So it’s been a few weeks since I’ve been optimistic about too much, but today, a Sri Lankan batsman hit a century! A good one! We would even be in a darn good position to give Australia a bit of a hiding in the test if we hadn’t decided it was somehow against our interests to turn the lights on when the pitch got dark. So though there’s some hope, our habit of shooting ourselves in the foot maintains. Still, we have a day of Rangana Herath, Sri Lanka’s own Mr. Potato Head, bowling tomorrow, and I cannot wait.
1. Let’s start with Branko. He argues that the current backlash against the model of globalisation that we have been working with over the last few decades – think Brexit and the prospect of an isolationist Trump regime – reflects an underlying unease and dissatisfaction the model of capitalism that has translated this globalisation into material outcomes around the world. It’s a tour de force of political economy thinking, tying together income inequality, development economics (he argues that the future is a world of more physical investment in the infrastructure of poor economies) and immigration. He may not be right (I suspect he isn’t, at least about development), but it’s – as ever – fascinating and educational. He is one of the most relevant thinkers for the world we live in. (As an aside, the German word for unrest is the best one. Also, an X-Files reference).
2. Behavioural economics can be a little Emperor’s-new-clothes-y, being basically a collection of psychological observations that we could easily have built into economic models or thinking without any new label or fanfare at all. Having said that, to the extent that its branding as a new discipline had made new thinkers use that collection of psychological observations in their economic analysis better, it has been a good thing. Noah Smith here looks at a new and potentially exciting ensemble that the emperor is wearing, a macroeconomic theory that builds on psychological insights to more realistically model the effect of things like changes in fiscal or monetary policy on economic outcomes. I don’t see how this is substantially more radical than Avinash Dixit’s model of hysteresis in investment behaviour from 1992, but I like it anyway.
3. This completely cracked me up: Nintendo got a massive stock market bump because of the success of Pokemon Go, and had to issue a statement pointing out they didn’t really come up with it, and own only a tiny part of it. This is basically the investors version of ‘all you guys look the same to me’, isn’t it?
4. Here’s some economics we can all get behind: getting our money back. Planet Money talk about how we get our money back, and I’ll be honest – I didn’t think it was very good until I got to the third section, which is all about bonds with negative interest rates, so I suggest you just read the transcript and skip to that bit. It seems counterintuitive, that people might pay the bank to hold a big chunk of their money for a long time, but it’s got a logic to it. In fact, Tyler Cowen think it might even be a good thing.
5. Two pieces on violence: first Dietz Vollrath makes a welcome return to the blogs by being himself and giving a very precise, ordered analysis of a controversial paper on the origins of conflict in Africa. He’s brilliant at explaining economic methods of modelling and measurement in a way that is accessible to non-economists. And secondly, a WaPo piece on how women do well in some post-conflict places, because the men have been so busy fighting that they’ve been able to seize more responsibilities and organise. This may also be true in places where men migrate outward en masse.
6. Amazing, amazing, amazing. The birdwatcher, the geek (yes, they’re separate), the humanist and the anthropomorphist in me all love this NYT piece about the relationship between Honeyguides and certain tribes in Tanzania. The Honeyguides lead people to the beehives, and wait patiently for them to smoke the bees out, being rewarded with the beeswax while the people get the honey (there is footage of this in The Life of Birds, the Attenborough documentary, if my memory serves). “When assisted by honeyguides, Yao hunters found beehives 54 percent of the time, compared with just 17 percent when unaided.” Amazing, did I say that already?
7. Lastly, this is my life. Giles Wilkes talks about trying to read everything in the economics blogosphere and slowly – eventually – falling in love with it. “There ought to be an ugly Germanic word for it, the anxiety at not having read enough” – and if anyone finds it, please let me know. He also says: “This is what the intellectual world looks like with no entry barriers, and much respectable opinion recoils from it.” My opinion is rarely respectable (it’s much like my appearance in that sense), but this is what I love about the breadth of reading available on the internet. I have discovered writers of brilliance in their subjects I would never have otherwise known: Jessa Crispin, Jack Slack, Kirk Goldsberry are just a few. The thirty minutes I spend disseminating some of their work every week is a small way of trying to pay them all back in kind.
Have a great weekend, everyone!