Links round-up

Hi all,

 So it seems like every week these e-mails start with an obit or some cricketing insanity. This week we’ve got both: first India’s continuing attempt to re-popularise binary coding outside of the computing field (just look at all the 0s and 1s in this scorecard), and secondly the passing of Kenneth Arrow (significantly closer to a century  at 95 than any of the Indian batsmen). Tim Harford has a nice, short appreciation here. Arrow was such a foundational figure in modern economics it’s almost a surprise to realise he wasn’t long-dead already. It’s a sign of how relatively young modern economics is that the co-author of the First and Second Fundamental Theorems of Welfare Economics (all capitalised, of course, because very econ student learns the FTWEs) could also be a co-author of a ground-breaking letter stating the economic risks posed by climate change. Arrow was a remarkable economist and inspired further remarkable economics: Amartya Sen made his name extending and critiquing Arrow’s Impossibility Theorem, already a canonical finding in economics 45 years ago.

 1.       You don’t need to be remarkable economist to recognise the mismanagement of the Venezuelan economy or be outraged at the consequences of it. Vox’s reporting of the numbers is a bit bizarre (“three quarters of respondents report losing an average of…” – wtf?), but it seems that the latest national surveying shows that most of the population has lost, on average, 19 pounds in body weight over the period of the crisis. This amounts to a crime against humanity, frankly; and I can’t believe this isn’t a bigger deal around the world. What’s worse is that the political leadership responds to this stark evidence with increasing certainty in their own capabilities. I’d say it couldn’t happen anywhere else, but events across Western Europe and in the US prove me wrong. This is what scares me the most: we feel that if things turn bad, people will recognise their mistakes and change course. No: they may well just double down on what caused the damage in the first place.

2.       Speaking of economic mismanagement, you know your new currency isn’t taken seriously when it trends on ebay as a collector’s item. That doesn’t exactly speak of market confidence that it’s going to last long, does it? However, since each bond note is selling for more than its dollar value in Zimbabwe, maybe the Reserve Bank should just cut out the middleman and start selling the notes as a novelty gift to foreigners? (thanks to Adam Lyons for pointing me to that one).

3.       Let’s pile on some more bad news, while I’m still frothing with outrage: apparently, we’re all at risk – banking crises in other countries can cause domestic banking crises even in the absence of direct financial ties or trade relationships. That bodes well for the next five years.

4.       To cheer us up a little, I thought the James Martin memorial lecture given by David Miliband recently was excellent. He mounts a sturdy defence of DFID and singles our new Economic Development Strategy and our work on the Jordan Compacts for particular praise; and he inches towards an approach to reconcile global and local politics.

5.       There’s hope, too, in this excellent New Yorker piece on behavioural science and its role in policy making in the US, using the example of Flint, Michigan. We constantly make little movements of progress that help us build a better world. The shocks that push us back are more visible, but the war will be won by the creeping tides of progress.

6.       There are echoes of this in this Tim Harford piece about setting rules and targets – we’ve made a lot of progress in identifying patterns, which has left us open to new mistakes – and we keep working out ways to get around them.

7.       And lastly, because the first half of this e-mail was a total downer, let’s end on a joyous note: Boogie Cousins has just signed to play alongside Anthony Davis in New Orleans, which means they’ve finally found an on-court combo cool enough to overcome the tragedy of being called ‘the Pelicans’ (seriously, I love birds but when they were selecting names did they just ignore the teams called things like Thunder, Rockets, Bulls, and all those other awesome things to pick that?!) And if you’re not enough of a basketball tragic to be excited by that, here’s Giannis Antetokuoumnpo (it’s pronounced exactly how it’s spelled) dunking the soul right out of Steph Curry. It’s only 28 seconds and watch it for the look on DeAndre Jordan’s face at 0:20s.

 Have a great weekend, everyone!

 R

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Links round-up

Hi all,

 Days when Sri Lanka win a last-ball victory against Australia and Lasith Malinga gets through four overs without accidentally breaking his bowling arm in the process of sitting down are good days. We should savour them when they come, rare as they are. My first thought, seeing the headline was ‘oh God, fake news has come to cricket’, but no, it’s verifiable. As opposed to certifiable, which is the adjective that runs to my head when I see most accusations of fake news. Sad!

 1.       Chris Blattman loved this piece by Dani Rodrik entitled Global Citizens, National Shirkers. Rodrik argues that the internationalist values that until fairly recently seemed to have won control of the political discourse have brought with them neglect of domestic problems and the failure to persuasively argue the case for the domestic benefits of internationalist policy. I may be arraying myself against two much heavier hitters with this opinion but I really disagree with a lot of what Rodrik writes, and by extension Blattman’s praise. An internationalist, outward facing discourse does not have to come at the expense of a progressive, thoughtful discussion about domestic problems and historically hasn’t. While it’s true that the last ten or so years have seen an increasingly global policy agenda coupled with the relative neglect of domestic redistribution and alleviation of deprivation, that’s a recent phenomenon. We have had extended periods when we cared about both and worked for both – both here in the UK and abroad. Putting them in opposition to one another is, as Owen Barder recently put it, a classic trick: to pit two progressive causes against each other; and it distracts us from the real problems.

2.       Speaking of distractions, I mourned the death of Hans Rosling last week, but he himself might have seen the attention I paid him as a distraction from what really matters. I was sent this brilliant tribute to Rosling by a colleague, and it argues that to really honour him would be to have made him unnecessary. “So how do we let Hans Rosling rest in peace?… by remembering that mothers in Bangladesh no longer give birth to five children on average, nor four, but TWO POINT TWO children “. Remember less of him and more of his message.

3.       As a quick fillip after a couple of down-notes, it may be hard to see right now, but some polling shows that America is getting more tolerant of religious minorities over time. It certainly doesn’t look like it right now, but it always pays to look deeper. Underlying currents and the short term movement are often at odds.

4.       Imagine you wrote a blog critical of a Nobel winner and he showed up to leave a long and detailed comment – agreeing with you. Sounds fanciful? Incredibly, it actually happened this week, with Daniel Kahnemann showing up on this blog to explain why he agrees that he was wrong (noting with bitter irony that he fell for a cognitive bias he a Tversky first identified in the 1970s). What a hero he is.

5.       I loved this piece by Tim Harford, about how giving workers control of their working environment can increase their productivity. I’m not going to make any pointed comments about clear desk policies or the restriction on me putting my world map up on the wall, but I’ll just leave you with the thought that if I was allowed to supplement my geographically-challenged brain with the map, I’d save about 20 minutes a day googling ‘where the heck is the Gambia?’

6.       I’ve got to draw this one to a close, as I’m running ridiculously late but here’s my favourite piece of randomness I read this week – Jack Slack on how to defend yourself against multiple attackers: “so far there is only one proven method: run, swing like a mad man when you need to, and run some more.”  Read it for the gifs. They’re hilarious…

 Have a great weekend, everyone!

 R

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Links round-up

Hi all,

 “If I say one in ten girls doesn’t go to school, or one in seven girls doesn’t go to school – I’m not talking about statistics. I’m talking about girls. There’s this idea that numbers are something else. No, this is reality.” Hans Rosling died this week, and if you weren’t upset about it, you probably haven’t seen enough of him. A few things were circulating on social media, with many people posting his Ted talk about the miracle of the washing machine, but my favourite is this interview on what appears to be a Danish Newsnight. What’s brilliant is not just the clear commitment to social justice and building a better world, it’s his anger at misrepresentation and willingness to fight back. People like this are rare, and needed very much now. The reach of those willing to lie and obfuscate for their agenda is wide and deep, and it takes a lot of people with a lot of fire to fight that.

1.       Keeping with that theme, some Trump to start us off: Francis Fukuyama doesn’t like Trump, and like many other observers, is wondering how well the American institutional structure will stand up to the pressures his Presidency may put it under. Unlike Daron Acemoglu, however, Fukuyama is an optimist. Indeed, he even believes that the institutional structure has too many checks and balances, even in the current context and makes the case for removing them here. I don’t pretend to know nearly enough about this to arbitrate this heavyweight debate. I can, however, offer a pithy one-liner stolen and repurposed from Keynes’ attack on Clemenceau in The Economic Consequences of the Peace: Trump appears to ‘have one illusion – himself – and one disillusion – mankind’. If Trump does try and isolate the US, though, China may well be waiting to step into their role.

2.       The most stunning thing about this Vox article, entitled What Donald Trump doesn’t Understand about Trade is how short it is. The main point it makes is that trade is not a zero sum game, one Tim Harford makes better here.

3.       Even better is this excellent double-whammy from CGD. First, Michael Clemens and Hannah Postel report on work they did on a guest worker scheme in the US which demonstrated that it was a great development intervention, it did not steal any ‘native born’ jobs (the jobs already existed and were unfilled), and added around $4000 per worker to the US economy. Charles Kenny then elaborates in one of the best pieces of the week; protecting US workers from trade and from immigration isn’t likely to get them any more jobs – it will just accelerate the pace of mechanisation.

4.       Returning to the topic of fighting with the truth, an excellent article by Michael Faye, Paul Niehaus and Joanna Macrae about cash transfers, following recent negative headlines in the UK.

5.       Ever since Chris Woodruff and Michel Fafchamps’ paper ‘Identifying Gazelles’ pointed out how hard it is to identify which firms we should concentrate our efforts on if we want to encourage growth, other researchers have tried to find ways of either circumventing this problem or getting better at gazelle-spotting. Two pieces this week report progress, first David McKenzie on targeting informal firms to focus on the ones most likely to formalise; and secondly, Ramana Nanda on using trial-and-error experimentation to round up lots of firms and let the non-gazelles out quickly.

6.       If, like me, you want to know more about the Congo – this WaPo blog is a good start, though it’s not going to cheer you up.

7.       Ok, I’ve depressed you all enough. Two things that make me happy to close (I have no idea what makes you all happy, so you’ll have to make do with this). First, a confluence of two of my favourite things: Planet Money econogeekery and birds (transcript). And second, an epic long read about Anthony Bourdain eating around the world and appreciating all the cultural diversity it has to offer. It also talks about my favourite of his essays, My Aim is True. And if none of that cheers you up, here’s Taylor Swift dancing at the Grammys (you can stop complaining now, Danny).

 Have a great weekend, everyone!

 R

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Links round-up

Hi all,

 I’m on leave tomorrow, so the links come early. Normally this intro would be where I make a token Taylor Swift joke and a glum mention of the latest cricketing disasters (seriously  – 8 wickets in 19 balls? Were they worried they’d be late to check in at the airport?). But I’ve been slightly uneasy all week at what I’ve been reading in the news and what I’ve been hearing from my friends, so here is something serious instead: on my 8th birthday I remember watching the news and seeing people climbing the Berlin Wall as it was made obsolete by the East and West German Governments (of course I didn’t understand what was happening, only that my parents’ reaction showed it was important). On my 35th I watched the votes pour in for a President whose main promise was to build new ones. I am deeply worried that those of us who are trying to use evidence and statistics to argue against policies we feel are wrong and counterproductive are misjudging both the objectives and the appeal of these policies (and polling suggests they are more popular than not there). I don’t know exactly what to do about that, beyond feeling that an alternative, positive vision is needed, not just a repudiation.

 1.       Before moving off the topic altogether, another consideration of the effects of trade. I said recently that trade was not really about competition between countries so much as a way of organising production and consumption across borders. This investigation of US-Mexico trade makes the point again, pointing out that “most US imports from Mexico are intermediate and investment goods… A tariff on Mexican goods is more likely to raise costs for US businesses … than to lead people to substitute American-made goods for Mexican ones.” Still, that might not stop anti-trade policies running – apparently, one of Trump’s economic advisers wants to dismantle cross-border value chains. I’m predicting that will either be forced into a stall or will end very badly indeed.

2.       Another thing I said last week is that the typical middle-aged worker is unlikely to simply retrain if his job dies out in a more competitive global economy. Plane Money seemed to hear me, because they went off and ran a piece on a long-standing US assistance programme which has the explicit aim of getting these workers reskilled and into new jobs. It’s fascinating – well worth a listen: the best laid plans can run aground against the messiness of the real world.

3.       Changing the subject – a great blog by Berk Ozler on the long run effects of an unconditional and a conditional cash transfer programme. Long story short: it’s complicated. Few of the short term effects of the unconditional transfer persist in the long run, while the conditional transfer may not have the full range of short term benefits, but a larger long term effect in some dimensions. Very interesting, and I recommend reading it all.

4.       I mentioned this paper recently, but am only now finding time to read it: Chris Blattman on the political effects of an income generation programme. It’s only one piece of evidence, so we need to be cautious about extrapolating the results, but it’s very interesting. He finds that the programme increases political opposition, and speculates that this may be because it frees participants from the need to survive through patronage from the state.  It would be amazing if more programmes asked these questions – it’s important data to understand social contracts and politics.

5.       For someone who gets his unredacted thoughts and brainfades published online every week, this is pretty scary: you can never be sure your data is truly gone when you want it gone. Thought that being the case it can’t hurt to ask: when my last laptop died, I lost a note I wrote about the Copenhagen Consensus Centre and some of its research – has anyone got a copy?

6.       Long-time readers will be aware that I think Kareem Abdul-Jabbar is the man. How many Hall of Fame Centres are also successful writers and cultural commentators? His New York Times book review of two recent books about Islam and identity is brilliant and timely. In it, he quotes Norman Vincent Peale: “The trouble with most of us is that we would rather be ruined by praise than saved by criticism.”

 Have a great weekend, everyone!

 R

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Links round-up

Hi all,

Strange things are happening in the world these days. Rafa and Roger are about to contest an Australian Open final, causing me to check my calendar; England thumped India in a Twenty20, causing me to dig a deep hole in the garden for signs that hell has frozen over; this Sixers are awesome while the Cavs suddenly suck. What the heck is going on? Increasingly, I’m starting to wonder whether we actually are all just in a big computer simulation, and the computer’s running out of RAM. If these links are all just repeats, I blame the RAM. That’s my new mantra: blame the RAM.

1.       We’re about a week into Trumperica now, and what have we learnt? And importantly, what does it look like he’s learnt? Let’s start with Mexico. All through the election, his promise to make Mexico pay for his wall seemed outlandish – how could he do this without significantly damaging the US economy? His first idea, quickly rowed back on, was a tax on Mexican imports – a tariff that would both hit American consumers and American producers hard. But he could hurt Mexico in other ways, too even if they wouldn’t raise much money – Mexico’s economic fortunes are tied to the US by an umbilical cord made up of both trade and remittances. In a way it doesn’t matter whether or not he actually does get the money for the wall this way – politically, he may only need to sell it like that. Similarly, the fact that net jobs created are a tiny proportion of gross jobs created and destroyed in a month probably won’t stop someone, at some point, just citing the stat that looks best. I’ll come back to this point, so bear with me.

2.       But in the interests of questioning my own prior convictions – is there something valid to Trump’s instinctive hatred of trade deals? Dani Rodrik has always been more circumspect than most economists in his approach here, and his analysis of NAFTA is required reading for everyone who thinks that free trade is the obvious answer. I accept his points here, but they beg further questions: if sections of the economy need protections in order to survive, in the answer to offer these protections up and create rents for exploitation? And if so for how long? And do we do it for all sectors or just some? Or do we phase them out slowly and really work at remodelling the economy? I lean towards the last, as do most economists, but I’m realistic enough to know that the average 45 year old isn’t just going to reskill and become a computer engineer. There are real costs, and we need a proper plan for dealing with them.

3.       Relatedly, Rodrik has been busy this month, with a further paper on structural transformation here. Interestingly, his co-authors use a separate paper on which Rodrik is not co-author to refute his argument of premature de-industrialisation.

4.       Recently, I’ve seen a few people asking for evidence of a prior belief they hold (“I think poverty is rising because of neoliberalism, can someone send me proof of this?”), rather than asking a neutral question and seeing what the evidence says (“what’s the best evidence about recent trends in poverty and their causes?”). It’s worrying if this is creeping into actual calls for research proposals though – even if it is only in an advocacy organisation or two for now.

5.       I mentioned the passing of Thomas Schelling in a recent links, focusing on his work on nuclear non-proliferation. Tim Harford considers the insights from his work for Brexit negotiations, concluding that they resemble a game of chicken with similar possible outcomes.

6.       This might have been my favourite article of the week – a book review that digs into the phenomenon of India’s criminal-politicians, suggesting that in the absence of a functioning state, it becomes a stable and rational equilibrium for voters to prefer crooks to the honest men, as it increases their chances of getting services delivered. Meanwhile it also removes the incentive to improve state functioning on the part of the criminal-politicians as their viability depends on their role as deal-makers, and thus in turn on the absence of a rule-based system.

7.       I promised to return to the issue of Trump’s relationship with data (or, more baldly, the truth). Via Tim Harford, I came across this article suggesting that the deep psychology of lying may mean that his approach is not just a good strategy, it will gradually win us all over, even the fact-checkers among us. I don’t buy it, not really. It misses the point that there are very different kinds of untruth and very different ways we respond to them. There’s the vague and difficult to verify ones (“This plan will create millions of jobs, jobs we’ve been losing”) and the concrete and relatable ones (“you’re better off today than you were four years ago”). At the moment, we’re still in the realm of the first kind; but soon, when policies are supposed to turn into reality, the second kind will come into play. Ambiguity will delay realisation; but ambiguity is unlikely to last for ever, or even for very long.

8.        Meanwhile – there’s always satire: “Cake shall henceforth be known as ‘alternative celery.’”: a poem of alternative facts.

 Have a great weekend, everyone!

R

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Links round-up

Hi all,

 I’m going to file the motion that it is physically and psychologically impossible to dislike Joel Embiid (yes, I’m aware about 4 readers have any idea who he is – the Philadelphia 76ers centre). How can you dislike a man who dances like this in a lurid red jacket? Capable of this array of skills? It doesn’t hurt that he’s historically good – and this after losing the first two years of his career to injury. Though if we’re talking returns from adversity, the week’s winner is definitely Yuvraj Singh, whose journey back from cancer culminated in a sensational knock of 150 off 127 balls against England yesterday.

 1.       Nothing else is happening today, right? No historic handovers of power or anything like that, right? As Trump takes over the White House, FiveThirtyEight launch a series looking at both how the media reported the election and what is going on in the country that led to this result. On the former, Nate Silver is justifiably harsh on print journalists who went in for an extended session of confirmation bias in covering the election and then turned around and blamed the numbers for their interpretation. He hints at exploring the behavioural biases that warped the analysis in future articles, too. A companion piece focuses on the demographic and political changes that at once made the democrats more popular nationally, less coherent as an ideological movement and less efficient as an electoral one. I love the fact that the article has an author (Claire Malone) and a lead analyst (Harry Enten). The future of journalism?

2.       You may need to sign in for this, but a very interesting look at the UK’s depreciation post-Brexit. GCSE economics teaches you that a depreciation makes exports cheaper and imports more expensive and  should result in a better trade balance as you export more and buy fewer foreign goods, but it’s a little more complicated than that. Firstly, exporters  haven’t actually been lowering their prices much – instead, they’ve been selling at only slightly lower prices and pocketing the difference from roughly the same sales – which they can do until new firms enter the market to undercut them. But investment requires certainty, which the market has not been offered yet. What’s more, it seems like we’re not importing any less either. In fact, we’re importing more despite price rises, mainly because we can’t substitute what we import with domestic equivalents – there aren’t any. Again, investment is the missing piece of the puzzle. It could still happen, long term. But it might not, too.

3.       On the other hand, when markets are given a much bigger injection of certainty, investment just rockets and if you want evidence, go to California and buy some weed. Once marijuana was legalised, firms invested large amounts of money on bigger plantations, better machinery and new technology, simply because they were protected by the certainty that legal commercial operations tend to enjoy in the developed world – and prices have fallen massively as a result. There’s a lesson here for fragile states. It’s not exactly investment that they lack, it’s certainty. No-one likes unexpected intrusions.

4.       Speaking of money flows, Maya Forstater puts the boot into some seriously shoddy analysis from the Guardian which suggested that illicit financial flows were 24 times the size of aid flows to development countries. It’s worth reading in full, just to get a sense of exactly how many liberties had to be taken with the data and common sense to get to this number.

5.       And speaking of illicit flows, what happens when you clamp down on corruption in a developing country? Well, to start with, the civil service gets in a massive huff as the experience of Nigeria suggests. This chimes with research Clement Imbert presented at DFID the other day, dealing with India.

6.       I found this interesting but not convincing: when Esther Duflo’s address to the American Economic Association demanded that economists become more like plumbers was she calling for economics to return to its roots as something more like a craft than a science? While I think this would be a good thing, I don’t think this is what she really meant. The idea that most economic relationships are always and everywhere true is hard to defend for anyone with more than a passing interest in history, and if that was what Duflo was railing against I’d be quite happy. But actually, I think her aim was a bit more prosaic. It was about implementation. To use the metaphor from the article, in this vision economists are still engineers, using the laws of the world to produce specific outcomes; but they must also learn how to fit their machines in an imperfect space – society, Government, wherever.

7.       Lastly, let’s leave in a good mood, even today. I said a couple of weeks ago that the world is, on most metrics a much better place than it has pretty much ever been. Tim Harford agrees. And if that doesn’t cheer you up, here’s the Bill Evans trio playing Israel. And if even that doesn’t work, go back to the intro and watch Joel Embiid dancing in his red jacket.

Have a great weekend, everyone!

 R

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links round-up

Hi all,

Let it never be said that I don’t admit to my errors (or error, as this might be the first one yet). Last week I suggested that 2016 might not have been especially fatal for celebrities and linked to a pretty middling bit of analysis to back it up. Well, it turns out a slightly deeper look at the numbers doesn’t quite back that up. It’s always good to revisit ones errors and correct the mistakes that lead to them, something that someone needs to urgently communicate to the Sri Lankan cricket team, knee-deep in yet another pathetic capitulation to the less-than-terrifying pace of a second string South African attack. It seems that a Sri Lanka tour abroad these days serves no other purpose than to aggravate me.

1.       Trump has got some perverse ideas (clean your minds, I’m not referring to any unverified dossiers here). His peculiar vision of ‘winning’ at trade involves importing less and exporting more. This assumes that there are some bad, terrible people who import and must be discouraged, and some lovely, shining ones who export and are our great heroes. It turns out, to coin a phrase, it’s a little bit more complicated than that. The major exporting firms are also, mostly, the ones who do most of the importing, and vice versa. Trade isn’t a fight where one side can win and the other loses. It’s a way of organising production and consumption across borders.  That doesn’t mean that everyone gets better off, or that there are no people or firms harmed. It just means that whatever type or level of trade we have (including none), some people will get better off and some will get harmed, and we need to decide which option is the best socially and how to mitigate the distributional effects. Related – what does the economics of golf tell us about who the winners of Trump will be?

2.       Staying on trade for a moment: one of my favourite papers of the last few years, the Atkin et. al. experiment that shows how exporting helps firms become more profitable, more productive and produce higher quality products gets a great, easy explainer from Markus Goldstein here. The innovation of the paper is to generate causal information on the effects of exporting, and then to use logical argument and additional data gathering to prove the causal mechanism through which exporting helps firms get better. This is why Nick keeps going on about why it’s important that we help developing countries develop their export capacities (but doesn’t say they have to restrict imports to do so).

3.       I’m not sure how much weight I’d put on this, but a very clever bit of research used chess analysis to test the hypothesis that women do worse than men in competitive environments. It turns out women don’t do worse in competition but do suffer when they play men, a finding not explainable by their ability. Part of the issue may be that they feel they need to do even better given negative stereotypes. But a really interesting finding is that men in losing positions resign the game later if they’re playing a woman than a man. The piece is decorated with a few spectacularly sexist quotes.

4.       I’m coming late to this piece, but Max Roser’s plea that we stop saying that 2016 was the worst year ever is absolutely brilliant and full of good insights. One of his thought experiments: what would the news headlines be if we had fifty years between them? Probably not the current shrill ‘TERRIBLE THING HAPPENED YESTERDAY AND WE WANT TO SPARK OUTRAGE ABOUT IT’ that typifies our dailies, but something more like “Humanity vastly better fed, in better health and better educated than ever before. Hooray!”. Read the whole thing.

5.       Thomas Piketty on productivity in Europe, the US and the UK. Apparently we have to work longer to achieve as much. Maybe we should spend less time reading blogs?

6.       I love this. Vox interview Obama about the Affordable Care Act. His grasp of policy detail is just amazing.

7.       And lastly, this one is different to the usual closing dose of Taylor Swift – the collateral damage of Meryl Streep’s attack on Trump at the Golden Globes included Mixed Martial Arts, which she essentially denounced as a white male phenomenon without beauty. I feel compelled to defend it, given the massive racial and national diversity of its participants. As Jack Slack writes here, whether you follow Georgina O’Keefe (art is ‘filling a space in a beautiful way’) or Andre Gide (‘Art begins with resistance’), MMA fits the bill. It’s genuinely internationalist, learning from Thailand, Brazil and Japan, for starters. So yeah, I disagree with her.

 Have a great weekend, everyone!

 R

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Links round-up

Hi all,

 Was 2016 a statistical aberration? Did things that were really unlikely continually happen? Did famous people die at a historically unprecedented rate? This seems to be the prevailing narrative at the moment, but if Kahneman and Tversky taught us anything (thanks to my brazen signalling on this e-mail, I did indeed get The Undoing Project for Christmas) it’s that narratives can’t really be trusted. In fact, what’s most likely is that 2016 was a year in which the actual outcome of two major votes was within the margin of error of the polls, but crossed a binary outcome threshold; and a year in which roughly the expected number of famous people died, but the random sample of them that were taken happened to touch some cultural nerves. Should that make us feel good or bad about 2017? Well, 2016 is the year stuff happened. 2017 is the (first) year we’ll live with the consequences. I suppose it all depends on what narrative we build for this year.

 1.       Let’s not leave 2016 just yet, though. Harry Enten covers some of the ground above, but with more rigour and more nuance here, in a piece which looks at all the mistakes he made in his political reportage for 538 in 2016, many of which served to underestimate the odds of Trump. It’s a great, informative exercise, something that everyone should do – reviewing the year that’s gone past and picking out what we can learn from it to do better in the future. I can’t think of anyone, least of all myself, who shouldn’t do so.

2.       It’s not been a great few weeks for foreign aid in the press (when even something as well-regarded as cash transfers comes under fire, it’s a hard week), but here’s something to be optimistic about. Chris Blattman did a study looking at whether ODA in politically dodgy places may prop up bad regimes and finds that it doesn’t. Ok – so it’s only one context, and the findings need to be replicated and explained properly but this is great, and his proposed explanation is plausible – that good aid programmes give people an alternative to chasing after patronage from dubious leaders.

3.       The Bank of England has been taking a shoeing recently, too, which puts aid in good company. Andrew Haldane admitted that the Bank got the immediate response to Brexit wrong (though he noted that he’s still confident in the medium-long term analysis). With their bad press, it’s worth reminding ourselves how strong the Bank’s technical skills are, and how well the bigwigs communicate their ideas. Here’s Haldane’s most recent speech about how the structure of an economy contributes to inequality, and here’s Mark Carney on global inequality, how economics needs to raise its game and the role of monetary policy. It’s brilliant, and I recommend everyone with half an hour read it.

4.       Of course, that kind of detailed analysis won’t make it into the public discourse; this is something we wonks haven’t really mastered yet, how to get the ‘it’s complicated’ point across when others are willing, often mendaciously, to say that it’s really very simple (and by the way, I have all the answers). I’ve not really followed the whole fake news thing, which seems like an offshoot of this tendency, but there’s an excellent long read at 538 about where it comes from, and why fact checking isn’t enough to stymie it.

5.       Ok, the last few links were pretty apocalyptic and depressing (an appropriate start to the year?), so let’s end on a positive note. First, an article about the (all-too-brief) collaboration between Wilson Pickett and Duane Allman (here’s the song it’s about – that solo is ridonkulous); and a great NYT profile of Charles Feeney, perhaps the greatest philanthropist of all time.

 Happy new year, everyone!

 R

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links round-up

Hi all,

 As threatened, this week’s links culminates with a self-indulgent ‘best of 2016’ section. Now, I know talking about the ‘best of 2016’ is a little like celebrating the five best punches to the face I’ve taken, but there’s some merit to the exercise. As Kahneman says, people need a narrative, and a retrospective look at the year is one convenient way of constructing one. One narrative might be that 2016 was a slow, brick-by-brick dismantling of the cultural firmament (Gah. Gah. NOOOOOOOOOO!) but that probably wouldn’t be the most helpful framing. Anyway, before we get to the best of, a few last links for the year.

 1.       Of course, one way 2016 might seem better in retrospect is if it turns out to be the last complete year in recorded human history. I’m not getting Millenarian, but one can’t deny the End-of-Days-ish vibe of this tweet (does it remind anyone of this great video I linked a few months ago, via Tom C?). It couldn’t come at a worse time, either, given that Thomas Schelling passed away a week or two ago, taking with him a lifetime of practical and theoretical knowledge of how to avoid nuclear war.

2.       Nick Bloom is consistently linked to some of the most interesting and inventive research out there. This time, he’s using data on researchers by sector to measure actual technological productivity. It’s an excellent working paper, finding that it now takes more researchers to make further progress on existing measures of technological advance, thus pointing to declining productivity in innovation. One problem – by definition, the biggest leaps in productivity are where new ideas entirely are devised, and these sectors are systematically different to the ones we know how to measure. So we’ll never really truly be able to measure how innovative we are. Still, a great paper, worth reading.

3.       An excellent note from Lee at CGD, looking at the random and improvable ‘LDC’ classification – something that might take on a very policy-relevant hue if the UK begins negotiating new trade deals post-Brexit.

4.       Branko has been the economist of the year, surely? He’s published the full text of his interview with the New Republic, and he makes it clear that he believes that globalisation has come with costs but that it is a desirable process nonetheless because it is inclusive – it ‘reduces the obstacles between people in the world’. I agree with him. Nevertheless, in 2017 I hope to see a proper consideration of the Tortoise graph, and whether it has overtaken the elephant.

5.       But let’s end (almost) the links with a happy one: the newest utility-scale solar energy is now cheaper than new-built natural gas. This is incredible.

 And now chosen entirely capriciously and with little recourse to consultation or democratic representation, my favourite links of the year, arranged by category.

1.       Over the year, there were a number of superb long reads about economics and the people who studied and shaped it as a discipline. One of the great weaknesses of academic economics as it is taught is the extent to which the history of economics as a discipline of ideas is neglected, though it bears many lessons for current economists. One of the best links of the year was from January, a long article about the Orthodox Jewish economist Nathaniel Leff, and his influence on the study of Brazil’s economy – interesting because of the human drama, but also because it reveals much about the ‘acceptable’ and ‘unacceptable’ ways of doing economics and the political currents that determine the direction of research. Similarly, only a couple of weeks ago, Michael Lewis’s piece on Kahneman and Tversky did much the same. There’s not much new economics in these articles, but much to learn.

2.       I remember describing 2015 as the year of inequality writing. I spoke too soon. 2016 featured a great deal of good new research and good new writing on various aspects of inequality: I recently linked to this write up of Raj Chetty’s most recent piece of brilliance, charting the death of the American Dream, but the NYT also had a great piece in January, in which Justin Wolfers looked at gender inequality and how women do not get any credit for work performed in teams, a terrible outcome for society. Of course Branko’s book came out this year, prompting an excellent review from Chico Ferreira, one inequality guru reviewing another. But there were signs that the limits of the research driving the increasing policy focus on inequality might be being reached: first, 538 pointing out how difficult it is to link inequality with global turmoil, despite the grand claims of many politicians and policymakers, and secondly, the revised elephant-that-is-really-a-tortoise.

3.       There was also a great deal of brilliant research published or covered in the media this year. My favourite was this experiment by Ben Vollaard, which showed that honesty falls dramatically when even a slight cost is introduced. A seemingly frivolous experiment which hints at a profound behavioural insight. Another was the one Chris Woodruff came to DFID to present, on an experiment which both helped explain the low numbers of female managers in Bangladeshi garment factories and to rectify it. I’ve also been waiting for the papers from Stefan’s experiment with Chris Blattman for ages, and was really pleased when Tim Harford covered it here. My favourite job market paper of the year was Guo Xu’s, partly because of his extraordinarily diligent data coding, but also because it’s a very clever way of proving one of those things we all suspect but never had the evidence for. And lastly, getting meta for a moment, Christie Aschwanden’s series about the state of scientific  inquiry was brilliant.

4.       Getting towards the end,  three brilliant opinion pieces, all inspired directly or indirectly by the political upheavals of the year and the standard of the discourse around it. Sarah O’Connor’s piece (and the Andy Haldane speech that inspired it) is superb, and came via Nick Lea: she says the best economist is the one with dirty shoes, the one who goes out to understand the reality his or her spreadsheets depicts. Tim Harford was angrier, I suspect, when he wrote about ‘bullshit’ – and the fact that it remains relevant today makes me even angrier still. Lastly, possibly my favourite piece of writing of the year was Owen Barder’s excellent, impassioned ‘More in Common shortly after Brexit. I was looking for a quote to garnish this recommendation with but the only honest way of selling it is to tell you to read it all.

5.       I leave you with three pieces of glorious marginalia: my favourite new poem (I think it was new, but am unsure), Karibu ya Bintou from the DRC, and  the best Taylor Swift gif of the year.

 No links next week, so have a great Christmas and wishing you all a happy and healthy new year.

 R

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Links round-up

Hi all,

 We’re coming to the end of the year, but these aren’t quite the last of these you’ll get – I’m still working next Friday, and I’ve been lobbied to do a ‘best links of the year’ post. I like the idea, but it’s going to test my record keeping  to its limits, so if any of you remember a link you particularly liked, jolt my memory and it might get a rerun. I realise I’m depending on people remembering anything I write for more than five minutes, which is a pretty heroic assumption, as we economists say. I’m also quite possibly going to discover that everyone’s favourite links were the Taylor Swift gifs, in which case next week’s links will be amazing. Anyway, this week, no Taylor and lots of economics:

 1.       THE ROBOTS ARE GOING TO STEAL OUR JOBS! I’ve suggested a few times that we aren’t the first generation to have this particular fear, but it’s always been one of those unsupported-but-plausible-sounding statements that politicians are so fond of making until I found this article, via Dietz Vollrath: a timeline of jobs technophobia, stretching back to the 1920s. The Luddites should probably get a shout-out here, too, but I’m not a DJ.

2.       What happens when an elephant falls in the woods, and no-one is around to hear it? Branko Milanovic tweeted an update to his famous elephant graph, using the new 2011 PPP conversion figures (basically the way in which we standardise incomes to account for different prices in different places) and extending the data up to 2011. As my boss pointed out to me, it looks more like a tortoise now, and some of the power of the original graph (demonstrating how the Western middle classes have been hammered for 20 years) has been diminished. Should this change what we think about globalisation and its discontents? That’s a discussion far longer than this e-mail but it has to have some effect.

3.       “The candleflame and the image of the candleflame reflected in the machine as it whined to a halt. He took of his hat and thought upon the declining productivity. The returns to scale were not increasing. They were not increasing.” Apparently a famous article about increasing returns to scale was edited, pro bono by Cormac McCarthy. As a great believed that all economic writing should be clear and jargon-free, I can only imagine how much it was improved for it. (I also kind of hope there’s a sudden burst of violence that comes out of nowhere, but leaves you shaking for days, because that’s pretty what happens in every Cormac McCarthy book).  

4.       I have been lobbied hard to include my now-annual link from Tim Harford about why no-one should buy presents, and why they’re inefficient, even though I don’t fully agree with it myself. But anyway – this is the season to be Grinchy, so here it is; and related, Sheldon explains the same thing in the Big Bang Theory.

5.       Having said that, I’ve been dropping some pretty heavy hints about what I want for Christmas. And, alongside a top-of-the-range Tesla Michael Lewis’ new book is high on the list. Here he is, in conversation with Nate Silver about it, dropping wisdom like “People are drawn, people want to make the world a more certain place than it is. They’re very uncomfortable thinking probabilistically. And they’re very uncomfortable turning to someone for advice or leadership and having that person be at all diffident, at all unsure. They want that person to seem totally certain. So, they want, in a weird way, idiocy from the people who give them advice.” The friend I most often ask for advice, during my 3pm coffee time, puts a confidence interval on almost all of it, which sums up why I ask him, and why modern political discourse gives me a bad case of the facepalms.

6.       Ok. I’m bored of the Worm Wars. I forgot about them. They’re not a thing anymore. But when David Roodman talks statistics and the interpretation of evidence, I’m duty bound to tell you all to listen.

7.       And lastly, for the festive season, what more could you ask for than fewer photos of Donald Trump’s hair? A google extension has been created to turn all photos of him into pictures of kittens, and I think we can all agree that this is a welfare-improving innovation, even if it puts all the manual Trump-Kitten-Painters out of work…

 Have a great weekend, everyone!

 R

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