Tyler Cowen's Blog, page 7

April 27, 2015

1. What are the new status symbols? (for one operator of private flights, the number of pets exceeded the number of people on a flight sixty-five different times; actually that strikes me as possibly efficient).  And here is an article on the Four Seasons private jet experience: “We didn’t sleep much on the flights, because we were always having much too much fun drinking champagne and giving our neighbors nicknames,” said passenger Davidson. An interior designer from Calgary, she booked the trip to celebrate her 55th birthday and wound up forging new friendships. “We loved our space and all of the people who were surrounding us.”


2. Russia has a steam locomotive reserve, still.  In case of nuclear war.


3. We have figured out why the earth hums.


4. Svetozar Pejovich attacks Milovan Djilas.


5. Acemoglu’s lecture notes on weak and strong states.


6. Fortunately, .


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Published on April 27, 2015 09:23 • 28 views

April 26, 2015

Jeffrey Rothfeder has a very good piece on that question, here is one excerpt:


Somewhat surprisingly, cross-border capital flows are equally anemic. Despite the common perception that multinationals these days manufacture their products anywhere but the West, global foreign direct investment (which reflects the amount that companies earmark for doing business in other countries) has fallen to a mere 2 percent of global GDP from 4 percent before the recession.


Still, the most tangible metric that belies the Pollyannaish depictions of globalization is corporate financial performance, which is also a window into the fundamentals of local economies. Although most companies don’t separate out geographical earnings, revenue comparisons provide an apt picture — and few multinationals can boast big returns in global markets.


There is much more to the argument, do read the whole thing.


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Published on April 26, 2015 23:16 • 24 views

In a word, Vietnam.  Vietnam has about ninety million people and a relatively low per capita income, below by 2k by some measures.  It liberalized tariffs a good deal upon WTO accession, but since then has done some backsliding.  It has large numbers of state-owned enterprises, and its policies toward such enterprises could use more transparency and predictability, as indeed TPP would bring.  Most generally, Vietnam is not today a free country.  Bringing Vietnam into TPP would further ensure their attachment to a broadly liberal global trading order.  TPP also would bring free(r) labor unions to Vietnam.


Tuong Lai writes (see the first link above):


But Vietnam cannot play its significant geopolitical role until it fully develops economically and further liberalizes politically. And adopting the T.P.P.’s requirements — free trade unions, reduced state participation in the economy, greater transparency — will help Vietnam along that route.


Many potential TPP signers still have significant tariffs against Vietnamese textiles?  Here is Jack Sheehan:


Vietnam is set to gain the most from the TPP due to the potential for a greater share of the apparel and footwear market, particularly in the US and Japan.


In 2012, Vietnam exported almost $7bn (£4.2bn) worth of apparel to the US, which accounted for 34% of US apparel imports. Vietnam also exported $2.4bn worth of footwear.


The TPP will allow Vietnam to export apparel to the US at a 0% tariff rate, which will make Vietnamese exports even more competitive.


Here is an assessment from the Peterson Institute that Vietnam will be the biggest gainer from TPP.  Do you get that, progressives?  Poorest country = biggest gainer.  Isn’t that what we are looking for?  And if you are a deontologist, Vietnam is a country we have been especially unjust to in the past.


Yes, I am familiar with the IP and tech criticisms of TPP, and I agree with many of them.  But if you add those costs up, in utilitarian terms I doubt if they amount to more than a fraction of the potential benefit for the ninety million people of Vietnam.  TPP is more of a “no brainer” than a close call.


Most generally, one of the big dangers today is “The Great Unraveling of Globalization.”  Is the passing or the striking down of TPP more likely to contribute to that trend?  People, you are allowed only three guesses on that one.


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Published on April 26, 2015 21:54 • 45 views

Harnessing high-powered computing, color sensors and small metal baskets attached to the robotic arms, the machine gently plucked ripe strawberries from below deep-green leaves, while mostly ignoring unripe fruit nearby.


Such tasks have long required the trained discernment and backbreaking effort of tens of thousands of relatively low-paid workers. But technological advances are making it possible for robots to handle the job, just as a shrinking supply of available fruit pickers has made the technology more financially attractive.


…Machines are doing more than picking produce. Altman Specialty Plants Inc., one of the country’s largest nurseries, has been using eight, squat robots for the past two years to ferry more than 1.2 million potted roses and other plants to new rows as they grow larger. The $25,000, self-driving machines have occasionally gotten stuck in mud, but they freed eight workers for other jobs and ultimately paid for themselves in 18 months, said Becky Drumright, Altman’s marketing director.


And we used to say that gardening was one of the hardest jobs to automate.  By Ilan Brat, there is more here.


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Published on April 26, 2015 13:00 • 30 views


Getting a speeding ticket is not a feel-good moment for anyone. But consider Reima Kuisla, a Finnish businessman.


He was recently fined 54,024 euros (about $58,000) for traveling a modest, if illegal, 64 miles per hour in a 50 m.p.h. zone. And no, the 54,024 euros did not turn out to be a typo, or a mistake of any kind.


Mr. Kuisla is a millionaire, and in Finland the fines for more serious speeding infractions are calculated according to income. The thinking here is that if it stings for the little guy, it should sting for the big guy, too.


…The fines are calculated based on half an offender’s daily net income, with some consideration for the number of children under his or her roof and a deduction deemed to be enough to cover basic living expenses, currently 255 euros per month.


Then, that figure is multiplied by the number of days of income the offender should lose, according to the severity of the offense.


Mr. Kuisla, a betting man who parlayed his winnings into a real estate empire, was clocked speeding near the Seinajoki airport. Given the speed he was going, Mr. Kuisla was assessed eight days. His fine was then calculated from his 2013 income, 6,559,742 euros, or more than $7 million at current exchange rates.



The full story is here, and in a much earlier MR post I argue against the practice.  Wealthier people have a higher value of time, and it is probably efficient to allow them to speed more.


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Published on April 26, 2015 09:38 • 34 views

April 25, 2015

What was once one of America’s most iconic and popular chains is now down to just two locations. According to NPR, one of the last three Howard Johnson’s restaurants closed its doors this week. Located in Lake Placid, N.Y., the restaurant opened in April of 1956. The Pittsburgh Post-Gazette writes that the owners of the Lake Placid location are getting old and their children are “not interested” in taking over. So, they sold the restaurant to new owners who plan to turn the building into a “high-end roadside diner.”


Via the excellent Mark Thorson, there is more here.  You can read the Yelp reviews here.


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Published on April 25, 2015 23:28 • 35 views

That is the subtitle, the title proper is Pedigree, by Lauren A. Rivera.  This is a very good book on the microdynamics of inequality and the important role played by social networks, how you present yourself, and…pedigree.  Not all of it is a revelation, because by now many of these mechanisms are well-known.  Still, it is unfailingly intelligent, well-written, and it documents these matters better than any other book I know.  Here is one excerpt:


…individual sponsors did not need to be high up in the organization.  HR professionals and school teams typically trusted the recommendations of even the most junior firm employees.  Insider-outsider status was more salient than vertical position within a firm.  First-year analysts or associates could successfully push through an individual they knew from class, athletics, extracurricular activities, their hometowns, or word-of-mouth to the interview phase, provided that they could successfully get the application on the “right desk,” in person or via email…In addition, the tie to an individual sponsor did not have to be strong.


More generally, it is often better to have a contact “within” an institution rather than at the very top.  Recommended, for all those who have an interest in such topics.


Via Chug, here is what happens when you plate junk food as if it were high-end food, a good link.


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Published on April 25, 2015 21:38 • 37 views

It is now available, notice the new subtitle The Economic Malaise at a Technological Plateau: Problems of the United States and Oppotunities for China.


I will be doing some book promotion in China in May, and soon I will have a few questions for you all.


ChinaTGS


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Published on April 25, 2015 11:00 • 34 views

Financial Post: Canada is now the first country in the world to require that for every new regulation introduced one of equivalent burden must be removed.


C-21, has been operating as policy for several years already, which means that the costs of new rules must be quantified and equal or greater costs removed. It essentially caps the cost of rules coming directly from regulations.


This is not quite as radical as it sounds. As I understand it, the law applies only to new bureaucratic rules and regulations not to legislation. Nevertheless, it’s reasonable to force regulatory bureaucracies to operate within a budget so that new rules are promulgated only when the new rule is expected to be an improvement over existing rules taking into account all costs.


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Published on April 25, 2015 04:38 • 31 views

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