Monday assorted links
1. Europe is dropping the ball on AI and in some ways positively discouraging it. And too many crummy firms in Europe: “Using a new survey, we show that the dispersion of marginal products across firms in the European Union is about twice as large as that in the United States. Reducing it to the US level would increase EU GDP by more than 30 percent. Alternatively, removing barriers between industries and countries would raise EU GDP by at least 25 percent.”
2. Remember when Clearchannel was going dominate all radio, forever?
3. Marcel Gauchet on democracy and the sweep of history.
4. How two economists got access to IRS tax data. Bravo to them I say, but it’s worth noting that the shift from regression-driven to data set-driven economics has been a remarkably inegalitarian development, widely praised by most top academic economists. So often progress means a willingness to disregard or even stomp on egalitarian norms.
5. The economics of why some restaurants need to leave Queens.
6. Kling on the new Chetty-Hendren-Jones-Porter results.
7. Those new service sector jobs: Iraqi war architect Paul Bremer now a ski instructor in Vermont.
CBO Data on Income Growth
Interesting data from the CBO. Income is up for all quintiles and, after taxes and transfers, the lowest income quintile have done quite well. See this link for information on the data and to switch back and forth between before and after taxes and transfers.
Opioids are not mainly an economic phenomenon
Overall, our findings suggest that there is no simple causal relationship between economic conditions and the abuse of opioids. Therefore, while improving economic conditions in depressed areas is desirable for many reasons, it is unlikely to curb the opioid epidemic.
That is from Janet Currie, Jonas Y. Jin, and Molly Schnell in a new NBER working paper.
The day job
ONCE UPON A time, artists had jobs. And not “advising the Library of Congress on its newest Verdi acquisition” jobs, but job jobs, the kind you hear about in stump speeches. Think of T.S. Eliot, conjuring “The Waste Land” (1922) by night and overseeing foreign accounts at Lloyds Bank during the day, or Wallace Stevens, scribbling lines of poetry on his two-mile walk to work, then handing them over to his secretary to transcribe at the insurance agency where he supervised real estate claims. The avant-garde composer Philip Glass shocked at least one music lover when he materialized, smock-clad and brandishing plumber’s tools, in a home with a malfunctioning appliance. “While working,” Glass recounted to The Guardian in 2001, “I suddenly heard a noise and looked up to find Robert Hughes, the art critic of Time magazine, staring at me in disbelief. ‘But you’re Philip Glass! What are you doing here?’ It was obvious that I was installing his dishwasher and I told him that I would soon be finished. ‘But you are an artist,’ he protested. I explained that I was an artist but that I was sometimes a plumber as well and that he should go away and let me finish.”
That is from Katy Waldman in the NYT. You will find similar themes discussed in my earlier book In Praise of Commercial Culture. In her article I also enjoyed this part:
Edi Rama, the Prime Minister of Albania, sometimes feels his hand doodling as he contemplates a political decision. The art pours out to center and steady him. In 1998, Rama left a promising career as an artist in Paris to become Albania’s minister of culture. Now the country’s leader, he shows his loose, improvisatory drawings and sculptures in galleries around the world. “I found myself drawing almost all my working time whilst interacting with people in my office or on the phone,” he said in a 2016 interview. “I began to understand that my subconscious was being helped … by my hand to stay calm while my conscious had to focus on demanding topics.”
Recommended.
My Tokyo advice for Scott Sumner
Eat both quality French and Italian food there.
They still have real CD shops, if that matters to you.
Spend some time in the underground/subway city parts, maybe Shinjuku station, a few others.
Not sure if the old fish market is still up and running, worth a visit if it is.
Get your iPhone ready for translate functions, print and voice.
Getting lost there is great, don’t obsess over sights.
National Museum. The Western museums are decent but also not essential.
Look for a neighborhood with immigrants.
Sample Tokyo at all possible hours, if you can.
Kinokuniya bookstore is quite good. Overall I don’t love the Roppongi part of town, though, fancy bars and restaurants for expats, though fun in its own way.
Visit a Japanese working class district, such as Ikebukuro, also a major subway stop.
Look for vending machines and collections of vending machines.
The arcades there, including for children, are pretty amazing.
Try Pachinko once.
Tyler
Addendum: Here are the suggestions from Scott’s readers.
Sunday assorted links
1. Interview with Ken Rogoff (on chess).
2. The economic impact of major league baseball in the Dominican Republic.
3. More on autonomous vehicle safety (NYT). And uh-oh. More here. Do you prefer zombies eating kitties!? And at this point I don’t think the “Google city” in Toronto ever will be built, do you?
4. Paul Samuelson’s changing views on women.
5. Bach and sex.
6. Fraser Nelson argues the Brexit process is proving manageable (WSJ).
Very good sentences (about Facebook)
It is telling that two of the greatest ethical scandals to have hit Facebook in recent years both involved academics…
That is from a very good William Davies piece in LRB, via an anonymous correspondent.
Iranian “CyberAttack” Threatens Elsevier Not USA
Here’s what Geoffrey Berman, U.S. attorney for the Southern District of New York, said when announcing charges against a group of Iranian “cyber attackers”:
“We have worked tirelessly to identify you,” Berman said. “You cannot hide behind a keyboard halfway around the world and expect not to be held to account. Together, along with our law enforcement partners, we will work relentlessly and creatively to apply the legal tools at our disposal to unmask and charge you. We will do all we can to bring you to justice. While the defendants remain at large, they are now fugitives from the American judicial system.
So what are these horrendous people being charged with? Stealing unreleased scripts of Game of Thrones and a bunch of academic articles. I am not making this up.
…members of the conspiracy used stolen account credentials to obtain unauthorized access to victim professor accounts, through which they then exfiltrated intellectual property, research, and other academic data and documents from the systems of compromised universities, including, among other things, academic journals, theses, dissertations, and electronic books.
(That is from the press release and here is the earlier press release on GOT, with which this has been combined in many news accounts. The full indictment is here).
In other words, the Iranians were running something like Sci-Hub, the website that some of you have probably used to bypass publisher paywalls to read articles linked to on MR that you haven’t paid for. I don’t defend such actions but neither do I want the federal attorney working tirelessly to identify you. As crimes go this is a yawner.
Indeed, since Sci-Hub is already used in Iran, one wonders how useful the additional Iranian hacking was. A few companies are also listed as targets, although they turn out to be publishers, a stock image company, two online car companies etc. A few government agencies are thrown in for good measure although that appears to be window dressing.
The federal attorney claims the hacking (hacking not attacking) cost billions which they estimate because:
Through the course of the conspiracy, U.S.-based universities spent over approximately $3.4 billion to procure and access such data and intellectual property.
That’s just DoJ making up some number to make them look good. The direct losses in this scheme almost certainly amount to zero, bupkiss, nada. Universities certainly haven’t lost anything – the data was copied, not taken. The publishers might have lost a bit, but even then it would only be the revenue they would have got from papers that would have been bought if they hadn’t been copied. A useful estimate of the size of that loss still being zero, bupkiss, nada.
Frankly, this is a joke of an indictment. But headlines like “US Charges 9 Iranians With Massive Cyberattack” are certainly fortuitously timed for new national security designate John Bolton and others who want to take a hardline on Iran.
U.S. metro regions with the biggest intra-national trade deficits and surpluses
First, the biggest deficits (data for 2010, in billions of dollars):
Washington: -$86 billion
Miami: -$68 billion
San Francisco: -$41 billion
Atlanta: -$35 billion
Baltimore: -$33 billion
…Next, the biggest surpluses:
Los Angeles: +$63 billion
Memphis: +$29 billion
Greensboro: +$18 billion
Corpus Christi: +$18 billion
New Orleans: +$15 billion
Buffalo/Niagara Falls also has a sizable trade surplus as a percent of its gdp.
Which is the better list to be on? Very often the surplus or deficit has a lot to do with demographics and population changes:
Now, I don’t think many people would consider New Orleans an economic winner. In fact, its population declined 11 percent from 2000 to 2010, partly because of Katrina, but also because of wider problems. And that very decline means that savings generated in New Orleans go elsewhere in search of returns.
That is from Paul Krugman at the NYT. When it comes to Australia, by the way, one reason the country can run perpetual trade deficits, without inducing a financial crisis, is because of its rapidly growing population.
You might be interested in this Andrea Ferrero piece from the 2010 JME:
This paper investigates the contribution of productivity growth, demographics and fiscal policy in accounting for the evolution of the US external imbalances against industrialized countries during the last three decades. Productivity growth plays a dominant role. Demographics explain a non-negligible and nearly permanent component of the US trade deficit. Furthermore, the international demographic transition is crucial for large US external imbalances to be consistent with the persistent decline of world real interest rates observed in the data. Fiscal policy is of minor importance.
Productivity growth matters because foreign countries wish to invest capital in countries, such as the U.S., which employ it relatively well.
Saturday assorted links
1. The consequences of economic development.
2. A postulate for rival firms with common owners.
3. 44 African countries sign a free trade deal (though not Nigeria).
5. “He said the stone defence was intended as a last resort if evacuations failed.”
6. “…we estimate that approximately 95% of the potential predictive accuracy attainable for an individual is available within the social ties of that individual only, without requiring the individual’s data.” Link here.
Why an American third party remains unlikely
Donald Trump would not be President today if he had tried to mount a third-party candidacy rather than running as a Republican. Bernie Sanders would not be a national leader if he had just stayed in third-party politics in backwater Vermont rather than caucusing with the Democrats and contesting for control of the Democratic Party. So the existing parties are a shortcut to power for ambitious politicians. The parties are porous to those ambitions. In the process, they take on new influences, and new policy priorities.
So it’s really remarkable when you reflect back on what the Republican Party was at its founding and look at what it is today. And the Democratic Party as well. They’ve literally exchanged places. The Republican Party was a Northern party that was for African-American rights, high-taxes, and internal improvements.
That is by Frances Lee, the entire symposium is interesting. Christopher Caldwell tells us: “The Democrats have become the party of sexual morality.”
How economists use Twitter
When using Twitter, both economists and natural scientists communicate mostly with people outside their profession, but economists tweet less, mention fewer people and have fewer conversations with strangers than a comparable group of experts in the sciences. That is the central finding of research by Marina Della Giusta and colleagues, to be presented at the Royal Economic Society’s annual conference at the University of Sussex in Brighton in March 2018.
Their study also finds that economists use less accessible language with words that are more complex and more abbreviations. What’s more, their tone is more distant, less personal and less inclusive than that used by scientists.
The researchers reached these conclusions gathering data on tens of thousands of tweets from the Twitter accounts of both the top 25 economists and 25 scientists as identified by IDEAS and sciencemag. The top three economists are Paul Krugman, Joseph Stiglitz and Erik Brynjolfsson; the top three scientists are Neil deGrasse Tyson, Brian Cox and Richard Dawkins.
Here is further information, via Romesh Vaitilingam. But I cannot find the original research paper on-line. These are interesting results, but still I would like to see the shape of the entire distribution…
Testing the eggheads in the cryptocurrency market
Some of the world’s best-known economists on Thursday announced plans to create what could be described as the thinking person’s cryptocurrency. Saga aims to address many of the criticisms frequently thrown at bitcoin, the world’s biggest cryptocurrency, to position itself as an alternative digital currency that is more acceptable to the financial and political establishment.
It is being launched by a Swiss foundation with an advisory board featuring Jacob Frenkel, chairman of JPMorgan Chase International and former governor of the Bank of Israel; Myron Scholes, the Nobel Prize-winning economist; and Dan Galai, co-creator of the Vix volatility index. The Saga token aims to avoid the wild price swings of many cryptocurrencies by tethering itself to reserves deposited in a basket of fiat currencies at commercial banks. Holders of Saga will be able to claim their money back by cashing in the cryptocurrency.
The currency also aims to avoid the anonymity afforded by bitcoin, which has raised financial crime concerns with regulators and bankers. Saga will require owners to pass anti-money laundering checks and allow national authorities to check the identity of a holder when required.
Oh so respectable sounding! They’re not doing an ICO, instead there is a variable fractional reserve system, and the ruling principle is that Saga, the asset, “entitles its investors to a rising number of Saga as usage of the cryptocurrency grows.” It sounds like a bet on the notion that bootstrapping is central to crypto success. But do investors really want “safe harbours from the raging volatility”? Do investors want a currency at all? By the way, this one is proof of stake, not proof of work.
Here is their web site, and here is the White Paper. Here are other readings on the asset. Here is the original FT article, FTAlphaville is less impressed.
Do the participants have too much skin in other games? So far I don’t see the point of doing this one, as it doesn’t create an asset with a truly different risk profile than the others, not from what I can see.
Further adventures in median voter land, GOP Omnibus edition
GOP House
GOP Senate
GOP White House
Planned Parenthood still getting $500 million in taxpayer funding
That is from a tweet by Peter J Hasson. One of the most underreported and insidious forms of media bias is underestimation of the median voter theorem. Unlike many forms of media bias, partisans on neither side have an incentive to reveal this one. It really does make a lot of political struggles much less interesting and dramatic. Here is my earlier post on “Three Word Explanations.”
Friday assorted links
1. The rate of draws is not going up in chess, even though play is improving and likely the perfectly played game is a forced draw (model this). And Noah Feldman on game theory in the Middle East, the Saudis and Kushner too.
3. A claim that India is becoming a minoritarian dystopia.
4. Diamonds embedded in the human being are the new trend in engagement rings.
5. The academic who defended colonialism. Good piece.
6. I did a short podcast with the new Institute for Innovative Governance Research about…innovative governance, starting with charter cities and seasteading but also going beyond that. Here is an associated essay by Mark Lutter.