I normally start these links with chat about the cricket or some other frivolity, but today’s start with a bit of personal news: at the end of the month, after a brilliant near-decade here, I’m leaving DFID to join the Center for Global Development. I’ve had an amazing time working here, and have learnt a huge amount from people all across the organisation. I aim to keep the links going from CGD, though, as writing these has always been both great fun and a really good way of keeping my horizons broad. I learn something every week not just from the reading I do to write these, but also from the attempt to summarise and talk about the things I’m recommending. So if you want to keep receiving these e-mails after I move over to CGD, please reply to this e-mail, or write me at firstname.lastname@example.org to let me know, even with an empty e-mail titled ‘Keep me signed up’. I’m happy to send them to institutional or personal e-mails, so let me know which e-mail address you’d like me to use. There will be 2 more links e-mails after this one, so I’ll keep reminding you till then. And now, to the links.
- As seems inevitable these days, the links will have a strong flavour of Coronavirus this week (though thankfully, not bleach). And this op-ed by Michael Kremer and co-authors is a good place to start: arguing that given the sheer scale of the costs of the virus and the response to it, there is virtually no possibility of over-spending on actions that might accelerate the widespread availability of a vaccine to those people who most need it. The team have done a lot of work looking at what specific bottlenecks there are to overcome, what specific prices and incentives are needed and make a convincing case; it’s on policymakers and politicians now to listen. Further coverage from Bloomberg here.
- Last week I gave a training course in how to use academic research evidence in designing development programmes. A lot of the talk focused on how you translate the things that a research paper reports (and omits) into a practical plan. One of my key bits of advice was to follow and read smart people who make a habit of doing careful deep-dives into the literature and can communicate the nuances of research effectively – especially those who do research themselves and thus know what to look for. This piece by David McKenzie on peer learning among small and medium-sized firms is an exemplar par excellence of this: he digs into different approaches, discusses the differences between the intent-to-treat and treatment-on-treated estimates, uses his own knowledge to discuss sample sizes and effect sizes… it’s just a masterclass in using research to learn something practical.
- Tennyson made the case for human interdependence rather beautifully in Ulysses: “I am a part of all that I have met”. Diane Coyle makes the same point with economics in an excellent Project Syndicate column. This is not a weakness. As she says, “Underlying it is the steady shift from an economy in which the classical assumptions of diminishing or constant returns to scale hold true to one in which there are increasing returns to scale almost everywhere.” This is what makes modern life so much easier and more varied than what came before. Related: Tim Harford wants our economy to fall off the wall, but bounce back like Jackie Chan, rather than shatter like Humpty Dumpty. More economics should be expressed in Jackie metaphors.
- Sticking to Covid for a moment: Emily Oster is one of my favourite economists because she uses her superpowers (high patience for reading research, carefulness to the point of pedantry, and an ability to discuss trade-offs without hysteria) to help the general public and improve their decision making. Expecting Better is a masterclass of economic writing for this reason; she’s now turning her brilliant hand to Covid-19 and deserves a wide audience. Another really good piece on Covid, which has already been misinterpreted by some, is this work by Mushfiq Mobarek and Zachary Barnett-Howell on the distribution of returns to lockdown. Please note, they are not saying that poor lives are worth less; but that in poor countries the gains from lockdowns come at a greater cost in terms of other ways of improving lives.
- If I’m talking about distributions, Branko Milanovic cannot be far away: and as usual, he has a take completely unlike any other economist. In this lovely digression of a blog, he looks at what Pride and Prejudice and Anna Karenina tell us about the distribution of income and social mobility in their respective settings. More on inequality: Jonathan Ostry and co-authors suggest that Covid will be greatly inequality enhancing, very plausible; another VoxEU piece looks at the positive impact of pay transparency on the gender pay gap in Denmark; while this one points out the depressingly predictable fact that women are bearing the brunt of lockdown in terms of productivity among economists.
- I loved this Planet Money piece on the effect of Covid on two different bookstores in Italy (transcript). A while back I speculated on twitter that firms are learning a lot about their capabilities that they would never have reason to learn in normal times; this will lead to many innovations and behaviours that would otherwise note have happened, and many of these will stick. This story is exactly this in action. Related: when Nick Bloom disagrees with you, question your priors: Bloom and co argue that the Covid shock is skewed in a way that is largely unrelated to productivity and the fate of individual businesses may matter much more than I had previously thought.
- My first month or two on social media has been eye-opening. It seems to me that it’s about 70% banality, 25% half-formed political rantery, 3% reasoned intellectual debate and about 2% hilarious idiocy. A few links in praise of the idiocy: Lockdown Gin and Juice, the Governator’s yoga routine; a toilet dressed up to look like a smoking frog; the Spanish flu as Sharknado; and one of the greatest Fry & Laurie sketches of them all, revived on Twitter.
Have a great weekend, everyone!
If feels odd these days to focus on any specific loss, given how many people are grieving for either someone specific or just for the sheer number of people passing in such a compressed period of time, but I took Irrfan Khan’s death hard, and I was definitely not the only one. It’s not quite like when Prince died, which felt like a constellation being erased from the sky, but as I said on Twitter, a bit more like losing a distant yet much-loved relative. I liked this LiveMint appreciation of his career very much; and I loved re-reading this interview with him (how well-adjusted and reasonable he sounds) but I can’t recommend enough that you simply watch his movies. A lockdown treat, maybe? Just don’t call it Bollywood.
- The best thing I read all week was another appreciation of person who died too young, but in this case, he died in 1930. Economists will – or should – know Frank Ramsey’s name, but they may not know his story. Last year I taught a seminar class (partly) about The Ramsey Rule, and in my head, Ramsey was an elderly, staid man in glasses with an accountant’s demeanor; nothing could be further from the truth. Frank Ramsey died at 26, having made pioneering breakthroughs in economics, maths and philosophy and becoming part of the Bloomsbury set. This New Yorker profile (on the occasion of a new biography, which I’ll be ordering) is fantastic; this sentence is glorious: “Although Ramsey didn’t bear grudges, the two men had no contact for four years, except for a distinctly cool exchange of letters in 1927 about the logic of ‘=.’”
- I can imagine Clemence Landers and co clicking publish on this blog and then immediately closing the door and putting up an umbrella to protect themselves, but it’s very good: they argue that debt relief from IDA (the World Bank’s concessional lending arm) would be counterproductive, reducing the flexibility the Bank has to respond to the crisis.
- Increasingly, I see the possibility that globalisation will be a victim of the longer-term response to Covid; not in the sense that it will be unwound completely, but more in that there will be some judicious vandalism to its edifice. Charles Kenny went on Planet Money to make the unambiguous case against this (highly recommended, transcript here), pointing out that our ability to fight disease has been immeasurably strengthened by globalisation. He is not alone: this piece by Anna Stellinger and co-authors also makes clear that protecting global value chains is an important component of protecting global health. And Anne Krueger takes solid aim at Trump’s war on public health, not least his attack on its global institutions.
- Two more Coronavirus links, before I try change the subject: first, FiveThirtyEight’s brilliant Maggie Koerth writes about what we know about the difference in deadliness of the disease by sex; and second, Andrew Gelman on the updated Imperial College model of the disease and its response to policy actions.
- On a completely different note, Branko Milanovic on how Marx and Ricardo conceptualised inequality. I don’t think nearly enough people spend nearly enough time learning about the history of economic thought, and I really like that Branko will sometimes just take a random topic and expound on it – it is always a learning experience.
- And finally, in definitive proof that I have too much time on my hands, my latest discovery: a research project which is trying to build a computer that tells jokes. It is TERRIBLE. The jokes are sub-Christmas cracker, and yet completely addictive. For example: What temperature is a son? Boy-ling point. I feel like these jokes are what Aubrey Plaza is thinking about to keep her face this dead on Parks and Rec. And speaking of Parks: this is old, but it bears repeating – Ron Swanson is a model human being.
Have a great weekend, everyone!
Just in time to distract you from eyeing up the Dettol, the Links arrive. Can we take a moment to discuss this, please? Despite that particular advice going directly into the Dunning-Krueger Effect Hall of Fame, and followers of it likely putting themselves in immediate contention for a Darwin Award, it was, stunningly not the dumbest thing I heard this week. Nope: that was the plan to ban immigration in response to a disease that is being transmitted locally, and with exceptions in no way correlated to likelihood of carrying the disease. At times like this, words fail me, and I turn to gifs. This is will do. Anyway – just in case you can catch dumb by reading about it, here’s the best of the internet’s economics and general geekery this week as an antidote (and some pretty intense basketball nostalgia prompted by The Last Dance).
- Tim Harford had a fantastic long read at the FT, looking at why Governments (and individuals) fail to prepare for disasters. This all touches on the kind of research I do, how our decision-making processes are prone to different kinds of failure, and it’s a great, rounded and engaging take on the topic. He talks about behavioural biases, of course, but a lot of this is driven by the reward structures we face and the accountability we face. We get credit for mending things that break, not for taking care of them in the first place; we find it easy to spend on the visible current problem, even if it’s small, rather than the potential big problem, even if it could be apocalyptic. For those who don’t have time to read the whole thing, his Planet Money interview was excellent, too (transcript).
- I’m going to try and keep a lid on Coronatalk today (I will likely fail). In that vein, I really liked Markus Goldstein’s blog on Esther Duflo and co.’s suggestions to keep Pre-Analysis Plans proportionate and light touch in economics. One of the reasons I really like Markus’s writing is that he often grounds it in his own experiences and tells us something about who he is as a researcher, a great service as most of us can learn a thing or two (or three or four) from him. Related: Cyrus Samii has a different take on PAPs.
- Apropos that immigration ban: as if you need any confirmation, it doesn’t really seem to have much to do with Coronavirus at all. And another great FiveThirtyEight explainer, this time on how to read Coronavirus graphs. It’s important: there are so many, with so many subtly but importantly different characteristics, and many of the people I speak to seem to treat them all the same.
- This week in giving my priors a good shoeing: a VoxEU piece on how the demand for restrictive employment regulation seems to be really high among people who are likely to lose out from it in developing countries. I can think of a couple of good reasons for this: it might be that people overestimate their likelihood of getting a ‘good’ job and therefore are in favour of good jobs being protected, or it might be that they simply don’t think about these relationships the same way economists do – for them, their labour market status is a lived experience, rather than an analytical problem, and when asked a question about making anyone’s labour market experience better, they agree. Still, this bears a lot more thinking about.
- A bit more Coronacoverage: more from CGD’s super education coverage, this time looking at when schools should reopen. And Heather Marquette has a pair of very good blogs about how to respond in developing countries. Part 1 sets out the framework and part 2 on what the response should be. I really liked this line: “in every crisis there are chances to make better decisions, to ‘do things that you didn’t think you could do before’”
- This is fascinating: research by Benjamin Enke and Thomas Graeber shows that when people are confronted by difficult calculations relating to uncertainty, they can default to thinking about them in 50/50 terms – even if the correct assessment of the uncertainties is very different. It’s a clever piece of research with implications for a number of behavioural economics findings. I’m pretty sure it has around a 50/50 chance of being right.
- Lastly, are you watching The Last Dance? For people of my generation, this is a massive nostalgia trip. It’s fun even for non-basketball fans – my wife enjoyed it and she couldn’t spell Giannis Antetokounmpo if she tried. It also sent me down a rabbit hole on youtube, watching the old basketball videos I had in the early ‘90s. Back then the NBA used to release music videos with basketball highlights on VHS, and I must have watched my copy of NBA Jam Session about 100 times. The NBA was really into subtle racial stereotyping back then: they gave Mark Price a highlights package, but set it to the whitest song in history (I am, of course, referring to Black Gold by Soul Asylum). There was some pretty good songs, too: Eric B and Rakim show up for a song about defence. Listen to that on a loop, and ignore the Dettol.
Have a great weekend, everyone!
They should really rename the virus Covid24/7, because it
really feels like almost everything I read, work on, talk about or do is
somehow related to the pandemic. This isn’t really surprising given how
inescapably big all the problems associated with it are, but I do wonder what
the mental health toll will be at the end of this all. I can imagine a
post-Coronavirus world a little like Meg Rosoff’s How I Live Now, where the
event is never really mentioned, but still seems to pervade the lived
experience all the way through. Still, it’s better than The Road, so I suppose
we should count our blessings. This week’s post-Easter links still retain a big
chunk of Coronablether, but also a little to take your mind off it, including
some fantastic Daron Acemoglu memes.
- One of my favourite things this week: Stefan Dercon
has written a piece for CGD on no-regret policies in response to Covid in
developing countries. Stefan’s key point is that given how deep the
uncertainty is over both the impact of the virus and the impact of the
response to it, in the context of scarce resources for developing
countries it’s prudent to focus on no-regret interventions – ones
which will be good investments whether the virus is as bad as the worst
case scenario or relatively minor, and whether the economic costs of
response turn out to be deep and lasting or shallow and short. The full
note is here,
and the summary blog here;
I summarised the key arguments on twitter here.
- There’s a line in Stefan’s piece where he says “I have
no answer about what the best policy is for tomorrow or next week”, given
how much uncertainty we’re operating under – an important statement given
how many strong opinions I’ve seen built on shaky foundations recently. Contrast
this humility with Tyler
Cowen’s summary of his opinion of epidemiologists. What I found
most hilarious was that he asks the question ‘how smart are
epidemiologists?’ and then immediately suggests that his preferred metric
is their GRE scores. It appears that a lot of his criticisms were
prompted by the controversial IHME modelling, which was led by… an
economist. I leave you
with Daffy Duck.
- Apropos of my rant about Covid and inequality last
week, FiveThirtyEight have a great piece on how
New York’s inequalities are reflected in its death tolls. The last
lines are magnificent: “in New York’s epidemic, death attends to the haves
and have-nots differently: For the city’s poor, it hovers closely, and
when it comes, it leaves them as crowded as ever.” Related: Rema Hanna
and Ben Olken on how
to protect the poor from Covid shocks in developing countries. And
Duncan Green has a
great roundup of African coverage of the pandemic and its response.
- For brief relief from Covid, though not exactly
cheerful, here’s Nathan
Fiala arguing that micro-interventions to reduce poverty may not work in
the long run. He’s correct to say that many studies show that short
term gains don’t persist relative to control groups, which suggests
that there may be multiple sets of barriers or systemic factors that
need to be addressed for sustainable exit from poverty. But some
studies do show long term effects; and the fact that one-off interventions
are not necessarily enough to power continued income growth does not mean
they are neither important nor part of a broader solution.
- More on the global response to Coronavirus. First
FiveThirtyEight has yet more excellence, with Maggie Koerth explaining why
global supply chains are so tight and its so hard to source
ventilators and PPE; then a couple of pieces looking at ventilators
specifically – one suggesting that the market for ventilators has actively
discouraged the search for cheap technologies (resulting, for example in Liberia
having just one ventilator in the whole country): Project
Syndicate and VoxEU.
Owen Barder calls for the US’s
freeze in WHO funding to be made up by other countries, pointing out less
US influence in this sphere is probably good thing (can someone
explain the Love, Actually reference? I’ve never seen it). And Justin
Sandefur and Julian Duggan have a truly magnificent graph on the World
Bank’s response to Covid here.
- And, almost finally: a little philosophy to help you
make sense of it all. This great piece on FT
Alphaville tries to dig into what the lockdown is for, not just in
terms of healthcare and the economy and QALYs but morally. It quotes Jo
Wolff from BSG; and one of his students (and my DPhil peers) Vafa
Ghazavi has a
great, hopeful piece on how the crisis can spawn ‘radical hope’, and a
reimagining of what our societies conceive as the good life, a life of
worth. Vafa is a ridiculously good writer: I’ve read early drafts of
his that are better-written than published, edited books, so I really
- Ending this on a cheerful note still: I have discovered
via twitter that there is a page full of Daron Acemoglu memes for the
hopelessly geeky on Tumblr. Think the trend for Chuck Norris memes
from a few years ago, but applied to an MIT professor and focusing on
econometrics, modelling and general nerdiness. They are all completely
hilarious – provided you’ve studied economics. For the non-economists
in need of a laugh, one of my favourite cartoons ever: Bugs Bunny conducting
Have a great weekend, everyone!
Rather than taking a break for the Easter Weekend, I thought
I’d get the links out in any case, since so much stuff is coming out so
regularly a week’s break could overload the next edition. There’s a glimmer of
non-Covid stuff, and a little optimism sprinkled judiciously through the links,
but it would be remiss not to start with two musical goodbyes. The last seven
days has cost us both Bill Withers and John Prine. Bill Withers is not only the
punchline of my favourite dad joke (“How do you turn a duck into a soul singer?
Just leave it in the oven until it’s Bill Withers”) but was also one of the
great soul singers of his time. Everyone knows Ain’t No Sunshine, but my
favourites were both from Still Bill: Who is He (and What is He to
You?) and Lean on Me.
John Prine was, if anything, an even better songwriter – and some of his songs
have been covered by everyone with vocal chords. Some of those covers were
pretty, good too. I love Speed
of the Sound of Loneliness (he sings backup to Nanci Griffiths) and Angel From Montgomery,
with maybe the most damning final line ever (‘how the hell can someone/ go to
work in the morning/ come home in the evening/ and have nothing to say?’).
- A few people have shared Emily
Matilis’s anger at the ‘Great Leveller’ narrative around Coronavirus; long-time readers of
the Links will not be surprised that the inequality of the impact has been
a concern for me, too. How big is the inequality? Shockingly large.
The Washington Post digs
into the racial disparity of the death toll in America, with blacks
much, much more likely to die of the disease than whites.
FiveThirtyEight does the same here, focusing
on the disparity within the young, and nominally low-risk group; it
turns out low-risk should have an asterisk because if you’re poor, black
or mixed race it isn’t that low. Abi Adams-Prassl (a brilliant economist)
and co look at the economic inequality of the impact of the virus in the
UK and US – again, outcomes
for the poor are much worse. This is not limited to rich countries. Data
is trickling through from developing countries; this
tweet from Mushfiq Mobarek is really worrying. Can I add a short
rant here? The inequalities we’re observing now are not deus ex machina.
They are the result of deliberate policy choices and years of pursuing a
kind of economy and state that leaves us vulnerable to exactly what we
observe today. This is not okay. And when this is over, pretending we
weren’t complicit is also not going to be okay.
- How to fight this a bit? Sam Bowles and Wendy Carlin
foresee a battle
for the narrative about the post-Covid world. They propose a more
hopeful, unifying message that emphasises civic duty.
- Do you feel like your working from home is a bit… bitty
at the moment?
And does this distress you because Nick Bloom literally wrote a paper
about how working from home is more productive? Never fear, via
Development Impact, here’s Nick himself explaining why
working from home under current conditions can be something less than
optimal. Though, those of us who can work from home at all are
- Moving away from Coronavirus for the moment: a
really nice piece on VoxDev about improved cookstoves. Previous
studies of clean cookstoves have found limited final impacts because the
new stoves themselves were not suited to domestic use in the contexts they
were designed for. This
study shows that if usability is a key design aim, stoves can both
improve outcomes and achieve sustained use, even when they have to be paid
- When I audited one of Vince Crawford’s classes on
behavioural economics I asked him if a certain bias (I can’t remember
which now) might not just be observed in lab settings because the stakes
weren’t high enough. Vince, who has more knowledge about behavioural
economics in his little finger than I do on my entire hard drive, said
that what they knew about the mechanism suggested that this was probably
not the case – he didn’t think much larger stakes than already tried would
make a big difference. A new paper gives
weight to his answer, finding exactly this.
- Laura Tyson and Anu Madgavkar on gender and the labour
market – definitely not an entirely rosy picture.
- Lastly, what to do to mentally unwind during a
I’ve been reading – currently Zeno’s
Conscience; this turned out to be an ironic choice since Zeno gets
locked into an apartment by himself inside the first 50 pages, which gave
me lockdown dreams – watching Junior Bake Off
(so much better than the adult version!) and keeping my eye out for
marginalia like the news that ancient Brits worshipped chickens
and hares. I’m also playing Pandemic Legacy with my wife, apparently
not the only ones, and it’s oddly comforting. Any other tips?
Have a great Easter, everyone. And stay home!
Coronavirus is kind of all-consuming, isn’t it? It’s not
just the links that it’s swallowing whole, but my time. Luckily, now that I
barely leave the house and don’t see any of my friends I have a whole lot more
of it. I feel terrible for my friends with kids, though – if they’re lucky they
about 42 seconds to plan dinner and relax in the afternoon and fifteen minutes
to decompress while they lock themselves in the bathroom and pretend not to
hear the banging on the door. This week’s Coronalinks have a little
distraction, but also – still – a whole bunch of Covid.
- The best thing I read all week was this
superb explainer on why it’s so gosh-danged hard to model Coronavirus. It’s a long read, but I
strongly, strongly recommend everyone read it. It’s a great way to
understand why different models are coming out with such different
outcomes, and how massive the confidence intervals around any predictions
need to be. Beyond that, it’s just a really nice applied example of how
modelling is done. I’ve seen a couple of people criticise forecasters who
use large confidence intervals in their predictions for the virus, but I
find such critiques ridiculous: they are asking for people to either know
much more than can be known at the moment or to lie about how much they
don’t know. One is impossible, and the other is irresponsible. 538
have done a bunch of other great pieces: this one on the
aforementioned confidence intervals and this one on the
uncertain science of handwashing (pesky confidence intervals again!).
- There has been increasing coverage of how poor
countries should respond to Coronavirus. Given those wide confidence
intervals a wide range of possible approaches are plausible. Two pieces
urging caution in importing Western models of response to LICs that are worth
considering: Amanda Glassman, Kalipso Chalkidou and Richard Sullivan at
CGD and David
Pilling in the FT. And more from CGD’s
superb coverage of Covid and education.
- And now something to cheer you up – NPR got a ringside
seat to a company in the
automobile supply chain shifting over to ventilator production, and
it’s kind of amazing (transcript).
I commented on Twitter a while back that firms, retailers and people
are learning a vast amount about our own flexibility and how we can work
and interact. At least some of these changes are going to stick. And
while we’re being upbeat, Marta
Foresti’s Ode to Key Workers, overwhelmingly migrants (#migrantsaregoodforyoupart2,030,291,928,119)
- Now on to something completely Covidthoganal: a
research paper uses Australia’s past as a penal colony to examine the costs of masculinity in men’s
health and wellbeing. I can’t say I’m completely convinced, but the
story the authors are putting forward, that norms of masculinty lead to
sub-optimal outcomes seems plausible. As all of you can tell from these
weekly e-mails, I model myself on the John
Wayne strong and silent type and sometimes wish I was more verbose.
on Covidmacro – part 3. Just read and take notes, please.
- And ending things on a non-Covid line, if not an
optimistic one: Martin Ravallion’s most recent piece looks at the extreme
difficulty of making the last steps to zero poverty, suggesting it may
wind up taking decades even from the time when poverty declines to 3% of
- I hope everyone is staying well, and taking care of
their mental health. I’m lucky that I’m cooped up with my wife, probably
the only human being on the plane who can bear my presence for such an
extended period of time. There’s a bunch of happy stuff online to keep
you going if you don’t have as much company as you’d like, though: Dolly
Parton reading bedtime stories, Poetry
read by poets, the
Stockport Spiderman, the Llandudno goats,
and a huge amount of mutual aid.
Have a great weekend at home, despite the lure of the
I promised to try and keep the links a little oasis of
normality amidst a sea of change, but while today there will be links that have
nothing to do with Coronavirus, there’s also still a bunch of stuff that’s
Covid-focused. I’ve been keeping my eyes open and trying to read as widely as I
usually do, but almost everyone online has turned their attention from normal
pursuits to Coronaspouting. There has been a lot of good, well-informed
comment, but also an avalanche of bollocks. I’m all for people of
different disciplines pitching in here – we all know something different – but
my twitter feed has been overwhelmed by people launching into strong opinions
or analysis without any collaboration or sense-checking with others at all.
This, coupled with the complete absence of any new basketball or cricket has
put rather a dampener on my mood. Also, Wonder
Woman 1984 has been delayed, thus denying us our Gal Gadot fix. Et tu,
- A lot of what I’ve been following (and commenting on,
to the limits of my ability) has been the economic response to Coronavirus – not just what we do
about the economic cost of distancing and lockdowns, which takes up a lot of
the air in this room, but also how the policies we implemented
pre-pandemic help or hinder our adaptation and how we can use economics to
help generate a faster, fairer way of responding. On our ability to
adapt, Tim Harford has a really good primer on the
general nature of this problem: our supply chains for different things
are flexible to different degrees, and some crucial supplies – medical
professionals, for example – are difficult to ramp up quickly. These
difficulties are made worse by policies that actively hamper useful
flexibility – in the US, harsh limits on migration are going to create
artificial choke points in the food supply quite soon, as Planet Money
this show (transcript).
illustrates the same point in a very different setting – poor set up of
the World Bank’s pandemic bonds have apparently dramatically slowed payout.
- There has also been quite a lot of good discussion of
the measures being taken in different places to limit the economic fallout
of the pandemic. To properly understand how bad things might get, and
for whom, we require quite a sophisticated understanding of how economic
relationships are structured, as Dietz Vollrath continues to
elaborate. I also quite liked these two Project Syndicate pieces, one
by Willem Buiter which does a pretty good job of explaining
how the monetary and fiscal responses made in the UK are coordinated,
and one by Mohamed El-Erian pointing out the need for economic
circuit breakers: making sure that failures or downturns in one
part of the economy do not create a vicious cycle. And for a dose of
well-informed economic optimism, VoxEU on why
Corona is not like the 2008 crisis, and with good policy we should
expect a quite different resolution. For poor countries, CGD’s call is
what it takes.
- And now, a brief interruption of normality as we return
to a regular series in the links: Why humans are absolutely the worst,
no-good, terriblest creatures, part 2,392,011 of a continuing series.
Research into assimilation of European migrants in America demonstrates
and acceptance were spurred by the entry of African-Americans into the
neighbourhoods. The mechanism appears to be that the appearance of
dark-skinned people made everyone else look at each other and say “well,
at least you’re white”. So reassuring when the mechanism fits your
worst expectations of the human race.
- Back on to Covid: this is a difficult thing to talk
about at the moment, but Amelia Thomson-DeVeaux takes on the tricky
subject of how
we value a human life, and how we decide whether the cost of saving it
is worth incurring. I hugely recommend this one, if you’re not familiar
with this topic – she covers a lot of ground and also discusses how the
‘value’ of a life varies with the income status of a country in a
sensitive way. For less sensitivity, but a brutal and blunt
discussion, here is Milton
Friedman eviscerating a student on the topic.
- I always find Markus Goldstein so reassuring to read. This
piece with Florence Kondylis is excellent, about how researchers should
respond to Covid. Related, I have been extremely impressed with the CGD
coverage of Covid and Education. Another good piece here.
- Penultimately, and again retreating to links-as-usual: social
scientists replicate their own highly-cited study and retract the findings
– via David McKenzie’s amazing World Bank links, a piece of good
practice that deserves more attention than it will get these days.
- How to close, when so much pop culture has been
cancelled? I could just link to videos to make you
happy (it’s not distancing-compatible – Jaan pehchan ho means ‘let
there be familiarity’)? Or more book
recommendations? Tips for housebound birdwatching (UK,
India wins)? Or The Ringer,
still producing basketball content? Whatever gets you through, be
safe and be home.
Have a great weekend at home, everyone!
I’m going to try and avoid turning the links into the
Coronagloom Weekly, but inevitably the virus will be a part of these emails
going forward. I will not focus on ranting about bulk buying (beyond this: wtf,
people: bog roll does not prevent you from getting it, and Covid doesn’t give
you the runs, so please calm down!) or speculating on the best course of action
from my position of solid epidemiological ignorance, but I’ll try and link to
some reasoned and intelligent analysis that will help us understand what’s
going on better. It is also incredibly important to take care of our own mental
health, especially as social distancing needs to be adhered to. I wrote a
thread on twitter (yes, I’m on twitter now, see link 2) with my best
suggestions for social distancing reading; and NBA
League Pass has opened its doors to everyone for free for the next 30 days.
The last link has a few more things to get you through.
- I’ll start with something that really irritated me: Arvind
Subramanian immediately reaches for the foreign aid budget in response
to our under-preparation for this kind of global event. I have many objections,
but here are a few. First, part of his justification is that the effect of
aid on growth is not that large, but this has always been a massive red
herring. Aid does lots of things, and not all of it (in fact, probably a
minority) is actually aimed at stimulating growth in any meaningfully
short time frame (i.e. a few years). So even if aid has no impact on
growth (and the final word on this should go to the
Clemens’ et al award-winning paper, not Subramanian’s older work with
Raghu Rajan), this does not mean that aid has a low opportunity cost –
quite the opposite as we have superb evidence from many fields that a lot
of aid-funded interventions do have large and meaningful effects. Even
if we focus only on loans, a few successful loans (given credit
constraints) are likely to have outsize effects. Thinking of aid more
like VC changes perspectives. And secondly, the economic costs of
pandemic prevention will be largest in the places with most to lose;
surely they should then bear the brunt of funding preparedness?
- A side effect of the crisis has been to move a lot of
academic activity online: teaching and also presenting research. The
CSAE conference has moved online this year, using the hashtag #DIYCSAE,
and I was an early adopter, attempting to tell the story of my
paper on decision-making in the civil service in an 8 minute video;
teaser is here. And in order to participate in the conference, I’ve
joined twitter, @scepticalranil.
Others have also done cool threads, not least Paul Clist
- A host of good Coronareading: Branko Milanovic
argues that the
biggest risk is of social breakdown at Foreign Affairs; 538 show
polling from the US that suggests that contrary to popular narratives, younger
people are not taking Covid less seriously; Planet Money deep dive
tests are run and manufactured (transcript); CGD
critique the UK
communications strategy and transparency, and investigate the uneven
gender burden of the disease in poor countries and much more; and Raghu
Rajan goes into how
the pandemic will test our economic resilience. He also says that
“Covid 19 has been quick to expose amateurism and incompetence”. Quite.
- There has also been a couple of pieces focusing on how
Covid interacts will precarity. This is extremely important: we have
allowed the economic model in much of the west to outsource risk,
uncertainty and insecurity to labour through changes in firm structure and
inter-relationships. This may have allowed greater expansion in the
economy and stimulated innovation but it has not been matched by
innovation in social protection or support for the vulnerable, and if
Covid is a stress test, this is the area I fear we are going to fail most
miserably. It is totally unacceptable that this is what we – myself
included – have predicated our comfortable, flexible lives on. 538 look at
the most precarious are in the US; Berk Ozler at how
we can quickly support the vulnerable in poor countries.
- Worthy of its own link – Dietrich Vollrath cuts no
corners and shows us how
to think more carefully about the systemic effects of the virus using
input-output tables. Again, macro matters a lot, and reading Dietz
can help you understand it better.
- Two wonderful non-Covid links. First, Sam Bowles and
Wendy Carlin talk about how we
can and should dramatically revise how economics is taught to undergrads.
I teach econ to public policy Masters students, many of whom have no
background in the subject, and I think the course convenors (I’m not one
of them!) have done an amazing job of getting people into complex and
interesting questions early. Consider this an advert for the MPP programme
at BSG. Also, as an aside, if I could turn Sam Bowles’ brain into some
kind of drug, I would mainline it directly into my veins. He is one of
the most interesting thinkers in the world. Secondly, David McKenzie on
learning from how
tech companies use experimentation.
- Lastly, some more stuff to get you through the long
hours of indoor life.
First, and best: LitHub rewrites the first
lines of classic novels for a social distancing world; The Ringer on how
to get the most out of the
newly-free NBA League Pass; more lithub: their
book recommendations to complement my thread in the intro; and the
link to Grim Fandango, remastered on Steam – hours to pass away with
the greatest game ever made.
Now, to borrow from Dietz: wash your hands and stay the
I’ve had a few text messages in the last week using some
formulation of the phrase: “is it time to panic yet?” For avoidance of
doubt, the answer to this question is always no: panic is inherently unhelpful,
this is just baked into the definition
of the word. I was working at home yesterday and went to the shops at
lunchtime to get a snack and some things for dinner and the local Sainsbury’s
was like a scene from an
old Spencer Tracy movie: people carrying enough toiletries to last a year,
bushels of lentils, peas, beans and dried pasta (the side effects of such a
diet don’t bear thinking about). I feel relatively certain I’m preaching to the
choir with this email, but please do not panic buy – any shortages we
experience at this point are much, much, much more likely to be the
self-fulfilling result of panic buying itself than the underlying supply
chains. One supply chain that has definitely broken, causing enormous welfare
loss (primarily concentrated in the population of cricket-obsessed basketball
fanatics) is the simultaneous supply of near-Playoff basketball (just
as LeBron was beginning to snap his fingers) and the forthcoming England
tour of Sri Lanka which, free of any fear of looking like a fool, I will now
suggest was heading for a whitewash by the glorious might of Karunaratne and
- I will leave speculation about the best course of
action in response to the Coronavirus itself to the many people better
equipped to deal with such questions than me; others have both more
information and more expertise than I do. I have been keeping an eye on some
of the best writing on mitigating or navigating the economic shocks of the
pandemic, however. Richard Baldwin, on VoxEU, has a good piece setting
out the many points in the economy that a disruption may be expected,
and the effects in different places. Kaushik
Basu, unsurprisingly, has noted implications that have escaped the
attention of many others, and in particular highlights the impact
of a novel and unexpected event like this on contracts, and the special
implications a spate of broken contracts can have. If you’re
interested in the effects on LICs (and if you’re reading this, you
probably are), Dave
Evans and Mead Over have you covered. Unfortunately, even a virus
can be politicised, and in the US, opinion
over the virus is split firmly on party lines (though a wise friend
has pointed out that these polls come from before Trump’s recent speech).
- In the US, many people who will need treatment will be
paying for this out of pocket, either in the form of insurance co-payments
or because they are uninsured. This Planet
Money podcast with Anne Case (transcript) should be
a reminder to pick up Deaths of Despair, her book with Angus Deaton about
the human impact of this kind of system; but you should also listen to it
to understand the deep indirect costs the US system involves. And there
is a truly mad statistic buried in here: pharma companies spend more on
advertising than they do on R&D.
- This has been a pretty depressing start to the links,
so something that makes me (and probably most economists) smile: a
randomised trial provides evidence for something most of us take as an
article of faith, but is surprisingly hard to prove: competition
works beautifully, reducing prices and increasing quality for
consumers. Obviously, not always, not everywhere, and not from every
starting point but… this matters.
- A very nice post by Florence Kondylis and John Loesser
questions that you are likely to encounter in almost any academic seminar.
For the policymaker, this doubles as a really good list of questions
you should ask of a paper as part of your process for assessing the
quality of evidence it provides. Related: Marc Bellemare, my new
econometrics crush, on the merits of Peter Kennedy and Judea Pearl for thinking about
evidence based on data. Read to the end.
- So with some time on his hands as his university works
out its response to Covid, Dietz Vollrath writes up the latest in thinking
about economy-wide productivity and profit mark-ups. Reading him is
still one of the best things you can do to keep your macro sharp.
- While we’re talking macro, I can’t quite remember why
but earlier this week I dug out the famous 1981 Sargent and Wallace
Unpleasant Monetary Arithmetic’, and I cannot recommend reading it
enough. It’s old enough (almost exactly my age) that many economists
these days will have never read it, but the power of the logic and the
clarity of thinking in the paper is a superb model for any aspiring
economist. Not only that, but it feels like the paper still has a lot to
contribute to current macroeconomic problems.
- Let’s close on things that (should) make us happy. Michael
Schur is writing a book, which in my head is titled “Don’t be a
shirtbag, for fork’s sake”; Tove Jansson’s love
letters to her partner are being published and they are very moving
(and Moomin); even if there isn’t any new basketball, there is nothing to
stop us watching
videos of Shawn Kemp and Gary Payton reminding us that Lonzo Ball and
Zion Williamson have a long way to go; and Sir Isaac Vivian
your hands, everyone!
No sooner than I speculated on what a self-quarantine period
might look like than I received actual data – a friend of mine has had to
self-isolate her entire family on their return from a holiday. In what will no
doubt be shocking news for you all, it turns out locking two very small
children into a small London dwelling with two increasingly stir-crazy adults
turns out to be rather stressful. Blissfully ignorant of the demands of
parenthood, I suggested she had 14 days of yoga, boxsets and depleting her accumulated
hoard of wine (especially if
you’re following the cricket); judging by the tone of her response, it’s
probably a good thing she has another 10 days to cool off before she can escape
and give a well-deserved thump. For the rest of you: wash your hands, stop
hoarding things like face masks and take solace in the data, if you can. This
week’s links include a slight dose of econometrics, so some self-isolation
with wine may be recommended.
- Should we get the econometrics out first? Two things, both of
which I would use to hammer home the message: no matter how clever your
measurement or your study design, you must always think through the model
you’re testing. First, Marc Bellemare, whose blog I have been enjoying
more and more as I dig deeper and deeper into it, considers the SUTVA.
Thought it sounds a little bit like non-violent
resistance, it’s not (and indeed, SUTVA violations have been known to
induce acts of violence against Stata); rather it’s an assumption that is
made in econometrics when you want to infer causality. Essentially, the
assumption (which is stronger than most people seem to think) requires
that there are no spillovers from a change in the causal variable for me
on either anyone else, or for me over time. This is actually a really
difficult thing to prove to be true, so most of the time, we have to
assume it or just argue that we think it holds. The problem is, very
often, studies don’t manage to make this case very carefully, and thus
report effects that are either stronger or not as strong as they should.
And related: David McKenzie reports on a
way to infer the long-term results of a short-term study. The best bit
is at the end, where he describes a case where the approach may break
down. Without really thinking through the ‘why’ of your result it can
be difficult to even know the ‘what’ that you think you’re finding. I
remind you of my
advice from earlier.
- Something lighter, if not less important: a
really nice piece from CGD setting out how they went about selecting
programmes that have made a dent in learning programmes at large scale.
One programme from DFID makes the cut, along with a bunch from USAID, with
none run primarily by Governments. It’s well written and thoughtful and
comes highly recommended.
- I really liked this
paper from Stefano Caria. He digs into Ethiopia’s push towards
industrialisation and documents that its cost advantage in labour is more
than offset by lower productivity vs. important peers. He does a bunch
of digging into this and argues that a big chunk of this may be driven by
worse management practices, and especially worse labour management.
Really good diagnostic work like this is rarer than it should be.
- VoxEU have produced a new e-book looking at the
position of women in
including minority women (summary here).
Meanwhile, Marginal Revolution have produced a
video about Janet Yellen, part of their own women in economics series.
Bonus gender link: also from VoxEU, research that shows that men
benefit more from larger venture capital boards than women do. They
find the result is not obviously (first order) discrimination, but that
men seem much more likely to reach out to and contact members of the VC
board than women. Once again, the findings suggest that gaps stem from
- I’ve said in other settings that the mystery of this
world is not that there is so much migration, but rather that there is so
Germany provides an interesting case study here. There remain substantial
wage gaps between the East and West, even once you account for the cost
and quality of living. Why do East Germans not simply move over until
wages are equalised? If I were speculating on this blindly, I might have
guessed that productivity is just higher in the West, but absorptive
capacity not sufficient to eliminate this difference through arbitrage. This
piece suggests it’s much simpler than that: people like home, and
moving away from it requires a premium.
- If you’ve been following Coronavirus in the UK, you
cannot have escaped Chris
Whitty, illustrious alumnus of DFID. He has very much been at the
public face of advice on the new virus, and the evidence suggests this
is rather a good thing. In the US, at least, trust in politicians is so
low that any intervention that makes use of them, even well-intentioned,
is likely to have the perverse effect of leading
more people to ignore their advice.
- And lastly, this week has been a bit low on frivolity
for me, but I did rather love these tweets pointing out exactly how
unsanitary most pop music wants us to be. Sweet Caroline:
vector of disease.
Have a great weekend, everyone!