Results for “daniel klein”
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Assorted links

1. Scott Winship reviews Piketty.  And Kevin Hassett on Piketty.

2. Why should there be deflation in Sweden?

3. Why is the singing of the national anthem so much better for hockey?

4. Liberalism unrelinquished, a project headed by Daniel Klein to reclaim the use of this word.  They are looking for signers.

5. Professional actor reading a Yelp review.

6. Will health care spending balloon again?

*Inventing Freedom*

That is the new book by Daniel Hannan and the subtitle is How the English-Speaking Peoples Made the Modern World.

Oh how one can mock those subtitles about the making of the modern world, heh heh!  Yet this subtitle has a plausible claim to be…true.  Even more shockingly, the subtitle accurately describes the book.

Every time my plane lands in England I shed at least a tear, maybe more, out of realization that I am visiting a birthplace (the birthplace?) of liberty.  This is not a joke and during my trips there I never quite snap out of that feeling, though I am also well aware of all the problems those people have foisted upon the world as well.

I found many parts of this book to be superficial, or perhaps well-known.  Yet often they were superficial and…true.  Here is one excerpt:

To put it another way, the distinction was not between Catholic and Protestant individuals, but between Catholic and Protestant states.

Here is from an Amazon review:

Author Daniel Hannan is a person of English ancestry who was born and raised in Peru then relocated to the United Kingdom as an adult and made a career in politics, including becoming one of the U.K.’s representatives to the European Parliament. His global experience has shown him how unique is our “Anglosphere” heritage of representative democracy, protection of property rights, the sanctity of law, and the inalienable rights of the individual.

This is in some ways an important book, though I do not think it is a book which will satisfy everybody.

For the pointer I thank Daniel Klein.

Assorted links

1. The best music journalism of the year?

2. Lars Svensson defends Sweden.

3. Are “booth babes” bad for business?  And the etymology of “brothel.”

4. Daniel Klein on how and where the word “liberal” originated (video lecture).

5. Egypt hires Washington public relations firm, then arrests them hours after arriving in the country.

6. Do the music companies benefit from streaming services?

7. Is the United States too corrupt for single payer health care?  And do Mini-Med plans continue to be legal?  Frankly, I am confused by that latter link and how it jives with everything else I have been told, both by program supporters and critics.

Assorted links

1. The paperback version of Daniel Klein’s Knowledge and Coordination is out.

2. Profile of Samantha Power in Elle.

3. El Universal reviews *Average is Over* (in Spanish).  Here is Yahoo Finance on the book, and here too.  And a podcast with Jim Pethoukis.

4. Britain’s dysfunctional housing market, very good presentation.

5. 1:18 YouTube video on the future of statistics.

6. Austan Goolsbee and Sean Hannity.

7. Laura Miller on Ender’s Game.

The Ideological Migration of the Economics Laureates

That work fills up the latest issue of Econ Journal Watch.

This issue of Econ Journal Watch (download, .pdf) is given over to a special project that considers such changes as may have occurred among the 71 individuals who, through 2012, won the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.

Ideological profiles of all 71 laureates make up the bulk of the issue. The 71 profiles are bundled in a single large document that is equipped with handy links for internal navigation.

Ideological change is interpreted in terms of either growing more classical liberal or growing less classical liberal. Daniel Klein leads the project. In his overview essay he explains the investigation, its many limitations, and the findings.

…David Colander served as overseeing referee, and he reports on the project.

Twelve of the laureates replied to a questionnaire requesting that they discuss their ideological outlooks at different times in their lives. The twelve who replied are Kenneth Arrow, Ronald Coase, Peter Diamond, Eric Maskin, James Mirrlees, Roger Myerson, Edward Prescott, Thomas Schelling, William Sharpe, Vernon Smith, Robert Solow, and Michael Spence. Their responses are included in their profiles, and they are also collected in a standalone appendix.

This is path-breaking work in intellectual history, the best contribution to the history of modern economics in recent memory, fascinating as intellectual biography and autobiography, and it should be snapped up immediately by some enterprising publisher.

David Brooks on the words we use

Daniel Klein of George Mason University has conducted one of the broadest studies with the Google search engine [TC: the paper is here]…On the subject of individualization, he found that the word “preferences” was barely used until about 1930, but usage has surged since. On the general subject of demoralization, he finds a long decline of usage in terms like “faith,” “wisdom,” “ought,” “evil” and “prudence,” and a sharp rise in what you might call social science terms like “subjectivity,” “normative,” “psychology” and “information.”

Klein adds the third element to our story, which he calls “governmentalization.” Words having to do with experts have shown a steady rise. So have phrases like “run the country,” “economic justice,” “nationalism,” “priorities,” “right-wing” and “left-wing.” The implication is that politics and government have become more prevalent.

So the story I’d like to tell is this: Over the past half-century, society has become more individualistic. As it has become more individualistic, it has also become less morally aware, because social and moral fabrics are inextricably linked. The atomization and demoralization of society have led to certain forms of social breakdown, which government has tried to address, sometimes successfully and often impotently.

This story, if true, should cause discomfort on right and left. Conservatives sometimes argue that if we could just reduce government to the size it was back in, say, the 1950s, then America would be vibrant and free again. But the underlying sociology and moral culture is just not there anymore. Government could be smaller when the social fabric was more tightly knit, but small government will have different and more cataclysmic effects today when it is not.

Liberals sometimes argue that our main problems come from the top: a self-dealing elite, the oligarchic bankers. But the evidence suggests that individualism and demoralization are pervasive up and down society, and may be even more pervasive at the bottom. Liberals also sometimes talk as if our problems are fundamentally economic, and can be addressed politically, through redistribution. But maybe the root of the problem is also cultural. The social and moral trends swamp the proposed redistributive remedies.

Here is more, interesting throughout.

On recoveries, elasticities, and Portuguese exports

In response to this post, Paul Krugman writes:

Suppose that I could wave a magic wand (or play a few notes on a a Magic Flute) and suddenly increase all German wages by 20 percent. What do you think would happen to the value of the euro against the dollar and other currencies? It would drop a lot, yes? And Portuguese exports would become a lot more competitive everywhere, including non-German and indeed non-Euro destinations.

I guess I thought this was obvious. Apparently not.

Let’s start with the data.  Portuguese exports have indeed gone up since 2009, with the weaker euro likely being one reason.  Here is a recent positive report.  Still, this experience shows higher exports are unlikely to prove their salvation.  Last year Portuguese shipments outside Europe rose by twenty percent, but that is from a fairly small base.  The country continues to have high unemployment and falling gdp, doing worse than does Ireland on the test which Krugman repeatedly applies to Irish recovery.  The Portuguese forecast for this year is 2.3% gdp shrinkage and 18% unemployment, and that is with an export performance described as “surging.”  “Surging” isn’t enough.

[A digression: If you are tempted to argue that “exports arising from inflation in Portugal would be so much more potent than the export boost from the status quo,” keep in mind that we are dealing here with the postulated scenario, accepted by Krugman for the sake of argument, where the euro falls, stimulating exports, as indeed has happened, but the inflation stays in Germany and does not spread to Portugal.]

To dig deeper, we might ask how strong the additional export elasticity, with respect to euro devaluation, is going to be.  The leading export partners of Portugal are Spain, Germany, France and Italy, not a surprise.  So a weaker euro won’t much help them on those fronts.  Around 71% of their exports go to the EU and most of that will be to the eurozone.  Next in line is the UK but the pound has fallen too and according to many should (will?) fall even further.  The BRICS are ailing on the growth front.  Team USA is not going to turn Portugal around, we just don’t buy enough cork.

The main import of Portugal from outside the eurozone seems to be petroleum, so a weaker euro hurts them on that front.

Portugal is also a victim of what is called “the gravity equation,” namely that distance hurts the prospects for trade and in a manner which is strongly non-linear.  Think about the map or failing that read Saramago’s The Stone Raft — Portugal is close to other eurozone countries and to some (relatively poor) parts of Africa, otherwise it is pretty far from most places.

As an aside, it is strange for Krugman of all people to so stress the real exchange elasticity of exports.  To do a bit of history of economic thought (pdf):

In particular, the seminal paper by Baldwin and Krugman (1989) shows that the existence of a sunk entry cost into the export market generates a persistent effect of real exchange rate movements on bilateral exports. The model also suggests that a larger sunk entry cost generates a more persistent effect, or equivalently a lower reaction of exports to real exchange rate movements [emphasis added]. We specifically test this theoretical prediction by making use of various measures of trade costs that can be associated to the sunk entry cost.

In other words, real exchange rate movements are not a panacea, and furthermore this is all the more true for countries which are in a disadvantageous position due to…the gravity equation.  The higher export elasticity for Portugal may well be through the dreaded internal devaluation, because that is at least relative to their close and most likely trade partners.

Krugman’s own words on the topic were “huge swings in the exchange rate have had only muted effects on anything real,” to cite one claim out of numerous similar passages.

[Now that sentence is from 1989 and perhaps now you will leap up and accuse me of not allowing Krugman to change his mind, or of thinking he wanted to raise marginal tax rates in 1959, or of seeing 1978 as a liquidity trap.  Please.  This is a fairly general result, but, if the relevant elasticities have indeed gone up significantly since 1989, and indeed that is possible, that is worth discussing.  But rather than making a case for such a change, Krugman’s response of “Portuguese exports would become a lot more competitive everywhere, including non-German and indeed non-Euro destinations.  I guess I thought this was obvious. Apparently not.” is little more than a self-parody of his own style of argumentation.]

In sum

We can all agree that inflation centered in Germany has some positive spillover effects to Portugal.  But let’s go back to the initial question, a positive rather than normative one.  Can a German prime minister credibly promise that significantly higher inflation would set things straight in the eurozone periphery or for that matter fix Portugal?  I don’t think so, though it may have worked in 2009, as indeed I argued at that time.

Krugman amended his initial post to state the following:

Again, as Ryan [Avent] says, the crucial difference between German/ Portuguese economic relations and, say, US/ El Salvador (whoops: some central American countries have dollarized. But that was their choice, not part of a grand project like the euro) relations is that Germany and Portugal share a currency. This creates obligations for Germany, whether it likes them or not.

That’s a good example of “distraction by introducing or stressing a moral issue.”  (You can track some of Ryan’s related tweets here.)  One can indeed argue the extent of Germany’s moral obligation to its fellow parties in a “we’re all in this together but no bailouts and price stability” treaty.  But the issue on the table was how much more inflation would help Portugal and other nations of the periphery; surely an understanding of that question should come first.

If someone argues “it may not help as much as you think at this point,” and the response is “Germany must be morally (and financially) committed to the grand project,” that is an object lesson in precisely why Germany and some other nations are insisting on so many limits and rules within the eurozone and EU.  Krugman is fond of saying he wants to change the world and not just engage in polite dinner table conversation, but may I suggest his framing is not likely to prove an advance marketing beachhead for the ideas of fiscal union and banking union in Berlin much less Helsinki or for that matter Paris?

As for myself, when the Krugman/Avent case for the German moral obligation so frequently and so quickly jumps to what Daniel Klein has called “The People’s Romance (pdf),” and so infrequently gets into the nitty-gritty of the positive economic argument, that makes me nervous too.

There is the usual snark in Krugman’s post, but if you read it through you will notice it does not cite a single fact or estimate.

Czech fact of the day

At a typical local pub, a pint—500 milliliters, actually, in this metric-measuring country—costs about $1. A similar portion of water, juice or soda generally costs twice as much. Offering free tap water as at U.S. eateries is extremely rare.

At U Zelenku, a neighborhood institution for more than a century, for instance, a pint of the cheapest beer goes for 99 cents. The same size of soda water is $1.30. At the fancier Kolkovna restaurant in touristy Old Town, a pint is $2.50, while mineral water is $2.29, for a bottle less than half the size.

Here is more.  The Czech government may end up mandating that some non-alcoholic drinks be cheaper than beer.

For the pointer I thank Daniel Klein and also NB.

Women economists see the world differently

The biggest disagreement: 76% of women say faculty opportunities in economics favor men. Male economists point the opposite way: 80% say women are favored or the process is neutral.

As for politics:

Female economists tend to favor a bigger role for government while male economists have greater faith in business and the marketplace. Is the U.S. economy excessively regulated? Sixty-five percent of female economists said ‘no’ — 24 percentage points higher than male economists.

The story is here.  The article is “Are Disagreements Among Male and Female Economists Marginal at Best? A Survey of AEA Members and Their Views on Economics and Economic Policy,” Ann Mari May, Mary G. McGarvey and Robert Whaples, Contemporary Economic Policy (forthcoming), but I can’t seem to find a copy on-line.

For the pointer I thank Daniel Klein.

New issue of Econ Journal Watch

You will find it here.  The contents include:

James Tooley on Abhijit Banerjee and Esther Duflo’s Poor Economics: Banerjee and Duflo propose to bypass the “big questions” of economic development and focus instead on “small steps” to improvement. But, says Tooley, they proceed to make big judgments about education in developing countries, judgments not supported by their own evidence.

Why the Denial? Pauline Dixon asks why writers at UNESCO, Oxfam, and elsewhere have denied or discounted the success and potentiality of private schooling in developing countries.

Neither necessary nor sufficient, but… Thomas Mayer critically appraises Stephen Ziliak and Deirdre McCloskey’s influential writings, particularly The Cult of Statistical Significance. McCloskey and Ziliak reply.

Was Occupational Licensing Good for Minorities? Daniel Klein, Benjamin Powell, and Evgeny Vorotnikov take issue with a JLE article by Marc Law and Mindy Marks. Law and Marks reply.

Mankiw vs. DeLong and Krugman on the CEA’s Real GDP Forecasts in Early 2009: David Cushman shows how a careful econometrician might have adjudicated the debate among these leading economists over the likelihood of a macroeconomic rebound.