Robert Pindyck on climate change models

Pindyck, from MIT, is a leading expert in this area, here is part of his summary conclusion:

It would certainly be nice if the problems with IAMs [integrated assessment models] simply boiled down to an imprecise knowledge of certain parameters, because then uncertainty could be handled by assigning probability distributions to those parameters and then running Monte Carlo simulations. Unfortunately, not only do we not know the correct probability distributions that should be applied to these parameters, we don’t even know the correct equations to which those parameters apply. Thus the best one can do at this point is to conduct a simple sensitivity analysis on key parameters, which would be more informative and transparent than a Monte Carlo simulation using ad hoc probability distributions. This does not mean that IAMs are of no use. As I discussed earlier, IAMs can be valuable as analytical and pedagogical devices to help us better understand climate dynamics and climate–economy interactions, as well as some of the uncertainties involved. But it is crucial that we are clear and up-front about the limitations of these models so that they are not misused or oversold to policymakers. Likewise, the limitations of IAMs do not imply that we have to throw up our hands and give up entirely on estimating the SCC [social costs of carbon] and analyzing climate change policy more generally.

The entire essay is of interest, via Matt Kahn.

The Nobel Laureate who is not a full professor

Donna Strickland (at right) was on Tuesday named one of the three winners of the 2018 Nobel Prize in Physics. Many have noted that she is the first woman in 55 years to win the prize. The BBC noted in a radio interview that Strickland is an associate professor at the University of Waterloo and asked why she was not a full professor. She said she never applied. She laughed when asked if she would apply now.

Link here.

It’s a lot of work to apply for full professor, in terms of compiling one’s dossier, writing a research and teaching statement, cultivating letter writers, and so on.  At many schools you might get a raise of say $1500 for the promotion?  Apply Canadian tax rates to that.  That could be accompanied by more administrative responsibilities, such as pressure to become department chair at some point.

Hail Donna Strickland!

Wednesday assorted links

They solved for the equilibrium, China equilibrium of the day

China will be less severe with its smog curbs this winter as it grapples with slower economic growth and a trade war with the United States, according to a government plan released on Thursday.

Instead of imposing blanket bans on industrial production in the Beijing-Tianjin-Hebei area as it did last winter, the Ministry of Ecology and Environment said it would let steel plants continue production as long as their emissions met standards.

Targets for overall emissions cuts have also been revised down. In the next six months, 28 cities in northern China are required to cut levels of PM2.5 – the tiny airborne particles that are most harmful to human health – by about 3 per cent from a year ago.

That is less than the 5 per cent cut proposed in an initial plan seen by the South China Morning Post last month.

Meanwhile, the new plan stipulates that the number of days of severe air pollution should be reduced by about 3 per cent, also revised down from 5 per cent in last month’s draft.

Here is more from Orange Wang at SCMP.  As I am sure you all know, air pollution (and I don’t just mean carbon emissions) is one of the great underrated problems in the world today.  The trade war with China is making it worse.

Tuesday assorted links

1. Median wages still have not been rising in the U.S.

2. How about one proposal per year per PI?

3. “As expected, sexism was a significantly stronger predictor of voting for Trump the more left-leaning (vs. right-leaning) the voter. Not only was Clinton correct that sexism played a role in her electoral loss, but she correctly characterized sexism as endemic, an influence especially perceptible on the left.”  Link here.

4. Gita Gopinath will be Chief Economist at the IMF.

5. Scott Alexander steelmans NIMBY.

6. Scott Lincicome on the new NAFTA.

New issue of Econ Journal Watch

In this issue

And the IMF said: LET THERE BE DATA. And there was dataRyan Murphy and Colin O’Reilly unearth assumptions behind the International Monetary Fund’s numbers for private capital stocks by country.

Hayek’s Divorce and Move to ChicagoLanny Ebenstein draws together new information to reinterpret Hayek’s personal life and how it related to his move to the United States, especially from 1945 to 1955.

The Russian pupils of Adam SmithAn essay from 1937 tells of the two Glasgow students of the 1760s who returned home and launched a tradition of Smithian liberal thought in Russia.

Ideological Profiles of the Economics Laureates: We resume the project with two of the 2013 laureates—Eugene Fama, who responded to our questionnaire, and Lars Peter Hansen.

An Icelandic sagaHannes Gissurarson responds to his compatriot Stefán Ólafsson on the proper way to tell their country’s story since 1991.

Against the Incorporation of BarbersA remarkable, forgotten pamphlet of 1758 argues that the restriction, which today would be termed occupational licensing, left those in need of a haircut at the mercy of “a greasy Barber, covered all over with Suds, and the excrementitious Parts of the Beards of nasty Mechanicks.”

EJW Audio:

Lanny Ebenstein on Hayek’s Personal Affairs

Dwight Lee on Teaching Econ and the Two Moralities

What should I ask Ben Thompson?

Yes, I will be doing a Conversation with Ben Thompson the tech commentator at Stratechery (worth the $$), no associated public event.  Here is Wikipedia on Ben:

Ben Thompson is an American business, technology, and media analyst, who is based in Taiwan. He is known principally for writing Stratechery, a subscription-based newsletter featuring in-depth commentary on tech and media news that has been called a “must-read in Silicon Valley circles”.

Here is Ben’s self-description.  Here is Ben on Twitter.  So what should I ask him?

Is it better to have more corporations?

A reduction in the corporate income tax burden encourages adoption of the C corporation legal form, which reduces capital constraints on firms. Improved capital reallocation increases overall productive efficiency in the economy and therefore expands the labor market. Relative to the benchmark economy, a corporate income tax cut can reduce the non-employment rate by up to 7 percent.

That is from the new AEJ: Macroeconomics, by Daphne Chen, Shi Qi, and Don Schlagenhauf.

Who is most likely to attribute an outcome to genetic factors?


Many scholars argue that people who attribute human characteristics to genetic causes also tend to hold politically and socially problematic attitudes. More specifically, public acceptance of genetic influences is believed to be associated with intolerance, prejudice, and the legitimation of social inequities and laissez-faire policies. We test these expectations with original data from two nationally representative samples that allow us to identify the American public’s attributional patterns across 18 diverse traits. Key findings are (1) genetic attributions are actually more likely to be made by liberals, not conservatives; (2) genetic attributions are associated with higher, not lower, levels of tolerance of vulnerable individuals; and (3) genetic attributions do not correlate with unseemly racial attitudes.

That is from , , and in the Journal of Politics.  For the pointer I thank K.

Monday assorted links

1. “…the values of more extreme (left-wing or right-wing) supporters are usually more heterogeneous than those with more moderate views.

2. New results on anti-discrimination statements (The Economist).

3. The Emperor of Japan still publishes (even though he has tenure).  He also usually gets his name first.

4. New economics discussion forum set up by AEA, first question from Olivier Blanchard.  In the comments you will find Jeremy Stein, Claudio Borio, Ricardo Cabellero, and Larry Summers, kind of like the MR comments section.

5. Has the abc conjecture been proven?

6. “Pursuit of T5 [top 5 joiurnal] publications has become the obsession of the next generation of economists. However, the T5 screen is far from reliable. A substantial share of influential publications appear in non-T5 outlets. Reliance on the T5 to screen talent incentivizes careerism over creativity.”  Link here.

7. Details on the new NAFTA.

The excellent David C. Wright podcasts me on *Stubborn Attachments*, and on other things

It starts with an extended discussion of Tyrone and more or less ends with a take on the meaning of Straussianism and the Straussian reading of my own books.  (If you read the transcript, the sentence in the middle about my believing in God as a teenager is a transcription error, it will be corrected.)  David is one of the best, and best prepared, interviewers I have interacted with.  Here is the audio and transcript.

Here is one bit from the middle:

David: …should academics or people who seek to influence the world, and according to your value system should they try and boost economic growth more? I’m thinking of in your podcast, you’ve had venture capitalists. I think of these in some ways as public intellectuals who are trying to boost economic growth.

[00:39:12] Tyler: They think very conceptually venture capitalists.

[00:39:14] David: They do.

[00:39:15] Tyler: They’re generalists.

[00:39:15] David: They are. Are they similar to university professors?

[00:39:19] Tyler: Well, they’re much better.

[00:39:20] David: Better at?

[00:39:21] Tyler: Almost everything. They’re smarter than we are. They’re playing with real stakes. They understand more different things, they’re better at judging people, they’ve created better for the world in most cases, and so we should feel ashamed of ourselves if we sit down with venture capitalists.

[00:39:35] David: Yet they don’t win a Nobel Prize, and they can’t become call it historically famous or much less so. Obviously–

[00:39:41] Tyler: I think they will become historically famous.

[00:39:43] David: Do you?

[00:39:43] Tyler: Well, they already. Well, like Mike Moritz or Marc Andreessen or Sam Altman Y Combinator. I think they will go down in history as major figures of great import.

Definitely recommended.

The Kavanaugh saga from afar

That is the theme of my latest Bloomberg column, here is one bit:

There is an asymmetry between male and female perceptions.

Most men are not abusers, yet very large numbers of women have been abused. So if a man is an abuser, there is a good chance he has abused a fair number of women.

That means many well-meaning men experience sexual abuse as a relatively rare phenomenon. They haven’t done it, and most of their male friends haven’t either. At the same time, most women have abuse, rape or #MeToo stories, and they experience these phenomena as relatively common and often life-altering. Probably they also have heard multiple such stories from their female friends. This structural asymmetry of perspectives is crucial to understanding the discourse and the often fundamental differences in opinion.

Our criminal justice system isn’t very good.

Whether you think Kavanaugh is innocent or guilty, we can all agree there are large numbers of intelligent people on both sides of the debate, and even after a week of intense national scrutiny there is no resolution. The reality is that ordinary accused people, who are basically presumed guilty by the criminal justice system, don’t receive very fair judgments. And if Kavanaugh is innocent, might we hope that this experience will make him more sympathetic to the plight of the unjustly imprisoned and accused?

But perhaps now we can move on to talking about the renegotiation of the trade agreement formerly known as NAFTA

Economists in the tech sector

…led by Pat Bajari, Amazon has hired more than 150 Ph.D. economists in the past five years, making them the largest employer of tech economists.  In fact, Amazon now has several times more full time economists than the largest academic economics department, and continues to grow at a rapid pace.

That is from the new Susan Athey and Michael Luca paper “Economists (and Economics) In Tech Companies.”

That was then, this is now

Negotiations for the preliminary agreement would be conducted under a new process, which the State Department, employing classic bureaucratic jargon, called “the selective nuclear-multilateral approach.”  In preliminary discussions held in July 1945, the Canadians had proposed this method of negotiations led by a small group of influential nations — which effectively became the model for multilateral trade negotiations for the remainder of the twentieth century — as a compromise between the strictly bilateral approach, which had been favored politically by FDR and Cordell Hull, and the broader multilateral approach the British insisted upon.  The Americans believed they were constricted by the requirements of the Reciprocal Trade Agreements Act specifically, and by political realities in Congress more generally, to negotiating bilaterally on select tariffs on an item-by-item basis.

That is from the new and highly useful and still under-discussed book The Wealth of a Nation: A History of Trade Politics in America, by C. Donald Johnson, Oxford University Press.  I am happy to second Doug Irwin’s blurb: “This splendid book covers the politics of American trade policy from the country’s beginnings through Trump.  Johnson provides a great overview of a fascinating subject.”

Sunday assorted links