Results for “age of em” 16883 found
How much did tariffs drive 19th century U.S. economic growth?
Not so much:
The role of high tariffs in the emergence of the U.S. as a leading industrial nation in the late 19th century is still hotly debated. Despite its symbolic signifi- cance in the arguments of Free Trade, the quantitative implications of the tariffs on key features of the development are still unknown. In this paper I ask: Could the U.S. have grown as it did without the high tariffs imposed on its manufacturing imports in the late 19th century? To see this clearly, my analysis is quantitative and counterfactual in nature, effectively isolating the effects of the tariffs from other important forces. To do this, I construct a three-region general equilibrium model. The model is calibrated to match the key data during this period. Then, I disentangle the effects of the tariffs under two different assumptions. First, I assume that manufacturing productivity is exogenous to the tariffs. Then I assume that there exists learning-by-doing in U.S. manufacturing so that the tariffs positively affect productivity. Contrary to popular beliefs, I find that the effects of high manufacturing tariffs are quantitatively small. Even with learning-by-doing, tariffs only contributes about 4 percent to the growth of the manufacturing output, and a little more than 1 percentage point to its share in world manufacturing from 1870 to 1913. I then ask what the key driving forces for development are. I find that the large increase in labour force is the single most important factor behind the development of the U.S. economy.
That is from a 2013 job market paper by Yeo Jooon Yoon (pdf), emphasis added by me. See also this earlier Doug Irwin paper, all hat tips go to PseudoErasmus.
Friday assorted links
1. TLS books of the year list. I can’t recall seeing such a good list from the TLS.
2. What has changed in the new Colombian peace deal?
3. Robust econometrics: “I am immortal.”
4. A tweet storm from my IO class, including on CEO pay.
5. David Brooks on Kahneman and Tversky (NYT).
Best fiction of 2016
I was disappointed by most of this year’s well-known releases, and did most of my rewarding fiction reading in past classics. But these are the fiction or fiction-related works I found to be outstanding this year:
Eimear McBride, The Lesser Bohemians. A novel of an affair, with intoxicating Irish prose and a genuine energy on the page, though it is more a work of intensifying fervor than a traditional plot-based story.
Claire Louise-Bennett, Pond, more from Ireland, short, nominally fiction but more like a circular sensory experience of reading overlapping short stories, with a cumulative effect akin to that of poetry. I found this one mesmerizing.
Javier Marias, Thus Bad Begins. I have only started this, but so far I like it very much. I have enough faith in Marias to put in on the list.
Juan Gabriel Vásquez, Reputations, a short Colombian novel on memory — personal, historical, sexual, and otherwise, this was my favorite short work of the year.
The Complete Works of Primo Levi, in three volumes, edited by Ann Goldstein. By no means is all of this fiction, but I will put these books in this category. A revelation, as Levi has more works of interest, and a broader range of intellect and understanding, than I had realized. There is plenty of linguistics, economics, history, and social science in these literary pages as well as consistently beautiful writing and superb translations. This is technically from 2015, but I missed it last time around.
Helen DeWitt, The Last Samurai. Review here. Strictly speaking, this is a reissue of an earlier published but neglected work. Maniacal, intense, super-smart, about a mother bringing up a prodigy.
Emily Dickinson’s Poems as She Preserved Them, edited by Cristanne Miller. The visual presentation of poetry matters too, plus she is one of the very best.
The Found and the Lost: The Collected Novellas of Ursula K. LeGuin, self-recommending.
Elena Ferrante, Frantumaglia. A revealing mismash look into the mind of the author, giving you an integrated picture of her world view, with carefully calculated feints thrown in. I should note this one works only if you know and love her novels already. Ferrante’s “children’s” story The Beach at Night is also worthwhile, very dark, you can read it in a small number of minutes. Here is a good NYT review.
Jean-Michael Rabaté, Think Pig! Beckett at the Limit of the Human. This work of criticism is grounded in literary theory, but informative and smart nonetheless.
Michael Orthofer, The Complete Review Guide to Literary Fiction. An amazingly comprehensive and informative work, mostly about literature in translation, from the creator of the Literary Saloon blog about fiction. I liked it so much I decided to do a Conversation with Michael Orthofer. If you could own only ten works on literature, this should be one of them.
If you give me only one pick, I opt for the Primo Levi, even if you think you already know his work.
A few I didn’t get to read yet, but have hopes for are Alan Moore’s Jerusalem, and Deborah Levy’s Hot Milk, caveat emptor in both cases, plus Invisible Planets, edited by Ken Liu, a collection of Chinese science fiction.
My post on best non-fiction of the year will be coming soon, plus I’ll do new entries for any excellent fiction between now and the end of the year.
Betsy DeVos, selected for Secretary of Education
DeVos, an advocate for school vouchers, has chaired the Michigan Republican party and played a key role in some major education policy decisions there in recent years. But unlike former D.C. schools chief Michelle Rhee and charter-school leader Eva Moskowitz, two others Trump considered for the education secretary position, DeVos has kept a relatively low national profile. She has neither worked in public education nor chosen public schools for her own children, who attended private Christian schools.
Earlier this week, Chalkbeat compiled a few things we could reasonably surmise from a DeVos pick:
1. Trump intends to go through with his sweeping voucher plan.
On the campaign trail, Trump vowed to use federal funds to encourage states to make school choice available to all poor students, including through vouchers that allow families to take public funding to private schools.
That’s exactly what DeVos has zealously worked to make happen on a state-by-state basis for decades. In 2000, she helped get a ballot measure before Michigan voters that would have enshrined a right to vouchers in the state’s Constitution. After the measure failed, she and her husband formed a political action committee to support pro-voucher candidates nationally. Less than a decade later, the group counted a 121-60 win-loss record.
One recipient of its support: former Indiana Gov. Mitch Daniels, who created the voucher program that Trump’s vice president-elect, Mike Pence, later expanded. Indeed, DeVos’s vision puts her more in line with Pence, who has supported private school vouchers for both low- and middle-income families, than with Trump, whose plan extends only to poor families.
Here is much more information.
Wednesday assorted links
Arguments to ponder for Thanksgiving
The population of wild koalas in the southeast portion of Australia’s Queensland state has plunged by 80% in less than two decades, but researchers are offering a simple plan to save them. They can sum it up in three words: daylight saving time.
Changing the clocks would help stem the koalapocalypse by reducing fatal encounters between koalas and the motorists who drive through their ever-shrinking territory, the researchers say. According to their calculations, the number of koala deaths could fall by 8% on weekdays and 11% on weekends.
“We hope that our study will encourage the Queensland government to consider the benefits of implementing DST,” they wrote in a study published Tuesday in the journal Biology Letters.
Queensland, the state in the northeastern corner of Australia, has a complicated relationship with daylight saving time. The practice has not been observed there since 3 a.m. on March 1, 1992, when a three-year trial period came to an end. The push to bring it back has spawned petitions, referendums and even a political party (Daylight Saving for South-East Queensland, or DS4SEQ).
There are too many noisy videos at the link. And might abolishing the U.S. penny help the koalas too? I am sure it will!
What if Donald Trump wanted *more* illegal immigration?
That is the topic of my latest Bloomberg column, here is the premise:
Imagine that a new U.S. president, different from the one we just elected, set out to maximize the number of illegal Mexican immigrants. Maybe he or she saw electoral advantage in this, or maybe just thought it was the right thing to do. But how to achieve that end? Imagine also that I was called into the Oval Office to give advice.
So what would I suggest?
I would start by recommending an enormous new program of fiscal stimulus and construction…
Don’t forget this:
By the way, infrastructure programs will help illegals in other ways, more than would citizen-focused Social Security or Medicare benefits, for example. Illegal immigrants use roads and mass transit and electricity and other forms of infrastructure all the time. And they won’t suffer much if subsidies for health insurance under Obamacare are reallocated to construction because it was so hard for them to get those subsidies in the first place.
There is much more at the link. My conclusion is this:
The president-elect we have, whether he knows it or not, already has figured out how to maximize the number of illegal Mexican immigrants.
Who ever said Donald Trump can’t solve a problem?
Tuesday assorted links
2. In defense of publish or perish?
3. Will Trump label China a “currency manipulator”? And what do the Chinese elite think of Trump? And might the “trade war” with China work out OK?
4. We’ve already built a wall.
5. Reddit thread on whether you should be excited about EW.
What if foreign countries could just bribe the American president?
Here is a Washington Post look at a related issue. I know bribing a president is illegal and it just…sounds so wrong…but what exactly does the equilibrium look like?
Here are a few points:
1. Presumably the wealthier countries would be willing to pay more for American security guarantees.
2. Countries whose wealth can be easily captured and controlled by hostile forces — oil exporters? — would be willing to pay more for protection.
3. Human rights would not matter so much for American security guarantees.
So far this is not sounding so different from the status quo. Let’s continue:
4. A selfish president might capture income from hard-to-defend countries, not internalizing the higher costs for the U.S. taxpayer. So American guarantees could extend too far and wide from an American perspective, although it is not obvious they will do so from a cosmopolitan perspective.
5. Presumably the president also could accept funds not to defend various nations. So large, wealthy foreign aggressors could “buy out” the United States from defending say Georgia or Taiwan. That sounds terrible, and perhaps it is from a cosmopolitan standpoint. But is it contrary to the U.S. national interest? Keep in mind if the United States becomes non-credible altogether, it would be less able to extract payments from Israel, South Korea, and other nations. That means a bribed president may not “fold his hand” so quickly on all of these endangered small countries. Alternatively, a bribed president may decide to let one of “the little ones” go just to prove a point to the others.
You’ll notice that #4 and #5 counteract each other. I suspect this balance would be worse than the status quo, but that doesn’t follow a priori.
6. You could imagine an American president who allows foreign countries to fall into especially precarious situations to increase his budgetary intake from bribes. The return to pre-emptive peace initiatives might be strongly negative.
7. An alternative perspective is that the American government already collects such bribes in the form of trade agreements, use of military bases, and so on. The real problem is not bribery per se, but rather concentrating so many of the returns in the hands of the president. Tariffs on American exports might go up, for instance, if the president is pocketing the bribes himself.
8. A worry is that bribes collected by a president would not lead to as much stability of policy as what might be generated by the decisions of “the foreign policy establishment.” Perhaps commercial arrangements are intrinsically less stable than bureaucratically-generated policies. A president’s utility function and game-theoretic behavior is probably harder to forecast than the wishes of the bureaucracy. The resulting uncertainty would limit global trade and investment and also probably increase nuclear proliferation. This strikes me as a major concern.
9. A related worry is that nations are so very large relative to the avaricious desires of the president. After a small number of payments, the president might act fairly arbitrarily, as extra bribes wouldn’t matter much and the foreign policy establishment already has been cut out of the picture. (Oddly it becomes less important if America has a truly greedy and rapacious president where the MU for money doesn’t much decline with presidential wealth.)
It is worth thinking through the dynamics on all this a little more clearly than what I am seeing so far.
Sunday assorted links
1. The new left-wing intellectuals.
2. Does playing chess make you smarter?
4. Is everything now at stake?
5. The investor who predicted Trump two years ago (speculative). And profile of Bannon.
6. There are indeed good arguments against an investment tax credit, however they tend to rely on the now-forbidden notion of “crowding out.” For context, here is Krugman’s blog post criticizing the proposed Trump stimulus.
YIMBY PARTY
The YIMBY (yes in my back yard) movement is a small but growing movement of people who are tired of ever increasing housing prices and entrenched rent-seekers who abrogate property rights and prevent development. Here is the YIMBY Party in San Francisco:
We strongly support building new housing. We have a severe housing shortage. Increasing supply will lower prices for all and expand the number of people who can live in the Bay Area.
YIMBY Party joins New York YIMBY and other YIMBY Town people from across North America and elsewhere.
By the way, McKinsey has a good report on housing in California. Key points:
California ranks 49th among the 50 US states for housing units per capita. Benchmarked against other states on a housing units per capita basis, California is short about two million units.
The report does a detailed analysis of housing patterns and finds that a large fraction of the deficit could be met by increased density around transit stations:
California could add more than five million new housing units in “housing hot spots”—which is more than enough to close the state’s housing gap. [Including]…1.2 million to three million housing units within a half mile of major transit hubs.
They also have good suggestions on streamlining the permitting process.
Why has regional convergence stopped in the United States?
It does seem it is skill-based technical change, which rewards high-talent urban clusters, and in the broader equilibrium, also lowers geographic mobility. That is the theme of the job market paper of Elisa Giannone from the University of Chicago, here is the abstract:
“Skilled-Biased Technical Change and Regional Convergence,” (Job Market Paper)
Poorer US cities were catching up with richer ones at an annual rate of roughly 1.4% between 1940 and 1980. However, wage convergence across US cities went from 1.4% a year between 1940 and 1980 to 0% a year between 1980 and 2010. This paper quantifies the contributions of skill-biased technical change (SBTC) and agglomeration economies to the end of cross-cities wage convergence within the US between 1980 and 2010. I develop and estimate a dynamic spatial equilibrium model that looks at the causes of the decline in spatial wage convergence. The model choice is motivated by novel empirical regularities regarding the evolution of the skill premium and migration patterns over time and across space. The model successfully matches the quantitative features of the decline in US regional wage convergence, as well as other stylized facts on US economic growth. Moreover, the model also reproduces the convergence and the divergence in the skill ratio across US cities and other features on quantities, such as the secular decline in within US migration after 1980. Finally, the counterfactual analysis suggests that SBTC explains the approximately the 80% of the decline of regional convergence between 1980 and 2010 among high skill workers.
Here are her other papers.
*Nudge Theory in Action*
That is a new and excellent volume edited by Sherzod Abdukadirov, with contributions by Mario Rizzo, Adam Thierer, Jodi Beggs, and others. I wrote a short introduction, here is an excerpt from that:
Private sector nudge is highly problematic, and I would say it is often worst in those areas we tend to feel best about: health care, education, and charity. In those cases, our guard is most likely to be let down, even if we are highly educated. Or should I say because we are educated?
What about public sector nudge? Well, the good news is that a lot of what government does is simply send money around through transfer programs. In this regard, its potential for manipulating us is fairly limited. Furthermore, government is extremely bureaucratic and usually it does not have top tier marketing talent. Most of the time I just don’t find my government very persuasive. Is there really anything the DMV can talk me into that I wouldn’t otherwise want to do?
But can I then relax? Can I stop worrying about public sector nudge?
I am not so sure.
The biggest costs in human history come from wars, and very often the public sector — especially the executive branches in various countries — nudges us into wars. I don’t hear enough discussion of this topic in the nudge literature.
Government also has nudged us into believing that more government regulation is the answer to many of our problems…
Finally, I worry about how private sector and public sector nudge interact. Nudges from the television news, and its coverage of crime stories, convince many Americans that rates of crime are rising when in fact they are falling. That’s a private sector nudge to be sure, and the private sector is doing the marketing, with great skill I might add. But how does it interact with the public sector? Well, prosecutors send more people to jail and for longer periods of time.
You can order the book here.
Saturday assorted links
1. Can Montreal fight gentrification by limiting restaurant creation?
2. LBJ, RFK, and the origins of the anti-nepotism law.
3. “I have been asked to explain why I want this unusual thing done.”
4. On Richard Baldwin’s Great Convergence, his new book.
5. “Beatty has now been making major motion pictures longer than anyone else alive.”
7. More Justin Wolfers on Trump and the stock market. And Sendhil Mullainathan on related topics, both pieces are NYT.
The little virtues
As far as the education of children is concerned I think they should be taught not the little virtues but the great ones. Not thrift but generosity and an indifference to money; not caution but courage and a contempt of danger; nor shrewdness but frankness and a love of truth; not tact but love for one’s neighbour and self-denial; not a desire for success but a desire to be and to know.
Usually we do just the opposite; we rush to teach them a respect for the little virtues, on which we build our whole system of education. In doing this we are choosing the easiest way, because the little virtues do not involve any actual dangers, indeed they provide shelter from Fortune’s blows.
That is from Nathalie Ginzburg, from her book The Little Virtues. Here is a copy of the essay (pdf). Discovering Ginzburg over the last few weeks has been a revelation for me; she is surely one of the more underrated writers. Here is Bookslut on Ginzburg.