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 days: the 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 doing anything?
- 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 their friends.
- 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!