Links round-up

Hi all,

It’s getting very Christmassy now, isn’t it? I find my inner Grinch becoming less inner and more outer with each passing day. Though as an economist I should enjoy the spiritual aspects of a frenzy of consumer activity, illiquid asset exchange and (if you’re lucky) some redistribution of the wealth acquired over the last year, it’s amazing how quickly it dissipates when I have to fight my way through rioting customers of John Lewis to find the ‘perfect’ novelty corkscrew.  In all seriousness, though, this season is a good time to remember that the choices we make – especially our consumption choices – can nevertheless have substantial welfare implications. And if you don’t believe me, Michael Schur, the genius behind The Good Place may yet convince you, describing how Peter Singer helped him  become less of a forking shirtbag.

  1. Christmas can be a difficult; elections can be excruciating. Tim Harford is here to tell you how to get through the silly season without mortally offending relatives and strangers (unless they really deserve it) or exhausting yourself fact-checking every bit of mendacious rubbish you read in the news. Related: do polls report voting behaviour or shape it? Worth reading just for Nate Silver’s cameo at the end.
  2. This might be my favourite Job Market Paper so far: Asad Liaqat reports on an amazing experiment which looks at how providing information on voter preferences can affect the policy choices of politicians. It is fascinating: at baseline, these politicians know almost nothing about their constituents, which may not surprise you. Giving them information finds a larger effect on elected officials (unsurprisingly), but also that information on the preferences of female voters moves preferences more. The mechanism is apparently that politicians think they know more about what men want than women, and so are more responsive to information about women. In a sense, being aware of your own ignorance is the first step to correcting it, and the ignorance we acknowledge is selective. Another cool JMP (by Antonella Bancalari) looks at how a public health programme in Peru actually increased mortality rates, apparently because implementation was usually abandoned before complete.
  3. Macroeconomics is important (this opinion is both so true as to be trivial and worryingly underrated). And in celebration of macro, Dietz Vollrath has stuck his head above the parapet to investigate the Kaldor facts; a series of ‘stylised facts’ about the economy that Nicholas Kaldor first observed in 1957. What’s stunning about them is that they have largely remained true over the interceding 60 years. Yes macroeconomics is hard, and our evidence on it is less causally robust; but much is consistent and remains important despite being well-known. (That which we are, we are, as Rumpole might say, quoting one of my favourite poems).
  4. Imagine being having written a book so compelling that Branko Milanovic compares it to Maradona’s football; Francis Fukuyama has achieved it. “It is like Maradona lulling his opponents to sleep just in order to strike a more improbable goal.”
  5. Christopher Pissarides joins the techno-optimistic bandwagon. Well, I say he climbs on the bandwagon, but his argument is basically that it’s not technology that we should worry about but frictions in labour market adjustment. So in a sense, he built the bandwagon, won a Nobel prize for it and then arrivistes like me clambered on board.
  6. Here’s some basic economics: pandering to the lowest common denominator is often a winning strategy. Tumblr took the high road and banned p*rnography; while a dip in demand probably won’t surprise you, the fact that visits declined by 20% and usage by 50% might do.
  7. Life is a simplified metaphor for cricket. I think we can all agree on this. In case the Good Place and Peter Singer wasn’t enough philosophy for you, Anthony McGowan wrote a piece in The Nightwatchman about how the main schools of classical philosophy would resolve the Walking problem: do you do the right thing, even if it comes at a personal, or team-wide cost? [Of course, the correct answer here is to take the sandpaper out of your pocket and focus on the real issues]. And just in case you’re one of the few readers who isn’t here for the cricket chat, here’s Alan Taylor remembering the year they gave James Kelman’s How Late it Was, How Late the Booker – and the cost to his career. Kelman should win the Nobel for literature, and never will, the fools.

Have a great weekend, everyone! Next week will be the last links for the year, and will include a brief round-up of my favourite ones of the year.

R

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Links round-up

Hi all,

Remind me never to make cricket predictions. No sooner had I finished predicting the collapse of the England cricket team in New Zealand than they proceeded to fold like origami – if origami came in the form of spineless amoeba. Clearly, this was a causal relationship, and I spoke the collapse into life (just in case this is true, I’m hereby predicting an anonymous millionaire choosing to make a large lump sum transfer to my bank account by the end of the day). Anyway, with Tom Latham unbeaten on a century, I’m not going to tempt any further fate. Straight into the links:

  1. If it’s true that the best economics comes from the hardest times, we should be in for a bonanza of economic thinking soon. Barely a day goes by that I don’t faintly bruise my forehead facepalming at the latest bout of economic insanity proposed by some politician somewhere in the world. Kaushik Basu is surely right that what will come next for economists is almost certainly a better understanding of how our economic interactions are shaped by norms and values – an interrogation of the assumptions in the woodwork of our models. This is what Sam Bowles, George Akerlof and others have been recently investigating and I am increasingly convinced of their importance.
  2. There is a fantastic quote from Thomas Schelling in this piece by Tim Harford on why we should all play games: “One thing a person cannot do, no matter how rigorous his analysis or heroic his imagination, is to draw up a list of things that would never occur to him.” I’m a big believer in letting your mind and attention wander: part of understanding the world can only come from being in it, and being surprised by it.
  3. Every year, my friend Paul texts me to ask when the Development Impact crew will start their Job Market Papers series. Well, it’s kicked off, and from the first few entries, it’s going to be another fun season. First, Jeffrey Bloem looks at the massive negative effects of the Dodd-Frank Act on conflict in the DRC (that’s negative as in more conflict, not the good kind of negative). He starts with a great first line, pointing out the reader is most likely using a conflict mineral to read it. And another post (by Julian Dyer) looks at the impact of crime and insecurity on agricultural productivity.
  4. Vox have a really good write-up on the latest paper on GiveDirectly’s basic income experiments in Kenya. This paper, by Ted Miguel and co-authors, finds large general equilibrium effects from their transfers. It appears that the demand stimulus creates a supply response and essentially creates a rising tide. I haven’t read the underlying paper yet, but these are really big results.
  5. I like to argue with people. (Note: This will not be news to anyone whose ever expressed an opinion in my presence). With Thanksgiving in the US yesterday, both Vox and 538 ran pieces this week on how to argue better; I have to say I find 538s more convincing. But if you don’t agree, that’s ok: we can argue it out.
  6. CGD look at the manifestos for the forthcoming elections are discuss what they mean for international development.
  7. Finally, are you a cat person? If you are, there are few things I can recommend more than this excerpt from Bohumil Hrabal’s book about his cats. Hrabal was a genius; who else could turn a single run-on sentence by a boasting drunkard in the pub into a novel (Dancing Lessons for the Advanced in Age), or an extended attempt to hide his short stature into a history of his country (I Served the King of England). His skill for plausible exaggeration is on full show here. If you don’t like cats, maybe you like rap? A man of similar talents, Rakim, has a new book out; it doesn’t take too much squinting to see the links between I Ain’t No Joke and Dancing Lessons…

Have a great weekend, everyone!

R

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Links round-up

Hi all,

It may seem like nothing ever changes: the seasons still follow one another with grim inevitability (in England, Winter follows Autumn, and then Winter comes back to annoy us after a mere insinuation of Spring or Summer); LeBron James continues to school fools and the Gods of Cricket find ever-more inventive ways of crushing dreams (England look good now, but I await the inevitable Trent Boult double century, followed by Ben Stokes getting out hit wicket, tying his shoelaces). Occasionally, though change shocks us into uncharacteristic action. Specifically, climate change can shock us to act out of character: I know many people who joined the climate protests whose previous heights of rebellion were to send back a lukewarm tea in a café. And now, that venerable institution, the Oxford English Dictionary has revealed its word of the year: ‘climate crisis’. Yes, that’s the word of the year. The end of days is upon us, verily.

  1. Well, this is awkward. What do you do when a senior World Bank Official goes off on one, calling you a Marxist (“committed or uncommitted”, as he puts it) because you run a piece of analysis and post your code for transparency’s sake? Well, if your Justin Sandefur you clap back, and point out that whatever name you call him, the analysis is still up there, and still not proven wrong.
  2. What do you remember from 13 July, 1994? If you’re anything like me, you remember Roberto Baggio running circles around Hristo Stoichov’s Bulgaria to send Italy into the final of the most boring World Cup ever, towards a mouth-watering confrontation with Romario. Silvio Berlusconi guessed that would occupy most other football-crazed minds (which covers about 88% of the Italian population), and used the day to sneak out the news that he would, by emergency decree, absolve hundreds of Italian politicians from corruption allegations. Can you keep a straight face while saying “I’m sure it was just a coincidence?” If not, then this paper is for you – Milena Djourelova and Ruben Durante show that the political news cycle is carefully choreographed to bury bad news, surely shocking news to anyone in the civil service.
  3. This is great: a David McKenzie twitter thread reviewing the migration and trade chapters of the new Banerjee-Duflo book; he considers a dissonance in how they handle the two topics. And on the subject of migration, this is fantastic: Planet Money look at how a small town in the US has turned itself into a refugee hub and is reaping the benefits (transcript). And on the benefits of migration (how often have I written these words here over the years?), this VoxEU piece sets out some of the benefits of returning migrants on growth in their country of origin.
  4. Daron Acemoglu and co. have produced a model of the data economy to illustrate the myriad ways it can generate inefficiencies. My go to analogy for Facebook and the like has for a while now been that of the Eiderdown farm, but they’ve extended the analogy: they point out that by providing free services, Facebook is in effect paying for our data, but also that they can use data collected from users to infer knowledge about non-users.
  5. Two good pieces about urban mobility, though very different. First Ricardo Hausmann discusses why it shouldn’t be surprising that a small metro price rise has generate such a large backlash in Chile. And then this VoxDev piece looks at the genesis of long journey times in India, finding that it’s not traffic but ‘uncongested travel times’ that is the biggest contributor time spent in traffic. Something to think about while I sit on the X90, cursing my way through the journey to London.
  6. Vijaya Ramachandran has done a survey of tech entrepreneurs in Nigeria, and reports some of the results here; they’re interesting and worth reading in more detail. I particularly like how she unpacks their responses on the perennial problem of credit. Read it carefully and it sounds like a banking system working well (even if that means not funding many firms) than one doing its job badly. As I never get tired of telling people here: fix the problems, don’t try and force yourself through them.
  7. Star Wars and economics collide in a supernova of geekery: the Ringer run a surprisingly economically literate analysis of monetary economics in The Mandalorian and the broader Star Wars universe. They consider what might be behind the multiplicity of currencies the Mandalorian operates in (surprisingly, they omit to consider currency hedging as an important part of the Bounty Hunter’s economic toolbox); they look at exchange rate volatility and relate it to incessant conflict; and finally, they ask if the failure to establish a single currency and unify trading standards was cause, not consequence of the Rebellion’s fall and the rise of the New Republic. Can you tell how much fun I had with this?

Have a great weekend, everyone!

R

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Links round-up

Hi all,

Every once in a while, you can actually see the economy evolve before your very eyes. I’m going to Porto next week for a short break (long hours working on my data have taken a toll), and have just received an email from the airline asking me to participate in an auction for an upgrade. I would like to announce this clearly for all companies who might be reading: GET YOUR FILTHY MITTS OFF MY CONSUMER SURPLUS. I’m so annoyed I’m not even going to bid zero. I’m not going to help them construct their demand curve. While part of me admires this attempt to maximise their revenues, is it surprising that so many are dissatisfied with the economy when companies weaponise personalisation so effectively?

  1. Arthur Cecil Pigou was, by reputation, a somewhat odd man. Back in the days when he was the only Professor of Economics at Cambridge, he used to rock up to meetings with an axe, on his way to climbing expeditions. He was a genius though, arguing for paid maternity leave roughly a century before it became a thing; and he came up with an idea for taxing negative externalities that is both intuitive and difficult to teach (I know: I was teaching it last week). Planet Money have a very fun show on him (transcript), including the way Canada has tried to adopt a tax on carbon, pairing it with a flat payment to citizens, which winds up being rather progressive, since the rich consume much more carbon…
  2. A very wise man gives a 90 second interview about a very good book. Matt wants more. Don’t @ me, mainly because I’m not on Twitter.
  3. Diane Coyle looks at productivity and its discontents, arguing that the dematerialisation of the economy (basically, the fact that we make, buy and sell less actual stuff and more ideas, services and information) has fundamentally undermined our traditional measures of productivity. Robert Solow once observed that the technological revolution is observed everywhere except in the productivity statistics. Diane is suggesting the problem is with the statistics and not the technology.
  4. When Michael Clemens talks about migration, just pull up a chair and listen. This blog (with Jimmy Graham) is typically excellent and will be a learning experience for most of us. I particularly liked the heading: “the effect of aid on migration is complex – because so are migrants’ motives”. No-one who has been receiving these links for more than a few weeks shouldn’t need a primer on why human movement is such a force for good, but it’s always nice to find a new angle: Planet Money discuss the social mobility of the children of migrants and why it is so impressive (transcript).
  5. Erica Field and co show that using digital payments to women to give them greater control over their resources increases the labour force participation of the most constrained women significantly in the long term. And on the subject of control, this piece by Aleitheia Donald and Markus Goldstein finds that surveys can uncover disagreements between spouses as to who has decision-making responsibility in the household – and these disagreements are predictive of negative outcomes for women. Meanwhile, Charles Kenny bemoans the lack of women in senior positions in think tanks.
  6. One for the contracting geeks (and if you’re an economist but not a contracting geek, shame): Oliver Hart and David Frydlinger on the role of stated norms and principles in overcoming incomplete contracts.
  7. I normally end the links on a note of pop culture marginalia, but  this week it’s something different: one of my friends, Paul, helps run an amazing football club in Glasgow dedicated to helping refugees, asylum seekers and minorities of all stripes find a sense of community there. The BBC gives a small taste of how amazing United Glasgow is, and if you live nearby and have some spare kit going, they are looking for donations.

No links next week: I’ll be knee-deep in Port and Francescinhas. Have a great weekend, everyone!

R                                                                                                                                             

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Links round-up

Hi all,

Winter is coming. More accurately, winter has arrived, taken off its shoes and declared its intention to crash on our couch until further notice, much like John Belushi. I’m sitting in the DPhils office at BSG, looking out the window onto an incredibly grey and depressing day, made worse by Sri Lanka’s third consecutive capitulation to the Aussies. On the plus side, the Challenges of Government Conference is running here at the same time, and the benefit of the pitiful weather is that it discourages attendees from straying too far from the coffee point during the breaks. Honestly, if it wasn’t for the NBA season, there would be no reason not to hibernate from mid October until April.

  1. Twitter seems like an extremely risky pastime to me. Every once in a while, people seem to let slip with a spectacularly ill-considered opinion that will forever more be brought up to mock them. Even by the standards of the twidiocracy, though, this tweet by Larry Summers in the middle of his critique of Gabriel Zucman and Emmanuel Saez’s new work on the tax system in the US was ill-considered (he noticed, too). The economics underlying this debate are fascinating though: Zucman and Saez argue that the American tax system is regressive, and in doing so make a number of methodological choices that depart from the norm in tax policy analysis; in particular, many economists from across the ideological spectrum have focused on the exclusion of tax-based transfers to poor people in their assessment of the progressivity of the tax system.  The NPR write-up of the debate is very good; I can see both why it seems strange to exclude tax refunds from the analysis, but also that Zucman is surely correct to point out that the rich also benefit from Government transfers, ones that are probably much less transparent. (In Twitter’s defence, it does facilitate the occasional zinger, too. Round 1 to Zucman, surely.)
  2. Zucman and Saez are at the centre of another, closely related debate: whether the US should implement a wealth tax, an idea associated in particular with Elizabeth Warren and Bernie Sanders. Tw pieces in Project Syndicate discuss the ins and outs of the idea, one by Jean Pisany-Ferry and the other by Michael Spence, who points out “The fact is that incremental wealth gains… above $1 billion… have little to do with consumption and lifestyle. They are signals of success and status.” This seems about right to me, though with the caveat that the closest I’ve come to being a billionaire was in Zimbabwean dollars. And Branko Milanovic discusses the extent and effect of inequality in Chile, in light of the recent unrest.
  3. Lee Crawfurd, Susannah Hares and co. take a critical look at the construction of the World Bank’s new metric for educational quality, Learning Adjusted Years of Schooling (LAYS). Their concern isn’t the unfortunate acronym (do we really want to talk about how many LAYS our kids got in secondary school?), but rather that the metric will need to subjected to quite a lot of scrutiny over quite a long time to ensure it keeps improving. While that is certainly true, it’s important not to forget that it is still a big improvement from where we started. It’s a huge thing that we have a metric that provides us with information about both schooling time and learning achieved, imperfect though it may still be. Related: the crew also take a look at the literature on low-cost private schooling, updating a review DFID funded a few years back with new findings.
  4. Is this the greatest example of Principal-Agent Theory in practice ever? A man in China (the Principal) hired a hitman (the Agent) to kill a business competitor; and being a rational young man, the hitman promptly turned around and sub-contracted the job – a possibility only because the Principal was unable to effectively monitor the effort exerted by his hitman of choice. So far, so classic, but it gets better. The subcontracted hitman in turn decides to farm out the dirty work to yet another subcontractor; but even he decided that the effort of killing a man was too great, and subcontracted the work out yet again. This goes on, seriously. Eventually, the fifth subcontractee decided to collaborate with the intended victim, collect payment and then inform the police. There has to be a way for me to incorporate this into teaching this term.
  5. People are the worst, part 12,393,393,191 of a continuing series: apparently, fact checking fraudulent claims about migrants and minorities hardens attitudes against them. In other words, once primed to think negatively about migrants, learning that in actual fact they are not out to steal your job and mug you in a dark alleyway does not at all reduce negative attitudes towards them. People: mindlessly bigoted since walking upright.
  6. It used to be a running joke among some of my friends that I would begin answering any question with some variant of the line “It’s actually a little more complicated than that” (I swear this was before Ben Goldacre published a book with that title). Tim Harford goes on a magnificent rant against virtually every politician in the UK, accusing them of seeing simplicity where complexity lies and selling clarity when a fog is the reality. Can we make him Emperor?
  7. Lastly, in the latest example of Japan being far cooler than any of the rest of us, it turns out that there is a tradition there on Halloween whereby people dress up as the most horrifyingly mundane thing they can think of. There is a real art to capturing the horrors of everyday life, and these people have absolutely nailed it.

Have a great weekend, everyone!

R

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Links round-up

Hi all,

That sound you can hear faintly in the background is faraway crowds mispronouncing the word ‘defence’ at great volume and repeatedly. That is correct: the NBA season has started again, and while Zion Williamson has injured himself (it turns out being built like a container ship and jumping like Super Mario is bad for the knees), the rest of it has been gripping. LeBron may finally be slowing from his Thanos-like peak! Markelle Fultz has remembered how to play basketball! Luka Doncic is still an extraterrestrial wearing a chubby Slovenian teenager suit! And my productivity is about to make like Wile E. Coyote!

  1. Having said all that, I’m never too busy for economics. There’s still a Nobel hangover on the econoweb (and a literal hangover if, like me, you celebrated with a little too much wine), but rather than link to all of it – there’s too much good writing to do justice to – let me mention two pieces. Firstly, Abhijeet Banerjee and Esther Duflo have apparently celebrated by uploading another paper to RePec,  a follow up on their much earlier work on microfinance that identifies the small group for whom microfinance does turn out to be very effective for. They call them ‘Gung Ho Entrepreneurs’, and they do very well indeed when they get access to credit; whether we can tell who they are early on, though, is the real kicker. And David Evans has done one of his unbelievable 100-paper summaries dedicated entirely to the output of Michael Kremer, who was his DPhil supervisor. Like supervisor, like student: David is a marvel, one of the best and most concise communicators of ideas I have ever had the privilege to meet.
  2. This requires a bit of attention and patience, but has outsize rewards. Brad Larsen at Stanford summarises an extremely cool new paper which looks at how often potentially viable trading negotiations (i.e. those where the buyer and seller have a shared price on which they can agree to mutual benefit) fail. He has some amazing data, and the finding is also kind of amazing; between a fifth and quarter of potentially beneficial negotiations fail. This should make us much less sanguine about… well, everything.
  3. When a paper digs into how humans interact with one another, you can bet there will be at least one result that proves that humans are the worst. Case 1,204,291,91: a recent analysis of tipping behaviour on Uber finds that men are more likely to tip female drivers… and that this effect is almost entirely explained by heavy tipping of young women with almost zero effect on older women. Men: transparently one-track minds since recorded history begins. For Uber drivers looking to get their own back: work in the small hours. Tips are highest between 3:00 and 5:00am; presumably to make up for the drunken ‘banter’.
  4. It’s always reassuring when Tim Harford likes ideas I ascribe to. Here he discusses how to think about worst case scenarios and sings the praises of pre-mortems.
  5. By the way, speaking of people being the worst: this fantastic piece by Berk Ozler looks at how hopelessly biased samples in early medical studies (almost exclusively conducted on white males) have led to (some) systematically worse health outcomes for minorities, and how algorithmic diagnosis can – sometimes – help rectify these inequalities.
  6. CGD continue to bang the drum for sensible migration policy, for which we can only applaud them. A first piece sets out how the new EU Commissioners for migration can use legal pathways to achieve their policy objectives; and another looks at how regularised migration can be a development tool for Nigeria. Both push the Global Skills Partnership idea, which I’ve pitched more than once, too. Are we getting any closer to it having a moment?
  7. Lastly, may I quietly and calmly point out that THE LAST TRAILER FOR STAR WARS: RISE OF SKYWALKER IS OUT AND IT I’M VERY SCARED THAT SOMETHING BAD IS GOING TO HAPPEN TO C-3PO. Sorry. I’m not sure what came over me. It is going to be a long wait for this movie. While we’re waiting, we can check out these ultra-creepy author photographs from LitHub. While no-one should be surprised that Angela Carter’s makes her look like a ghost, what is up with Patricia Highsmith and HP Lovecraft? Why does she look like she’s planning my murder? Why is Lovecraft eating his own face? And is it time for Star Wars yet?

Have a great weekend, everyone!

R

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Links round-up

Hi all,

I write this sitting in the kitchen sink. Actually, that’s not remotely true, I actually write this sitting on the bus to Oxford at ridiculously early o’clock, though the odds are I’ll actually wind up sending this e-mail out sometime this afternoon. These rare occasions I motivate myself to get up extremely early to travel to work remind me how lucky I am. There’s an entirely different economy moving in the early hours of the morning, travelling from deepest north London (where I live) to the bus terminus in Victoria. More people on the buses were coming home from work than going to it, or for the person next to me on the underground, going between jobs. Never let me complain about my workload again.

  1. It’s not going to surprise anyone what I lead off with today. The Banerjee-Duflo-Kremer Nobel is a massive win for development economics. I first studied development economics in the mid-1990s when I was a young economics-obsessed teenager at school (I’m older, but not much different). Back then it was considered an esoteric choice; it’s not anymore. This Nobel and the one for Angus Deaton a few years ago has put understanding, measuring and impacting on poverty and human immiseration (as well as progress out of both) at the heart of what economics is about, not an esoteric side-issue. The Nobel’s formal justification is worth reading, but I particularly liked the pieces on Marginal Revolution about Banerjee (“He was always willing to help those less advanced [in his econ class at Harvard]. Furthermore, that was literally everyone else.”), and Tabarrok’s discussion of Michael Kremer’s work, as well as this Planet Money conversation with him (transcript). Someone said to me yesterday that the idea that doing RCTs somehow limits one’s vision of economics is most elegantly disproven by reading Michael’s CV. My colleague Tom sent me a nice explainer of his O-Ring Theory, which made me dig out the original paper, here. My favourite coverage on Esther Duflo, though, was her own comments on the award: what this (should) mean for women in a male-dominated field, and explicitly recognising the hundreds of researchers they have worked with or inspired.
  2. On that note – the Royal Economic Society is doing a campaign to increase diversity in economics in the UK, which still showcases disproportionately few female and ethnic minority voices. This piece by Arun Advani, Rachel Griffith and Sarah Smith points out that this isn’t simply an equity consideration (though, of course, it would be fine if it was), since background does seem to affect the policy advice offered, which means that a monocultural discipline provides less diversity of thought and advice (hilariously, this means that economists aren’t disagreeing enough, which anyone who has been to an econ seminar since the dawn of time will be surprised by). More of the piece, though, focuses on the pipeline of potential economists: access to A-Level econ courses (where I first studied development) is incredibly uneven, and economists are apparently projecting an ‘unappealing’ image to young women, of ‘boring men in suits’. Though the Barney in me wants to defend the suit as an excellent sartorial choice, the bigger problem is boring. Economics isn’t boring, especially when you have dirty shoes.
  3. So, boring men in suits doing equations – if this is still the dominant picture of what a great economist does, we’re doing something very very wrong. Great economists look at whatever they see in the world that they think we need to understand better. That can take you all sorts of places. If you’re Steven Levitt (John Bates Clark award winner), it might mean studying cheating in exams, or playing poker with Tim Harford. If you’re Robert Shiller, Nobel Laureate, it’s trying to understand narratives – stories with emotions, morals, world views – and what their role is in determining peoples’ expectations and decisions. I don’t know if either Levitt or Shiller wear suits (they are, admittedly both men), and I know there’s a lot of data work and coding going on under the hood, but hey – they never showed Indiana Jones dusting off thousands of pointless rocks, did they? Just cut to the Holy Grail.
  4. Natalie Bau and Adrien Matray summarise their new paper in VoxDev, a very cool look at how foreign investment stimulates economic development, focusing in on its roll in reallocating capital towards the most productive firms.
  5. This one definitely tends towards the geeky, but there is now a stata command to directly query the World Bank’s povcalnet data, using any poverty line you like – though I haven’t seen yet if this will also allow us to use the median income data. Somewhere, I can hear Nick Lea laughing – he worked out how to do this in Excel years ago.
  6. I’m going to have to cut the links slightly short today as I’m teaching this morning and buried in Stata for the rest of the day (I’m not wearing a suit, though). But there is no way I could let you go without sharing these glorious images of Kim Jong Un on a white horse; what is it with oddball dictators and horses? Nothing will ever rival the Vladimir Putin barechested horse riding, though. It looked like an advert for a cologne called Machismo. And speaking of Machismo, here’s Zion Williamson, a man who would make Achilles quiver in fear, dunking your soul out of your body.

Have a great weekend, everyone!

R

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Links round-up

Hi all,

We live in interesting times. The news is full of extraordinary events: the Extinction Rebellion going on pretty much directly outside this building. Virat Kohli is rewriting the law of averages. Politics are… shall we just say eventful, and move on? And of course, reliable as rain, violent bigots are doing daft, violent things, be it in Germany or in Manchester. I’m a little tired of linking to this same Tim Harford piece, but the message bears repeating: terrorism aims to inspire both terror and an overreaction. Give them neither.

  1. Want to go down a rabbit hole with me? The people outside the door aren’t protesting for nothing: the cost of climate change could be rather large indeed, as Planet Money note (transcript). But walking past the protestors, I’ve heard a few odd chants and read a few signs that blame the climate crisis on economics. It’s not just the protestors – Jared Bernstein in Vox has gotten in on the act, too – and he’s an economist. This conflation of ‘the economy’ and ‘economics’ drives me nuts, as I’ve pointed out before. Economists have done a huge amount of work which aims to work out how to fix imbalances in the economy that are driving unsustainable emissions – but there seems to be little appetite to implement them. It’s like blaming doctors for a disease outbreak caused by people refusing to get vaccinated. I’ve mentioned carbon pricing before; Tim Harford gives another example in this typically excellent piece about Martin Weitzman, who changed the way we think about discount rates and sharpened the tools that economists can use to analyse and propose solutions for how the economy drives emissions (oddly, apart from one by a colleague, over email, very few retrospectives of his career mention this work). The problem is not that economics has got this wrong, but that the political will to make difficult choices and listen to good analysis has been lacking. Roger Farmer argues that to solve this, we need more economics, not less.
  2. Speaking of ‘more economics’, David Evans and Almedina Music weave their magic to produce one-sentence summaries of every paper presented at a recent conference on Development Economics.
  3. The Economist has had a few excellent pieces on development recently; I particularly liked this one about the cottage industry in support for ‘entrepreneurship’ that has mushroomed out of the development sector. The summary is spot on: much has been tried, but relatively little works. A telling sentence: “most African success stories involve a lucky break”. To borrow a metaphor from Stevan Lee: in toxic ponds, most tadpoles die. This has very little to do with the tadpoles and very much to do with the pond.
  4. This week in updating my priors: David McKenzie’s new paper, summarised on Twitter here, finds that schemes to promote self-employment in developing countries do seem to have a small effect on out-migration. I’m going to have to think about this one for a while. Given the returns to migration, is this a net welfare gain? If we simply go by revealed preference it seems to suggest that small improvements in domestic circumstances are enough to put people off large possible improvements elsewhere. Or perhaps it shifts their perceptions of their longer term prospects (rightly or wrongly)? As ever, the over-riding question of migration for me is not ‘why do people move?’, but ‘why do so few?’
  5. I watched The Big Short recently, and loved it (especially for the use of When The Levee Breaks when the financial crisis finally starts to unfold). It’s difficult to make complex economics so gripping, and so comprehensible. In VoxEU, this piece isn’t quite in the Michael Lewis class of clarity, but is a really interesting look at the psychology of asset pricing, distinguishing between ‘bubbles’ and ‘manias’. It’s almost spooky how accurate Hyman Minsky’s model is when applied to 2008.
  6. A long interview with Amartya Sen. For development economists of a particular vintage (my vintage), reading Sen was a formative experience, no matter how far from that starting point you’ve moved. What always drew me to him was the range of his study and perspectives, not any particular one of them. That has remained.
  7. In eleven days, the NBA season kicks off, and after trying to stay calm about it for the last couple of weeks, I’m losing control. Have you seen the videos of Zion’s first pre-season matches? The man is basically a bull crossed with a frog, wearing Nikes. How does someone that big jump so high? He reminds me of Shawn Kemp, a man who was medically proven to have springs instead of muscle in his calves. And that’s not even what I’m most excited about.  Ben Simmons took a three – and made it! I’m simultaneously happy for him and sad that he’s rendered this t-shirt obsolete. But best of all is this: Markelle Fultz might actually be able to play basketball again. He was filthy in college, and if he gets anywhere near that level again, this season is going to be a lot of fun…

Have a great weekend, everyone!

R

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Hi all,

Today, I have been thinking about shifting goalposts. The computers I’m working with today (yes, plural: I’m doing some mind-numbing data work that requires two screens) are light years away from the machines I used as a teenager, but my emotional responses to them have hardly budged. Rather than celebrating the fact that I can look at two websites at once, I find myself barely suppressing a sense of fury at the sluggish pace at which they work, and my suspicion that a malevolent gremlin is operating them with the sole purpose of driving my blood pressure up and my vocabulary to the gutter. Are our expectations forever doomed to stay one step ahead of our capabilities? Perhaps the paralysed man who today is walking a few feet using a mind-controlled exoskeleton (try convincing teenaged Ranil of that in the mid-90s) will one day be reduced to sputtering rage by his Pacific Rim suit taking too long to charge up its weapons? Humans: never satisfied.

  1. That said, dissatisfaction is important, even in the face of progress. We should be pissed off when things aren’t improving quickly enough, or where will the motivation to change them come from? Fortunately, the world is quite good at providing us with reasons to be furious: our exhibit this week is the AEA’s report on the diversity and inclusion in the economics profession. It is grim. I really recommend you take a moment to look at the original report: there is a lot in there that should make us feel uncomfortable, not least the responses from those who felt that there wasn’t any problem at all – going so far as to label it a ‘politically correct waste of time’. (Exclusive footage of this respondent here). For those who prefer their information in tweet-sized bites, Ben Casselman comments here; and this op-ed in the NYT focuses on the experience of black women specifically. Surely we can do better than this.
  2. This week in updating my priors: A VoxEU piece focuses on the limitations of home-building (via regulatory change at least) as a way to combat inequality. One of my go-to responses on inequality has always been ‘build more’ – it simultaneously reduces the value of the wealth that the rich hold and can transmit to their children, and reduces the cost of moving to higher productivity areas. But apparently, it doesn’t work quite so well in practice, with local markets being rather segmented and investment tending to focus in the already-rich areas – though it is possible that this is a US-specific result. Also giving me something to think about: Erica Field and Rohini Pande mount a (partial) defence of microcredit. It’s not that it will suddenly unlock growth in developing countries, but it can at least be delivered better and with better results than those that have been observed to date; though whether this should dramatically change our position on it is still open to question.
  3. Dan Honig knows more about how organisations can torpedo their own best intentions than most; this piece suggests that by relinquishing control (especially in the messiest places to work, where the temptation to exert a closer grip is often greatest) they can achieve better results. Much in the vein of his (excellent) book, it’s the kind of message big donors need to take more seriously.
  4. Depending on what newspaper you read, you may well have diametrically opposed views of the same factual events. Why is it that people can look at the same facts and come out with such completely different views? It’s not just the editorialising that’s to blame: our own brains play tricks on us, with a number of biases affecting how we interpret new information. FiveThirtyEight investigate and focus on the poisonous effect that partisan affiliation can have on our ability to interpret the world.  
  5. This was one of my favourite things this week: The Economist ran an essay competition asking for submissions on the topic of what economic or political change is needed to effectively combat climate change. One of the entrants to this competition was an artificial intelligence, an algorithm that was trained to write essays. They published both the algorithm and how it was judged by their panel of assessors. It’s creepily rather good, if a bit odd stylistically. After all, who on earth likes rhetorical questions that much?
  6. As my working calendar reveals, I am much more of an Arnie than an Elon; or rather an Arnie in the body of an Elon…
  7. My earliest memories of watching sports are of Magic Johnson’s Showtime Lakers and Diego Maradona. There’s more in common between them than you might think – both were absolute geniuses who had their fair share of off-court troubles, and turned out as absolute failures on the managerial side of things. This long read about Maradona is brilliant: it absolutely captures the sense of chaos you had watching him play, the sense that none of this should really be happening. It’s also chock-full of barely-believable stories, the ones that are actually true almost more ridiculous than the myths. And he really is a mythical figure: there were articles recently celebrating the 30th anniversary of his warm-up before a game against Bayern. What a genius.

Have a great weekend, everyone!

R

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Links round-up

Hi all,

Yesterday, a friend sent me an e-mail full of Stata code; this isn’t how we normally communicate, she was trying to help me format some tables better. But in a perfect encapsulation of my attitude towards Stata, my e-mail programme offered me the following prompt: “This message appears to be in Slovak. Would you like to translate it?”. I tried. It wasn’t any more comprehensible. After a morning of data entry and wrestling with Stata, with no cricket on (thanks to a ground being entirely submerged in Karachi), and a month until I can start spamming all of you with videos of Zion Williamson dunking on NBA players, that’s as much of an intro as you’re going to get this week…

  1. This is a complete disaster. According to Planet Money, I am a millennial: “millennials are young adults who are now between the ages of roughly 22 to 38”, they say. [We go live to my reaction]. But it’s not all bad: apparently, millennials aren’t quite the reprobates their elders would have them be. Rather, they entered the economy and job market in a very particular moment, one which penalised them substantially relative to previous generations. One sign of this is that (contrary to popular belief) they are much less likely to switch jobs early in their career – a sure sign of less than dynamic economy, which normally involves a lot of churn as people move between jobs and find regular new opportunities (transcript).
  2. While we’re engaging in some revisionism driven by data, consider the case for China as a green giant. Stephen Roach argues that the pace with which China is increasing renewable energy consumption, switching to more eco-friendly transport options and moving out of heavy industry is unprecedented once you account for its level of development. While it’s clear that we need even more, this is a very different trajectory to those of the previous generation of advanced economies, and provides a model for the rest of the world rather than a scapegoat.
  3. It’s kind of thrilling to read a genuinely radical idea, even if it doesn’t have a snowball’s chance in hell of being implemented any time soon. Martin Ravallion and Michael Lokshin have one here: what if you could sell your right to enter the labour market to the highest (international) bidder? Imagine you’re a sixteen year old, but have plans to be in full time education until you finish a DPhil – let’s say around 8 years if we’re really optimistic. You can sell your place in the labour market for those years to someone from outside the country and use the proceeds to fund your education. Alternatively, you could retire early and do the same. They even discuss how it could be implemented in practice – though I will eat my hat if any Government in the world goes with this scheme in the next decade or two. 
  4. Capitalism, Alone, the new book by Branko Milanovic has just been released. I haven’t got a copy myself, but it’s surely self-recommending. He summarises what he considers to be the four central themes of the book here. Branko is one of my favourite economists to read. Even if you wind up disagreeing with everything he says, you will always learn something on the way.
  5. Sorry, John. It turns out that money can buy you happiness (love remains to be proven). Previous studies showed that lottery winners do not wind up happier than non-winners, but it turns out that the canonical study had a sample of just 22 winners! Kelsey Piper at Vox points out that when studies were run on larger samples, winners did indeed appear happier. You know what else makes you happier? Power calculations. And bigger samples. Sheesh.
  6. Income inequality in the US (using the Gini coefficient) is now higher than at any point since data started tracking it.
  7. Finally, The Joker opens next Friday. I’ve already gone on more than one massive geek-out over this, but the point bears repeating. Batman has the best villains: funny, anarchic, monstrous (and mumbly), and just plain weird. And apropos of that last link, The Ringer write a loving celebration of Danny De Vito, though they manage to get through the whole thing without mentioning Rod Lurie’s unforgettable description of him.   

Have a great weekend, everyone!

R

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