
6. Ideological bias in immigration studies.
7. Cook Islands plan break with New Zealand.
8. Grok estimates the impact of various economists.
9. “Roy, undeterred, pointed out that the revised legislation Musk and Trump had trumpeted as an improvement, while vastly shorter in length, didn’t actually spend any less money than the original deal.” (WSJ)
What should I ask Joe Boyd?
Yes, I will be doing a Conversation with him. Here is from Wikipedia:
Joe Boyd (born August 5, 1942) is an American record producer and writer. He formerly owned Hannibal Records. Boyd has worked on recordings of Pink Floyd, Fairport Convention, Sandy Denny, Richard Thompson, Nick Drake, The Incredible String Band, R.E.M., Vashti Bunyan, John and Beverley Martyn, Maria Muldaur, Kate & Anna McGarrigle, Billy Bragg, James Booker, 10,000 Maniacs, and Muzsikás. He was also one of the founders of the highly influential nightclub venue UFO…
Boyd was responsible for the sound at the 1965 Newport Folk Festival, when Bob Dylan played a controversial set backed by electric musicians.
And:
Boyd returned to the United States at the end of 1970 to work as a music producer for Warner Bros. with special input into films, where he collaborated with Stanley Kubrick on the sound track release of A Clockwork Orange. Boyd also contributed to the soundtrack of Deliverance, directed by John Boorman, where he supervised the recording of “Dueling Banjos“, which became a hit single for Eric Weissberg.
Here is Joe’s official website. Joe has a new and remarkably thorough and polymathic book out And the Roots of Rhythm Remain: A Journey Through Global Music. So what should I ask Joe?
Jefferson’s DOGE (that was then, this is now)
Jefferson swiftly undid twelve years of Federalism. He allowed the Sedition Act to expire and adopted a more catholic naturalization law. He reduced the federal bureaucracy — small even by today’s standards — particularly in the Treasury Department (a slap at Hamilton, who had been Secretary under Washington), slashing the number of employees by 40 percent and eliminating tax inspectors and collectors altogether. He cut the military budget in half, which was then 40 percent of the overall federal budget. He eliminated all federal excise taxes, purging the government of what he called Hamilton’s “contracted, English, half-lettered ideas.” Reluctantly he kept the First Bank of the United States, but paid off nearly half the national debt. “No government in history,” the historian Gordon S. Wood has observed, “had ever voluntarily cut back on its authority.”
That is from the new and very good book Martin van Buren: America’s First Politician, by James M. Bradley. Later things were different:
Martin van Buren went into office deermined to avoid Andrew Jackson’s fateful staffing mistakes. The backbiting and intrigue wasted two years of Jackson’s presidency. This van Buren could not afford.
And a wee bit later:
Then the voters had their say. The November elections in New York were an absolute bloodbath for the Democrats. There were 128 elections for assembly in 1837, and the Whigs won 101 of them.
The book is well-written.
*Goethe: A Faustian Life*
By A.N. Wilson, an excellent book and worthy of being addended to the year’s best non-fiction list. In addition to appreciating the work of Goethe, which one can never do enough of, Wilson argues (with reasonable evidence) that Goethe was bisexual, including with Jacobi (!). Goethe also had, at the very least, alcoholic tendencies, at times drinking three bottles a day for extended periods of time.
Of course there are the extensive Nicholas Boyle volumes (in the works) as well, fortunately you do not have to choose. Recommended, noting that many of Goethe’s best works make sense only in German. Here is a Henry Oliver podcast with Wilson.
Stephen Miran nominated to head the CEA
Here is Stephen on Twitter, Harvard PhD, mostly he has been in the private sector. The NYT has further information.
Via Jon Hartley.
Sunday assorted links
1. FT lunch with Abhijit Banerjee. And his new book.
2. It seems Niall Ferguson has converted to Christianity?
3. Irish video warning California about its housing policies.
4. “Rwanda, Ethiopia, Ivory Coast and Tanzania, for example, are projected to grow by at least 6%.”
5. All We Imagine as Light is an excellent movie.
One thing I have learned doing Emergent Ventures
As you likely know, we have sent money to quite a few different individuals in different countries around the world. And one thing I have learned is that there really are legitimate payments uses for crypto. Very often international payments simply do not work that well. We do not use crypto for this purpose, but matters would go more smoothly if we could. That would require everyone to be in crypto networks, similar to how most people today are in banking networks. I do understand there are possible trade-offs with money laundering and criminality and the like, but it is silly not to recognize the significant potential gains here.
Artificial Intelligence in the Knowledge Economy
The rise of Artificial Intelligence (AI) has the potential to fundamentally reshape the knowledge economy by solving problems at scale. This paper introduces a framework to study this transformation, incorporating AI into an economy where humans form hierarchical firms: Less knowledgeable individuals become “workers” solving routine problems, while more knowledgeable individuals become “solvers,” assisting workers with exceptional problems. We model AI as a technology that transforms computing power into “AI agents,” which can either operate autonomously (as co-workers or solvers/co-pilots) or non-autonomously (only as co-pilots). We show that basic autonomous AI displaces humans towards specialized problem solving, leading to smaller, less productive, and less decentralized firms. In contrast, advanced autonomous AI reallocates humans to routine work, resulting in larger, more productive, and more decentralized firms. While autonomous AI primarily benefits the most knowledgeable individuals, non-autonomous AI disproportionately benefits the least knowledgeable. However, autonomous AI achieves higher overall output. These findings reconcile seemingly contradictory empirical evidence and reveal key tradeoffs involved in regulating AI autonomy.
Important results, and largely in accord with my own intuitions. That is from a new paper by Enrique Ide and Eduard Talamas.
The show so far, DOGE edition
Round one is over, and so far no progress and indeed steps backwards:
President-elect Donald Trump’s last-minute demands for a congressional funding package were rejected by dozens of Republicans this week, foreshadowing the legislative challenges he could face next year — even with unified GOP control.
The Republicans also revealed they are not willing to shut down the government, and they do not have such a stable coalition in the House, and that is even before they lose some number of seats.
The package that passed the House includes more than $110 billion in disaster aid and a one-year farm bill extension but is stripped of Trump’s demand: a debt limit extension.
There was not an actual substantive win in the final outcome. Not surprisingly, the Democrats are touting it as a win for the Democrats.
And here Vivek concedes the loss.
I very much hope DOGE makes progress on its key issues — excess regulation and spending — but political change is tough and requires some highly unusual and idiosyncratic skills. Keep also in mind that while Trump has a mandate to attack Woke and secure the border, voters seem far less excited by cutting back on government spending and regulation (if anything the opposite?). Government spending is what “makes Washington go round,” and Reps love it, no matter what they may say in some of their more manufactured moments. So DOGE strategy will need to adjust accordingly.
Saturday assorted links
2. The impact of new products on ethical beliefs.
3. Speculative claims about the new economics of open source AI.
4. BBC interviews me about Milei.
5. Grok rates the top economists on X. This seems better than AGI, right? Four of the top tier are GMU-affiliated.
6. A lengthy Scott Sumner post on inflation dynamics. Here is commentary from o1 pro.
AI is Not Slowing Down, Except for Stop Lights
After 25.3 million fully autonomous miles a new study from Waymo and Swiss Re concludes:
[T]he Waymo ADS significantly outperformed both the overall driving population (88% reduction in property damage claims, 92% in bodily injury claims), and outperformed the more stringent latest-generation HDV benchmark (86% reduction in property damage claims and 90% in bodily injury claims). This substantial safety improvement over our previous 3.8-million-mile study not only validates ADS safety at scale but also provides a new approach for ongoing ADS evaluation.
As you may also have heard, o3 is solving 25% of Frontier Math challenges–these are not in the training set and are challenging for Fields medal winners. Here are some examples of the types of questions:
Thus, we are rapidly approaching super human driving and super human mathematics.
Stop looking to the sky for aliens, they are already here.