Steve Smith is batting. In 2229, when the earth is a
furnace, stripped bare of vegetation and the humans are being
harvested for energy by the machines, Steve Smith will still be batting.
And in 21917, when the universe has almost completed it’s implosion, and all
life has been extinguished, and the only movement is the c-beams glittering in the
dark by the Tanhauser Gate, Steve Smith will still be shuffling across his
stumps and tucking the ball to leg and running across for an ambled single. He
will still look like he’s 12. While Steve Smith is batting, here is some
economics, all of which will be out of date by the time Steve Smith is finally
dismissed, because Steve Smith will never be dismissed.
- There are few things in life as inevitable as Steve
Smith’s batting, but in my darker moments I wonder whether ill-thought out
and short-sighted policies about migration are another. A couple of migration
links today: first, with a little hope – Japan has a policy to increase
the amount of inward migration it attracts to counteracting a shrinking
population. Rebekah Smith and Anita Vukovic suggest
how they can achieve it; Rebecca is setting up a new organisation
dedicated to labour mobility, which is definitely worth keeping an eye.
It’s interesting, though, how Governments make this so much harder for
themselves than they need to: rather than looking for a few thousand
engineers or a few hundred something-or-others, why not just let people
in and let the magic of labour economics work? We know that there isn’t a
finite number of jobs, and that new entrants will lead to the creation of
new jobs; and we know that the increased competition leads incumbents to
move up the value chain. My colleague Adam calls this ‘magic economics’
and it really pretty much is. Less hopefully, Maggie
Koerth-Baker in FiveThirtyEight points out that there are no legal
norms or structures in place to deal with refugees fleeing from climatic
disasters, and little hope on the horizon for any coherent set of them.
- While I’m on a downer, Dani Rodrik considers whether
the relevant inequality to consider is between or within countries; he
points out that while it’s still typically true that you will be better
off in absolute material terms as a poor person in a rich country than a
rich person in a poor country, the dramatic rise in inequality in rich
countries over recent decades has made it closer. In the US it may not
even be true anymore. Fortunately, you don’t need to choose between caring
about these two problems. You can address both.
- I’ve had a few conversations outside of work which have
really driven home how little about trade is widely understood. I’m
absolutely not an expert by any means, but much like migration, it’s clear
that things that seem obvious and straightforward quickly dissolve into
dust with a little thought. One point I’ve found myself making repeatedly
recently is that it’s not exactly the ‘price’ of trading that matters
(for example, the tariff on a traded good), but the cost of it in terms of
documentation, management attention and time. This piece
on rules of origin is a case in point; many exporters pay tariffs
rather than fill out all of the required documentation, and others may
choose not to export at all.
- This is very cool: an experiment on adolescent
girls’ empowerment in Sierra Leone was interrupted by the Ebola crisis,
researchers discovered that their intervention substantially improved
girls’ outcomes in the places hardest hit. You’d expect as much with
such an amazing cast of researchers on the project, but it’s very
impressive how they managed to use their data and experiment to
investigate this – it can’t have been what they started off with the
intention of examining.
- This is interesting, though I haven’t fully digested it: Philippe Aghion and
that credit constraints can have a positive effect on productivity by
removing the safety net that keeps the worst firms alive (though it also
has a negative effect by making it harder to finance innovation). It makes
sense to me, and has implications for our current period of prolonged
cheap credit. It occurs to me that they might test it to see if the
relationship between credit and productivity differs by term structure of
debt, but they’ve probably already thought of that.
- How much rest do people need? I’m on the
‘perpetual-ball-of-energy’ end of the spectrum, and lean towards long,
infrequent holidays to completely recharge – a bit like how you’re meant
to let your phone die completely and then charge it up completely rather
than keep topping it up. Tim Harford (and my wife; to be clear these
are separate people) tell me I’m doing it wrong, and you need lots of
frequent breaks. Tim
Harford brings the evidence.
- I’ve had a few crikey-I’m-old moments in the last
couple of weeks.
I injured myself falling down trying to get on a bus. A friend pointed out
to me that our friendship pre-dated the existence of e-mail, and now
bringing a vat of salt to marinade my wounds in, The Ringer is running
a 90s nostalgia week. Even worse, the Grauniad’s list of the
best moves of this century has reminded me that Gladiator is almost
twenty years old. On the one hand, this isn’t making me feel
younger. On the other, my memory must be in decent shape if I can still
recite that speech: “My
name is Maximus Decimus Meridius…”
The century must be over now, because Steve Smith is no
longer batting. Have a great weekend, everyone!
Normally, these intros write themselves. I say something
about the weather (this is England, after all, where complaining about the
weather is almost a spectator sport), make a thinly veiled allusion to whatever
the political farrago of the day is, and then settle into a proper geek-out on
the cricket. Today has been a bit more difficult: the politics is far too
eventful to comment on (without throwing caution to the wind); the cricket
likely to be won by some combination of rain and dead pitch and the weather is
already incorporated into the rain. It says an enormous amount about how much
has changed in the last couple of years that it didn’t even occur to me until
now to run with news of Mugabe’s death; his deposition from power has sucked so
much of the charge from it.
- This one is bittersweet: Ricardo Hausman mounts a spirited defence of economics… by unloading both barrels onto public policy schools. It’s like someone saving my childhood home from a flood by diverting the waters onto my current apartment. Hausman’s main argument is that economics has already produced much of the knowledge we need to rectify many of the world’s problems– but public policy schools haven’t actually produced a model that can populate Governments with the kind of people who can find and use them. He draws an analogy with medical schools to suggest how public policy should change, arguing that long hands-on practice should be the core of the curriculum. It’s an analogy that makes some sense, but I think it rather falls apart under closer scrutiny. Unlike medical schools, public policy departments do not have monopoly status on the production of Government staff, nor should they. Policy schools are difficult to run because they cannot improve Government simply by churning out good graduates, they also need to identify how best to structure the incentives, objectives and apparatus of Government. I’m not sure Hausman’s suggestions would get us there.
- Speaking of public policy in the real world, Branko Milanovic was hanging out in Argentina and observed the culmination of their most recent economic crisis. As ever, his take on it is well worth reading, especially for those who haven’t been following this closely.
- This is completely brilliant and continuing on the public policy theme: Planet Money cover the Moving to Opportunity project, a great example of good public policy and research in action, and also a textbook case of how complicated it can be even know a good policy when it happens (transcript). The basic premise, that moving people into ‘better’ neighbourhoods could have long-lasting effects on their life chances was reasonable; the problem was the benefits didn’t show up until after the programme had been initially evaluated, since those benefits mainly manifested in the youngest children, the ones who didn’t enter the labour force data until relatively recently. It was sheer good luck that Raj Chetty and Nathan Hendren picked up the same people in later research; and when Chetty wins the Nobel I imagine this will be given as an example how his work has attempted to remake Government policy.
- If I had to guess which Nobel-winning economist would hang out at Burning Man and have fun, I probably would have picked Paul Romer (although an outside guess would be Elinor Ostrom, whom I bet would have a field day with all the collective action that has evolved). Romer apparently uses maps of Burning Man’s road layout to explain how cities can evolve around basic infrastructure and it seems somehow typical that he used these maps without ever having been there. Still, whether or not you agree with the underlying economics (long time readers will know what I think about Mr. Romer’s cities), this is a really fun read, and Romer comes off really well.
- Johannes Haushofer and colleagues report on an RCT investigating the impact of cash transfers on gender-based violence. There is a lot of good research on this and related topics in the pipeline, so expect much more to be added to this literature. It makes for uncomfortable reading in some places, but then I imagine writing about GBV always should.
- FiveThirtyEight continues it’s excellent coverage of how science works in this piece on another battlefront of psychology’s replication crisis, this time questioning whether forced smiling really can make you happier. It’s a very thoughtful, interesting piece, distinguishing between what replication tells you about a methodology from what it says about a hypothesis and pointing to ways forward.
- But just in case smiling really can make you happier (though it certainly didn’t seem to work for The Joker, did it?) here is a random list of that will reliably make me smile, and I hope they work for you, too: Lasith Malinga taking four wickets with consecutive deliveries (twice); The Allman Borthers Band playing Blue Sky; My Name is Aram by William Saroyan; The Big Lebowski; watching Vasyl Lomachenko box; the intro to The Muppet Show; Spike Milligan, in writing or on screen; Craig Robinson; Calvin and Hobbes; Rumpole of the Bailey – though even more so in writing; and just to bring this to a close, every delivery Murali ever bowled.
Have a great weekend, everyone!
Well, what the heck am I supposed to say about that innings? No England
batter can ever have batted better (say that three times fast), doing virtually
everything a batsman will ever have to do in a career in one day. Seriously:
tough out seventy balls for just 3 runs, recover after getting whacked in the
head, shepherd the tail, then slaughter the bowling to win a match with no
wickets left – done, done, done, done. It says a lot for how incredibly um… eventful
this week has been that when thinking about how to open this e-mail, I almost
entirely forgot about it. I suspect that no amount of careful word-choosing can
render the remaining events of the week safe to comment on here, so I will
swiftly move on to the economics.
- What would the plot of an economics horror movie be? I suspect it would
involve a plot to do real damage to the economy just when the powers and
policy levers most often saved for exactly these occasions have
mysteriously stopped working (yes, I’m aware this is basically the plot of Superman III).
There’s a growing school of thought that this is exactly what is
happening in the global economy right now, with an incipient slowdown to
be weathered without any functioning monetary policy with which to combat
it. Larry Summers and Anna Stansbury explain how
and why monetary policy is weakening, and suggest that a return to
Keynesianism in its classical sense may be necessary. Meanwhile, Planet
Money trace the history of a radical idea that is gaining currency these
idea of money that expires, thus forcing us to spend it and invest
if it isn’t to slowly denature entirely. Summers and Stansbury actually
give the big argument against it in their piece: how messed up is an
economy in which losing investments are still more attractive than not
- Speaking of investing well, one of the big problems in
lots of programmes that seek to support businesses with grants, loans or
services is the kissing frogs problem: you have to support a whole
bunch of failures to
find a few successes. A cool
new paper by Natalia Rigol and Benjamin Roth finds the seeds of a
solution: apparently peers and community members are actually really
rather good at identifying the most likely successes, perhaps because they
have more knowledge or more difficult to codify and express knowledge
about the ability of different entrepreneurs. They also suggest it
might even be possible to leverage this ability to distribute support more
efficiently, provided we incentive people not just to give the help to
- While on the subject of growth, Dietrich
Vollrath has a new book about growth coming out, called Fully Grown.
Readers will know this is self-recommending: Dietz is one of the best and
clearest communicators of modern macroeconomics out there, and a fantastic
writer, to boot. If anyone out there is looking to buy me a present,
consider this a link-sized hint.
- Esther Duflo explains how female role models in positions
of power lead to all
sorts of good outcomes for women in this nifty VoxDev video. She
and Abhijeet Banerjee also have a new
book out shortly.
- The generation and application of economic policy is
inherently a political process; that exposing economics to politics
typically leads to worse economics is the reason why most Central Banks
have been made independent of Government, despite recent
efforts to influence them. The dangers of Government capture when
politics rules economics can be one of the most fun things to teach,
because it leads to some properly ridiculous policy. Take Trump’s
tariffs on China: since it is possible to get exemptions on tariffs, the
second a trade war loomed on the horizon, interest groups pulled out their
wallets and mobile phones. As a result, you have tariff exemptions on cod,
haddock and salmon, but not on pollock; and bibles being shipped
tariff-free because they’re printed in China. It’s funny for a second, until
you realise it’s basically redistribution of a bizarre kind: rewarding
people who eat haddock and read the Bible over the pollock-eating atheists
of the USA. Planet
Money have a show on tariff exemptions and their genesis (transcript).
- How many times do you think you can cite your own work
before it becomes a little much? Is it fine if 10% of your citations come
from yourself? What
about 94%? A new database provides transparency; I’d say it also
provides an opportunity for navel-gazing, but I doubt anyone comfortable
with a 90% self-citation needs any more of that…
- Lastly, I have been trying quite hard to distract
myself this week, and luckily being a massive nerd has come to the
rescue once again. The new
trailer for Joker has dropped, and if this film isn’t brilliant I’ll
eat my hat. What is it about The Joker that brings out the best in actors? (We’ll
ignore Jared Leto here). And if that wasn’t enough, there is a
new Star Wars trailer. I repeat, THERE
IS A NEW STAR WARS TRAILER. And in the most unnecessary words ever
written in the links (against strong competition): it is AWESOME.
Have a great weekend, everyone!
I had a whole spiel prepared to open the links, warning you
that since the first link is all about the prospect of an impending global
recession – which may turn out to be permanent – those looking for a shot of
optimism before diving in should refer to the Ashes scorecard, in which King
Jofra was the hot knife and the Aussie batting line-up the butter. But England,
never missing an opportunity to punish hope with despair, promptly surrendered
four early wickets and now look like they may contrive to lose even this test.
Added to the news that Boogie
Cousins has had yet another career altering injury, this week’s links are
in an absolutely filthy mood, no doubt to be made worse by the UK rail network
this evening. Gah.
- So, about that impending global recession… (five wickets now. Mood darkens). Increasingly, I’ve been wondering whether part of the apparently unpredictability of the economic policy of major players in the global economy has in fact been the result of incorrectly diagnosing what their ultimate aims are. Take Trump’s trade policies. They appear to most economists short-sighted and counter-productive against his stated aim of improving the US economy, living standards and trade deficit. But what if his actual aim is far more radical than that? What if the US is actually aiming to completely decouple their economy from the other major economic superpower, China? If this is the aim, then much of what they’re doing is at least internally consistent. Chad Brown and Douglas Irwin make this case in Foreign Policy, and Brown discusses it further on Planet Money (transcript). Nouriel Roubini lays the doom on thick in his Project Syndicate forward look, explaining that the consequences of this may not be a simple recession, but permanently lower global living standards.
- My mistake, six wickets down. Grrr. However, channelling both Hans Rosling and Charles Kenny, trying hard to be positive: Africa is *this far* from being Polio-free, a tremendous victory for technology, policy, service delivery and the hard work of some incredible people.
- Lest you get all misty-eyed about how great humanity is, let me draw your attention to another story on the same day from the same source: an immigration judge refused an application for asylum on the basis that the applicant was insufficiently camp. This is not an exaggeration: he literally drew comparisons between the poor man he refused and another witness who wore bright colours and lipstick. Just when I think that my outrage at how absolutely messed up the sheer injustice and callousness of the way humanity treats those who leave their homes has peaked, along comes this relic.
- Are you still upset about the global recession? Well, one point to bear in mind is that economists are actually quite rubbish at predicting recessions – though most of the mistakes come in the form of false negatives (i.e. predicting no recession when one is actually around the corner).
- Seven wickets down. Words fail me. Well, not actually – they’re just unprintable. In other news, I very much liked this piece on India’s demonetisation and its effects on the real economy (technically, according to some macroeconomics, money is basically neutral and should not have real economic consequences). This is one for the economists, having few policy implications, despite the final section.
- David Evans’ regular round-up of education research is always worth reading, but this week’s is particularly so, especially the section on the impact of secondary schooling on teen pregnancy. Secondary schooling reduces the risk of teen pregnancy, even if learning is basically absent. Policies typically have lots of impact (and not all good). Good research thinks through many of them.
- Lastly, this week’s links have been rather miserable – and England are nine down for 66 right now – so I’m going to make an effort to sign off on a happy note. Firstly, this great FiveThirtyEight video highlights the absurdity of American political discourse by asking participants (all of them either political or sports journalists) whether a given quote comes from political pundits or sports broadcasters. Both are ridiculous. Secondly, it feels appropriate to celebrate the emergence of a genuinely fast, scary England bowler with this fantastic interview with Shoaib Akhtar, once probably the fastest bowler on the planet, and certainly the maddest. From his very first words he’s endearingly nuts. And lastly, I was telling a colleague from abroad about Bake Off yesterday, and trying to explain the appeal of it. I don’t think I quite did it justice, but this interview with Selasi and Val, who developed an odd-couple friendship gets somewhere close to it. And with that, the links (much like England) are all out of material for the week.
Have a great weekend, everyone!
Are there any grimmer, more inevitable words in the English
language than ‘rain
stops play?’ The rain has put a dent in Sri Lanka’s attempt to rescue the
reputation of Galle Fort against New Zealand and England’s efforts to even up
the Ashes (for what it’s worth, both tasks currently looking out of reach). At
least the interminable rain delays have actually left me time for work; there
was a real risk that two tests in different time zones would take up all my
waking hours. As it is, I’m at home, doing some exceptionally mind-numbing data
work watching the rain pummel my back garden into submission. The Great British Summer continues.
- I’m about to hit a rare pitch of geekery, so brace
Planet Money go to Liwonde National Park in Malawi, one of my favourite
places in the world, where I finally got a full and unobstructed view of Pel’s
Fishing Owl at around 5am on Boxing Day in 2006 after several days of
dawn excursions, dodging crocs on the riverbank. It’s not owls that send
Planet Money there, though, but elephants, and specifically the sound of
elephants. In an amazing feat of automation, scientists
have used neural networks to train computers to learn what an elephant sounds
like (its motion, noises and calls), to facilitate censuses in
remote places we cannot easily access (transcript).
As interesting as the conservation aspects, though, are what this tells us
about how automation and the labour market interact. We typically worry
that robots and computers will take our jobs, but combing through 100,000
hours of tape is the kind of thing that is so labour-intensive and
expensive that we don’t do it at all. Instead, automating this task
creates jobs interpreting the data and coming up with policy responses
that could never have occurred if we hadn’t been able to automate.
- I really liked this: CGD helps explode
the idea that there is anything particularly special about Chinese firms
in Africa, pointing out that nationality explains relatively
little of their characteristics.
- There is a lot to chew on in this
Diane Coyle piece about progress, and the need to study it (quite apart from the
fact that I found myself disagreeing with her just two sentences in: it is
of course possible that we know lots about what drives progress, but can
do little to affect any of it). One thing that really stuck with me was
her point that we lack any good definitions or measures of what
progress actually is. There are things that seem obvious to me as
progress, but which don’t show up in GDP or things like the Human
Development Index, my favourite example being the dramatically reduced
cost of obtaining information today compared to my teenaged years.
I used to have to make a trip to the library, spend hours searching
for books and within them and writing down notes, while now I can google
almost anything and simply save entire papers or books onto my hard drive.
- Two good pieces on thinking long term: first, in
VoxEU Jon Danielsson and Robert Macrae discuss how bad
the tools we have for thinking about long term risks are; they don’t
have any solutions, but it’s a very good statement of the problem. And Eva Vivalt discusses why
you might want to ‘give later’, with one compelling reason being that
we are constantly learning more about how to make the world better, a
good (and evidence-based) reason for being an optimist. Of course
knowing how to make the world better doesn’t mean we actually do it, but
it’s a necessary step…
- The IMF’s
Article IV note on China is also optimistic, marking yet another point
at which the Chinese bureaucracy and policy makers have managed to avoid
widely-predicted disaster and keep the economy ticking. We were discussing
this in the office recently: at some point they’ll have a recession
(everyone does), but bets against the Chinese economy are almost always
- Really nice VoxDev piece on how
to structure promotion incentives to induce high performance. I will
definitely be citing this one day.
- So, normally the last link is where you go for
frivolity and pop culture references, but there’s been an acute shortage
of good marginalia this week. So in lieu of a Ringer list of the 50
greatest rap beefs of all time or something similar, here is a list of Shakespeare’s
best insults. It misses out my favourite (Kent’s extended rant
in Lear, describing Oswald as – among other things – a
‘one-trunk-inheriting slave’), but it still brought a smile to my face.
Have a great weekend, everyone!
Well, I couldn’t keep my mouth shut, could I? No sooner did
I suggest England were on top than… well, watch for yourself.
England now place their hopes in Jofra Archer, who has never played test
cricket before, though in his defence, he’s basically a Game of Thrones
character and has just taken six wickets and scored a
century in a warmup match. No doubt the England brains trust are working on
a way to comically screw this up, too, but take solace in the hope for as long
as it lives and remember – it has sometimes been worse (in that
06/07 series, I remember thinking at one point that Mike Hussey should just
change his name by deed poll to Michael Hussey Not Out, because that was all
anyone ever called him).
- “An iPhone, it seems to me, is a bottomless bowl of digital cashews.” Tim Harford has lunch with Richard Thaler and in a moment of fan service worthy of a Marvel movie, places a bowl of nuts in front of him. The joke is this: when Thaler invited some friends (academic economists, all) to dinner, they were eating so many of the cashews left out as a snack that they were destroying their appetite before the main course arrived. He removed the nuts and was thanked – a sequence of events that he credits with the inspiration for behavioural economics because a rational consumer would never benefit from having less choice. It’s a fun read: if you know your behavioural economics, there’s nothing new here, but Thaler takes gleeful aim at politicians on both sides of the pond and the announcements on the tube, all while managing to resist the temptation of the nuts. Related, Tim has an angry and evidence-based rant about the atrocious state of US healthcare.
- A really cool piece of work by Abi Adams and Alison Andrew is summarised on VoxDev. They use a very clever set of survey instruments and vignettes to elicit information on preferences to understand how education can affect the age of first marriage of young women in India. What they find is that education is seen as a way of improving marriage prospects – but such prospects decline rapidly after the end of formal education. This means that those girls who drop out of school early for any reason are at great risk of early marriage – and there appears to be little intrinsic value attached to education for girls, beyond its marriage benefits. Great research, depressing findings.
- Planet Money examine the long and strange history of research into twins – a history that covers some pretty grim episodes in science (transcript). I cannot for the life of me understand why they didn’t interview Arnie and Danny de Vito, though.
- A good piece in Vox about how software and information might be the next big margin on which we reduce carbon emissions, by carrying out large-scale synchronisation of electricity demand, which is now possible thanks to computing power and the digitisation of the household.
- Branko reviews Paul Collier’s new book, The Future of Capitalism. It’s the first part of a putative two-parter (the second is yet to be published), and this part focuses on what Branko disagrees with. As with any good review, of course, you need not agree with either the original book or the reviewer, but it does introduce a lot of ideas worth thinking about. There’s one point in particular that struck me, however: how much progress relies on conflict (either latent in the form of a threat or active in the form of protest). Eric Hobsbawm put it thus: ‘the world will not get better on its own’, and I think he’s right.
- Toni Morrison died this week; I think she would very much have agreed with Hobsbawm’s sentiment. A very good appreciation by Yiyun Li was published in the NYT, and for those (like me) who have not read enough of her work, The Ringer have a handy syllabus of her work. And lastly, because I don’t want to end on a downer, scientists have discovered the remains of a three-foot tall parrot, and they have named it Squawkzilla, because of course it has to be called Squawkzilla.
Have a great weekend, everyone!
I’m assuming none of you have done any work today, right? I
haven’t: it is the Ashes after all, gloriously sunny outside and Steven Smith
has just scored one of the great centuries of our time (and before my boss
starts writing out my dismissal letter, I’m off work altogether today and my
only meeting started with five
minutes reviewing the highlights from yesterday). And whisper it, despite
that century, England are very much in the driver’s seat. I have to apologise
to the hard-of-cricket: the links will, for the next few weeks, likely start
with Ashes talk each time, especially towards the end: I’ve got an entry to the
office sweepstakes that might yet win.
- VoxDev has been running a series of pieces about electrification and development. Two pieces caught my eye in particular. The first, by Dana Kassem, looks at the expansion of electricity in Java and finds that extending the grid led to important changes in firm structure: in particular, it seems associated with much higher firm entry and exit. The second part of this turns out to be especially crucial: heightened competition drives the worst firms out of business more effectively and consequently leads to the reallocation of business (and resources) to the more productive ones – leading to a 40% increase in productivity. For those of you who haven’t suffered through an economics degree, that sentence is basically erotica for economists: this is exactly what we dream of when we dream of markets working effectively (what do you mean that’s not what you dream of?). The second piece stops us getting overly excited, pointing out that electricity access for households doesn’t actually achieve much at all in terms of poverty reduction.
- Women who leave the workforce after childbirth face a substantial and long-lasting penalty to their labour force earnings (substantially more than just any foregone earnings during a maternity absence). However, enforced shared parental leave appears to reduce this effect, and in an almost magical way. It barely puts a dent in the incomes of fathers, but leads to substantial reduction in the penalty faced by women, one which lasts so long that it may also be shifting gender norms. Lest you get all optimistic, however, here is a headline from our Not-the-Onion section: Saudi Arabia – Women allowed to travel without male permission.
- A super Planet Money podcast on the German experience in appointing workers to the boards of large companies (transcript). What makes this so good is that it does what very little of the economics on institutional economics does, namely focus on the cultural and historical reasons it works the way it does, and considers whether they are portable or idiosyncratic.
- This one isn’t economics but is a rare case: a private individual producing a public good. A deaf Scottish man invents new signs for extremely complex scientific terms to facilitate learning for other hearing-impaired people. As someone who has gone through lectures with a much less-severe hearing problem, the fact that he found energy to do this after the incredibly draining process of concentrating intensely through multiple hours of talking (never any deaf person’s favourite activity) is frankly astonishing. I wonder if someone’s done this in economics yet, and if so, how you sign ‘multicollinearity’?
- Tim Harford asks where the margin for better economics is – is it through ever more precise methods and ‘hardness of science’ or is it through softer approaches and synthesis? He argues that it is likely to be at the softer end of the discipline. He’s preaching to the choir with me, a committed fox, but it appears that econ journal editors may not agree: Marc Bellamare’s piece on getting published in economics suggests that the peak of the profession is occupied by those who do few things, but do those things enormously influentially.
- Speaking of the peak of the profession, I have to say I found this VoxEU piece by Stiglitz, Martine Durand and Fitoussi really underwhelming. The Stiglitz-Sen-Fitoussi commission was asked to consider how better to understand the sense of economic dislocation and deprivation that many people have even in economies that seem to be getting better. The gist of this piece is basically “don’t just look at GDP per capita”. Thank goodness we called them, eh?
- Lastly, I’m a sucker for trashy pop culture, as anyone who reads down to the last link knows. But even I have limits, and have never managed to sit all the way through one of the Fast and Furious movies, films that exist solely to celebrate the ability to push the pedal labelled ‘go fast’ on a car really hard and to flex muscles hard enough to break a cast. However, this completely cracked me up – a detailed statistical breakdown of the Fast and Furious movies, informing us, for example, that the Rock spent 90% of the first Furious movie he was in drenched in either sweat, water or baby oil. Even better, he apparently has a contract which states that he can’t get beaten up in the movie more than the other stars. I’m deeply disappointed that he needed that in writing. Surely he could just drop Vin Diesel with the People’s Elbow?
Have a great weekend, everyone!
Change can be surprising. Sometimes it seems to happen all
at once (hmm, any good examples to hand?) and sometimes it just creeps up on
you. Today is Lasith
Malinga’s final ever ODI match, and with him goes just about Sri Lanka’s
last shred of competence. About fifteen years ago, Sri Lanka were rolling out
bowling line ups that included Murali, Malinga, Vaas and Nuwan Kulasekera,
bowling at targets set by Jayasuriya, Dilshan, Mahela and Sangakkara. There
great moments, though, and many from Malinga. One
hopes at these low ebbs that from the ashes something will rise. Let’s see.
- England isn’t really built for the heat (it doesn’t
seem to do all that well with the cold, either, but let’s put that
aside for a moment).
Yesterday was one of the hottest days on record in England, and if the
latest research is to be believed, a few readers might have just felt a
nagging urge to engage in some wanton destruction (Brockwell Lido
certainly seems to have
experienced some). A new NBER paper looks a bit deeper than raw
correlations and, controlling for the amount of social activity and
whether schools are in or out of session, discovers
a clear relationship between heat and violent crime (but not property
crime). There is a clear policy recommendation here: the Government
needs to urgently install some nice-looking ceiling fans in my flat if
it wants to keep the peace in the greater Stoke Newington area…
- I have a few friends whom I can rely upon to routinely
argue that I’m wrong about almost everything I say; it’s a good discipline
– even on the rare occasion I’m not, it forces me to find and patch up any
holes in my thinking. Charles Kenny found himself, indirectly, criticised
by Rory Stewart’s book, Can Intervention Work?, and here does
some erudite and thoughtful navel-gazing as a result. He looks at
whether ‘best practice’ is always out of place and when – and how – it is
- Speaking of being wrong, there’s nothing more likely to
make me spit my tea out in rage than one of those irritating Grauniad
articles that argue that economics is all wrong about the world, written
by someone who betrays a sub-GCSE grasp of the subject. That said,
conventional wisdom in economics has been wrong about a lot in the past,
and is changing and Planet
Money do a much better job of investigating this (transcript).
Some of the topics are old hat (no serious economists think that the
relationship between minimum wages and unemployment is straightforward
anymore – most would say that it really depends on the levels considered
and market structure); but it’s still worth a listen.
- Is Facebook a product or a production technology? Until fairly recently I
hadn’t even thought about this. Increasingly, though, it’s become clear
that it operates more as a way of creating virtual crowds and generating
data about them; this data is where the value of the company lies. The
best comparison is not a company that makes chocolate bars and sells them
to people cheaply, but rather a company that creates goose down blankets –
but we’re the geese in this analogy. Facebook is essentially just the
comfortable location used to lure the geese. If that’s right, then we’ve
been trying to value these companies all wrong; VoxEU run a
techy article thinking about better ways of doing so.
- In development, we very often assume that the
relationship between a policy and its outcome is very stable – if I keep
running the policy the outcome will keep getting better. But there are
strong reasons to believe this will often not be so, especially in
developing countries. We often look at the effect of certain policies
when the sector we run them in is at a nascent stage – once it’s developed
(often because of our earlier policies), new things will be needed to keep
driving improvements, and the old things might no longer work.
Bottom-up accountability might be an example of this, as evidence
from Uganda suggests.
- Via Matt – a really detailed look into how
tax havens – in this case Mauritius – operate.
- Finally, Rutger
Hauer died this week. If you were a film geek in the 1990s, Roy Batty
in Blade Runner was very likely to be one of your cultural touchstones. His
final scene, describing the things he lived through, was totally improvised
and incomprehensible (where is the Tanhauser gate? What are c-beams?) but
it’s still one of the
greatest monologues in cinema history. Despite casting the
guy from Kim’s Convenience, I somehow doubt Marvel’s
Stage 4 (for which, yay!) will reach those heights…
Have a great weekend, everyone!
So, you go away for a few weeks and the whole world gets
upended: Kawhi and Paul George play for the Clips?
Aberdeen is the home
of whisky? London is finally, finally catching up with Hong Kong’s MTR (in
a very limited way) by rolling out phone networks underground? England
are World Champions?! I managed to miss the most thrilling
one day international ever played, sadly, but England couldn’t have won in more
fitting fashion: slightly unsatisfyingly and possibly the beneficiary of an
epic error. Still: show me the champions of anything that didn’t benefit
from an enormous stroke of luck somewhere – England deserved to win the
tournament, a sentence that I could not have imagined my fingers tapping out in
an intro to the links even 12 months ago. And to cap a brilliant tournament,
Sri Lanka weren’t a complete and total national embarrassment. It’s been a
pretty excellent few weeks, it has to be said.
- There are many things I like about this excellent article about Raj Chetty, Nobelist-in-waiting, but one of my favourites is the first line: “Raj Chetty got his biggest break before his life began.” No matter how brilliant you are, if you are successful you are also lucky, even if it’s not obvious immediately. Chetty’s work on inequality and mobility in America isn’t without some flaws, but it remains to me one of the most impressive and important projects in modern economics. Much of it is simply descriptive, though he and his co-authors are also exploiting natural experiments and running some RCTs to see how to change mobility dynamics in the US; but the sheer scope of the project and it’s ambition is amazing. Best of all, it seems fundamentally geared towards informing large-scale public policy. At some point the lack of political analysis in the work will constrain it, but it’s a long way from there still.
- This one is definitely for the economists, but is very much worth reading: Morgan Kelly summarising his new paper looking at an overlooked empirical problem with the large and growing literature on the deep roots of development. He demonstrates how spatial correlations (i.e. correspondences between regions next to each other) can significantly bias the results of all those empirical results that say things like ‘if you your country had pointy headwear in the 1700s, you are 3% poorer today’. He doesn’t attack individual papers, but suggests that this problem is widespread. A good companion piece to Dietz’s recent series on this literature.
- Also for those with both time and inclination: I highly recommend taking a scan of what underlies March 2019 update of the World Bank’s poverty figures. The paper is a primer on the varied and non-standard problems with poverty statistics and how we do our best to overcome them. If you use these numbers a lot, it’s good to have at least a passing knowledge of what goes into them.
- A new paper from Joyce Sadka, Enrique Seira and Chris Woodruff on a simple experiment to try and improve outcomes from Mexican Labour Courts. Dispute resolution is one of those hidden problems that I suspect underlies a lot of the problems we see in developing country markets, and yet there’s a horrible paucity of good research in the area, so this is to be welcomed.
- Good CGD summary of recent innovations in promoting legal, regular and safe migration. I sometimes despair of ever having sensible policies (let along politics) around migration, so this shot of hopefulness helps.
- Branko Milanovic is going to be spending part of his year in the UK, which is good news for us. Two of his recent posts help demonstrate why: he asks questions that other economists don’t and the breadth of his knowledge and his willingness to speculate mean that he generates ideas at a faster rate than most. Here he is on population density, and on the evolution of oligarchy in Russia.
- This is terrifying for any civil servant who routinely sends out massive e-mails rammed with pop culture references and the occasional rap video: the Head of Iowa’s Department of Human Services may have been fired over loving Tupac too much, and more specifically for sending out reminders on his birthday, the anniversary of his death and inspirational quotes from his songs (though presumably not “Grab your glocks when you see Tupac! Call the cops when you see Tupac!”). I’m going to restrain myself from tempting fate by linking to more Meek, Jidenna and Rakim, but instead will geek out over this: they are making a Top Gun sequel. This is not a drill: A TOP GUN SEQUEL IS COMING OUT! Whether this means more one liners, more volleyball (seriously, how low is the net when the famously 3-foot-1 Tom Cruise is spiking?), or more sad motorbike moments, I think we can all agree that one day we will look back on this as the moment when humanity peaked.
Have a great weekend, everyone!
These are going to be the last links for a few weeks. I’m getting married next week, and will be on a strict no-laptop regime for a couple of weeks after that it will be radio silence until mid-July as I get over the extended process of wedding planning, an ordeal which tests emotional resilience, organisational capacity and financial reliability. Of course, all of that is rather useful information for your partner prior to putting pen to contract, so perhaps weddings are a costly signalling device, much like a long and gruelling university qualification – which makes me worry about exactly how much of my life is dedicated to signalling at the moment. It’s not all signalling though – it’s also a way of getting as many behavioural biases to work in favour of the marriage as possible. We’ve got sunk cost bias after spending so much time on the wedding. It’s deepening status quo bias. It’s a big party for optimism bias. But junk all of that – Tim Harford apparently describes a marriage somewhere as ‘rational addiction’, and I’m definitely going with that description. And yes, I’m getting all of this out now because I’ve been banned from making econ jokes in the speech.
- Come for the research stay for the amazing graphics: Pamela Jakiela and Susannah Hares have a really good descriptive post looking at the gender gap in education across the world and over time. They find lots of good news (women have never been more educated, and in more educated countries, the gender gap almost always disappears) and some bad news (the gap is still there, and usually get worse before better). The graphics throughout the piece are really creative – they don’t all work equally well, but they try make complicated points with elegant pictures. And bonus women-in-economics links: the Planet Money newsletter (yes, I get the Planet Money newsletter, what of it) has a section focusing on Joan Robinson and her development of the concept of monopsony. It is always worth reading about Joan Robinson.
- I wish my digressions were as scholarly and thoughtful as Branko Milanovic’s. Here he ponders if being a great social scientist requires leading an interesting, full life – whether you can understand people without being among them and seeing their best and worst up close. It’s clearly not going to make a blind difference to how well you can use stata, but he may be on to something. Interesting questions come from interesting lives (and interesting times).
- FiveThirtyEight’s writers have such a gift for expressing difficult truths simply. I loved this piece about the difficulties of sustainability: “It becomes a mess, because the environmental damage we don’t like is deeply embedded in our lifestyles. Even simple-seeming changes like getting rid of plastic drinking straws turned out to be much more complicated when … able-bodied Americans discovered their disabled neighbors viewed the straws … as a necessity.” The point that is that we tend to focus on those parts of sustainability that are relatively costless to implement – but most of the work requires a fundamental reimagining of life, which is why I think technology rather than behaviour change has to form most of any solution.
- Tyler Cowen interviews my microeconomics textbook, also known as Hal Varian. There’s a section on online journals and their ridiculous cost, an issue which I alluded to last week. It turns out that my rant was at least partly incorrect – DFID at least actually do have institutional journal access, through an E-Library anyone on the DFID system can access. Apparently, it just needs a little more publicity…
- This seems well-timed for all sorts of reasons: Emily Blanchard explains why, in a world of global value chains, tariffs are particularly and multiply damaging to both producers and consumers in both countries. Apropos of nothing (of course), I also really enjoyed this article about the roots of Brexit in the student population of Oxford in the late 1980s.
- Yesterday, in order to illustrate a point about how much of our life is determined by sheer luck, I pointed out to someone that just knowing their country of birth, you could probably guess their income to within around 5 or 6 percentage points of the global income distribution; given a bit more information (say gender, or parent’s educational status) you could probably narrow it to around a single percentage point. Tim Harford makes the same point from a different perspective, pointing out how much of swings in performance are simply ‘noise’, an idea I’m exploring as part of my first paper.
- So this last link is basically being written as I’m balanced on the end of my seat as Sri Lanka get closer and closer to what would be a ridiculous win over England – though never doubt Sri Lanka’s ability to snatch defeat from the jaws of victory. And in another case of cocking up enormously, I rather loved this, via Matt: a religious group with the faintly hilarious name The Return to Order have been petitioning Netflix to cancel a TV show… produced and shown by Amazon. And in the best news all week, researchers from Cornell have literally written a paper about detecting sarcasm. It’s obviously going to be central to human progress in the next decade.
Have a great few weeks, everyone!