Results for “age of em” 16714 found
Growth tigers of the 1950s
If we pull out Japan, Israel, and postwar European catch-up, and do per capita growth, B.R. Shenoy’s list of top performers looks like this:
Jamaica, 6.9%
Trinidad and Tobago, 5.9%
Algeria, 5.7%
Puerto Rico, 5.5%
Rhodesia and Nysaaland, 4.1%
Turkey, 2.9%
Philippines, 2.5%
If you do absolute rather than per capita, many of those numbers go up by a few percentage points, for instance the Philippines becomes 5.8% and Algeria becomes 8.0%.
Those numbers are from B.R. Shenoy’s book Indian Economic Policy. Are there lessons? One is that parts of the Caribbean are in fact wealthier than many people think. Another is that the 1950s were a very good decade for the Caribbean, culturally too. A third lesson is that the top performers in one period may not have legs. Finally, looking at this table makes one realize, yet again, how good it was to more or less rid the world of communism.
Assorted links
1. Markets in everything, the ****** burger.
2. Trailer for the Peter Thiel fellowships, and Arnold Kling on the future of education.
3. Contrary to rumor, Omar Sharif has not converted to Judaism.
4. Stefan Voigt on the European Constitution, and Babyklappen.
5. Arbitrage silver dimes rent-seeking Black-Scholes “they’re very easy to spot” Gresham’s Law video.
The new tug of war over Medicaid
My New York Times column is here, it has two parts, a prediction and a proposal. The prediction:
Medicaid has never been especially popular, and when its expanded role becomes more widely understood, it is likely to become less popular still.
I am not expecting that governors will turn away nearly-free federal dollars outright. (Though probably some will, here is an update on how the governors are reacting, which as I see it involves lots of bargaining.) I am predicting that the extreme subsidies for states to hop on to the expansion will at some point weaken or go away.
Change might come soon. If Mitt Romney wins the presidential election, and if Republicans control both houses of Congress, they could turn Medicaid into a block grant program, where states can spend the money as they wish.
Even if President Obama is re-elected, some state governments will work hard to reduce the number of people covered by Medicaid. State officials know that limiting Medicaid will place more individuals in the new, subsidized health care exchanges, and that those bills will be paid by the federal government. The basic dynamic is that state and federal governments have opposite incentives as to how many people should be kept in Medicaid.
The proposal? Here is my best take on how Obamacare might evolve into something more practical:
1. Many of the states slip out of expanded Medicaid obligations and many employers slip out of expanded mandate obligations to cover their employees (waivers, willingness to pay fines, lobby to have the law altered). The system evolves toward a form of means-tested vouchers, sold on the exchanges.
2. The subsidies for the private exchanges become so expensive that the individual mandate is limited in scope. Eventually the mandate applies to catastrophic coverage only.
3. For catastrophic coverage, we move toward a mandate and subsidized exchanges, and for non-catastrophic coverage there is no mandate and health savings accounts, the latter supplemented by public contributions if needed or if you wish.
I am not predicting that, nor is it my first or even preferred second-best solution. It is however the best solution I can see evolving out of ACA in its current form.
Assorted links
Barriers to entry cocoa bean counter edition
Becoming a cocoa beans grader is about four times harder than passing the New York State Bar exam, judging by a comparison of the two tests’ pass rates.
Candidates must correctly identify defects in beans such as mold, infestation from insects and cocoa that is “smoky or hammy”—a sign that the beans have been dried over a fire, not in the sun. Since beans easily absorb odors, the fire can give the beans a smoky flavor. In another section, they must identify the origin of various beans, most of which look identical to the layperson’s eye.
David Morales, one of the three men huddled over the beans in the ICE’s grading room, says he failed twice before he passed the exam two years ago. “I was studying for it, but not enough,” said the 37-year-old Bronx native, who noted the origin section tripped him up.
Is it a public sector monopoly, private sector monopoly, or some combination of both? Or is it just really hard to do well, requiring individuals of truly specialized abilities and with a lot of value at stake?:
The problem is that there are only 24 certified graders for ICE and the exchange is concerned that retirement and old age will deprive it of a crucial cog in its commodity-trading machine.
In an effort to “keep the talent pure and fresh,” the exchange is offering its licensing exam in October for the first time in two years, said Valerie Colaizzo, managing director of commodities operations for the exchange.
The full article is here, hat tip goes to the excellent Daniel Lippman, note by the way that Daniel’s most recent piece is here.
Assorted links
1. Good essay on *Girls*, hat tip Yana, and David Brooks on why elites stink.
2. The current state of 3-D printing.
3. HP filters and potential output.
5. On the workplace restrictions issue, let’s revisit this old data about OSHA.
How to improve firms’ treatment of workers
Say a firm screws over a worker on ten dimensions at once, subject to some constraint of the worker leaving. With those ten depredations, the firm tries to extract from the worker as efficiently as possible, but again so the worker does not leave or leaves only with some lower probability.
Let’s then say the law alters one of those dimensions to favor the worker, for instance the firm cannot force the worker to consent to a body search. The firm may then increase one of the other depredations. Perhaps not for individual workers on the spot (there is “depredation stickiness”), but over time firms will fill the niches of new depredations to the maximum degree possible.
The new depredations will be less efficient ways of extracting rents than the old, which may hurt the worker. At the same time, the firm’s rate of return on enforcing depredations may decrease, which may help the worker.
The net effect is indeterminate. Note also that the lower efficiency may in the longer run limit firm entry and production, which will hurt workers and consumers (and possibly shareholders). Again, the net effect still is indeterminate but the more you think about this model the less you will see it as an effective way to help workers. You might try “regulating all ten depredations” but for that to work you also must fix the wage, and so on.
Maybe some of the model variants here will help the workers, but come on, let’s be realistic. Is it the case that the commentators have firm beliefs about these models for well-argued reasons? I don’t think so. It is more likely the case that there is a core belief something should be done, with not too much concern for the systemic effects nor with the “not totally sound but still better than what the critics are serving up literature on compensating differentials.” I am worried by the common tendency to first cite a lack of perfect competition and then assume the proverbial pony.
Here is Henry Farrell’s response to Matt Yglesias.
Fortunately there is a rather smooth path forward. Raise the utility of unemployment to workers. This could be a guaranteed annual income, better unemployment insurance, more food stamps, whatever. Call it the welfare state. Improving the welfare state will improve worker bargaining across virtually all workplace dimensions and in the longer run limit the scope of all the employer depredations.
We’re back to the point that what helps is to give people cash, or something cash-like, including when it comes to the dimensions of workplace quality. It is also a huge help to institute policies which will raise rather than lower worker productivity.
As I said before, the criticisms haven’t even yet dented the traditional economic point of view on this issue. Those criticisms are operating within the current frontier of analysis, not on it much less beyond it.
Medicaid Wars, Episode IV
While the resistance of Republican governors has dominated the debate over the health-care law in the wake of last month’s Supreme Court decision to uphold it, a number of Democratic governors are also quietly voicing concerns about a key provision to expand coverage.
At least seven Democratic governors have been noncommittal about their willingness to go along with expanding their Medicaid programs, the chief means by which the law would extend coverage to millions of Americans with incomes below or near the poverty line.
Here is more.
I wonder if this is actually true
Researchers who have scanned books published over the past 50 years report an increasing use of words and phrases that reflect an ethos of self-absorption and self-satisfaction.
“Language in American books has become increasingly focused on the self and uniqueness in the decades since 1960,” a research team led by San Diego State University psychologist Jean Twenge writes in the online journal PLoS One. “We believe these data provide further evidence that American culture has become increasingly focused on individualistic concerns.”
Their results are consistent with those of a 2011 study which found that lyrics of best-selling pop songs have grown increasingly narcissistic since 1980. Twenge’s study encompasses a longer period of time—1960 through 2008—and a much larger set of data.
Here is more.
I didn’t mean to leave anybody out
From my entering class at Harvard, that is. A few emails prompt me to produce a longer list:
Douglas Elmendorf, now head of the CBO in addition to his previous illustrious career in research and policy.
Rob Stavins, teaches at the Kennedy School and is one of the leading researchers in environmental economics including climate change.
Perry Mehrling, we’ve covered him a lot on MR, most of all I love his book on Fischer Black.
Asher Blass, living in Israel, working as a partner in a consulting firm, for a while he was chief economist at Bank of Israel. I recall Asher once telling me that an individual can have a larger impact in a country with a small population.
Kenneth Kuttner, he has spent time at the San Francisco Fed and co-authored several important papers on money and credit. Now at Williams College.
John Nachbar, a noted theorist at Washington University and for a while he was department chair.
David Corbett, he now works as a lawyer.
Allen Sanguines, he was brilliant in theory, he is now the President of Rasaland, a development fund in Mexico.
Mark Sundberg, a while ago he was at the World Bank.
Mary Hirschfeld, former Jeopardy champion, went on to get a Ph.D in theology at Notre Dame, now teaching humanities at Villanova.
Greg Duffie, macro and money, professor at Johns Hopkins.
Richard Grossman, at Wesleyan, he is well known in financial history.
Hamish Stewart, has done well recognized work in economics and philosophy.
Deborah Weiss, for a while she was my colleague at GMU Law, now she is living in Texas and raising a family.
My earlier coverage of the class was here. Our TAs included Michael Mandel and Nobu Kiyotaki. There are more, perhaps Miles can help me out in the comments.
What is the ideal “development economics” Twitter feed?
I have some suggestions:
https://twitter.com/#!/GdnDevelopment
@Viewfromthecave
@OECD_Centre
https://twitter.com/#!/blogageco
https://twitter.com/#!/WorldBankPSD
https://twitter.com/#!/clairemelamed
@Shanta_WB
@whydev
@cblatts
@evavivalt
@deankarlan
@m_clem
@RachelStrohm
Some of them are shirkers, I know. Whom else do you recommend?
Pictures of Spain
Grandiose projects across Spain now sit empty and dying. The New York Times focuses in on Ciudad de la Luz, a mega-movie studio built far from cultural centers that is now foundering.
Ciudad de la Luz has become a prominent example of Valencia’s frenzy of modern-day pyramid building, which left a legacy of $25.5 billion in regional debt and bankrupt infrastructure projects as well as the backlash now building against it.
Valencia’s other investments included a harbor for superyachts, an opera house styled like the one in Sydney, Australia, a futuristic science museum, the biggest aquarium in Europe and a sail-shaped bridge, not to mention an airport that never had a single arrival or departure. It also attracted extravagant events like the America’s Cup and Formula One racing.
The Daily Mail takes a look at Spain’s “ghost airport,” a billion Euro project that was meant to serve 5 million passengers a year and is now closed after just three years in operation.
The Socialist regional government spent millions propping up the venue, promoting the project with advertising campaigns and approving a €140 million guarantee to keep it afloat.
But, last October, it saw its final commercial flight, by Vueling. The airport remained open for another six months, the staff still being paid to deal with a handful of private arrivals.
It finally closed in April, but even though it is now closed to air traffic, maintenance tasks still have to be carried out.
The 4,000 metre runway has to be continually painted with yellow crosses, so pilots flying over the airport will know they cannot land there.
Private money appears to have also taken a bath on many of these projects although it’s always difficult to say after government guarantees and kickbacks. The Times quotes one tourist on the meaning:
“I understand now why there’s a financial crisis in Europe,” said Bryce Matuschka of New Zealand. “The bridge is a real work of art, and the aquarium is great, but for some of these buildings you just have to ask, What was all that money spent for?”
I don’t think that’s quite right. My view is that rather than causing a crisis, bad investments are mostly masked by a boom and revealed by a crisis. Still, “infrastructure spending” doesn’t always create jobs; sometimes it’s better to stick with slow rail and sewers.
Private Firefighters
Colorado Springs: When firefighter Eric Morris shows up at wildfires across the West, locals battling the flames sometimes look at him and wonder who sent him.
The answer isn’t a public agency. It’s an insurance company.
Morris is among a group of private firefighters hired in recent years to protect homes with high-end insurance policies. In a wildfire season that is one of the busiest and most destructive ever to hit the region, authorities and residents say their help is welcome.
…For insurers, hiring them is worth the cost. They spend thousands on well-equipped, federally rated firefighters, potentially saving hundreds of thousands, if not millions, of dollars to replace a home and its contents.
Private fire fighters benefit the insured and also the non-insured because the extra manpower lets public firefighters divert their attention elsewhere. Since there are spillovers, private firefighters are under supplied.
Hat tip: Tyler Watts.
Paul Krugman on contractionary devaluation
This is from the 1970s, and with Lance Taylor:
The presumption that devaluation is expansionary is not supported by firm empirical evidence. Why, then, is it so widely accepted? Leftists have been known to suggest class bias — as we will argue later, devaluation does typically redistribute income from wages to profits — but this is too glib. We believe, instead, that the orthodox view of devaluation derives much of its strength from the persuasive power of the simple, elegant models in which it is presented. Since skeptics have mostly relied on Journalism or at best partial equilibrium analysis, it is not surprising that theoretical discussion is dominated by the belief that devaluation has an expansionary effect.
As just hinted, neglecting the contractionary impacts of devaluation amounts to ignoring income effects, especially those transferring real purchasing power toward economic actors with high marginal propensities to save. By redirecting income to high savers, devaluation can create an excess of saving over planned investment ex_ ante , and reductions in real output and imports ex_ post .
…Casual empiricism suggests that all three circumstances prevail in many countries, especially the less developed ones. In these
countries a deflationary impact from devaluation is more than a remote possibility; it is close to a presumption. The purpose of this paper is to show in a formal model how devaluation can cause an economic contraction. The results will come as no surprise to those concerned with policy in the underdeveloped world.
There is nothing wrong with changing your mind, as indeed I have myself on numerous issues. The point is that most macro questions are not cut and dried, and opposing viewpoints are rarely stupid. I also note a general tendency that, when critics attack other people, they are often attacking views they once held themselves. I leave it to Adam Phillips and Darian Leader to tell us what that means.
The document you will find here. For the pointer I thank Jay S.
Assorted links
1. Summary of Dani Rodrik’s trilemma.
2. Do our innovators traffic in trifles?
3. Ask Ariely, a new and regular column?