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!