It’s been an eventful week, to say the least, but one of my favourite things about the UK is how resilient it is – an appalling attack and increased security all around and people quickly settle back into their old routines: the tube keeps running, continuing to tell us that the train that will eventually huff up to the platform in about a quarter of an hour is “two minutes away”; six people still stand around the one empty seat on the carriage because they’re too polite to take it and too shy to ask others to; twitter trolls still pop up spouting hate at every opportunity; and despite a day off, the links still go out.
1. I’m going to tread lightly with the first link. After all, Robert Shiller is a Nobel-winning economist of incredibly high standing across the profession and I, not to put too fine a point on it, am not. However, when I see an article with the title ‘The economy is stagnant because people fear for the future’, arguing that people aren’t spending because they have vague fears about robots eventually taking their jobs and exacerbating inequality, my sceptical face gets an airing (no, that’s not me). I’m going to go out on a limb here and say he’s wrong. People have been scared of machines taking their jobs since the first sharp stone was discovered. And, if they are worried about the future it might have more to do with the fact that the future prospects of most economies are pretty uncertain at the moment, which wouldn’t be the case if we were all about to hire Alex Murphy as our personal bodyguards. Poorly thought out techno-pessimism really winds me up.
2. Of course, Americans might be uncertain about the future because a budget has been presented to Congress that can best be described as a ‘hot bag of crazy’. It cuts taxes to the bone while maintaining a great deal of spending, but claims it is deficit-neutral because is assumes US growth will be 3% for the foreseeable future. 538 lay out the problems with this assumption, but to put it simply: it’s the equivalent of me going to a bodybuilding competition and predicting I’ll win because I’ve assumed a six-pack, huge biceps and good teeth. The problem is US productivity has gone stagnant, so growth isn’t likely to swing upwards any time soon (so much for the robots). NPR report on the lack of evidence for the march of the robots here (transcript).
3. You’ve all been reading this for long enough that I don’t have to sell a Michael Clemens blog on migration, but this one is particularly good for economists, as it gets right into the data on the Mariel boatlift, and explains why Borjas’ recent paper arguing that it reduced wages is wrong. Just in case you need more evidence, David Roodman, one of the most careful researchers in the world, also digs into the data and agrees with Michael.
4. This rendered me speechless for a while. Paul Romer causes a stir at the Bank with what some might term a tyrannical approach to the English language – so much of a stir that he may have been ‘moved sideways’. I like parsimony in writing (well, excepting the links, which is my opportunity to drone on to a captive audience), but this does seem a little extreme. Romer’s side of it, with the not-at-all-hysterical title ‘Paul Romer slaughters kittens’ is here. As an aside, measuring the frequency of the use of the word ‘and’ is only a good indicator of wooliness as long as people don’t know it’s being used as an indicator. And and and and and and and and and and and and. And.
5. A nice summary by Duncan Green of a new research programme into state authority in fragile places, which he will be part of. Looks fascinating.
6. Is three weeks in a row of Lant Pritchett too much? Obviously not, even though a lot of this has come up in previous links. This is Lant on Russ Roberts’ EconoTalk podcast talking kinky chickens, development and the role of aid and what’s wrong with how we think about poverty (hint: a lot). It’s been recommended to me as a good thing to listen to while doing the ironing.
7. And lastly, it’s been a pretty stressful week, so I think we all deserve a few photos of hamsters on the run and meerkats doing calisthenics.
Have a great weekend, everyone! I’m on leave from Friday next week, so I’ll send the links out on Thursday night and that’s your lot till mid-June.