Results for “age of em”
15591 found

Tim Harford on long-distance relationships

In today’s FT:

Economist Tyler Cowen, a professor at George Mason University, has
pointed out that the Alchian-Allen theorem applies to any long-distance
relationship.

The theorem, briefly, implies that
Australians drink higher-quality Californian wine than Californians,
and vice-versa, because it is only worth the transportation costs for
the most expensive wine.  Similarly, there is no point in travelling to
see your boyfriend for a take-away Indian meal and an evening in front
of the telly.  To justify the trip’s fixed costs, you will require
champagne, sparkling conversation and energetic sex.  Insist on it.

Meanwhile,
optimal-experimentation theory suggests that at this tender stage of
life you are highly likely to meet someone even better.  Socialise a lot
while your boyfriend is not around.

Here is Trudie on that same topic.  By the way, here are two clips from Tim’s BBC Econ TV show, on YouTube.

Nordhaus review of Stern on global warming

Here is Bill Nordhaus’s critique of the Stern report.  Nordhaus argues that Stern’s "new" results boil down to the choice of a lower discount rate.

I agree with Stern that the discount rate should be zero or near-zero for resources which will not be reinvested but rather represent alternative consumption streams across the generations.  If we are doing normative analysis, however, and considering alternatives to controlling global warming, a’ la Copenhagen Consensus, we are by definition considering other investments.  In that case the correct rate of discount is given by opportunity costs, which might be quite high, provided the alternative investments will in fact be undertaken.  (On this topic, there are a few really good comments here.)

Having pondered the report a bit more, my main question is what it would cost for China and India to cut back on carbon emissions, all relevant institutional changes included in the calculations.  In other words, that figure should count costs of persuasion, enforcement, and implementation, not just the cost of one technology rather than another in the abstract.  We do not have a good sense of these costs, and given how many basic tasks these economies fail at, I can imagine the cynic citing the figure of infinity.  (To consider one analogy, what is "the cost" of getting avian flu out of China?)  Furthermore China in particular has a high rate of savings, and both economies have high rates of return on capital.  Current compliance costs should thus be compounded, when considering their future importance, at rates considerably higher than zero. 

Trudie on kids and career

Trudie can think of a few approaches:

1. Practice major life shifts, so you get used to regret and thus can bear it more easily.  In other words, try to make the costs of regret smaller. 

2. Hire eminent psychotherapists to administer electric shocks every time you feel regret.  Try to make the costs of regret higher, so that you won’t regret so much.

3. Drink yourself senseless after making life commitments.  Attack your memory.

4. Have so many kids there will be no time or energy for regret.  One should suffice.

5. Hire someone to force the choice upon you, whether by posting a bond with a friendly blogger or approaching the Russian Mafia.  Or, once you get pregnant, do something unpardonable and post it on YouTube, being sure to alert your blogger enemies.

6. Realize that you value control more than any of these options for overcoming regret, so live with the regret and enjoy that sense of control for all it is worth.

7. Get over #6 by studying Leibniz, Holbach, and other determinists.

Trudie believes that Tyler is good at managing regret.  Surely we shouldn’t just let regret manage us.  But what is best to do?

What I’ve been reading

1. Permissions, A Survival Guide: Blunt Talk About Art as Intellectual Property, by Susan Bielstein.  Yet another treatment of how copyright has gone too far, this book is full of both information and good humor. 

2. Jonathan Tokeley, Rescuing the Past: The Cultural Heritage Crusade.  A pro-property rights, pro-market (but with regulation) approach to the antiquities trade.  A breath of fresh air in an otherwise poorly framed debate.

3. Adam Tooze, The Wages of Destruction: The Making and Breaking of the Nazi Economy; I blogged this before, but now I am reading it, this book is a major achievement.  Here is an interview with Tooze.  Here is more, and here.

4. The Crying of Lot 49, by Thomas Pynchon.  This is also for my Law and Literature class next spring; from Pynchon, I enjoy this book and the first half of Gravity’s Rainbow.  You don’t have to love 1960s left-wing semiotics for this one, although it doesn’t hurt.  Over Christmas I might try Pynchon’s V., and for that matter Civilization IV.

5. Lots of opinions about intro economics, from CrookedTimber.

Milton Friedman, a father of financial futures

Leo Melamed writes:

I asked him [Friedman] whether he would endorse–when Bretton Woods collapsed–the concept of futures contracts in foreign exchange.  Without hesitation, Dr. Milton Friedman embraced the concept and authored a study in December 1971 which became the intellectual foundation for the birth of currency futures.  It was not a major treatise, hundreds of pages long with footnotes and a bibliography.  The world-renowned economist stated all he needed to say in just 11 pages.  His paper, entitled "The Need for Futures Markets in Currencies," provided us with academic authenticity of the highest magnitude to prove that our theory was a viable necessity.  As I often stated, "Professor Friedman gave my idea the credibility without which the concept might never have become a reality."  For with Dr. Friedman’s paper in hand, I was able to convince government officials, bank presidents and the CME brokerage community that the idea had merit.

This is an excellent illustration of Alex’s point that Milton was an entrepreneurial economist.  Here is more

Milton had been right all along that flexible exchange rates were entirely workable.  He was wrong in underestimating their volatility through periodic, and possibly inexplicable, "long swings" in the levels.  Oddly, his mistake on this point probably enabled currency futures and options to be even more successful than he had expected.

Addendum: Here is Greg Mankiw on Milton, here is Arnold Kling.  Here is a link fest at PrestoPundit.  Here is a misleading piece on Milton as friend of big government; just ask Roger Douglass, Vaclav Havel, or many others.

My favorite things Indiana

A brief trip it will be, but here goes:

1. Music: Michael Jackson is from Gary, and his most underrated song is "She’s Out of My Life."  There is also Cole Porter (overrated in my view, compared to Jerome Kern) and Ned Rorem.  Wes Montgomery has a few good albums, usually they are live; it is a shame he wasted his immense talent on muzak.

2. Literature: Sorry, but I find Kurt Vonnegut unreadable, and don’t tell me about Harrison Oberon.  Dreiser?  I’ve never read Newton Tarkington, who wrote The Magnificent Ambersons.  I’ll go with Philip Jose Farmer and his Riverworld series.

3. Painter: I am only slightly fond of Robert Indiana (yes he is from the state), or for that matter William Merritt Chase; here is my favorite Chase painting.

4. Favorite small town: Alex recommends Columbus, Indiana, for wonderful architecture.  I defer to him.

5. Movie, set in: Hoosiers and Breaking Away do not sit well with me, so help me out if you can.

6. Blogger and libertarian crusader for civil liberties: Radley Balko.

The bottom line: I don’t even like James Dean.  Radley is great, but my favorite thing Indiana is in fact Liberty Fund.

Milton Friedman passes away at 94

Here is the NYT story, still gated.  Here are more articles

I believe Capitalism and Freedom was the second or third book I ever read on economics and it definitely shaped my life.  I knew Milton only a bit but he was always gracious and of course razor sharp and a lover of liberty and prosperity.  He was one of the most important minds of the second half of the twentieth century and his influence remains felt all around the world.  In purely academic terms, he easily could have won two or three Nobel Prizes from the quality and quantity of his work.

Here is Levitt’s brief tribute.  Here is WSJ.com, via Brad DeLong.

Mistakes, or behavioral economics for babies

Hiding

Young children aged between two and four years believe that you only
have to hide your head to become invisible – if your legs are on view,
it doesn’t matter, you still can’t be seen.

That’s according to Nicola McGuigan
and Martin Doherty who say this is probably because young children
think of ‘seeing’ in terms of mutual engagement between people. It
explains why kids often think they can’t be seen if they cover their
eyes.

Here is further discussion.

Politically incorrect paper of the month

Many studies have shown that women are under-represented in tenured ranks in the sciences.  We evaluate whether gender differences in the likelihood of obtaining a tenure track job, promotion to tenure, and promotion to full professor explain these facts using the 1973-2001 Survey of Doctorate Recipients.  We find that women are less likely to take tenure track positions in science, but the gender gap is entirely explained by fertility decisions.  We find that in science overall, there is no gender difference in promotion to tenure or full professor after controlling for demographic, family, employer and productivity covariates and that in many cases, there is no gender difference in promotion to tenure or full professor even without controlling for covariates.  However, family characteristics have different impacts on women’s and men’s promotion probabilities.  Single women do better at each stage than single men, although this might be due to selection.  Children make it less likely that women in science will advance up the academic job ladder beyond their early post-doctorate years, while both marriage and children increase men’s likelihood of advancing.

Here is the NBER version, here is a non-gated version.  Alas, I have not had time to read this piece, although I know and respect the work of Shu Kahn, one of the authors.

Addendum: Matt Yglesias comments.

The suburbs are good for your social life

A new study says that people who live in sprawling suburban areas have more friends, better community involvement and more frequent contact with their neighbours than urbanites who are wedged in side-by-side. The results challenge the accepted idea that suburban life is socially alienating a notion that’s inspired everything from the Academy Award-winning American Beauty to Harvard professor Robert Putnam’s book Bowling Alone.

The study, released by the University of California at Irvine, found that for every 10 per cent decrease in population density, the chances of people talking to their neighbours weekly increases by 10 per cent, and the likelihood they belong to hobby-based clubs jumps by 15 per cent.

"We found that interaction goes down as population density goes up. So, turning it around, it says that interaction is higher where densities are lower," says Jan Brueckner, an economics professor at UC Irvine who led the study. "What that means is suburban living promotes more interaction than living in the central city."

Here is the story.  Here is Brueckner’s home page, here is the paper on-line.

How much does economic growth matter anyway?

Chris Bertram writes:

Mill’s idea (endorsed by Rawls btw) that the goal of our policy ought not to be one of continual struggle for growth or for relative advantage once the threshold has been reached where we could all hope to enjoy a satisfactory level of well being seems to be right.

In a forthcoming article, I write:

Just as the present appears remarkable from the vantage point of the past, our future may offer comparable advances in benefits.  Continued progress might bring greater life expectancies, cures for debilitating diseases, and cognitive enhancements.  Millions or billions of people will have much better and longer lives.  Many features of modern life might someday seem as backward as we now regard the large number of women who died in childbirth for lack of proper care.  Most of all, economic growth limits and mitigates tragedies.  It is a simple failure of imagination to believe that human progress has run its course.

If I read Chris correctly, he is saying "so what if Germany is poorer than the United States?" 

It is not my belief that the Germans will be consumed with envy.  I do think that a) the Germans will be missing out on some wonderful gains, b) there is no real standard for "a satisfactory level of well-being," c) a poorer Germany will be much less able to help the truly desperate parts of the world, if only by accepting immigrants, d) this is not a long-run political equilibrium in Germany, and e) at the global level, it is important that Western and European values are prominent, and this does require good or at least a decent growth performance.  Furthermore it is possible to believe a)-e) without seeing status games in relatively healthy Western societies as zero or negative sum.

On growth, keep the following in mind: If we are comparing a two percentage point boost to the growth rate, and starting at real income parity, a time horizon of only 55.5 years is needed to establish a 3:1 ratio of superiority in income.   

I am not not not saying that Chris is a communist or even a socialist, but my reporting would be remiss if I did not point out that defenders of East Germany, in the 1980s, made more or less the same argument as Chris’s bit quoted at the top of this post.

That all said, I am relatively bullish about German recovery, at least compared say to France or Italy.

How happy are French workers?

On the new (and anonymous) Economist blog, Maybe Megan McArdle writes:

A new working paper from the IMF
looks at the impact of the 35-hour working week in France, where it has
been imposed by law on large firms since 2000. The authors, Marcello
Estevao and Filipa Sa, find that the 35-hour week has:

(i) encouraged workers in large firms to take second jobs, or to move to small firms where the 35-hour week is not obligatory;

(ii) driven up hourly wage costs for large firms;

(iii) probably had "no significant impact" on aggregate employment;

and

(iv) brought no significant increase in worker satisfaction, as measured by the Eurobarometer opinion survey series.

I usually doubt the kind of questionnaire evidence that would go into the kind of judgment represented by iv), but nonetheless this is worth reporting.

The resurgence of the $2 bill

In 2005, depository institutions ordered $122 million in $2 notes,
according to Federal Reserve statistics.  That is more than double the
average amount ordered from 1991 to 2000.

…with banking and currency experts not certain what is fueling the
surge. A few possibilities are inflation, the introduction of the
Sacagawea $1 coin in 2000, and even, according to some, immigration.

Regardless
of the reason, anecdotal evidence shows that at the local level,
vendors and customers are getting more comfortable with $2 bills.

One
group that has embraced the note is the exotic-dancing industry.  Strip
clubs hand out $2 bills when they give customers their change, and the
bills end up in dancers’ garters and bartenders’ tip jars.

"The
entertainers love it because it doubles their tip money," said Angelina
Spencer, a former stripper and the current executive director of the
Association of Club Executives, an adult nightclub trade group.

In
addition to the inflation factor, Robert Hoge of the American
Numismatics Society thinks $2 bill demand may be getting help from
immigration flows, particularly from Canada and Europe, where currency
denominated in twos is common.

Peter Morici, professor at the Robert H. Smith School of Business at
the University of Maryland, thinks that with the introduction of the
Sacagawea, named for a famous Native American woman, people are
beginning to realize an inconvenience of $1 bills.  "In order to have a
successful $2 bill, you have to have a successful $1 coin," he said.

Here is the full story.  It is odd, is it not, that people would change their denominational holdings as the most efficient way around wage and price stickiness?