Results for “model this” 2739 found
The new British university model?
Well, it’s certainly star-studded. A new private university in London, devoted to the humanities, will have the philosopher and public intellectual A.C. Grayling as its “master.” Richard Dawkins will teach evolutionary biology, Niall Ferguson economic history, Steven Pinker psychology, and Ronald Dworkin the philosophy of law.
Christopher Shea has more. Daniel Davies notes correctly that few if any of these illustrious names will be resigning their normal academic posts. That is the real innovation of this business model. Why not rent illustrious names rather than paying the whole set of fixed costs? Then hire excellent teachers — mostly not top researchers — to provide most of the actual instruction. If say Dawkins teaches an intensive two-week course, that is perhaps more than a student would see of him anywhere else, while benefits of certification and affiliation remain in play. I predict this has a good chance of succeeding, and since the illustrious lecturers hold equity shares in the venture, their incentive is to talk it up. It doesn’t have to outcompete Harvard, it simply has to draw international interest from students/families who cannot get into Harvard or who do not wish to donate the required $$.
A simple model of a reluctant Fed
Imagine there is incipient downward pressure on real wages, just as real wages have fallen in Japan and male real wages have been flat or falling in the United States, both across longer-run periods of time. Yet for the usual reasons of morale and uncertainty, employers do not wish to cut real (or nominal) wages. An extra three to four percent price inflation would cut real wages by three to four percent for a large segment of the employed. It would accelerate a trend which is already underway, and will eventually happen anyway, yet it will telescope a lot of that trend into pre-2012.
There are more employed than unemployed, by a considerable margin, plus many of the unemployed do not vote or do not vote strategically. The inflation may be a Pareto improvement, desired by benevolent central bankers, but why should an office-holding politician desire this outcome? Which politician wishes to accelerate a decline in real wages?
Most generally, I suspect that electoral opposition to inflation will rise to the extent median wage stagnation is a problem.
A Rubinstein bargaining model with a finite time horizon
Not something I’ve studied in any depth, but there is this paper by Randolph Sloof:
We characterize equilibrium behavior in a finite horizon multiple-pie alternating
offer bargaining game in which both agents have outside options and threat points. In contrast to the infinite horizon case the strength of the threat to delay agreement is non-stationary and decreases over time. Typically the delay threat determines proposals in early periods, while the threat to opt out characterizes those in later ones. Owing to this nonstationarity both threats may appear in the equilibrium shares agreed upon. When the threat to opt out is empty for both agents, the outcome corresponds exactly with the (generalized) Nash bargaining solution. The latter observation may prove useful for designing experiments that are meant to test economic models that include a bargaining stage.
In other words, I am not surprised they are on the verge of reaching a deal. The features determining behavior in the earlier periods are not the same as the features determining behavior toward the end. Low “delay costs” do not mean low “no deal at all” costs, especially for the Republicans.
A sexual selection model of schizophrenia
Schizophrenia is a mental disorder marked by an evolutionarily puzzling combination of high heritability, reduced reproductive success, and a remarkably stable prevalence. Recently, it has been proposed that sexual selection may be crucially involved in the evolution of schizophrenia. In the sexual selection model (SSM) of schizophrenia and schizotypy, schizophrenia represents the negative extreme of a sexually selected indicator of genetic fitness and condition. Schizotypal personality traits are hypothesized to increase the sensitivity of the fitness indicator, thus conferring mating advantages on high-fitness individuals but increasing the risk of schizophrenia in low-fitness individuals; the advantages of successful schzotypy would be mediated by enhanced courtship-related traits such as verbal creativity. Thus, schizotypy-increasing alleles would be maintained by sexual selection, and could be selectively neutral or even beneficial, at least in some populations. However, most empirical studies find that the reduction in fertility experienced by schizophrenic patients is not compensated for by increased fertility in their unaffected relatives. This finding has been interpreted as indicating strong negative selection on schizotypy-increasing alleles, and providing evidence against sexual selection on schizotypy.
That is from Marco Del Giudice and for the pointer I thank Harpersnotes.
The Schelling-Stapledon model of the Octopus
Octopuses have large nervous systems, centered around relatively large brains. But more than half of their 500 million neurons are found in the arms themselves, Godfrey-Smith said. This raises the question of whether the arms have something like minds of their own. Though the question is controversial, there is some observational evidence indicating that it could be so, he said. When an octopus is in an unfamiliar tank with food in the middle, some arms seem to crowd into the corner seeking safety while others seem to pull the animal toward the food, Godfrey-Smith explained, as if the creature is literally of two minds about the situation.
The full story is here and for the pointer I thank Michelle Dawson.
How well does the Mortensen-Pissarides model match the business cycle data?
From a few years back, Harold Cole and Richard Rogerson study this question and write:
We examine whether the Mortensen-Pissarides matching model can account for the business cycle facts on employment, job creation, and job destruction. A novel feature of our analysis is its emphasis on the reduced-form implications of the matching model. Our main finding is that the model can account for the business cycle facts, but only if the average duration of a nonemployment spell is relatively high — about nine months or longer.
I do not wish to claim that today's currently long unemployment spells make this the model to use. I would point out, however, that most Keynesian models suggest more mean-reversion than we seem to be experiencing, especially since our central bank, whatever its weaknesses, is no longer allowing outright deflation. The topic of "short run macroeconomics for the long run" will be a boom area, and right now it is poorly understood.
The Mortensen and Pissarides employment model
I have been seeing and hearing misunderstandings of it. Here is one link to the piece and here are a few points:
1. Simulating the model, it is possible to generate something approximating the time series of U.S. employment changes, at least up through the 1990s.
2. This can be done by combining shocks to labor productivity, as measured (not calibrated to get the required result), combined with changes in search and matching profitability. No bizarre assumptions are required about the intertemporal substitutability of leisure, as the matching function does the work in this regard.
3. The results do not require sticky wages or AD shocks. Do not.
4. Mortensen and Pissarides do not explain "structural unemployment" in the traditional sense. Instead the model shows that one overall negative shock — to all sectors — can make good matches harder. In other words, unemployment can look like it is structural when it is not and in this regard the model can be viewed as a threat to traditional structural explanations. Furthermore unemployment can look like it is AD shock-induced even when it is not. Another way to read the model (my words, not theirs) is that it deconstructs the traditional distinction between cyclical and structural unemployment.
5. The model is built upon earlier theoretical contributions by Peter Diamond, but it is a mistake to speak of a unified Diamond-Mortensen-Pissarides model. I read Diamond's view as closer to Keynesianism and the Mortensen and Pissarides story as much more Schumpeterian. It is worth reading Paul Krugman's MIT-centric account of the prize, though I would stress the diversity of views among the winners.
6. Mortensen and Pissarides do not analyze monetary and fiscal policy in their basic model, but it is not obvious that such reflationary policies will solve the employment problem, which is defined in real terms, not nominal terms.
7. In the pure model, the Beveridge curve can have either slope and so we should not infer much from an observed Beveridge curve.
The Mortensen-Pissarides model is daring and subversive and it is impressive that the committee would award a prize for what is essentially a single paper. Yet I don't see too many bloggers trying to come to terms with it.
The Solow Model with Mathematica
In Modern Principles Tyler and I explain the Solow model of economic growth and show how the model can easily be run using Excel. I have also written a fun Mathematica demonstration of the Solow model.
You can see a quick animation of what the demonstration does by clicking "watch web preview" at the link above but anyone can also run the demo interactively by downloading a free copy of Mathematica Player. The Player is actually a stripped down version of Mathematica so what you see in the demo is not an animation but a computation of the equilibrium on the fly. Many of the other demonstrations in science, math, economics and other fields are also of interest.
Disclosure for airbrushed models in Israel?
A bill (note: linked site is written in Hebrew) submitted to Israel's parliament, the Knesset, by lawmaker Rachel Adatto — a doctor who devoted much of her career to women's health issues — pushed for legislation to keep underweight models out of commercials; to prohibit modeling agencies from employing them; and to bar advertising agencies and media from airbrushing models into stick figures.
The bill has since been modified to allow for airbrushing, provided it is identified as such in a transparent manner. The original pointer comes from Berliner Morgenpost.
A Mathematical Model for the Dynamics and Synchronization of Cows
I've wondered about this plenty, though I was hoping for a simpler model:
We formulate a mathematical model for daily activities of a cow (eating, lying down, and standing) in terms of a piecewise affine dynamical system. We analyze the properties of this bovine dynamical system representing the single animal and develop an exact integrative form as a discrete-time mapping. We then couple multiple cow "oscillators" together to study synchrony and cooperation in cattle herds. We comment on the relevant biology and discuss extensions of our model. With this abstract approach, we not only investigate equations with interesting dynamics but also develop interesting biological predictions. In particular, our model illustrates that it is possible for cows to synchronize \emph{less} when the coupling is increased.
For the pointer I thank Michael F. Martin. Here is a claim that cows tend to align north-south. Here is further discussion.
Can the Canadian banking model work for the U.S.?
No, and Simon Johnson explains why. Excerpt:
Proposing a Canadian-type model to create stability in the U.S. is, to be blunt, nonsense. We would need to merge our banks into even fewer banking giants, and then re-inflate Fannie Mae and Freddie Mac to guarantee some of the riskiest parts of the bank’s portfolios. With our handful of new “hyper megabanks”, we’d have to count on our political system to prevent our banks from going wild; Canada may be able to do this (in our view, the jury is still out), but what are the odds this would work in Washington? This would require an enormous leap of faith in our regulatory system immediately after it managed to fail repeatedly and spectacularly over thirty years (see 13 Bankers, out next week, for the awful details). Who can be confident our powerful corporate lobbies, hired politicians, and captured regulators can become so Canadian so soon?
There is much more at the link, recommended.
Today’s music model: meet the 1950s
Someone teleported through time from the early 1950s to 2009 would find a music business curiously similar to the landscape of 60 years ago. Few specialty record outlets. Department stores dominating the market. A singles-driven industry. Pop music dominating radio. TV musical talent shows all the rage.
That's from the 21 December issue of Variety. One difference, of course, is that the best-selling album of this decade — but not the 1950s — was by The Beatles.
The Danish mortgage model
The Danish model has another critical and innovative feature. Holders can retire their own mortgages by purchasing the same face amount of mortgage bonds at the prevailing market price. To prepay a mortgage by purchasing bonds, the home owner must give advance notice of several weeks to the MCI [mortgage credit institutions], which designates by lottery the specific bonds to be purchased. Thus, if rising interest rates or other factors cause mortgage bonds to trade at a discount, home owners can reduce the principal or retire the whole mortgage by purchasing an appropriate mortgage bond at a discount.
That passage is from Robert Pozen's new and notable Too Big to Save? How to Fix the U.S. Financial System.
You can't do this in the United States. You can pay off your mortgage but the "face value" of that transaction does not vary with market conditions. In essence the Danish system creates a new contingent claims market for homeowners who do not understand how to use interest rate futures and options. De facto, the homeowner receives some implicit insurance against the prospect of negative equity in the home.
Here is The Economist on the Danish model. Denmark also allows for speedy repossession of property, in case of default. Here is a more general discussion of the Danish model, which emphasizes transparency. Mortgage finance is conducted by explicitly designated institutions and originators retain a financial interest in the loan, even following securitization. The emphasis is on plain vanilla products. Here is Wikipedia on the Danish mortgage model. Here is a longer study.
Which vacation model is best?
Marko, a loyal MR reader, asks:
Compare and contrast US vs European vacation model.
How much vacation do we really need?
That is a good question for August. I think of the European "minimum three weeks in August" model as resulting from lots of collective bargaining, small families, fewer large dependent pets, higher tax rates, and many nearby desirable locales which do not exhaust themselves easily. Plus you already live near the kids' grandparents, so you either don't need the four-day trip there or you wouldn't consider a full three weeks with them. Head to Morocco and hire a guide.
Rather than comparing the vacations per se you also can ask whether the preconditions for the European-style vacation are desirable. Overall I see the European approach to leisure as having higher private returns but lower social returns. It reflects a very coordinated but less flexible approach to labor allocation and it reflects a weaker obsession with work and children, both of which in my view have larger social benefits. If there is nowhere fun to go, as for many Americans, or your pets and kids tie you down anyway, you'll maybe have a better time at home.
One ideal is to have an American-style income and tax rate and then some free time in May and September rather than August, combined with a willingness to take longer flights; I have most of this (though I teach in September) and we don't have pets. It is Yana who leads the charge to go places.
Addendum: Matt Yglesias makes some interesting points.
A simple economic model of today’s NBA
Given economic bad times, many teams have overspent. But they have lots of long-term contracts, plus there is a salary cap and luxury tax for going above that cap. Real wages ought to fall but most of them cannot fall right away. If a player becomes a free agent, few teams will bid and those players will absorb a disproportionate share of the required wage cuts (the pricing of complementary inputs had some indeterminacy anyway, plus there is an AC constraint).
The lower returns available mean that a given free agent is more likely to be a self-deluding trouble maker who has worn out his welcome (Artest, Gordon, etc.). This favors teams with dominant players (Cleveland), strong systems (Boston), and strong coaches. All those teams can swallow the troublemakers without cracking up. It also favors teams which suffer from well-defined "missing pieces." It favors already-good teams and indeed we see that Cleveland, Orlando, San Antonio, and LA have been major players in the free agent or trade markets.
I predict a greater dispersion of win totals for next year's season.
I am wondering to what extent a similar analysis applies to economics departments, or to teams of bloggers, or to other groups of complementary labor inputs.
Addendum: TrueHoop comments.