Results for “piketty”
171 found

Should you tell your children how much you make?

This NYT article has been widely read and emailed.  Ron Lieber argues yes, you should tell your children, but I’m not sure I can pull out the exact thread of his argument from the piece.

I say no you should not tell them.  But you should tell them something about your monetary situation.  If you are not so well off, you should tell your children that you are upwardly mobile, and will someday be more prosperous, through hard work.  At the very least then they won’t be scared.  If you are middle class, tell them a somewhat scaled-up version of the same.  You don’t want to tell them anything they can use as a “club” against their possibly poorer friends, so leave creative ambiguity in your answer.  If they boast about the family income, they will mostly end up embarrassing themselves, in addition to the negative externalities they might impose on others.

That said, you are marking out a range, so when they grow up and the time comes for them to learn the exact truth, they won’t feel you were tricking them or keeping family secrets.  In the meantime you are a role model for upward mobility.

If you are well off or very well off, tell them “Yes, we are well off but the real metric of success is X,” depending on what you think they need to hear, within the bounds of realism of course.  X might be how many friends you have, how happy your children are, how holy or pious or God-fearing you are, how many books you have read, or how much you have helped the world, among other candidates.  Serve them up a weighted average of those Xxs over time, so as to a) avoid seeming like a monomaniac, and b) give them a sense that many values are important, and c) drive home that money is not at the top of the list, even if you think it is.  They’ll have enough chances to learn to feel that way.

Remember, you’re trying to maximize some weighted average of covering your bases for future revelations, moral instruction, not scaring them with Piketty-like reasoning, stopping your kids from making fools of themselves with the information you give them, and stopping your children from making you look foolish or like a bad parent.  You’re in essence the central bank here, and it’s creative ambiguity all the way.

Assorted links

1. A bigger and better classical music meta-list (the mega-meta list?).

2. Did the Romans (Tiberius) try QE?  And John Quiggin has three predictions for 2015.

3. Claims about teeth.  And the Obama tax plan.

4. Edward Snowden on cyberwarfare.

5. Can nudges help students?  And a short history of Kim Fowley.

6. Paul Krugman on Mongols and the herring trade.

7. Scott Sumner responds on the Swiss central bank.  And here is James Hamilton.

Assorted links

1. How Amazon tricks you into thinking it always has the lowest prices.

2. Most neoclassical economists don’t understand most of these.  I think not one in fifty actually understands the Heckscher-Ohlin theorem, for instance.

3. In one restaurant in China, beautiful people eat for free.

4. The blockchainiacs?

5. 3-D printed drones.

6. British markets in everything: fish and chips chips.

7. In praise of Piketty’s translator.

Top Ten MR Posts of 2014

Here is my annual rundown of the top MR posts of 2014 as measured by page views, tweets and shares.

1. Ferguson and the Debtor’s Prison–I’d been tracking the issue of predatory fining since my post on debtor’s prisons in 2012 so when the larger background of Ferguson came to light I was able to provide a new take on a timely topic, the blogging sweet spot.

2. Tyler’s post on Tirole’s win of the Nobel prize offered an authoritative overview of Tirole’s work just when people wanted it. Tyler’s summary, “many of his papers show “it’s complicated,” became the consensus.

3. Why I am not Persuaded by Thomas Piketty’s Argument, Tyler’s post which links to his longer review of the most talked about economics book of the year. Other Piketty posts were also highly linked including Tyler’s discussion of Rognlie and Piketty and my two posts, Piketty v. Solow and The Piketty Bubble?. Less linked but one of my personal favorites was Two Surefire Solutions to Inequality.

4. Tesla versus the Rent Seekers–a review of franchise theory applied to the timely issue of regulatory restrictions on Tesla, plus good guys and bad guys!

5. How much have whites benefited from slavery and its legacy–an excellent post from Tyler full of meaty economics and its consequences. Much to think about in this post. Read it (again).

6. Tyler’s post Keynes is slowly losing (winning?) drew attention as did my post The Austerity Flip Flop, Krugman critiques often do.

7. The SAT, Test Prep, Income and Race–some facts about SAT Test Prep that run contrary to conventional wisdom.

8. Average Stock Returns Aren’t Average–“Lady luck is a bitch, she takes from the many and gives to the few. Here is the histogram of payoffs.”

9. Tyler’s picks for Best non fiction books of 2014.

10. A simple rule for making every restaurant meal better. Tyler’s post. Disputed but clearly correct.

Some other 2014 posts worth revisiting; Tyler on Modeling Vladimir PutinWhat should a Bayesian infer from the Antikythera Mechanism?, and network neutrality and me on Inequality and Masters of Money.

Many posts from previous years continue to attract attention including my post from 2012, Firefighters don’t fight fires, which some newspapers covered again this year and Tyler’s 2013 post How and why Bitcoin will plummet in price which certainly hasn’t been falsified!

Who are the most influential economists?

Everyone is up in arms over the list supplied by The Economist.  I won’t go through those debates.  Let me just note that for all the talk of wonk this, data that, and Generalized Method of Moments this that and the other, every now and then the best algorithm is simply Asking Tyler Cowen.  So here are, in no particular order, the most influential economists circa 2014:

1. Thomas Piketty

2. Paul Krugman

3. Joseph Stiglitz

4. Jeffrey Sachs

5. Amartya Sen

Basta.  Of course Yellen and Draghi are extremely influential as central bankers, but in the way Paul Volcker was, so that is a different list, albeit a more important one.

I would add several comments:

a. Piketty does very very well for marginal impact in 2014, but probably would/will do less well over broader time spans, even if you think his work will hold up.

b. Krugman is a clear winner for the United States.

c. Stiglitz, Sachs, and Sen have most of their influence outside of the United States.

d. Larry Summers is influential among economists and the intelligentsia and is one possible choice for number six, with Dani Rodrik as another, or maybe drum up the leading Islamic theorist on sukuk.  But Summers is not so influential with casual observers, which in some ways puts him as the opposite of Stiglitz (in his current incarnation).

e. There is no right-wing or center-right economist on the list.  See the EJW symposium on why there is no Milton Friedman today.  Krugman is probably the most politically conservative figure among the top five.

f. Behavioral economics as a whole is quite influential, but with no single dominant figure of influence.  In actuality Cass Sunstein (not formally an economist) and Richard Thaler might globally be #1 in the behavioral area, followed by Daniel Kahneman.

Assorted links

1. Capital controls for Belarus, and worse.

2. The word is that Doug Elmendorf will not be reappointed at CBO.  Doug has done a very good job and he deserves our plaudits.  And Kaiser on the Medicare spending slowdown.  Excellent piece, and if nothing else it shows what a fiscal conservative Elmendorf has been.

3. Interview with Piketty, more than just the usual, recommended, he also needs some PR training.

4. List of films that most frequently use the word “fuck” (yes, someone seems to have counted).

5. “Conspicuous authenticity”?

6. More women get gun gifts.

Assorted links

1. The political economy of Bitcoin.

2. Pizza Hut reads your mind.

3. Chris Rock won’t play colleges any more: “You can’t even be offensive on your way to being inoffensive.”

4. The economics of Seinfeld.

5. How much do different quintiles benefit from government?

6. Twitter-driven economic history reading list.  And more writers’ book picks from The Guardian.  And NYT’s 100 Notable Books of 2014.

7. “Watch two Japanese women fry shrimp with a “cooking detonation” cannon.”

8. Cochrane covers Deirdre McCloskey on Piketty.

9. Profile of Reihan Salam.

Economist cereal boxes

We are running a contest for MRU, and the goal is to figure out how economists ought to be put on cereal boxes.  Imagine that a famous economist would in fact be represented by a cereal and a cereal box.  For example there would be:

Thomas Piketty, Special K

Another possibility would be tweaking the cereal name slightly, so you would get:

Hyman Minsky, Captain Liquidity Crunch


John Bates Clark, Marginal Product 19

You could try:

Eugene Fama, Lucky Charms, though perhaps that is too subtle for some.

The winner of the contest gets…his or her suggestion actually realized.  Please enter your suggestions, and vote on the suggestions of others, here.  Or if you don’t want to enter the contest per se, there is always the MR comments section…

Best non-fiction books of 2014

First there are the economics books, including books by people I know, including Piketty, The Second Machine Age, Tim Harford’s wonderful macro explainer, Megan McArdle’s The Up Side of Down, Lane Kenworthy on social democracy, The Fourth Revolution by John Micklethwait and Adrian Woolridge, Daniel Drezner The System Worked, and Frank Buckley on why the Canadian system of government is better.  And Russ Roberts, How Adam Smith Can Change Your Life: An Unexpected Guide to Human Nature and Happiness.  We’ve already talked, written, and thought about those plenty, and they are not what this list is about, so I will set them aside.  Most of you are looking for excellent new books in addition to these, books you might not have heard about.

Here are the other non-fiction books of the year which took my fancy, mostly in the order I read them, noting that the link usually leads you to my previous review or comments:

Jürgen Osterhammel, The Transformation of the World: A Global History of the Nineteenth Century.  Long, exhausting, and wonderful.

Christopher Hale, Massacre in Malaya, a broader history than it at first sounds, fascinating from beginning to end.

Howard Eiland and Michael W. Jennings, Walter Benjamin: A Critical Life.

The Very Revd John Drury, Music at Midnight: The Life and Poetry of George Herbert.

John Keay, Midnight’s Descendants: A History of South Asia since Partition.  An excellent treatment of how much work remains to be done in the “nation building” enterprise in South Asia.

Alice Goffman, On the Run: Fugutive Life in an American City.  A sociology graduate student hangs out with lawbreakers and learns about police oppression, an excellent micro-study.  My column on her book is here.

Gendun Chopel, Grains of Gold: Tales of a Cosmopolitan Traveler, Tibetan scholar goes to India and records his impressions, unusual.

George Prochnik, The Impossible Exile: Stefan Zweig at the End of His World.  I loved this one.

I’ve only read the first half of the new Tom Holland translation of Herdotus’s Histories (I will get to the rest), but surely it deserves note.

Evan Osnos, Age of Ambition: Chasing Fortune, Truth, and Faith in the New China.  This book won the National Book Award for non-fiction.

David Eimer, The Emperor Far Away: Travels at the Edge of China.  A look at China’s outermost regions and their ethnic minorities.  Just imagine that, we had two excellent popular China books in the same year.

The Falling Sky: Words of a Yanomami Shaman, by Davi Kopenawa.  Repetitious in parts, sometimes incoherent too, but it offers a smart and unique perspective you won’t get from any of the other books on this list or any other.

Jonathan Rottenberg, The Depths: The Evolutionary Origins of the Depression Epidemic.  This treatment stresses the (partial) cognitive advantages of having a tendency toward depression.

Edward Hirsch, A Poet’s Glossary, assorted facts and insights about the English language, you don’t have to feel like reading a book about poetry to find this worthwhile.

David Sterling, Yucatán: Recipes from a Culinary Expedition, huge, expensive, wonderful, more than just a cookbook though it is that too.  I’ve spent some of the last few weeks learning these recipes and what makes them tick.

Walter Isaacson, The Innovators: How a Group of Hackers, Geniuses, and Geeks Created the Digital Revolution.  A good overview of how some of the main pieces of today’s information technology world fell into place, starting with the invention of the computer and running up through the end of the 1990s.

Arthur M. Melzer, Philosophy Between the Lines: The Lost History of Esoteric Writing.

Andrew Roberts, Napoleon: A Life.

Jan Swafford, Beethoven: Anguish and Triumph.  As good or better than the classic biographies of the composer.

Stephen Kotkin, Stalin, vol. 1.  This one I have only read a part of (maybe 150 pp.?), it is very long and does not fit my current reading interests, but it seems very good and impressive and also has received strong reviews.  So I feel I should include it.

Hal Whitehead and Luke Rendell, The Cultural Lives of Whales and Dolphins.

So who wins?  If I had to pick a #1, it would be The Very Revd John Drury, Music at Midnight: The Life and Poetry of George Herbert, not the kind of book I would be expecting to coronate, which is a testament to the magnetic force it has exercised over my imagination.

Then I would pick Alice Goffman, On the Run: Fugutive Life in an American City and David Sterling, Yucatán: Recipes from a Culinary Expedition as the runners-up.

My fiction picks were here.  There are still some wonderful books to come out this year, and already-published books I will still read, especially after mining other “best of” lists, so around Dec.31 or so I’ll post an updated account of what I would add to this list.

Where is the external social value for marginal book reading?

Let’s assume books — at the margin of course — bring some external social value, perhaps by stimulating ideas production or by improving the quality of voting and citizenship.  If that were the case, at which margin should we look for this external benefit?  I can think of a few possibilities:

1. More books should be produced.  Yet this hardly seems plausible, as there are so many books produced right now and most of them are largely ignored.  In any case, Amazon clearly makes a larger number of books readily accessible, although its lower prices may discourage the number of books longer run.

2. Better books should be produced.  Arguably this is true by definition, but it is not a useful means of evaluating most proposed changes to the book market.  That said, Amazon creates an open forum for useful reviews.  That may improve long-run book quality, or at least lead to a more useful matching of readers with books.

3. Books should be cheaper and thus purchased and read more often.  Maybe so, but public libraries give books away for free — great books too — and their shelves are not stripped bare.  So making commercial books cheaper will get us only so far.  If all books were completely free, reading would go up by only so much, because time and attention would remain scarce.  In any case, with reference to the recent debates, Amazon does in fact make books cheaper.

4. Books should be more vivid in the minds of readers.  People would read more if the books meant more to them and that is a more effective lever than simply making books cheaper.  You will note of course that “buzz” can make books more vivid, and so Piketty’s Capital became a vivid book for a large number of people.  They bought it, though most of them did not read past page 26.  So even making books more vivid will not necessarily bring about the desired end of additional interested readership.  That said, Amazon does create various lists to try to boost the buzz around books, and Amazon tries to raise the relative status of reading and book-buying more generally.

It is in fact not so easy to specify how we might reap significant additional social benefits from the current book market.  The real externality, if there is one, lies in improving the humans not the books.

In the meantime, Amazon, in its current configuration, seems to be producing some marginal social benefits.

The French disease is not just hypochondria

From a Jean Tirole press conference:

French economist Jean Tirole advocated Scandinavian-style labour market policies and government reform as a way of preserving France’s social model.

Hours after he won the economics Nobel Prize, Tirole said he felt “sad” the French economy was experiencing difficulties despite having “a lot of assets”.

“We haven’t succeeded in France to undertake the labour market reforms that are similar to those in Germany, Scandinavia and so on,” he said in telephone interview from the French city of Toulouse, where he teaches.

France is plagued by record unemployment and Tirole described the French job market as “catastrophic” earlier on Monday, arguing that the excessive protection for employees had frozen the country’s job market.

“We haven’t succeeded also in downsizing the state, which is an issue because we have a social model that I approve of – I’m very much in favour of this social model – but it won’t be sustainable if the state is too big,” he added.

Tirole remarked that northern European countries, as well as Canada and Australia, had proven you could keep a welfare social model with smaller government. In contrast, he said France’s “big state” threatened its social policies because there will not be “enough money to pay for it in the long run”.

There is more here, hat tip goes to Alex.  And I very much liked this Appelbaum interview with Tirole,here is one bit:

There’s no easy line in summarizing my contribution and the contribution of my colleagues. It is industry-specific. The way you regulate payment cards has nothing to do with the way that you regulate intellectual property or railroads. There are lots of idiosyncratic factors. That’s what makes it all so interesting. It’s very rich.

It requires some understanding of how an industry works. And then the reasoning is very much based on game theory. Usually we don’t have a perfectly competitive market, so we use game theory, which describes situations with a small number of actors. And information economics, those are the tools. But then you go into the industries and try to think about the possible rules. It’s not a one-line thing.

I liked David Henderson’s piece, and this one too, Tirole on France and Canada.