Results for “kremer”
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What do we know about population and technological progress?

Bryan Caplan writes:

The more populous periods of human history–most obviously the last few centuries–clearly produced more scientific, technological, and cultural innovations than earlier, less populous periods. More populous countries today produce many more scientific, technological, and cultural innovations that less populous countries… Here’s a challenge for you: Name the most credible measure of idea production that isn’t at least moderately positively correlated with population.

Is this about the absolute number of ideas generated or ideas as a percentage contributor to economic growth?  If we are estimating the costs and benefits of greater population, or the future of economic growth rates, the latter is arguably the more important variable.  In any case, most plausible theories of economic growth imply that higher populations should lead to higher rates of ideas generation, as measured in terms of value.  Ideas are non-rival and can be enjoyed by the entire group, thus yielding a higher social rate of return.  There are also larger markets to pay for the ideas or award more fame to the inventors.

Here is a famous Michael Kremer paper arguing for a version of Caplan’s position.  That all said, it is far from obvious that Caplan is correct:

1. The measured rate of technological progress, as it contributes to gdp, seems to have peaked in the 1930s.  At that time total population, including the population of scientists, was much lower than today.  “Effective” total population was yet lower, given the backward nature of transportation and communications and trade at the time, compared to today.

2. A recent paper by Ashraf and Galor (it’s also worth reading for other reasons) concludes: “…population density in pre-industrial times was on average higher at latitudinal bands closer to the equator.”  Yet the countries closer to the equator did not end up being the drivers of industrial progress, even though they sometimes had higher rates of progress in agricultural times.  Northern Europe, with the exception of the Dutch Republic, was never the star for population density.  This paper also indicates that technology drives population growth — more than vice versa — and that “time elapsed since a region’s neolithic breakthrough” predicts later technological progress fairly well.

If you add an extra baby to most societies, ceteris paribus, the rate of expected idea generation does indeed go up in theory.  But how important a factor is that, compared to other influences on ideas generation?

Or: at very gross time scales (“the last few hundred years” vs. “the dark ages”) a positive relationship holds between population and ideas production, or at very gross numerical comparisons (“one million people” vs. “ten people”).  But viewed at finer granulations (by the way, the evidence in the Kremer paper is quite gross; e.g., pp. 710-712), the relationship isn’t nearly as strong as one might expect.  In the time series, it’s been largely a negative relationship for the last eighty years or so, as mentioned above.

What model might give you a positive relationship between population and innovation at grosser scales but not finer scales?  Let’s say there are various technological “platforms,” such as “fire,” “agriculture,” and “fossil fuels,” and maybe someday “uploads.”  At any point in time, growth rates depend on how much a region has exhausted the potential of its current platform.  This is largely independent of current population.  That said, larger population areas may have a greater chance of progressing to the next platform, so there is a long-term, gross correlation between population size and levels of technology.  Furthermore, if all regions have more or less exhausted the current platform, the larger region has a greater chance of leading the next breakthrough and thus being first to have the new and higher growth rate, even if most of the time it doesn’t have a higher growth rate for technological progress.  That view is hardly anti-population, but it explains why you will find screwy population-innovation correlations all over the place.  Finally, further breeding, as a recipe for progress, is an extreme lottery ticket and it only works at some special margins.

Assorted links

1. On right-wing economists and health care plans, John Goodman responds.

2. Should you stuff your little kid full of learning?

3. One hypothesis as to why they are selling expiring ebooks to libraries.

4. How to end the Great Stagnation there is no Great Stagnation.

5. File under “unlikely to prove expansionary for the global economy.”

6. Scott Sumner on Japan and the yen.

7. What kind of economic arguments work on TV? (pdf)

8. Dilbert markets in everything.

9. The forthcoming change in Japan’s working age population.

10. Michael Kremer symposium on development economics, RCTs, etc.

Assorted links

1. More on why it is hard to get tough on bank creditors.

2. Scott Sumner: "It's complicated."

3. Active Duty Army Ranger named #3 pastry chef in the world.

4. Roger Garrison's Powerpoints for macroeconomics.

5. How women want to be wanted.

6. U.S. will resume deportations to Haiti.

7. Economic History blog is back.

8. al-Qaeda in Iraq, 2005-2006, turned a profit but paid low wages.

9. The hazards of nerd supremacy; some observations on Wikileaks.

10. Michael Kremer's program leads to actual vaccines.

11. How to shut down a libertarian summit.

Michael Clemens on the Millennium Village project

It's hard to summarize, so read the whole thing.  But he is calling for a closer look at the evidence and the application of RCT [randomized control trial] standards.  Here is an excerpt:

First, the fact that a technology has been scientifically proven in isolation–such as a certain fertilizer proven to raise crop yields–does not mean that it will improve people’s well-being amidst the complexities of real villages. Recent research by Esther Duflo, CGD non-resident fellow Michael Kremer, and Jonathan Robinson shows that fertilizer use is scientifically proven highly effective at raising farm yields and farmers’ profits in Kenya. But for complex reasons very few farmers wish to adopt fertilizer, even those well trained in its use and usefulness. This means that this proven technology has enormous difficulty raising farmers’ incomes in practice. The gap between agronomy and development is very hard to cross.

Second, it is not sufficient to compare treated villages to untreated villages that were chosen ex-post as comparison villages because they appear similar. Many recent research papers have shown this conclusively. A long list of studies conducted over decades showed that African and other children learned much more in schools that had textbooks than in schools that appeared otherwise similar but did not have textbooks. Paul Glewwe, Michael Kremer, and Sylvie Moulin evaluated a large intervention in some of the neediest schools in Kenya (ungated version here, published here). Schools that received textbooks were randomly chosen from an initial pool of candidates. The problem: Children did not learn more in the treated schools than in the untreated schools.

Chris Blattman comments.

*What Works in Development?*

The subtitle is Thinking Big and Thinking Small and the editors are Jessica Cohen and William Easterly.  Usually essay collections are of low value but this is the single best introduction (I know of) to where development economics is at today.  Contributors include Dani Rodrik, Simon Johnson, Michael Kremer, Lant Pritchett, Ricardo Haussmann, and Abhijit Banerjee, among others.  Even better, there are two published (short) comments on each essay, a practice which should be universal in every collection, if only to establish context.  My favorite piece was Banerjee's on why development economics should "think small" rather than just doing macro issues.  Recommended.

First debug the child, then the computer

The idea of computers as liberators appealed to Silicon Valley philanthropists and Nicholas Negroponte could certainly tell a compelling story but, as Timothy Ogden explains, today the one laptop per child project seems to be in technical and financial trouble, the evidence that computers increase learning either in the classroom or at home is weak and the demand for the computers (as opposed to say cell phones (pdf)) in the developing world is low.  Meanwhile, simpler, cheaper approaches with proven evidence are not being fully exploited.  Here's Ogden.

The simplest and least costly of these programs is deworming. Nearly 2 billion people around the world are affected by parasitic worm infections, with children disproportionately affected. While each variety of parasitic worm affects a person differently, they all take a substantial toll on growth, energy and attention, with entirely predictable impacts on school attendance and learning. Harvard economist Michael Kremer has studied the impact of mass deworming in Kenya and India. Delivering deworming medication costs 50 cents per child per year in Kenya but yielded a 25 percent increase in school attendance; a similar program in India cost $4 per student per year and yielded a 20 percent attendance gain. "This is a simple, cost-effective and yet tragically not-done program. It's a scandal that [deworming] hasn't been addressed," Kremer says. There are spillover effects as well. "The most surprising thing about the study in Kenya was the widespread impact," Kremer says. The program drove down infection rates for several kilometers around the schools, he says, and there were significant improvements in attendance for untreated students, in the treatment schools as well as in nearby schools not in the program.

Read the whole thing.  Help to deworm the world.

Hat tip to Alanna Shaikh via Chris Blattman and also to Dan in the comments.

A Biological Model of Unions

That’s the title of a paper by Michael Kremer and Benjamin Olken.  The bottom line is:

…a union that implements workers’ preferences will not be evolutionarily stable.

The union that survives must either extract fewer rents for the workers (thus lowering anti-union expenditures from the employer, or helping keep the employer in business) or spend excess funds on organizing and bolstering union membership in the broader economy.  A union that spends on membership and organizing drives tends to spread from one firm to the next.  If a union were truly controlled by its members it would take lots of current rents with little concern for the longer-term future of the firm or for the longer-term future of the union.

Here’s a neat paragraph:

The dynamics of unionization levels also bear a similarity to those under the Susceptible-Infected (SI) model of epidemiological dynamics…In that model, new potential hosts are born uninfected; the chance that they become infected increases with the number of hosts already infected; and once hosts are infected, they stay infected until they die.  Note that this comparison is purely positive, not normative.

Yes the paper does offer some evidence but it is more interesting as a theory piece.  Here is an earlier ungated version, there is also 2001 version listed at NBER and here is the current version.

More Sex is Safer Sex

In More Sex is Safer Sex Steven Landsburg famously argued (based on work by Michael Kremer) that if more people, especially more sexually conservative people, had sex the AIDS epidemic could be reduced.  Landsburg wrote:

Imagine a country where almost all women are monogamous, while all men
demand two female partners per year. Under those circumstances, a few
prostitutes end up servicing all the men. Before long, the prostitutes
are infected; they pass the disease on to the men; the men bring it
home to their monogamous wives. But if each of those monogamous wives
were willing to take on one extramarital partner, the market for
prostitution would die out, and the virus, unable to spread fast enough
to maintain itself, might well die out along with it.

In The Wisdom of Whores (see also my earlier post) Elizabeth Pisani says that such a country exists, it’s Thailand, and the results of more sex was safer sex – exactly as Landsburg argued. Here’s Pisani’s story:

Thailand used to fit the the classic ‘virtuous girls, philandering boys’ model.  At the start of the 1990s, 57 percent of twenty-one-year-old men in Northern Thailand trooped off to the brothel to do their philandering.  More than half the sex workers who soaked up their excess energy were HIV-infected….

Then…the Thai economy boomed.  Girls were getting better educations than ever before…Educated girls were waiting longer before getting married, but not before having sex.  By the end of the 1990s, 45 percent of girls aged 15-21 in northern Thailand admitted to having sex with boyfriends before marriage, compared to less than a tenth of that in a nationwide survey in 1993.

…So at the end of the decade, we have a lot more premarital sex and not all that much condom use with girlfriends.  But now that these young, cash-strapped guys can have sex without paying, they’ve stopped handing over cash for sex.  By the end of the 1990s, only 7 percent of young men were paying for sex, and HIV prevalence in sex workers had come down too.

….In short, more women having premarital sex equals less HIV.

Pisani cites neither Landsburg nor Kremer so I believe her account is independent.  Note that Pisani also credits Thailand’s successful condom program.

Assorted links, revised

1. Monkey wars?

2. Bolivian decentralization

3. A new Amazon feature: who writes short and long sentences?

4. Farewell to Alms MP4: Tyler Cowen, Brad DeLong, and Greg Clark.
It was much fun, as Brad and I realized we hadn’t seen each other since
graduate school.  Greg goes first, we each speak for about fifteen
minutes, Brad presents Michael Kremer, I talk about institutions, then
there are questions from the audience.

5. "After losing embassy employees to attacks, he advised staffers to keep a six-sided die in their glove compartments; to thwart ambushes, they should assign a different route to work to each number, he said, and toss the die as they left home each morning."  More here.

A prize for the Edwards plan?

I am awaiting details but this proposal from John Edwards is not entirely crazy.

Mr. Edwards said he wanted to discourage pharmaceutical companies from
obtaining long-term patents on medicines for specific ailments like
Alzheimer’s and cancer. Instead, an upfront cash prize would be made
available to serve as an incentive for research on such drugs.

I worry, however, that the prizes will be far too small.  Since the social value of breakthrough medicines greatly exceeds the private profit, prizes of tens of billions of dollars would not be unreasonable.  In fact, optimal prizes must increase the profits of US drug companies.  Can a Democrat like Edwards sell that?  And who will decide how the prizes are handed out?  Can the US government award billions of dollars in prizes without significant rent seeking?

Partly for these reasons, I would much prefer a patent buyout as suggested by Michael Kremer (Kremer’s paper can also be found in Entrepreneurial Economics.)  Let’s at least have a few experiments to buyout say 5 years of the time remaining on some important patents.

Do keep in mind that the problem of expensive drugs is overblown – a typical new drug will go off patent in 12 years anyway.  The real issue is how best to increase the incentive to develop new and important pharmaceuticals.

Should endangered antiquities be leased out?

Michael Kremer has another neat idea:

Most countries prohibit the export of certain antiquities.  This practice often leads to illegal excavation and looting for the black market, which damages the items and destroys important aspects of the archaeological record.  We argue that long-term leases of antiquities would raise revenue for the country of origin while preserving its long-term ownership rights.  By putting the object into the hands of the highest value consumer in each period, allowing leases would generate incentives for protection of objects.

I’m all for trying this, as I see no major downside.  But I don’t think it would have a large positive effect.  Collectors, being irrational creatures and "completists," wish to own rather than lease, even if the lease extends past their expected lifetimes.  Museum donors wish to fund museum acquisitions more than museum borrowings.  Similarly, it is much easier for a non-profit to raise money for buying a building than leasing one long-term.  So the demand for leased antiquities won’t be all that huge.

Does eliminating disease spur economic growth?

A loyal MR reader asks:

…is the flow of research against malaria and other targeted diseases
good or bad (or mixed) for the recipients?  I have been a believer that
eliminating diseases would have a big impact on economic growth, but
Foreign Affairs recently had an article attacking the concentration of
charity dollars in a few diseases as tending to distort funding
allocations away from the most important local needs.

The fight against disease, taken alone, won’t improve matters much.  There are, let’s say, thirty different major problems in sub-Saharan Africa.  Eliminating any one of these problems will hardly matter, even if there is no Malthusian trap.  Economic growth is all about complementary factors, and more generally it is hard to produce outputs of real economic value.

I favor Michael Kremer’s plan to offer prizes for vaccines against diseases in poor countries.  It doesn’t cost a fortune, and its successes are as likely to boost other forms of aid as take away from them.  The lives are worth saving for their own sake, and perhaps it will herald a larger push out of misery.  But, taken alone, such an initiative won’t much improve measured economic growth.

On the other side of the debate, this Jeff Sachs paper argues that disease kills the young, thereby requiring excessively large families as a form of insurance, and underinvestment in the human capital of each child.  Limiting disease might reverse this negative dynamic, though I am less inclined to see any unique lever in this kind of vicious cycle.

#42 out of 50.

The economic effects of immigration

Kremer
and Watt argue that as more immigrant women serve in household
positions, more high-skilled native women are therefore available to
join the labor market, driving down relative wages among high-skilled
workers and reducing the disparity in wages between low- and
high-skilled workers.

Here is the paper, and that is via Greg Mankiw.  I’ll say it again: it is not frequently enough recognized that the gender of immigrants is a major policy issue.  Female immigrants bring fewer problems than do male immigrants, and they encourage the male immigrants to behave better, but of course they also, in the longer run, mean a greater demographic shift in favor of the immigrants and their culture.

Use foreign aid to prevent catastrophe?

Our research find that a 5% drop in per capita income due to drought increases the likelihod of a civil conflict [in African countries] in the following year by nearly one half.  That’s a very large effect.

…Currently, most foreign aid focuses on long-term investments in infrastructure of education but does little to deal with such short-term triggers of violence as drought or falling export commodity prices.  But our research suggests a larger share of aid should aim to dampen the sharp falls in income that actually generate recruits for rebel movements.

That is from Edward Miguel, p.14 of Business Week, edition of 18 September.  My main worry is that these are the societies where foreign aid is least likely to find its way into the hands of the poor.  In fact the distribution of the aid might, at the margin, make the plum of political power all the more appealing to would-be rebels.  Keep in mind that many of these civil wars are led by elites, not the starving poor.  (So what is the mechanism linking drought and conflict?  Focality?)  Nonetheless I am sympathetic with the basic idea that simply preventing catastrophe is often the best that aid can do.

Here are links to the guy’s working papers and the data set for this paper.

Here is Bill Easterly on what the World Bank should be doing, namely focusing on modest and measurable projects, in the name of accountability.  Michael Kremer argues the World Bank should support global public goods.  Here are other views, courtesy of New Economist blog.