It was tempting to just copy and paste the intro from last week today: like a glitch in the Matrix, England have had a batting collapse, Sri Lanka are being stomped like the bad guy from The Naked Gun and you still need an electron microscope to find the funny side of the newspapers. I was going to complain about the weather, too, but then I saw that it’s so cold in Chicago that noodles are freezing in mid-air and they’re setting fire to the trainlines to keep them running and thought better of it. Into the links, which at least start a little warmer.
- Anecdote alert: when I was in secondary school, I had one particularly amazing teacher, who was clearly passionate about the subjects he taught and was always so excited to be talking about them that the excitement was contagious. He taught me both history and economics, and made economics in particular come to life as a struggle between opposing forces that shape the world. Though biology was actually my best subject, I ended up taking history and economics at university, and I’m eternally grateful: I suspect that but for him, I’d be an unhappy, third-rate scientist rather than a second-rate economist who finds actual joy in what I do. In one of those rare cases where received wisdom and research wisdom are in broad alignment, teacher quality really does matter for young people’s learning and life outcomes. Dave Evans and Tara Beteille have summarised the latest evidence on how to get the most out of teachers here, organised around five key principles. Related: Dave is leaving the World Bank to join CGD, to bolster their already excellent team of research fellows.
- Jeremy Singer-Vine’s Data is Plural (well worth subscribing to) threw up a gem earlier this week: a free, online data source that measures the ethno-nationalism of political competition in Europe. I haven’t looked at the data properly yet, but it will be interesting to see if the ‘eye-test’ of increasing nationalism across the party spectrum in Europe is borne out by the data. Even taking the narrow lens of economics, nationalism that reduces the role of outsiders is short-sighted: this VoxEU piece shows how the presence of multinational firms drives productivity improvements in even domestic firms in the same sector, an effect driven by both within-firm improvements and (possibly) sharper competition across firms.
- How to improve tax revenues in countries where there is chronic under-reporting of incomes and under-filing of returns? This seems like a deeply difficult question, full of complicated politics and technical problems, but it turns out one solution is as simple as imaginable: just ask. An intervention in Costa Rica literally just sent e-mails to firms (ok, the e-mails themselves were carefully sculpted) and it had a significant and lasting impact on returns.
- David King’s e-mail today reminded me that I missed this in the links last week – our Chief Economist, Rachel, summarises the seven things she’s learnt in her first year on the job.
- Vox are running a series of pieces that summarise some of the key ideas of recently-deceased economists. They cover Harold Demsetz here, a pioneer in the economics of organisation and industrial economics (both areas I have a keen interest in). I highly recommend reading it. Despite something like four Nobel wins in this field, at least two of which have been awarded in the last 20 years, it’s an area that a lot of professional economists have a relatively shallow knowledge of. It offers deep insights to a range of economic questions (especially in developing countries, where industrial organisation is pretty dysfunctional thanks to failures of contracting, dispute resolution and generally high transactions costs).
- My own interests sit somewhere between the economics of organisation and economics of decision-making. A lot of the economics of decision-making focuses on behavioural biases or systematic ways in which people are wrong about thing. But increasingly, I wonder whether non-systematic ways of being wrong are more important in practice – this NBER paper (via Tyler Cowen) takes one approach to this question.
- Of course, the perfect setting for examining decision making would be the New York Knicks. They might be biased, or they might just be garden-variety imbecilic, but there’s no question that they consistently do very stupid things. Take yesterday: they traded a Latvian unicorn for a bag of week-old bread, a packet of instant noodles and the husk of DeAndre Jordan. The only upside is that Porzingis might be the first player to make fans cry both when he was acquired and when he was discarded.
Have a great weekend, everyone!